1969-03-18

PRIVILEGE


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I rise this afternoon on a question of privilege. I shall be brief but wish to point out that my brevity bears no relation to the strength of my feelings in respect of the matter I am about to raise. Your Honour did not accept the question I asked on March 12 and as a result that question was set down to be debated on the late adjournment debate. Your Honour announced that the question would be debated last night and at the time of your announcement a fair number of hon. members were in the house. Yet last evening, after I had finished speaking for seven minutes, no minister or parliamentary secretary was present in the house to reply to my question. Several hon. members then present noticed this. The hon. member for Hillsborough (Mr. Macquarrie), who also wished to ask a question expected an answer from the treasury benches. Frankly, hon. members then present were amazed that there was no reply from the government side of the house.
I am aware, sir, that the rules of the house do not require government members to answer questions set for the late show. When they fail to do so however that is an insult to the house, and I hope this practice will not multiply. The rules were changed to permit adjournment debate in order that we may have greater parliamentary efficiency. I submit that when hon. members co-operate with Your Honour in agreeing to have questions debated on the late show, instead of challenging decisions of the Chair and holding up house procedures, those hon. members and their constituents should not be treated with the kind of arrogance that was displayed last night.
In conclusion, I hope that the President of the Privy Council will look into this matter and make certain that the situation is rectified and does not reoccur.



THE LATE HON. JOHN BRACKEN TRIBUTES TO FORMER LEADER OF THE OPPOSITION

Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, there is a matter that I think should be brought to the attention of the house. I refer to the passing of the Hon. John Bracken, former Leader of Her Majesty's Loyal Opposition in the house and a member of the Privy Council of Canada who, over many years, gave devoted service not only in the province of Manitoba where he was premier for almost 21 years, but here in the House of Commons as Leader of the Conservative party and as Leader of the Opposition.
His devotion to Canada, his sincerity and, above all, his desire to make certain that all sectors of our country should receive equal attention and that there should be no economic disparities caused him to devote himself throughout the years to the welfare of agriculture in particular.
I first met him 59 years ago when he was a professor in the agricultural college at the University of Saskatchewan. I have known him through the intervening years and feel sure that the house would wish to pay tribute to one who was an ornament of this chamber and a great Canadian. At the same time may we extend to his wife, who throughout the years has been devoted to him in a way no words can express, the condolences of this chamber and the people of Canada.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, on behalf of this party I wish to associate myself with the feelings of the right hon. gentleman for Prince Albert in expressing our admiration for a Canadian who gave himself to the public life of this country with such devotion and sincerity.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I on behalf of the hon. members of this party express our regret at the passing of the Hon. John Bracken. As a boy when I lived in Winnipeg I knew of him as the premier of that province. I came to know him personally over the years, and I think all who knew him were impressed by his quiet dignity and fine integrity. In his

March 18, 1969
Inquiries of the Ministry public life he was a good example of one who left the academic field in order to devote himself to the public service. He had the respect of all who knew him and worked with him. We in this party would like to express our admiration for the contribution he made to the public life of Canada, and express our deep sympathy to his wife and the members of his family.
[DOT] (2:10 p.m.)


Mr. Real Caouelle (Temiscamingue):: Mr. Speaker, we of the Ralliement Creditiste are sorry to hear about the death of the Hon. John Bracken. My colleagues and myself wish to join with the other members of the house to extend our deepest sympathy to the bereaved family. I knew Mr. Bracken in 1946 at the time he was Leader of the Opposition. He was a hard worker and a worthy leader of the official opposition in the House of Commons. I must point out that, on the death of Mr. Bracken, Canada mourns the loss of a loyal and devoted Canadian.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to direct a question to the Minister of Industry, Trade and Commerce. Will the minister say what reply the government has made to the communication of the Canadian Federation of Agriculture asking for an immediate announcement by the government that the government will make up to the producer any shortfall from the minimum prices under the International Grains Arrangement?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: I did not personally receive this request; I presume it went to the Prime Minister. As I indicated in my statement last Friday, it is our objective to work with the other exporters to ensure the restoration of the existing I.G.A. price range and bring back stability in wheat pricing. We have not given up that objective.



DIPLOMATIC EFFORT TO PREVENT BREAKDOWN IN MARKETING

[Stage Direction]
Hon. Robert L. Stanfield (Leader of the
Opposition): A supplementary question to the Prime Minister, Mr. Speaker. My question arises from the minister's answer and from the statement made by Mr. William Hamilton on behalf of the Canadian Federation of Agriculture in his letter to the Prime Minister. It is stated in the letter that a major diplomatic effort by the government is needed to prevent a breakdown of the international machinery for grains marketing. Can the Prime Minister assure the house that such an effort, and the effect referred to by the Minister of Industry, Trade and Commerce, is in fact being made? Will he also indicate specifically some of the concrete initiatives the government is taking in this respect?
Pierre Elliott Trudeau: Yes, Mr. Speaker. When I am in Washington next week I intend to raise this subject with the President of the United States and have our officials discuss various aspects of it. I intend also to do the same with the Prime Minister of Australia who will be here in the succeeding week. I intend to discuss any common approach we might have on a bilateral basis before going to any world council on this problem.



WHEAT-ATTENDANCE AT MEETING OF PRICES REVIEW COMMITTEE

Robert Lorne Stanfield: One further supplementary question, Mr. Speaker, to the Minister of Industry, Trade and Commerce. Will the minister confirm that a meeting of the International Grains Arrangement price review committee was held in London yesterday? Was Canada represented and if so by whom? Is the minister in a position to report on the meeting or can he say when and where the other meetings referred to by him on Friday last, when he unfortunately had to make this rather dismal announcement to the house, will be held?


Jean-Luc Pepin: Yes, Mr. Speaker. Yesterday the Minister of Agriculture referred to that meeting of the prices review committee which began yesterday in London and is continuing today. However I do not yet have a report on it.
This meeting is a regular one. It was called a number of months ago. Canada is represented there by officials of my department and of
March 18, 1969



the Department of Agriculture, and by a commissioner of the Wheat Board. It is an important one, but we are giving even more importance to the meeting of exporters, to which I have already referred, which will take place early in April. As the Prime Minister just said, he will also be speaking to the President of the United States and to the Prime Minister of Australia on the same subject. These are parts of the diplomatic move to which I referred in my statement last Friday.


Mr. A. P. Gleave (Saskaioon-Biggar):: Mr. Speaker, may I direct a supplementary question to the Minister of Industry, Trade and Commerce. Can he give the farmers of western Canada an assurance of such price support as may be necessary to maintain incomes in that very important area of Canada?


Jean-Luc Pepin: Mr. Speaker, the Minister of Agriculture said yesterday that the government is considering many things that would be helpful in this serious situation.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, may I ask the Minister of Industry, Trade and Commerce whether he will personally participate in the meeting to be held early in April, and whether Canada's position will be in any way based on the suggestion made by Mr. Runciman when he said that an entirely new grains agreement should be drawn up, perhaps scrapping years of work on the old one?


Jean-Luc Pepin: Mr. Speaker, I hope Mr. Runci-man's extreme solution will not have to be used. I hope that within the framework of the agreement as it now stands there is room for improvement. With respect to the meeting of exporters I do not yet know if I will personally participate, but if I find there is a possibility that this might be useful, I would certainly do so.


Stanley James Korchinski: As a further supplementary question, Mr. Speaker, in view of the fact that we now know this meeting will be held early in April, has the government given consideration to assuring the farmers that they can expect a subsidy from the government until such time as this meeting is held?


Jean-Luc Pepin: Mr. Speaker, I have already answered that question by saying it is premature to look at it from that point of view, and that we are working for a restoration of the I.G.A. pricing schedule.
Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, may I ask the Minister of Industry, Trade and Commerce whether my interpretation of his remarks today is correct. Do they indicate that he is optimistic that there is not going to be a cut in the price of Canadian wheat, and that the danger of international competition at fire sale prices is not as serious as he believed to be the case on Friday?


Jean-Luc Pepin: Mr. Speaker, I have not
changed since Friday. What I said on Friday was that the Wheat Board would be competitive with the other exporters, and this is being done now.



NATIONAL DEFENCE


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the right hon. Prime Minister. In view of the statement by Canada's chief disarmament negotiator to the effect that a galloping arms race between the United States and the U.S.S.R. would be catastrophic for Canada may I ask the right hon. gentlemen whether he intends to make any representations to the President of the United States indicating the danger that the construction of an A.B.M. system may further escalate the nuclear arms race?


Pierre Elliott Trudeau: Mr. Speaker, I believe I stated yesterday I would be discussing this subject with the President but I doubted whether by next Monday we would have taken a finite position on the United States announcement. I did indicate, and I repeat now, that any danger of escalation is something which we would be very anxious to discuss, and if there is evidence of escalation then we would be ready to indicate our disapproval of such escalation.


Thomas Clement (Tommy) Douglas: In view of the fact that the Prime Minister's predecessor, the Right Hon. L. B. Pearson, indicated in 1965 that it was his government's intention to begin negotiations to remove United States Bomarc missiles from Canadian soil, is the present administration taking any steps to remove Bomarc missiles from Canada?


Pierre Elliott Trudeau: Without conceding that that was exactly what the former prime minister said, I would tell the house what I have said

March 18, 1969
Inquiries of the Ministry in previous months, which is that the matter of our defence policy in the world and in North America is under review and any announcement in this regard will be made in due course.


Hon. George Hees (Prince Edward-Haslings):: Mr. Speaker, may I ask the Prime Minister whether the government has received a request from the government of the United States for permission to establish anti-ballistic missile bases on Canadian soil?


Pierre Elliott Trudeau: No, Mr. Speaker; no such request has been received.


Mr. David MacDonald (Egmoni):: Mr. Speaker, since the Prime Minister a moment ago referred to the general policy review, and his own interest in the security of the world, may I ask him when we might expect some clear-cut statement on Canada's position with regard to the installation of an A.B.M. system either in the United States or elsewhere?


Mr. J. Edward Broadbeni (Oshawa-Whii-by):: Mr. Speaker, I have a supplementary, but I do not know whether or not the Prime Minister intends to reply to the former question.


Pierre Elliott Trudeau: I replied to that question yesterday, Mr. Speaker.


John Edward Broadbent: Mr. Speaker, my supplementary for the Prime Minister is with reference to what he said a moment ago. Did I understand him to say that his government would have its own position clear by Monday next as to whether or not they would oppose the installation of an A.B.M. system either in Canada or in the United States?


Pierre Elliott Trudeau: No, Mr. Speaker; I said the contrary. I said it was very doubtful that by Monday we would be able to look into all the complex implications of a statement made by the United States government only on Friday.



POST OFFICE DEPARTMENT


David Réal Caouette: Mr. Speaker, I would like to direct a question to the Postmaster General.
Last Saturday, on the television program "Les ccuche-tard", the Minister of Labour said the Postmaster General was not dead but not strong. I would ask the minister whether the threat of a postal strike in Canada has been completely averted.


Hon. Eric W. Kierans (Postmaster General):: Mr. Speaker, I think the threat of a national strike is now past. However, negotiations must take place with the unions and a solution is forthcoming. Grievances have been recognized. We have now reached the fourth level of proceedings and we are waiting for the appointment of an arbitrator.


David Réal Caouette: Mr. Speaker, I want to ask a supplementary question.
Considering the present discussions, is the minister in a position to say whether the services and the ability of his colleague, the Minister of Labour, are being used?


Eric William Kierans: Yes, Mr. Speaker.



MONTREAL-USE OF ARMED GUARDS IN PARCEL DELIVERY

Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the Postmaster General. Since the position of outriders on the mail stage went out of use a hundred years ago in Canada and the United States, is the minister now resurrecting this' position out of fear, in respect of the situation in Montreal, where armed guards have to accompany the parcel post?


Mr. Speaker:: Order. The hon. member for Churchill.



REPRESENTATIONS OF POSTMASTERS

['In other words, on the late, late show.']
Mr. Robert Simpson (Churchill):: Mr. Speaker, my question is also for the Postmaster General. Can he say whether he has been able yet to find a solution in respect of the request of the postmasters?


Eric William Kierans: Yes, Mr. Speaker. The deputy minister met with a group of staff postmasters. They presented one or two requests to him, and they declared yesterday that they were perfectly satisfied with the responses. I am not quite clear exactly what the representations were. If they had to do with the group of staff postmasters and an announcement concerning salary increases, I would have to say that the Public Service Alliance of Canada is the bargaining agent for the program administration group. I do not know whether the hon. member is talking about the program administration group. However negotiations are under way between this group and the Alliance. I am as anxious as I imagine the management of the Post Office is for the negotiations to come to a successful conclusion.
March 18, 1969


Robert Simpson: Mr. Speaker, when I first posed the question to the Postmaster General I made a specific request in respect of salaries. I believe this was about mid-February.


Eric William Kierans: Mr. Speaker, there were a number of other matters included in the question asked, one of which was whether we would consider closing post offices where the postmasters themselves were nearing the retirement age. That was one question among others. At that time the deputy minister said we would certainly consider this if the postmaster was within eight or nine months of retirement. Obviously we would not close the post office prior to that retirement date.


Mr. Jack Marshall (Humber-St. Georges-Sl. Barbe):: Mr. Speaker, in view of the many hundreds of letters of complaint I am receiving from my constituency regarding the closing of some 60 post offices, will the minister explain how I can mail my replies when there are almost no post offices left?


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.



George Harris Hees: Mr. Speaker, in view of the very generous allotment of TV and radio time given Mr. Cardinal who was representing the government of Quebec in Paris a short time ago, and the very cavalier treatment meted out to our Secretary of State, and the complete refusal of the government to permit the use of TV and radio time, has the government made any official protest?


Pierre Elliott Trudeau: Mr. Speaker, I understand the facts are not those which have been recorded in some papers, but that the French a offert-did offer -some air time to the Secretary of State at a time when he had to be back here in Ottawa on another engagement.


George Harris Hees: In other words, on the late, late show.



ATOMIC ENERGY


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I should like to direct a question, of which I have given notice, to the
Inquiries of the Ministry Minister of Industry, Trade and Commerce in his capacity as the minister acting for the acting minister of energy, mines and resources. My question arises from a news release by the minister on Friday last concerning additional production of heavy water and prospective sales of heavy water nuclear generating stations abroad. Does the government contemplate additional purchases of uranium and may we shortly expect an announcement of the re-opening of uranium mines in Canada?


Jean-Luc Pepin: Mr. Speaker, there is no change in the government's policy on uranium; uranium is being purchased at this moment for the stockpile. In respect of the possibility of re-opening mines or opening new mines, the experts I could consult, between the time I received notice of this question and now, feel that this may have to wait another year until the big requirement for uranium occurs. Nobody can be sure, however, of what the plans of utility companies in Canada and abroad are in their long term planning for uranium supplies.


Gordon Harvey Aiken: Mr. Speaker, does the bidding on overseas power plants include the supply of uranium oxide?


Jean-Luc Pepin: It does generally, at least for the first fuel loading.


Mr. Ed Schreyer (Selkirk):: Mr. Speaker, can the minister say whether there has been any change recently in the long standing policy that any country purchasing fissionable material from Canada must subject itself to certain conditions?


Mr. Speaker:: I would think the hon. member is now asking for a statement of policy and I doubt that this can be done at this time.



FINANCE


Mr. Max Salisman (Waterloo):: Mr. Speaker, in view of the success of the Minister of Finance in his moral suasion of banks in regard to the $400 million refinancing operation, can he say whether he is now prepared to use the same sort of moral suasion on the Bank of Canada to see that the prime rate is not increased?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I am pleased to say that the bond issue went very well, in spite of the fact

March 18. 1969
Inquiries of the Ministry that the interest rates were raised in the United States in the midst of our bond issue.


Max Saltsman: I am very pleased to receive the optimistic report from the minister, but I am wondering whether he will answer my question regarding the intent to increase the interest rate.


Edgar John Benson: I suggest to my hon. friend that he read the Bank Act.



HOUSING


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I should like to ask a question to the Prime Minister.
We have just learned today that the federal government intends to invest more than $200 million in order to help substantially the urban renewal program in the city of Hull. Can the Prime Minister tell us if this report is true and official and if he is ready to make a statement on this subject today?


Mr. Speaker:: The hon. member knows that he may not ask a minister or the Prime Minister to confirm or deny a news report.



INDIAN AFFAIRS


Mr. Len Marchand (Kamloops-Cariboo):: Mr. Speaker, I have a question on Indian Affairs for the Minister without Portfolio in connection with the dispute over the staking and recording of mineral claims between Bethlehem Copper Corporation and the Cooks Ferry Indian band of Spences Bridge, British Columbia. Can the minister assure the house that the Indian interest in this dispute is being safeguarded and that the Department of Indian Affairs and/or Justice will be represented in the dispute so that the responsibility of the federal government regarding the Indian people is carried out?


Hon. Robert K. Andras (Minister without Portfolio):: Mr. Speaker, I can give the house that assurance. There have been consultations between the officials of the Department of Indian Affairs and those of the Department of Justice, and there will be a representative of the federal government present when the case opens tomorrow. In addition to that, the Cooks Ferry band have hired what I am told

is very competent counsel. All steps will be taken from the point of view of the federal government to protect the interests of the Indian people involved.


Len Marchand: A supplementary question, Mr. Speaker. Can the minister also advise the house if he or his department would take steps, or if steps are being taken, to amend the British Columbia Indian mineral resources act so that such disputes will not occur again, and maximum benefit from mineral resources on Indian reserves can be realized by the Indian people?


Robert Knight Andras: That course of action is being given deep consideration now, Mr. Speaker.



FINANCE


Mr. A. D. Hales (Wellington):: Mr. Speaker, I would like to direct my question to the Minister of Finance, and ask whether his colleague the Minister of Indian Affairs and Northern Development is presently touring Europe in search of funds for Canada,


Edgar John Benson: Not funds for the government, I can assure you, Mr. Speaker.


Alfred Dryden Hales: A supplementary question, Mr. Speaker. Could the minister elaborate on the purpose of the trip?


Edgar John Benson: Mr. Speaker, I think the hon. member would have to ask the Minister of Indian Affairs and Northern Development. I did not ask him why he was going to Europe.



LABOUR RELATIONS


Mr. Georges Valade (Sainte-Marie):: Thank you, Mr. Speaker, for giving me the opportunity to do my physical exercises during the question period.
I would like to direct to the Minister of Labour a question deriving from the statement he made over the weekend, but in his absence I shall direct it to the Prime Minister.
The Minister of Labour said over the weekend that closing the harbour in Montreal would bring a solution to the present dispute. I would like to ask the Prime Minister whether the Minister of Labour was stating government policy when he suggested tc close the
March 18. 1969

harbour in Montreal for one year as a solution to the labour dispute there and whether it is the only means the government is proposing to bring about a settlement in this dispute?


Mr. Speaker:: As far as a statement made outside the house is concerned, the hon. member can only ask the Prime Minister whether the minister's statement represents government policy and I think it is what he was suggesting in the first part of his question.


Pierre Elliott Trudeau: Mr. Speaker, the Minister of Labour sometimes takes devious ways to achieve generally happy results; perhaps he was compelling the hon. member to do not only physical exercises, but intellectual exercises as well.


Georges-J. Valade: Mr. Speaker, I would like to ask the Prime Minister whether, with the help of his own intellectual exercises, he has a solution to offer to settle the dispute before the situation deteriorates further?


Pierre Elliott Trudeau: I think the hon. member might wish to direct his question to the Minister of Labour, Mr. Speaker.

Hon George Hees (Prince Edward-Hasl-ings): A supplementary question, Mr. Speaker. As the port is in the Prime Minister's constituency, may we take it that it will not be allowed to close?


EXTERNAL AFFAIRS
Mr. Robert Muir (Cape Breion-The Sydneys):: Mr. Speaker, my question is for the Prime Minister. Arising from the statement made yesterday by the Secretary of State for External Affairs, that the onus is on the government of France to issue an invitation to the Prime Minister to visit France, may I ask the Prime Minister whether as a result of the minister's statement there has been any communication from the French embassy in Ottawa. In other words, has France taken the hint?


Pierre Elliott Trudeau: Mr. Speaker, since yesterday I have not had any rapport with my neighbours.


Some hon. Members:: Oh, oh.


Pierre Elliott Trudeau: But I must say that it would have to be a pretty pressing invitation because I have just heard that "La Perouse"
Inquiries of the Ministry has lost one star, and one of the incentives I had for going to Paris has now gone.



FINANCE


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Now that the Prime Minister has cleared up that mystery, could he clear up for us the purpose of the visit to Europe of the Minister of Indian Affairs and Northern Development?


Pierre Elliott Trudeau: The minister has gone to Europe to interest various European governments and sectors of the population in the development of the Canadian north from various points of view, -capital investment, immigration, development of various kinds.


Mr. Maclnnis:: Resign, Benson.


Pierre Elliott Trudeau: I guess there is some problem over there, Mr. Speaker.


Alfred Dryden Hales: I rise on a
point of order, Mr. Speaker. I just finished asking the Minister of Finance a question and he advised the house that he did not know why the Minister of Indian Affairs and Northern Development was in Europe. The Prime Minister has now given us the answer to the question. I think the Minister of Finance owes us an apology for his answer.


Edgar John Benson: Mr. Speaker, I do not owe an apology, at all. I simply said that the Minister of Indian Affairs and Northern Development was not in Europe borrowing money for the government. As a matter of fact, the exchange reserves of Canada are standing up very well, much to the-


George Harris Hees: Considering the way the government has been run.


Edgar John Benson: -consternation of the opposition, and we have no reason for wanting to borrow funds to increase our exchange reserves.


Robert Lorne Stanfield: On a point of order, Mr. Speaker, I agree that the Minister of Finance does not necessarily have to answer questions directed to him. On the other hand, I do not think he should trespass upon the good nature of the house, and yourself, sir, and make a statement that bears no relation at all to the question directed to him.

March 18. 1969
Inquiries of the Ministry [Translation]



REQUEST FOR STUDY OF INTEREST RATES

Mr. Henry Lalulippe (Complon):: Mr. Speaker, I should like to put my question to the Minister of Finance.
Would he tell the house if he or the government intends to study thoroughly the problem of the present interest rates, since they are at their highest in this century and do not seem to encourage foreign investments?


Mr. Speaker:: The hon. member's question seems to be too comprehensive and should be put on the order paper.
IEnglish]



VETERANS AFFAIRS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. In view of the large number of letters that many of us are receiving from registered nurses at Westminster hospital in London, Ontario, may we assume that members of parliament from that area have made representations to the minister; and can he tell us what assurances he has given them that the subject matter of these letters will be dealt with, namely, the shortage of registered nurses at this hospital?


Mr. Speaker:: Order, please. I suggest to the hon. member that it is certainly not in order as a question at this time to ask whether hon. members have made representations to the minister.


Stanley Howard Knowles: Then, Mr. Speaker, may I simply ask the heart of the question. What steps is the minister taking to meet the problems created by the shortage of registered nurses at Westminster hospital?


Mr. Speaker:: I would think the question could be considered at the time of adjournment.



FISHERIES


Mr. James A. McGrath (Si. John's East):: Mr. Speaker, I would like to direct a question to the Minister of Fisheries. It refers to a reply given by his parliamentary secretary

yesterday to a question posed to him regarding foreign vessels that were killing seals inside the three mile limit at a time when the minister was making his statement outside the house on Saturday. My question is: Has the government taken any action against the four Norwegian vessels that were caught killing seals within the three mile limit, similar to the action taken against the Japanese vessel on the west coast?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, the hunt for seals off Labrador is under the closest possible surveillance. The fisheries protection vessel, the Cape Freels, is there; we have aircraft there, and a Department of Transport icebreaker is on its way. We know now that there are five Norwegian vessels inside our territorial limits. They have been warned both by the Canadian authorities and by the Norwegian authorities not to take seals. If we find they are killing seals we will of course have no alternative but to take the same action as we took with respect to the Japanese vessel off the west coast.


James Aloysius McGrath: A supplementary question, Mr. Speaker. I refer the minister to the reply given yesterday by his parliamentary secretary in which he left no doubt about the fact that they were taking seals. As a consequence, why have not these vessels been arrested?


John (Jack) Davis: Mr. Speaker, this has yet to be established as a fact.


Some hon. Members:: Oh, oh.


John (Jack) Davis: We have had one fisheries officer on board one of the Vessels. We have no final evidence that they have taken seals within Canadian waters. But as I say, we have the situation under very close surveillance.



SEALS-REQUEST FOR EXTENSION OF SEASON

David Samuel Horne MacDonald: I have a supplementary question, Mr. Speaker. Yesterday I put a question to the minister's parliamentary secretary; today I wish to add the following question to it. Has the minister received from a number of fishermen in Prince Edward Island and from the minister of fisheries of that province a strong request to extend the seal hunt season until the allocation has reached 50,000 pounds?


John (Jack) Davis: have received a recommendation to that effect from the minister of fisheries of Prince
March 18, 1969

Edward Island. We find however that less than one third the normal number of seals have entered the Gulf of St. Lawrence. Some
35,000	whitecoats have been taken; the quota is normally 50,000. A careful review of the situation after the submission was received from the minister of fisheries indicates that the number of seals immediately north of Prince Edward Island is much smaller than had originally been expected.



SEALS-REPRESENTATIONS URGING TERMINATION OF KILLING

John George Diefenbaker: I have a supplementary question, Mr. Speaker. Speaking of representations, may I ask the Minister of Fisheries whether he has received innumerable and voluminous representations from all parts of Canada asking for an end to this seal killing, and will consideration be given by the government between now and a year from now in respect of this matter and something provided by way of substitution for those who otherwise would be deprived of their earnings?


John (Jack) Davis: Numerous representations have been made by Canadians and an even greater number of representations by people from other countries in this respect. I would like to assure the right hon. gentleman that we will give every consideration to whether or not the hunt should be continued next year.


James Aloysius McGrath: I have a further supplementary question, Mr. Speaker. As a representative of the fishermen and not of the seals I should like to put the following question to the minister: Would he give serious consideration to having this matter referred to the Standing Committee on Fisheries?


John (Jack) Davis: It sounds like a very good idea, Mr. Speaker.



POST OFFICE DEPARTMENT


Mr. Arnold Peters (Timiskaming):: I have a question for the Postmaster General. Will the minister give consideration to giving preference to the sorting of first class mail over the weekend to ensure that it is given priority for Monday delivery?


Eric William Kierans: We already do so, Mr. Speaker.
Inquiries of the Ministry REFERRAL OF OUTSTANDING ISSUES TO MEDIATION PROCEDURES


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. I should like to ask the Postmaster General whether, arising out of the apparent inconclusiveness of his talks with the president of the Letter Carriers Union, he is now prepared to agree to a mediator being invited to settle the outstanding issues which are a constant threat to a sure and speedy mail delivery-not just the grievance procedure he has announced, but a reference of the outstanding issues?


Eric William Kierans: There are only two sources for the conclusion that my meetings with Mr. Decarie yesterday were inconclusive, one of which is myself, and I did not give the Leader of the Opposition any information that would lead him to draw such a conclusion. The actual fact is that we had a very useful and pleasant discussion. So far as I know, the letter carriers are satisfied that the four main issues are proceeding to adjudication. They asked neither for arbitration nor for mediation.



INQUIRY OF THE MINISTRY

Donald MacInnis: I have a question for the Prime Minister arising out of the question asked by the Leader of the New Democratic party in reference to Bomarc sites. The Prime Minister indicated that he was not sure of the stand taken by the former prime minister. Was it not the question of Bomarc sites that brought on the remarks by the Prime Minister that Mr. Pearson was the unfrocked priest of peace?



TRANSPORT


Mr. Melvin McQuaid (Cardigan):: I have a question for the Prime Minister. I should like to ask him whether he has received a request from the premier of Prince Edward Island asking the government to review its decision not to proceed with the Northumberland Straits crossing, and if that request has been made what answer has been given to the premier?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I did receive such a request and I answered the premier's telegram. I do not think there is any reason not to make it public but I would not want to do so without the premier's authorization.

March 18. 1969
Inquiries of the Ministry



INQUIRY AS TO TABLING OF STANFORD STUDIES

David Samuel Horne MacDonald: I have a supplementary question, Mr. Speaker. Would the Minister of Transport indicate to the house now when the documents having to do with Stanford Research Institute studies, which he assured me on three previous occasions would be tabled, will in fact be tabled in the house?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, perhaps I
should respond to that question. The replies from most of the departments have been received. I understand that a request for their approval has been put to the appropriate provincial authorities and that at the moment this authority has not been received from all provincial governments. As soon as an affirmative reply has been received, we will table the documents.


David Samuel Horne MacDonald: When this notice of motion for the production of papers was agreed to, had the government not already consulted the provincial authorities in order to give that consent?


Mr. Speaker:: Order, please.



AGRICULTURE


Mr. R. E. McKinley (Huron):: My question is for the Minister of Agriculture. Now that the necessary estimates have gone through the house, can the minister say when the phasing out payments to the sugar beet growers in southwestern Ontario will be made?


Hon. H. A. Olson (Minister of Agriculture):: I am not sure that I can give the exact date without checking, but so far as I know, now that the authorization has been given all that is required is the mechanical process of issuing the cheques.



HOUSING


Mr. John Gilbert (Broadview):: My question is directed to the Minister of Transport in charge of housing. When will the minister bring in legislation relating to the recommendations of the task force report on housing?


Hon. Paul Hellyer (Minister of Transport):: I hope there will not be much delay. Satisfactory progress is being made. There is quite a

large package of amendments that we are considering, and I hope I will be able to report to the house quite soon.



NEW DEPARTMENT-DISCUSSIONS ON URBAN RENEWAL

John Gilbert: I have a supplementary question for the Prime Minister. When will the government set up the new ministry of housing and urban development recommended in the report of the task force on housing?


Mr. Lincoln M. Alexander (Hamilton West):: I have a supplementary question, Mr. Speaker.


John Gilbert: On a point of order, Mr. Speaker. I believe the Prime Minister was ready to answer my question.


Mr. Speaker:: The hon. member for Hamilton West has a supplementary question. Perhaps the two questions can be answered at the same time.


Lincoln MacCauley Alexander: Thank you, Mr. Speaker. My question is directed to the Minister of Transport. I see him over there smiling at me and I know he knows what I am going to ask him. About a week and a half ago the minister assured me there would be meetings with several cities, particularly with the city of Hamilton, in order that discussions take place with respect to urban renewal. Has the minister had any such meetings, and if so with what cities?


Paul Theodore Hellyer: My hon. friend will be pleased to know that I have spent quite some time looking at that proposal in the last day or two and I hope I will be in a position to meet representatives of the city some time next week.


Lincoln MacCauley Alexander: I have a supplementary question, Mr. Speaker. The minister's answer is optimistic but I did not get the name of the city to which he referred. Perhaps he would clear it up for me.


Mr. Speaker:: Order, please.


John Gilbert: My supplementary question is directed to the Prime Minister. When will the government set up the new ministry of housing and urban development recommended in the report of the task force on housing?


Pierre Elliott Trudeau: I do not know of any such plans, Mr. Speaker.
March 18, 1969


Georges-J. Valade: I have a supplementary question for the Minister of Transport. I should like to ask him whether he would consider bringing the Prime Minister with him to the next meeting with the municipal authorities on housing, since the latter was so warmly received in Montreal during the weekend?



RENEWAL PROGRAM IN HULL

Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I should like to put a question to the Prime Minister.
Could he tell the house whether the federal government intends to give shortly some financial assistance to set up an urban renewal program for the city of Hull and its vicinity?


Pierre Elliott Trudeau: Mr. Speaker, for quite a long time the tripartite board in which the federal government and those of Quebec and Ontario are represented has been discussing the future of the national capital. It has gone through certain stages and the federal government is rather anxious to go ahead.
But, as we have always thought that federal-provincial co-operation is necessary, especially in that field which comes mostly under provincial jurisdiction, we are now more or less waiting for an agreement which has not yet been finalized. It remains, Mr. Speaker, that the federal government is rather eager to proceed.



OAKVILLE, ONT.-BOARDING UP OF UNITS

Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Minister of Transport in his capacity as minister in charge of housing. Did Central Mortgage and Housing Corporation consider the needs for low income housing at Oakville, Ontario before boarding up some 70 housing units, and has the minister received requests that such housing be made available? If so, with what reaction?


Mr. Speaker:: Order. I think that question, which is very similar to one asked previously, should be placed on the order paper or discussed at the time of adjournment.


Robert Jardine McCleave: Ten o'clock.
2918C-4271
Inquiries of the Ministry AIRPORTS



GANDER, NFLD.-STATUS OF ADMINISTRATION

Mr. John Lundrigan (Gander-Twillingaie):: Mr. Speaker, my question is for the Minister of Transport. Has the minister received a copy of a brief from the Gander civil service association regarding elevation of the airport administration to regional status? If so, what action does the government plan to take?


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



NATIONAL DEFENCE


Edward Richard Schreyer: Mr. Speaker, my question is directed to the Minister of National Defence. The minister received an official delegation from Manitoba yesterday in relation to the announced closing of the Canadian Forces base at Rivers. My question is: Will the minister agree to table in this house or otherwise make public the document showing the timetable for the phasing out of those bases that are slated for phasing out?


Hon. Leo Cadieux (Minister of National Defence):: With respect, Mr. Speaker, I think the assertion of the hon. member that an announcement had been made on the closing of Rivers is incorrect. As we have indicated on many previous occasions, this is a marginal base and we are considering its future. As a result of the discussions which took place yesterday this matter will be investigated further, and-


Mr. Speaker:: Order, please.



PRUDHOE BAY-COMMON CANADA-U.S. MARKET

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I wish to thank you for recognizing me again. I should like to direct this question to the Minister of Trade and Commerce, and ask him whether the government task force on oil policy is currently studying the significance for Canada of the Prudhoe Bay discoveries, and has the government task force been asked to consider the possibility of a common market in oil between Canada and the United States?


Jean-Luc Pepin: Mr. Speaker, the task

March 18. 1969
Inquiries of the Ministry force has been working on all aspects of the oil situation, as recently modified by the Prudhoe Bay discoveries and also by possible findings on Canadian territory. The Acting Minister of Energy, Mines and Resources is in Calgary today speaking to a group of oil men about these matters.


Mr. Speaker:: The hon. member for
Battleford-Kindersley.


Steve Eugene Paproski: A supplementary question, Mr. Speaker.


Mr. Speaker:: Order. I have to bring to the attention of the hon. member that we are about reaching the end of the question period, and I thought that we should give an opportunity to the hon. member at the other end of the house.


Mr. Rod Thomson (Ballleford-Kindersley):: Mr. Speaker, my question is to the Minister of Industry, Trade and Commerce and is supplementary to the last one. Would the minister comment on and/or table in this house the feasibility study made by his department in connection with a possible oil line to Montreal from western Canada?


Jean-Luc Pepin: Mr. Speaker, this is an internal document and represents a contribution of the Department of Industry, Trade and Commerce to the over-all study being made by the task force.



BILINGUALISM AND BICULTURALISM


[Stage Direction]
Mr. Andre Fortin (Loibiniere: Mr. Speaker, I wish to ask the Prime Minister a question.
Can he assure the house that the report of the Laurendeau-Dunton Commission on bilingualism in the public service will be published in the spring of 1969 at the latest, as was announced earlier?
Mr. Speaker:: It seems to me the hon. member is repeating a question exactly as it was asked a few days ago.


André-Gilles Fortin: On a point of order, Mr. Speaker.
Last week, I asked the question and the Prime Minister did not seem to know what commission was involved. Therefore, I want to tell him it is the Laurendeau-Dunton Commission and I request the same information he could not provide then.


Pierre Elliott Trudeau: Mr. Speaker, I believe the hon. member is referring to Volumes III and IV of this Commission's report. As far as I know, no date was given for the publication of those papers. True, some time ago newspapers mentioned that parts of the volumes had been given to the Queen's Printer. I checked and the information is unfounded. Perhaps it concerned working papers or other documents, because at the time I inquired, two weeks ago, Volumes III and IV were not at the Printing Bureau. Besides, the Commission did not say when the volumes would be published; of course, it makes its own decisions in that regard and there is nothing I can do.



GOVERNMENT ORDERS


[Stage Direction]
ALLOTTED DAY, S.O. 58 (4)	(a)-UTILIZATION
Gilbert F. Rondeau: Mr. Speaker, I move:
That, in the opinion of this house, the government should consider the advisability of making use of the powers and resources of the Bank of Canada for the purpose of alleviating the taxation burden which weighs upon Canadian, provincial and municipal taxpayers and for undertaking an efficient struggle against poverty in order to establish a just society.
Mr. Speaker, this is the first time the Ral-liement Creditiste is accorded the privilege of introducing a non-confidence motion under the new Standing Orders. We are therefore happy of this opportunity, as an opposition party, to draw the people's attention to some points apparently neglected or overlooked by the government, and to the pressing problems the government has failed to tackle.
Mr. Speaker, this debate and the solutions we are going to propose will at least make the people look into the policies of the Rallie-ment Creditiste, even though the government, because of its arrogance, its apathy or its indifference for the Canadian taxpayers, turns a more or less deaf ear. Whether the government or its members realize it or not, or whether they even deny it, the situation prevailing now in Canada is of the most serious nature.
Governments, and the federal government in particular, are in need of money. They are asking more and more of the Canadian taxpayer, as the President of the Treasury Board
March 18, 1969

(Mr. Drury) commented when the Main Estimates for 1969-70 were tabled in the house. For that period, the estimates totalled $11,858 million as compared to $10,826 million for
1968-69, an increase of $1,032 million. The minister added:
There may be a need, as in the past, for supplementary estimates in the course of the year to meet urgent and unforeseen requirements.
So, that means, Mr. Speaker, that, when money is scarce, the government will be compelled, for the 1969-70 period, to ask for $1,032 million more from the Canadian taxpayer.
For its part, the government of Quebec announced last week estimates of $3,176,323,000 for 1969-70, an increase of $384,708,000 over the previous year. The Minister of Finance of the province of Quebec (Mr. Dozois) has not yet made known the rates of the new taxes that he will be compelled to levy and of which the taxpayers of the province will hear soon enough.
In Ontario, the government announced, a few days ago, estimates of $2,998 million as well as new taxes on cigarettes, liquor, meals, hotel rooms and production equipment. It also made known its intention to invade the field of personal and corporate income tax.
Those are a few examples of the urgent needs of the higher levels of government. Municipalities, corporations and individuals are not safe from similar worries. Far from it.
In Montreal, for instance, the property tax recently went up by 24 per cent and the municipal authorities, shorter of money than ever, had to negotiate a $26 million loan on the money market in West Germany. It is not the first time that governments or corporations have to resort to foreign financing to make up for the lack of Canadian funds needed to ensure the social development of the country.
The Ontario and the Quebec governments had to get loans from Germany during the year. The city of Sherbrooke had to apply to German interests to obtain $1 million. Hydro-Quebec is regularly negotiating with West Germany, and its commitments with German bankers now exceed $100 million. Why? Because money is scarce and costly in Canada.
We can therefore assume, Mr. Speaker, that all these loans negotiated by the governments, these sales of government bonds, of savings bonds especially at high prices have as a result incited the holders of municipal bonds or of corporations' preferred shares to sell them and to buy federal government bonds.
Use of Bank of Canada to Ease Tax Burden This puts the municipalities in a bad situation and compels them to apply to foreign financial enterprises.
The Minister of Finance (Mr. Benson) clearly recognized this on January 7 last when in a speech before the Canadian Club in Ottawa he expressed his worry about the slackness of the bond market. No wonder, therefore, that the Montreal newspaper The Gazette published on January 9 the following rebuke aimed at the Minister of Finance. I quote:
a (3:00 p.m.)

The state of the bond market, especially the market for bonds with longer terms, is exactly what one might expect as the result of the government's policies over many years. The government has never really controlled its spending. And when it has spent heavily in a period when inflation was general, it has only spread inflation on its way, almost with its blessing.
The most that the government has done in recent budgets is attempt to reduce the yearly rate of increase in its spending, never to cut back the spending from what it was the year before. But even this has not been successful. The government, in the spring, promised a balanced budget. But in the autumn it faced a fantastic deficit.

And the editorial writer concluded: [English]
Without bonds and without long-term bonds neither governments nor businesses can function properly. But the credibility gap in the bond market will have to be closed. And it will not be closed until the government closes the credibility gap in its own policies. So long as present policies continue, no one can trust the money values of the future.
Mr. Benson does well to weep. But he weeps for the wrong reasons. And, surely, he must know it.


We will hear about the Hellyer report and the resulting projects, but everything seems to indicate that the Hellyer proposals were not received very warmly in Canada. I have here a few comments picked at random from various Canadian sources, and made after the Hellyer report had been published:
On January 30, the Director of the Canadian Conference on Housing, Canadian Welfare Council, Mr. Michael Wheeler said this:

The federal task force on housing report offers nothing concrete for the housing needs of the more than one million Canadian families with incomes below $5,500.

And now, here is what the comptroller of the city of Toronto, Mr. Allan Lamport, had to say, as reported in the Globe and Mail on January 9:

"Transport Minister Paul Hellyer's study group on housing is the biggest 'whitewash' I've ever seen", Toronto controller said yesterday.

And the article goes on to say:

Mr. Lamport said the group inquiry into housing problems avoided doing the one thing he should have done-setting a ceiling on interest rates for mortgages on houses.

Last January 8, in an editorial presented on Quebec-Canada Television, Limited, on channels 4 and 5, which today serve 473,000 viewers, the following was heard:
What will result from the Hellyer report to improve the construction of single housing? It is certainly not by increasing its interest rate from 8J to 9g per cent, as the Central Mortgage and Housing Corporation has done, that the central government will encourage Canadians to build. Nor is it by maintaining the 11 per cent tax on building materials that the governments will encourage builders to erect housing complexes.
Now here is what the Confederation of National Trade Unions had to say in its annual memorandum to the Canadian government last February 18. I would very much like to know what the Minister of Forestry and Rural Development (Mr. Marchand) thinks of the statement of his successor at the head of the CNTU.
March 18, 1969

[DOT] (3:10 p.m.)
I quote:
One word describes it: deceiving. If your government were to implement those recommendations, it would, on the whole, further consolidate the foundations of this unjust society which is ours. Not one recommendation capable of solving the housing problem, the problem of the low income and even of the average income groups: encouragement to run oneself into debt for life, through the recommendation aimed at extending the terms of reimbursement, which is an apology of the efficiency of private enterprise in a field where the social needs are tremendous and where private enterprise has failed, the hoax and false pretences connected with the concept of property ownership by individuals who, over a period of 40 years, will pay three times over for their homes. It is readily realized that workers and wage earners want at least to be home owners in a society where tenants are systematically abused. At any rate, the task force is merely offering an illusion of property ownership to the people.
Abolition of the 11 per cent tax on building materials, if accepted, will clearly not be enough to reduce materially the cost of housing as a counter-measure to the present interest rate of 9.3 per cent.
The Hellyer report has failed to deal with the basic problem and to tackle the root of the evil which is eroding the society as a whole, that is, the present financial system.
Here is an excerpt from the report concerning the financing of housing:
To achieve this minimum target of one million new housing units by 1973, will require new housing capital of about 20 billion dollars. The task force believes that the vast majority of these funds can be provided by the private sector. Over the past 14 years lending institutions, primarily insurance companies have provided 6.6 billion dollars or some 50 per cent of their total assets.
In view of these findings and of this recognition by the Hellyer task force, we are surprised, as should all Canadians, that the government has decided to subject life insurance companies to the income tax act during the current, and almost inexhaustible, fiscal year and to dry up that source of available funds for the construction of new housing units.
What will be the result of that policy on life insurance companies? First of all, with this centralizing act we can expect to see several companies merge which otherwise, because of their weakness, could not continue to offer enough protection considering present needs.
And so, companies which previously made conservative investments, in mortgages, government bonds and low yield but safe debentures will be forced to improve the quality of their investments to cope with the cost of
Use of Bank of Canada to Ease Tax Burden living index, and to look increasingly to coownership in the form of industrial, financial and commercial shares in order to increase their revenue and share it with the policy holders through reductions in premiums or higher profits.
The high premium on Canada savings bonds has attracted many investors who sold their low yield industrial and municipal bonds to purchase Canadian savings bonds.
However, it must be recognized that these high premium bonds impose a heavy burden on future generations which will have to pay the high interest on those bonds as well as redeem them at maturity.
Need I point out that those bonds also channel Canadian savings towards certain forms of security, to the detriment of the bonds and industrial shares market, thereby depriving industry in general from the funds it needs to expand.
As I also pointed out, by turning to private savings to finance its debt and to taxes on insurance companies the government deprives industry and construction of the money they need to develop.
[DOT] (3:20 p.m.)
It follows that the construction industry for instance will be unable to meet the present requirements due to a shortage of available capital and the inaction or apathy of the federal government.
Mention should be made of the credit deserved by the Minister of Transport (Mr. Hellyer), responsible for the report on housing and urban development, who in some way anticipated this shortage of available capital by including in his report the following recommendation:
Serious consideration should be given to the establishment of a Central Mortgage Bank to provide additional liquidity for existing lending operations and as a necessary prerequisite to the creation of new mortgage institutions.
But how can we reconcile this admission when the report immediately adds the following:
While lacking any panacean solution to the problem of high interest rates, the task force believes one concrete step can be taken which will have a positive effect on the level of mortgage rates in Canada. Last year the federal government dropped the previous practice of setting the maximum NHA rate at a fixed level and, instead, freed it at least in part to be adjusted automatically on a quarterly basis to a rate of 2.25 per cent maximum above that of long-term government of Canada bonds. This represented a major step forward from the fixed rate system under which housing suffered
March 18, 1969
6754	COMMONS
Use of Bank of Canada to Ease Tax Burden from a continual boom-bust cycle of financing depending on whether the rate so fixed was high or low in relation to interest rates generally.
This means that, on the one hand, the government regrets the high interest rates and, on the other hand, it authorizes the Central Mortgage and Housing Corporation to raise its own interest rate. This is incomprehensible. This is a makeshift policy. These are conflicting approaches.
For all these reasons, this government does not deserve the confidence of the people but should rather be put to the test of a nonconfidence vote. This is why we are pleased to move the motion which was read at the opening of my remarks.
This is how we could implement the proposals intended to reduce the interest rates and to promote housing construction in Canada as well as economic development.
Section 18 of the Bank of Canada Act, chapter 13 of the Revised Statutes of Canada 1952, deals with the operations and powers of the Bank. According to paragraph (1) (c) it may:
(c)	buy and sell or rediscount short term securities issued or guaranteed by Canada or any province-
-Those who always laughed at Creditiste proposals can see, on reading section 18 of chapter 13 of the Revised Statutes of Canada, that it would be very easy to put into practice the proposals of the Creditistes by applying the provisions of the present act.
According to paragraph (d) of the same sub-section, the Bank of Canada may:
(d)	buy and sell securities issued or guaranteed by Canada or any province, having a maturity exceeding two years-
-namely long-term securities. On the other hand, according to the provisions of paragraph (j), the Bank of Canada may:
(j)	make loans or advances for periods not exceeding six months to the Government of Canada or the government of any province on the pledge or hypothecation of readily marketable securities-
Under paragraph (k), the Bank of Canada may again:
(k)	make loans to the Government of Canada or the government of any province-


Sub-section (1) of section 20 provides, and I quote:
(1)	The bank shall act as fiscal agent of the Government of Canada without charge and, subject to the provisions of this Act, by agreement, may also act as banker or fiscal agent of the government of any province.
That, Mr. Speaker, is the role the Bank of Canada should have played toward the federal government and the provinces in order to enable them to liquidate their debts and honour their obligations, but the government has not used its sovereign power on matters of currency and credit to control credit and currency in the best interest of the economy of the nation, as it is stated in the preamble of the Bank of Canada Act.
If we refer to the debates that brought about the establishment of the Bank of Canada, the then Minister of Finance, Mr. Rhodes-a Progressive Conservative-said, and I quote from page 828 of the official report of the Debates of the House of Commons:
-the Bank should be available to the government specially in times of crisis and urgency.
He added, and I quote from page 828 of Hansard of the same year:
The dominion and provincial governments are also eligible for loans and advances-
Further on, he stated:
-The bank is to be required to act as fiscal agent of the Dominion of Canada without charge and may also by agreement act as banker or fiscal agent for the government of any province.
I am happy to see that the Minister of Finance is in the house, which should enable him to say once and for all what he thinks of the use of the Bank of Canada under the present law which authorizes the Bank to finance the federal government, the provincial governments and the public agencies.
However, when it was nationalized the following year by the King government, in practice the Bank of Canada became an organization of the federal Department of Finance and, for all practical purposes, it ceased being a bank for the use of Canadian governments. It therefore became an organization with centralization purposes, a federal control.
However, in spite of this, the Bank of Canada Act still allows that organization to favour the financing of provincial expenditures. I am quoting hereunder what Mr. Fran-gois-Albert Angers, director of l'Ecole des
March 18, 1969

Hautes Etudes commerdales, said in the brief he submitted to the Quebec royal commission on constitutional problems in 1956.
However, that last subversion was not a matter of course, even with the total nationalization of the Bank of Canada by the federal government, although it was greatly to be feared. In spite of its nationalization, the central bank should follow its own policy to follow, in agreement, of course, with the general policy, but not necessarily and immediately with all the views of the government. Even nationalized, the bank should be able, always in agreement with the general policy, to deal directly with banks and through them with the business world.


The Acting Speaker (Mr. Bechard):: Order. I regret to interrupt the hon. member, but his time has now expired. Does the house unanimously agree to allow the hon. member to carry on his remarks?


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: Not too
long.


Gilbert F. Rondeau: I thank you, Mr. Speaker, as well as my hon. friends for allowing me to pursue my remarks.
Mr. Angers stated further, and I quote:
It should buy a large number of provincial bonds according to the requirements of their fiscal policy in harmony with the country's general policy. After all, provincial governments are Her Majesty's sovereign governments, responsible to their own people. There is no more reason to put them under guardianship than to put under guardianship the central government itself or the businessmen, all of them being patrons of the banking system.
Technically, there is no objection to it at all and it is in no way detrimental to federal jurisdiction in monetary or banking matters.
[DOT] (3:30 p.m.)
The central government still retains control over the monetary and banking system. It determines the general direction of policy. However, such direction having been determined and involving, for instance, a fiscal policy that shows a deficit, one can hardly see why the Bank of Canada could not buy the province's bonds to help them finance their public works or their unemployment insurance, as it purchases those of the central government for identical purposes. In such a light, it would be comparatively easy to convince the provinces to try and avoid increasing taxes in periods of crisis. Electoral interests would contribute to make them accept both the idea and the financial facilities, because governments which tax heavily in difficult periods are never very popular.
Monetary expansion for public financing in emergencies is therefore allowed. But too many writers still consider it as using the printing press. Such an expression should certainly not be avoided. It is colourful. At least we should know that it can only be used now as a figure of speech.
In a system like the Canadian one, it is not the printing of money which constitutes monetary circulation. On the contrary, the latter calls for bills
6755
Use of Bank of Canada to Ease Tax Burden issued on request for withdrawal from banking deposits. Such deposits constitute today the real monetary circulation and permit us to settle most of our exchanges without using money. Money itself comes into it only for small current operations.
The solution arising out of these findings would enable each level of government, under the general direction of the central government as exercised in terms of its jurisdiction over banks and money, to resort to the policy of cyclical budgets and deficit financing. It would have multiple advantages, firstly with regard to the real independence of the provinces and then in connection with the realistic requirements resulting from the various conditions in Canada.
As Mr. Roland Parenteau has shown in the study already quoted, the economic conditions peculiar to each province vary extremely from one region to another in Canada. Some provinces, like British Columbia and Ontario, are really much more powerful and wealthy relatively speaking than the federal government; the latter partakes of their wealth but also of the poverty of some other provinces and sets the average.
Those two provinces are well able to finance all their needs without exception. Other provinces, such as the Western provinces, come next with regard to average income. Quebec follows, half-way between the two extremes, then come the Maritimes at the very bottom.
The case of each province can be studied later if this should prove necessary, at which time some national compensation can be provided if circumstances warrant it.
Nothing could be simpler than to transfer any provincial deficit to the national debt. Such questions, however, should be settled at interprovincial conferences, to start with, (possibly through a Council of provincial States that could be created along the same lines as the American Council of State Governments), and then at federal-provincial conferences.
Thus, interested parties would be made thoroughly aware of the problem facing the provinces in need of help and it would be possible to avoid a return to the senseless system, from the standpoint of autonomy, which consists in favouring (sic) all provinces, at the cost of their own financing and their freedom of action, on the plea that some of them are in a difficult situation.
Such are the solutions, Mr. Speaker, which the government should apply in order to solve the financial problem facing the government of Canada, the provincial governments and the municipalities that are looking for capital.
Such solutions would help private enterprise to reassert itself, to finance its own needs, and would allow private savings, once again, to look after the industrial needs of the country, instead of being used as a screen to hide the mistakes of the federal government.
For all those reasons, Mr. Speaker, we believe the government does not deserve the confidence of this house any longer.
March 18. 1969
6756	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden


Marcel Joseph Aimé Lambert: Mr. Speaker, in my opinion, we should look fully into the proposition of the amendment now before us. In order to make it easier for the Minister of Finance (Mr. Benson), I shall speak in English. Incidentally, my notes are in English.

This motion asks that the government should consider the advisability of making use of the powers and resources of the Bank of Canada for the purpose of alleviating the taxation burden. The motion does not, of course, determine in what way. It merely expresses a pious hope. The Bank of Canada is a central bank which has an essential role as the reserve bank organism in Canada, and it also participates as a central bank in a world context which in this day and age is even as important as its role within Canada. In any event, the motion expresses the pious hope that, in an indeterminate way which the proposer of the motion has not indicated, the government of Canada should make the Bank of Canada some sort of supine instrument at the beck and call of the Minister of Finance.
The hon. member was not here in years past when the role of the governor of the Bank of Canada or the relationship between the Minister of Finance and the governor was finally and clearly established. It was shown that there must be independance in the relationship between the governor of the Bank of Canada and the Minister of Finance. True enough, the Minister of Finance may give directions to the governor, but if the governor does not think they are proper he may insist upon receiving them in writing. The minister can give directions and give them in writing, but I suggest to the hon. member that the required degree of co-operation and, shall we say, degree of confidence and support as between the Minister of Finance and the governor of the Bank of Canada would then go right out the window.
In any event, the motion does not say in what way there shall be an alleviation of the burden of taxation. I suppose one might presume that the interest burden imposed upon the municipalities, the provinces and the federal government could be lowered

and I think this is the basis of the suggestion of hon. members to our left-by the Bank of Canada making loans apparently without limit to the various government organisms at an interest rate barely above zero, merely a nominal rate, and to that extent thereby perhaps reducing the expenses of the various governments.

Then we come to the words, "and for undertaking an efficient struggle against poverty in order to establish a just society." Now, what on earth does that mean? I must consider the motion in the sense of whether or not it is meaningful for me in order to be able to lend support to the hon. member. If it is meaningless to me, then I cannot lend my support.
I think back to my days in Alberta when social credit was coming in from 1935 to 1940. We saw the old cranking machine in the offing. This is all it was.


Gilbert F. Rondeau: Be serious.


Marcel Joseph Aimé Lambert: I am deadly serious. I was there. The administration of that time thought it could put it into effect but it was a complete and utter failure. The proof of the pudding is that that administration has completely abandoned any attempt at instituting social credit. In British Columbia, of course, the administration has never made any pretence in this regard. Its only allegiance is to a name because it had to find a name. On reflection I must say too that in what I was saying about finding a name not only do I say "an aim" but also "a name" for that administration.
I find it rather difficult to follow the thesis of the hon. member for determining that the Bank of Canada should be prepared at all times to purchase the securities or obligations of municipal governments, the provinces and the federal government apparently without restriction so that these bodies may carry out their works as they see fit.


Gilbert F. Rondeau: No.


Marcel Joseph Aimé Lambert: Then the hon. member should say so. He said that the Bank of Canada must purchase the obligations of the municipalities and provinces. Then the hon. member intervenes and says he did not say without limit.
[DOT] (3:40 p.m.)


Gilbert F. Rondeau: I did not say that.


Marcel Joseph Aimé Lambert: The hon.
member must say so because he says the Bank of Canada must purchase the obligations of these municipalities and provinces. The hon. member says he did not say without limitation. Who would establish the limitation? The Minister of Finance in effect would do so since the Bank of Canada would be acting as his agent. If in fact the Minister of Finance, were to establish such a limitation
March 18. 1969

we would immediately have reached the point where the Minister of Finance would be pressing with his fingers on the municipalities and provinces. Of course, that would be constitutional nonsense today.


Gilbert F. Rondeau: We agree.


Marcel Joseph Aimé Lambert: What is the hon. member asking that I should do? He is asking me to support this motion, at the same time recognizing the provincial government's right, which it now has constitutionally, to spend freely the money which now falls under its own jurisdiction. Having said this, we are told that the federal government must now impose a direct or indirect control on the provinces by agreeing that it will buy from province "x" or municipality "y" so many millions of dollars in securities in each and every year. What is this but an immediate control on the pursestrings? The federal government would then be manipulating the policies of these governments-provincial and municipal.
I can tell the hon. member how this works. In the province of Alberta the municipalities, school boards and hospital districts have not had at all times to go on the market for their borrowings. They go to an organization called the Alberta Municipal Corporation which is a centralized financing agency supported by the government of the province of Alberta. That agency goes out on the market and borrows money at more favourable rates.
The province can then say it does not borrow any money but in fact it was the government of Alberta that guaranteed the loans. In actual fact it was the municipality, corporation or other agency borrowing the money which was guaranteed by the Alberta government. On the other hand, when the city of Edmonton and the city of Calgary wished to carry out programs for roads, utilities or educational works and sought financing, they submitted their programs to the Alberta Municipal Corporation. It was then that body which told them how much they could undertake. If that is not indirect control through the exercise of centralized borrowing power, what is it? That is what is envisaged by this motion. This is the only interpretation possible to be placed upon it. This is the interpretation put forward by the hon. member for Shefford in his motion.
I cannot see how else you could have control by the Bank of Canada in respect of borrowing programs in provinces and municipalities. Is the Bank of Canada merely to be a supine instrument reacting to 29180-4281
Use of Bank of Canada to Ease Tax Burden individual actions and programs of municipalities and provincial governments? I hope this question will be considered seriously by hon. members. We will likely hear about these points. I want to know how deeply they are prepared to consider this matter. I suggest that as far as I am concerned their whole thesis completely disregards the role of the central bank. The Creditistes have completely forgotten the role of the Bank of Canada in relation to the International Monetary Fund and the World Bank. Of course, that is an attitude which-


Gilbert F. Rondeau: National first, and then you starve.


Marcel Joseph Aimé Lambert: 
going to do $75 million worth of roll-over. No new money in any of that!


Edgar John Benson: No.


Marcel Joseph Aimé Lambert: It is a good thing the minister is not going for new money because it is my information that the Canada savings bonds campaign of last fall, which was touted loudly by the minister as being such a resounding success-after all, the issue was paying over 7 per cent effectively-produced merely about $70 million of new money.


Edgar John Benson: It was $700 million.


Marcel Joseph Aimé Lambert: It was not
$700 million of new money, not at all. That is not what my friends in the bond business tell me. I ask, Mr. Speaker, how much of that money has remained and has not been reconverted? The Bank of Canada is also being used by the government to support these sagging bond issues. Every time the Bank of Canada intervenes and purchases bonds it places more money at the credit of the banks in their central reserves and expands the reserves on which they may lend. Because there is inflation, because the government cannot control it, because government bond prices are sagging, the bank is forced to act on behalf of the government. This results in a much greater flow of money.
The cash supply is today vastly in excess of what it was in April of 1963 when the Liberals took office. The net result, of course, is that since that time we have seen the cost of living index rise by about 25 per cent. It is now a little more difficult to see the true change. On January 1 we saw the new index which already, based on 1961, is up to 122 or 123. If 1961 is 100, it has already gone up well over 20 per cent. My time is limited on this type of motion, Mr. Speaker. All I can say is that the motion is far too vague, it certainly has not been spelled out, and I cannot support it.


Max Saltsman: Mr. Speaker, like the hon. member for Edmonton West (Mr. Lambert) I cannot support this motion. I understand the spirit that motivates this attempt at changing the system under which the Bank of Canada operates, that is, changing its terms of reference. I have been in this house for a number of years and have had occasion to listen to many of my hon. friends to my left. I have become aware of the fact that there is a genuine sentiment there that speaks on behalf of the frustration of the
March 18, 1969

little people in their part of Canada. But I cannot agree with some of their theories, as I am sure they do not agree with some of mine. I cannot appreciate the motivation that prompted this kind of motion because what my hon. friends are saying in effect is that in a country so rich and prosperous, in a country that has so many needs and in which people are not being looked after to the extent that our resources would seem to indicate they could be looked after, something is wrong and they turn to the Bank of Canada as a way out of this dilemma. I do not think that is the answer.
The hon. member for Edmonton West has said that the motion is little more than a pious hope. I have the feeling that since nothing else has had any effect on the Minister of Finance (Mr. Benson) and the government, perhaps a little piety is not out of place. When I listen to the hon. member for Edmonton West I cannot help thinking that there but for 200 years goes Adam Smith. I say this with great respect to my hon. friend because Adam Smith, like himself, was a great man.
I sometimes wonder how the hon. member can launch such criticism at this time when looking back on his own government's record in office he is faced with such an example of failure. Those were the years of some of the highest unemployment in Canada and a financial anarchy that even this government has not been capable of developing. It is difficult to accept his arguments at this time and it is difficult to accept his criticism of the government. To put it perhaps in its tritest form, it is a case of the kettle calling the pot by a colour.
This government deserves to be criticized. I think it has mishandled and mismanaged the economy of the country. This has happened because it has much the same terms of reference as the Conservative party when it was in power. It has the "hands-off" attitude, the attitude of letting the interest rate determine the priorities of our society. In effect, whoever can pay for things gets them and those who cannot pay do not get them.
We know that in any society human and capital resources are limited. If the competition for those resources becomes great, as is the case today, obviously those resources are bid upwards. The question then becomes: What do we do in a situation like that? Do we simply stand back and let the market determine our future? Do we relax and say: There is nothing we can do about this situation? Do we wring our hands
Use of Bank of Canada to Ease Tax Burden and say: It is none of our business, it will straighten out later, we really have no control over the situation? I got that sort of answer from the Minister of Finance this afternoon, who suggested that I read the Bank Act. I presume he meant that the Bank Act does not permit the government to intervene.
[DOT] (4:00 p.m.)
Surely the Minister of Finance is putting me on. He knows that the government intervenes in these matters, and the statement of the previous minister of finance should convince him if he does not know this himself. I am sorry I do not have the exact quotation of the words of the previous minister of finance, but if the minister is interested I can get it for him. He said in effect that it is the government of Canada through the Minister of Finance that determines the interest rate in this country, and this is on the record. I admit that this is done within, the restraints of the existing conditions in the world.
I suggest that the government can go even farther than it has in the past in deciding on the allocation of our resources. This is central to what is going on in this country. There must be a deliberate decision on the part of the government as to how our resources shall be used and who shall have access to them. I cannot see that a society with the knowledge that is available to us at this time could choose to do otherwise than to say: "We are in control of our destiny and of our future and we intend to exercise the sovereignty that was given to us by the people on behalf of the people to give them the kind of life and the kind of society to which they aspire".
In the last election a leader of a political party travelled throughout the country and virtually set the imagination of its people on fire. They looked at him and agreed there should be a change; after their disillusionment with politics here was somebody who would really use the reins of government and create a just society. This is what the people of Canada wanted, and I suggest that this is what the people of Canada can have if the government wishes to live up to the promises it made on the hustings.
Let me put forth a number of examples to demonstrate the kind of problem that exists in our society, and let us ask some questions about these instances. First, let us take the question of building banks. The Royal Commission on Banking and Finance pointed out that Canada probably has twice as many branch banks per capita as the United States
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6760	COMMONS
Use of Bank of Canada to Ease Tax Burden and some of the other countries of the world and that one of the effects of this overbuilding of banks is to increase the overhead costs. It pointed out that it was far costlier to bank in Canada than in almost any other country. Why do we need all these banks? Why do we have to continue this massive program of building bank structures? This is true not only of banks.
Let us take a look at small towns. The main streets are dominated by finance companies, trust companies and banks. Do they serve to reduce the rate of interest? What useful purpose does all this overbuilding really serve? Does it create competition? I doubt it. One has only to look at the rates that are offered. All the banks charge the same and virtually all trust companies charge the same for the same kind of risks. Finance companies are limited by legislation. What is the point of all this and what does it really get us except higher costs and an allocation of resources to a sector that is extremely wasteful and that deprives us of capital which could be used to better purpose elsewhere?
I could make the same argument with regard to service stations. I could ask: In which way is the gasoline at one service station different from the gasoline at another service station, and why does every corner in this country have to have a service station? Even the oil companies realize that this is wasteful, but their argument is that this is the way the system works and there is very little they can do about it even if they wished to do something about it. So even in the case where industries would like to do something about the situation they cannot because they have become victims of Adam Smith. Only the government can step into this situation and create order out of the financial chaos and the capital waste.
It is small wonder that we do not have money for houses when the money is being used in these directions. When we take a look at the way goods and services are brought into the market today, at all the waste, at disposable bottles, fancy packaging, cellophane wrapping and all that goes with it, as well as the advertising that accompanies this sort of thing, we have to ask: Is this the kind of thing on which to spend money when 20 per cent of our population lives in poverty? Is this the kind of thing on which to spend money when we cannot educate our people to their full ability, when we cannot provide them with the necessary medical services, when, in the course of spending money on these things, we pollute our environment at
[Mr. Saltsman.l

the expense of who knows what future detriment? Where is our sense of values? It is our tax system that encourages this kind of expenditure.
Does the government not realize that it can make a substantial change in its order of priorities simple by changing the tax system, and that this is not very difficult to do? We are not talking about setting up huge bureaucracies to do this sort of thing. Only one simple change has to be instituted. We have to say that selling costs are no longer deductible for income tax purposes and that we will change our distribution system. We will make these products carry the full economic cost instead of subsidizing them through the tax system. We virtually encourage this sort of thing at a time of a tremendous shortage of financial resources, and human needs are being neglected while frivolous spending is being subsidized.
I have no quarrel with some of the monstrous television commercials depicting people going around with their arms stretched upwards and other people smelling their armpits. We are told that this is their chief occupation on the north American continent, that if your armpits do not smell nice there is something wrong with you, and that everyone must be judged on this basis. If people want to buy this stuff, let them pay for it, but at the moment they are not paying for it. Every taxpayer in this society, whether or not he buys that product, whether or not he abhors that sense of values, is paying for it because that is the way our tax system is designed. In effect we say to these people: "For every dollar you spend on this kind of nonsense we will give you back 50 cents as a subsidy." Surely this is not the kind of tax system that should be encouraged or should be continued.
Sometimes I would like to know how much of the resources of our society go into this nonsense of selling. A number of years ago I saw an article that said that almost 50 per cent of the cost of goods in Canada is spent on distribution. We know that some distribution costs are necessary and desirable, but surely 50 per cent is too much. This is an enormous cost and an enormous wastage of our resources.
I could elaborate further on this disease of our society by pointing out that on the one hand we subsidize this waste and on the other we pay for cleaning it up. It may be that disposable bottles are more convenient for the people who use them, but who pays for cleaning up the disposable bottles afterwards? If people want disposable bottles I think their
March 18, 1969

total cost should be added to the purchasing cost instead of being subsidized through the tax system. The problems that are being created cost money which has to be paid by the taxpayer whether or not he likes or uses disposable bottles. That is one example but there are many others.
[DOT] (4:10 p.m.)
I am suggesting that there is not sufficient capital to meet all requirements; neither are there sufficient resources. The motion before the house seeks to find a way of establishing priorities through the Bank of Canada. I do not think this is effective. I should like to argue this point more fully but I do not have the time at the moment. It is sufficient for the purpose of this debate to say that I do not think we can do things in this way.
However, the intent of the motion is very clear. What my friends to the left are saying is that we have to find some way of making the requirements of the public of this country available at lower cost. There are other ways of exploring this proposal. For example, not very long ago we wanted to stimulate housing construction in the winter and in order to do so a bonus of $500 was paid on each house so constructed. This worked very well and. almost revolutionized the construction industry in terms of stretching out work. The seasonal attitude of the industry changed. That particular form of incentive proved most effective.
I suggest to the Minister of Finance that he consider this kind of incentive approach in order to stimulate housebuilding in this country, particularly houses that are within the reach of the low and medium income groups. This can be done, as I suggested earlier, by using the taxation system. If the minister were to announce that the tax on building supplies, would be refundable in the case of certain types of housing construction, this would have the desired effect of stimulating house construction. It would work in this way. In the construction of a service station, a bank or a luxury office building a whopping sales tax would be applied on the building materials required. In the case of the construction of a low or medium cost house the sales tax paid on the materials would be rebated. The same level of taxation would be maintained simply by shifting the taxation from one source to another. There is ample precedent for this. The minister attempted to do it with estate tax and it is done under our income tax system. A differential sales tax on
Use of Bank of Canada to Ease Tax Burden building materials should be considered in order to stimulate the construction of certain kinds of houses.
The hon. member for Edmonton West-I am sorry he is not in the house at the moment to engage in debate on this particular aspect-might be horrified at my suggestion that the government make value judgments about our society, that the government should say that some things are more important than others. My hon. friend from Edmonton West might say that this is not the role of government, that the marketplace should make judgments of that kind, though when his party was in office obviously it did not completely believe this theory.
I think that the role of government is to make value judgments. That is why governments are elected. The issues of an election campaign are the kind of society we are going to live in and the kind of value judgments we are going to make. This is done by the government now through the taxation system. The government says that some things are more important than others, that some things should receive a bonus and others a penalty. It is incumbent upon any responsible political party to make value judgments according to the wishes of the people.
I think the wishes of the Canadian people at this moment are quite clear. At a time when three-quarters of the people of this country cannot find adequate housing they want the government to make a value judgment that will stimulate housing construction within the reach of the low and medium income earners of our society. This the government has failed to do. More than that, the government has gone or appears to be going in the other direction. The task force on housing suggested that even the limited intervention the government now makes in our money markets should be discontinued, that the entire financing of housing mortgages should be left in the hands of the financial institutions of this country. It said that the government should not appropriate any funds for housing nor make value judgments about their disposition; the entire matter should be one for the free market. I think such a proposal would be disastrous and should be resisted with all the power at our command.
I should like to recall to the house a statement that I made in 1966 when the Bank Act was being debated. At that time we were being told that we should take the ceiling off bank interest rates, that if we allowed the
March 18. 1969
6762	COMMONS
Use of Bank of Canada to Ease Tax Burden rate to find its own level everybody would benefit and there was the possibility that rates would come down. I should like to quote what I said in the house on July 7, 1966, as reported at page 7321 of Hansard:
To remove the interest ceiling without proper safeguards is to raise the cost of every single thing in this country. We know the banks are lent out. All financial institutions are lent out. How will the minister get more mortgage money unless it is diverted from other sources? How will he get cheaper money in the circumstances he is developing for us? If the bank rate in this situation is freed from restriction or permitted to increase,
I have no hesitation in saying that Canada will face the highest interest rates, the highest cost of money, in all history. It is to put the cost of money in Canada at a height it has never achieved previously, and one that no one at this point can calculate. Interest rates of 8 per cent and 9 per cent on commercial lending may be possible through this type of approach.
I remember very clearly that on that day the minister of finance of that time sat and hooted, as if to say: "Interest rates of 8 and 9 per cent? You have to be out of your mind! It will never happen in this country". But what are interest rates today? There are people in this country who would consider themselves fortunate to obtain money at 8 or 9 per cent. The effect of removing the interest rate ceiling has been to send interest rates skyrocketing. The effect of removing whatever protection there is now under the National Housing Act would be that the interest rate would go even higher than it is. The minister's contention is a myth that has been completely demolished by past experience.
The bond market in Canada is not in a very happy state at this moment. I think the minister was fortunate and somewhat astute in the timing of this latest issue. We may never know the full details about what went on behind closed doors before the issue was made. But we can speculate. Perhaps the minister went to the chartered banks of Canada and told them that if they were thinking of raising their prime rates they should refrain until the market had been approached. If the minister had in fact done that I am sure the banks would have responded. There is no independence among our chartered banks. Sometimes their heads make speeches to give some indication that they resist what the Minister of Finance is doing, but my feeling is that the banks really have no choice but to accept what the minister says. When the Minister of Finance wants


certain things to happen in the banking system, they happen. His persuasion may go beyond mere moral persuasion. The minister may refer to the Bank Act and say he has limited powers, but I say that he has very real powers over the banks because he may introduce changes in the present framework within which banking is conducted. He has the ultimate power in that at any time the government may change the Bank Act.
[DOT] (4:20 p.m.)


The Acting Speaker (Mr. Bechard):: Order, please. I interrupt the hon. member to inform him that his time expired a short time ago.


Mr. Bell:: On a point of order, Mr. Speaker, since the hon. member for Waterloo called the attention of the house to the fact that our financial critic, the hon. member for Edmonton West, is not in the house may I say by way of reply that he is not here because he is working very hard in a committee. I thought it wise, knowing how this house operates, to place this information on the record.


Max Saltsman: Mr. Speaker, I would not wish the record to give the wrong impression to anyone perusing it. We are all aware that the hon. member for Edmonton West works very hard and that his absence is unavoidable.


Edgar John Benson: Mr. Speaker, if hon. members would consent I would have no objection to allowing the hon. member to continue his remarks.


Max Saltsman: Thank you, but as I took
advantage of a similar opportunity last night I shall not do so at this time.


Mr. F. J. Bigg (Pembina):: Mr. Speaker, although I do not usually answer partisan attacks I cannot resist answering the -attacks of those who speak disparagingly of our banking legislation and the financial structure of Canada. While talking about changes that might be made in the financial structure of our country it might also be well to point out some of the so-called differences in the ideologies of certain parties in this house. In some circumstances it is -difficult to distinguish between the Liberal party and the socialists. Much of the difficulty the present administration has got into stems from the fact that the Liberals have abandoned to a great extent the old concept of Liberalism
March 18. 1969

and have tried to outsocialize the socialists. This is a path of no return. It cannot be done.
I hope the socialists will never be responsible for the fiscal policy of this country. We can see what has happened where socialist governments have ruled. Poor old England has floundered under socialism since the end of the second world war. Her troubles stem not so much from the fact that she has fought two wars during my lifetime but that socialism has sapped her energy.
As a creed, socialism goes against human nature. It does not work in a modern world. After people have worked hard and stored up wealth a socialist government then comes along, takes it away from the people and spends it. Not until men have worked hard in modern factories storing up a nation's wealth can a socialist government take that wealth away. Socialism cannot work as a short term solution. It just does not work.
Unfortunately, socialism is being taught at Harvard. In North America socialism has been introduced by well meaning socialists who left the old country and came here with a great deal of education but little wisdom. This creed, being taught at a centre of learning in the heart of the United States, contains the seeds of the downfall of that country if it is allowed to flourish. If the United States declines as a world power, as our own Prime Minister has suggested it may, that decline will stem from the rot of socialism coming from within. That rot will set in when its people are no longer willing to work hard, as they must in any modern society. That is my opinion, and I am not alone in holding it. I therefore suggest that the government should take a good look at all its programs. It is never too late to mend.
The government should examine again the old Liberal policies involving hard work. It should not spread wealth among the lower ranks but encourage those with small incomes to work hard and better themselves. Instead of saying to small farmers, small businessmen and others, "we are here as big brother to help you," it should say to them, "we are not going to carry you but at the same time we are not going to burden you with taxation in an effort to be more socialistic than the socialists are." If the minister says that cannot be done, I say he will be replaced. It is necessary for our leaders to tell our people that they can have a better life only by working hard and adopting the principles of private enterprise.


Some hon. Members:: Hear, hear.
DEBATES	6763
Use of Bank of Canada to Ease Tax Burden


Frederick Johnstone (Jack) Bigg: In tired Europe they may need socialism in order to hand out rations of one kind or another. But we in Canada need no kind of rationing. We need the kind of leadership we had in the latter part of the 19th century and the early part of the 20th. I would say that period of leadership ended in 1962.
I say to the hon. member who preceded me that in suggesting that the last five years of the regime of the right hon. member for Prince Albert (Mr. Diefenbaker) were not good for this country he is mistaken. Our people have good memories. We assumed the burden of previous unemployment. And what did we do about that?


Gilbert F. Rondeau: You increased it.


Frederick Johnstone (Jack) Bigg: We put the people of Canada back to work.


An hon. Member:: You increased unemployment.


Frederick Johnstone (Jack) Bigg: And what did we do with the millions of bushels of unsold wheat then in this country?


An hon. Member:: You gave them away.


Frederick Johnstone (Jack) Bigg: No. We sold wheat at record prices in markets that had previously not been open to us. Our idea was that hungry people had the right to be fed as long as they could produce cash for our wheat. When we took office many of our people were unemployed because they lacked training. The training program introduced under the Conservative government of that day under the leadership of the right hon. member for Prince Albert and hon. Michael Starr did much to correct the difficulties of those who had dropped out of high school and could not gain employment. That was the finest program of its kind and in my opinion had never before been equalled in the history of mankind. If hon. members call what we did backsliding, let us have more of that type of backsliding.
It was strange to hear the kind of criticism that came from those who purport to be the friends of the people and who coined the phrase "the just society" before the Liberals took it over. The just society is more than mere words; you can only have it when you put into operation certain principles that affect all our people. The just society means
March 18. 1969
6764	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden that the small businessman, small farmer and small entrepreneur will not be taxed out of business. Bigness alone in business is not a virtue.
I am surprised that those who purport to have taken over the mantle of Sir Wilfrid Laurier should try to outsocialize the socialists in introducing give-away programs. There is no such thing as a give-away program. You can only give away under such programs what does not belong to you, namely, the wealth that has been earned by others. You take wealth from those who have earned it and give it to those who have not earned it. It was the policy of the right hon. member for Prince Albert and Hon. Michael Starr that every worker in this country should carry his part of the burden. When that is done our budgets will balance. A biased press and other biased media of mass communication were influential in persuading the uninformed part of the public that we had made a colossal mess of running this country. That was nonsense. We inherited the mess. Anyone examining the facts will see that what I have said this afternoon is the gospel truth. Mr. Keynes, who is the keystone of socialistic economics may be-
[DOT] (4:30 p.m.)


The Acting Speaker (Mr. Bechard):: Order, please. The hon. member for Etobicoke has a question.


Mr. Gillespie:: Would the hon. member permit a question?


Frederick Johnstone (Jack) Bigg: Yes, I would be delighted.


Alastair William Gillespie: Would the hon. member tell the house in what years during the Diefen-baker regime the unemployment rate was lower than it is today and in what year the Diefenbaker government balanced the budget?


Frederick Johnstone (Jack) Bigg: 
An hon. Member:: That is the just society.


Frederick Johnstone (Jack) Bigg: You know who invented the just society. And above all, now we are to be governed in Canada by committees. The House of Commons is old and out of date. I am a member of the Public Accounts Committee. The members of that committee are supposed to try to stop waste and extravagance. That is not partisan. Some of the waste and extravagance goes back for many years. What is being done about it? Very little is being done. Waste and extravagance have to be paid for by increasing interest rates. Money has to be borrowed to pay for the waste and extravagance.
Waste and extravagance should be stopped at all levels of government. We should start right here with the government of Canada
March 18. 1969
6766	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden and stop waste and extravagance in every department. We should stop teaching that Canada owes us a living, like Kennedy said in the United States-


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


Edgar John Benson: On a point of order, Mr. Speaker, we on this side would be pleased to allow the hon. member to finish his remarks if he so wishes.


The Acting Speaker (Mr. Bechard):: Does the house give unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Bechard):: There is no unanimous consent.


Mr. Rene Matte (Champlain):: Mr. Speaker, it is a pleasure for me to take part in this debate and to second in an unqualified way the non-confidence motion introduced by the Social Credit Rally and which reads as follows:
"That, in the opinion of this House, the government should consider the advisability of making use of the powers and resources of the Bank of Canada for the purpose of alleviating the taxation burden which weighs upon Canadian, provincial and municipal taxpayers and for undertaking an efficient struggle against poverty in order to establish a just society."
Mr. Speaker, one of the most important, if not the essential step to take in order to come successfully to grips with poverty is to provide families with an income that may enable them to lead a free and happy life and to bring up their children decently to make first class citizens of them.
The Canadian Welfare Council which, last January 29th, published its report on the social policy in Canada, gave top priority to the increase in family allowances. Here is the text of that statement which in an admirable way sums up the stands of the Canadian Welfare Council, and I quote:
A sharp increase In family allowances and young people allowances from the federal government, with modified regulations regarding the income tax, is economically possible and socially advisable-
-as states Mr. Reuben C. Baetz, general director of the Canadian Welfare Council, on the occasion of the publication on Wednesday January 29th of the statement of the above 
said council which is entitled "Social policies for Canada".
In addition to many other advantages, a sharp increase in family allowances and young people allowances would mean a quick and fair means to fight poverty.
Such increase would be an immediate step, but probably only temporary if a guaranteed income plan, based on family size, must be instituted in the future.
Increased family and youth allowances are socially desirable for a number of good reasons. Among the 30 per cent of Canadian people living in poverty, according to the Economic Council of Canada, there are several thousand families with many children who, through their own volition and pride, succeeding in not depending on public assistance. It is perhaps an everyday irony for such families-
This fact should concern the nation. And this report goes on to state:
-that many of them have not even the minimum and very often have a family income lower than their neighbours who are living on welfare and get assistance, at least theoretically, according to their needs.
An increase in family allowances would be of great financial assistance to those low income families without putting them under a degrading justification of their needs, and without destroying their sense of dignity. Such increase would encourage them more to remain independent and without depending on welfare.
This would alleviate significantly the obligation for our welfare services according to needs by allowing them to give better service to those who have a good reason to benefit from them.
A more adequate family allowances plan should encourage families to keep their children in school. This is of special significance in the light of the growing need for better education.
[DOT] (4:50 p.m.)
An adequate family allowance system would help to reduce the marked regional differences in family incomes; it is quite an important point at a time when we are so much concerned with national unity.
An adequate family allowance system reduces the tendency to set up social insurance systems based on earnings by setting the benefits according to the size of the family rather than according to earnings only.
All citizens anxious for the establishment of a humanly just society will readily agree with those proposals of the Canadian Welfare Council.
If one refers, Mr. Speaker, to the debate held when the bill for the establishment of family allowances was introduced in 1944, it is interesting to note certain words of the mover of that bill in the house, the then prime minister, Mr. Mackenzie King.
March 18, 19S9

This is what he said in the house on July 25, 1944, when he moved the second reading of that bill.
The announcement in the speech from the throne was as follows:
The family and the home are the foundations of the national life. To aid in ensuring a minimum of well-being to the children of the nation and to help gain for them equality of opportunity in the battle of life, you will be asked to approve a measure making provisions for family allowances.
I wish to point out, Mr. Speaker, that Mr. Mackenzie King was then speaking of a minimum of well-being and an equality of opportunity.
Further on, he explained the purposes of that bill, according to his philosophy, and I quote:
It has always been a part of the policy of the party to which I belong to do as much as possible to further equality of opportunity.
Mr. Mackenzie King gives statistics to show that large working class families did not have equal opportunities in society and that the legislation on family allowances by adding to their revenues would allow them to fight for life with as much, if not more chance than before.
Further on, Mr. Mackenzie King explained the measure was also promoting the interests of the entire community rather than those of a particular class. I quote:
-no nation liveth to itself, that we are members one of another, and that, if any part of the community suffers because of subnormal conditions, sooner or later other parts of the same community will suffer likewise. You cannot have one section of the nation undernourished, ill-clothed and unequal to its daily tasks, and not have the rest of the nation sooner or later suffer as a consequence.
The plea of Mr. Mackenzie King pointed to the necessity of helping families, particularly through allowances.
The former prime minister stressed also the advantages of family allowances for the nutrition of Canadians.
Finally, he emphasized the fact that family allowances did not replace wages but supplemented them to allow families to live better.
Of the concept of family allowances and the philosophy behind them, one must remember that they were designed to increase the standard of living of children and their families.
Wages and other forms of revenue that do not as a rule vary with family obligations proved to be insufficient to meet basic needs of large families in which children are raised in conditions of poverty, and thus are
DEBATES	6767
Use of Bank of Canada to Ease Tax Burden frustrated in their physical and mental development.
It is therefore possible to perceive the presence of purely economic purpose behind most of the national family allowances plans: the concern to lift to an acceptable level the family's buying power, particularly that of low income families.
According to a 1947 issue of the International Labour Review, the law adopted in Canada implicitly recognizes this objective. Here is what we could read in four points, Mr. Speaker:
1.	Public grants should be established, whether in kind or in money or in both, to allow children to be brought up in healthy conditions, to help take care of the children of large families and to complement the measures taken for the good of children under the family allowances plan.
2.	When the objective is to help bringing up children in healthy conditions, the grants should take the form of benefits, such as free food or at less than cost price for children in infancy, school cafeterias and housing at below normal rent for families with several children.
3.	When the objective is to help take care of large families or to complement measures for the good of children, whether carrying benefits in kind or established under the social security system, the grants should take the form of family allowances.
And finally-
4.	These allowances should be paid, whatever the parents' income, according to a schedule that would represent a substantial contribution to the maintenance costs of the child and would take into account the expenses incidental to the maintenance of older children.
This is therefore an opinion put forward by the Canadian Welfare Council and it corresponds to that of the Economic Council of Canada.
Now what was the measure suggested by the Liberal government in 1944 in order to supplement the family income? Section 3 of the Family Allowances Act reads as follows and I quote:
Subject as provided in this Act and in the regulations, there may be paid out of unappropriated moneys in the Consolidated Revenue Fund, in respect of each child resident in Canada maintained by a parent, the following monthly allowance:
(a)	in the case of a child less than six years of age, six dollars per month;
(b)	in the case of a child six or more years of age but less than ten years of age, six dollars per month;
(c)	in the case of a child ten or more years of age but less than thirteen years of age, eight dollars per month; and
6768	COMMONS
Use of Bank of Canada to Ease Tax Burden
(d)	in the case of a child thirteen or more years of age but less than sixteen years of age, eight dollars per month.
This was in 1944-45.
In this regard, I would like to point out, Mr. Speaker, that this schedule established in 1944 is still in force and that it has not changed for 25 years or a quarter of a century.
Now the 1944 Act set the schedules to which I have just referred. There is no doubt that the law-makers at the time did not intend to fix the rates for a period of 25 years, for it is obvious that today such rates destroy the philosophy that was behind1 the legislation then enacted and that they no longer correspond to the ends sought when the Family Allowances Act was passed.
Since then, Mr. Speaker, the cost of living has increased considerably, mainly as concerns food. For instance, if we take as a basis the cost of living index of 1949, set at 100, we readily see that in 1949 a dollar could purchase $1.34 worth of consumer goods at 1944 prices, when this legislation was passed.
On the other hand, if we consider the cost of living index today or the consumer price index, we realize that a dollar is worth 64 cents only in 1968 as compared to what it was worth in 1949.
In 1949, the consumer price index was set at 100, whereas it stood at 74.6 in 1944. On the other hand, that same index has gone up to 157.5 in 1968. Therefore, it has more than doubled.
[DOT] (5:00 p.m.)
Therefore, Mr. Speaker, if family allowances are to preserve the value they were attributed in 1944, such as encouraging the development of families and insuring them a minimum of well-being, the rates must now be doubled.
At a time when governments are being asked to control expenses and to decrease taxes, where will the money come from? Is decreasing taxes a solution? The Creditistes have a ready answer, even though the hon. member for Edmonton West (Mr. Lambert), who was one of the first to speak on this subject, asked how it is possible to accept our theories. The answer mieht be that he should take some advice from his party caucus and ask the hon. member for Red Deer (Mr. Thompson) to give him supplementary information.
Nevertheless, the Creditistes have a quick answer: from the same sources as the banks

DEBATES	March 18, 1969
whenever they lend money and create deposits out of nothing.
If it is taken for granted that the Canadian production of real credit is equivalent to twice our national consumption or more, it is possible to arrive at figures indicating the true benefits of real credit being realized by the Canadian people and to credit each Canadian citizen with his share of this surplus value.
The real national credit is defined as social credit, a common credit which belongs to all. On his appearing before the standing committee of the house on banking and credit, in 1934,-one year before I was born1-the founder of Social Credit, Major Douglas explained the origin of a national dividend as follows:
It is the surplus value through association. For instance, this is the case when ten people are pulling a load. If they pull separately, they might try for a week without moving the load. However, if the ten of them use a rope and combine their efforts, the task becomes easier. The ten men can do together what they could not do separately.
We cannot say that the tremendous production increase made possible by the association is due to the efforts of one person only, it comes from the association. The result is the profits of this association that have become so important that we have reached a phase where a decreasing number of people, much lower than the available number, is able to produce the necessary wealth for the whole of the people.
The surplus of wealth thus produced belongs to society because it comes from the automatic surplus value of the association.
The real problem of our time consists in coining this surplus value and in distributing it. This is the base of the Social Credit philosophy.
It is for this reason, Mr. Speaker, that I shall support the motion moved by the hon. member for Shefford, in order to make use of the powers and resources of the Bank of Canada for coining the real credit of this country; coining the surplus value earned by the social work and the joint capital in order to distribute this surplus value in a social fashion.
History teaches us that over the years, there have been three kinds of currency: cash money, credit money and near money. History is nothing but day to day experiences, and these experiences teach us also that credit money is used today as a means of exchange for almost all kinds of goods in this twentieth century.
If since the last century, governments or sovereign powers have withdrawn to private banks the privilege to issue money or to print banknotes, before the end of the twentieth
March 18, 1969

century, those same sovereign powers will have to take back the control of the issuing of money and of the credit supply, presently in the hands of private organizations.


The Acting Speaker (Mr. Bechard):: I am
sorry to interrupt the hon. member, but his time has expired.
It is my duty, pursuant to Standing Order 40, to inform the house that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Bran-dbn-Souris (Mr. Dinsdale)-Canadian Film Development-Establishment of an advisory commission; the hon. member for Winnipeg North Centre (Mr. Knowles)-Veterans Affairs-Nurses of Westminster hospital, London (Ont.); the hon. member for Halifax-East Hants (Mr. McCleave)-Boarding up of housing units, Oakville (Ont.).
Unless the house allows the hon. member to carry on his remarks, he will not be able to do so.


Some hon. Members:: Agreed.


René Matte: Mr. Speaker, I am very grateful to my hon. colleagues.
By virtue of the regalian right it possesses, due to the social role credit is playing in transactions and to the social nature of true credit which belongs to society, the state will have to issue itself new credits necessary to finance public capital.
Here are the general principles on which this new kind of financing is based:
1. Every issuance of credit will have to correspond to a new public production; secondly, this credit issue will also have to include an issuance of cash money equivalent to the average rate it gets within the money in circulation.
Since any issue of cash money or credit money will become the exclusive privilege of the Bank of Canada, it will be the role of the latter to finance, by means of new credits, any new capital relating to such department.
The Bank will also have to require, on a scientific basis, the repayment of the loans made, according to the depreciation of the services rendered and financed with those loans, and in accordance with the fiscal ability of the country.
On the other hand, since the objective of the economic and social system is to provide all and everyone with an adequate income to ensure an honest living and a vital minimum, and that precisely because of the relationship
Use of Bank of Canada to Ease Tax Burden of its members, the financing of social security must also be ensured.
The financing of social security, and therefore of family allowances, education and old age pensions, must be directly provided by the department concerned, which will issue the necessary cheques on its account at the Bank of Canada, to the extent that the country is physically and socially able to meet the needs of those particular classes of the population, through the production of the goods which they need.
The only thing to remember is that the issue of credit is an entry in the books of the state in the credit column of one department or another inasmuch as that new monetary credit actually refers to the creation of real credit or new wealth.
To the extent that the necessary physical resources exist or are possible, through the existence of the natural resources, the manpower, the machines and the equipment suitable to develop them, the issue of new credit can be made in advance by the Bank of Canada.
Thus, it is not necessary to resort to taxation in order to pay higher family allowances. The Bank of Canada can create new credit on the basis of the existence of actual resources, or on the ability of the country to produce them.
[DOT] (5:10 p.m.)


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I think that the democratic system is best suited for men, since it enables the representatives of the people to fulfill their role. Even parliamentary procedure has provided for special days, during the session, when the members of the opposition could further criticize the government on some particular points. Government members therefore will not be surprised when they hear members of the opposition attack certain government measures which do not seem to promote the development of the low income Canadian family. This provides also the opportunity for some suggestions which will help the government achieve the common objective of a just society. This is precisely the purpose of the motion now being debated.
What is most amazing in our Canadian tax structure is the fact that the family is always the first to foot the bill. The family, which is the basis of our society, does not get from the government all the attention which it deserves for its development in an atmosphere of financial security.
6770	COMMONS
Use of Bank of Canada to Ease Tax Burden
Society is made up of small societies called "families" and, generally all well-informed people notice that our society is ill, that things are not quite right and that society is not just towards everyone. If society as a whole is ill, obviously, its. component families are not in good health.
Let us take for example the personal income tax. Is it really reasonable for the government to grant only a $2,000 exemption to a married couple? With the present rise in the cost of living, the basic exemption should normally be raised to $5,000, to which would be added a $500 exemption per child. Thus many more families would be able to own a house.
Each man has a fundamental and natural right to own external possessions that are essential to his upkeep and normal development, such as a decent home for example.
Nature prescribes to the head of a family the sacred duty of providing his children with shelter and food, of looking after their future, of providing them with a heritage and with the education that will help them to protect themselves against the set-backs of life.
Man's right to own property was given him by his Creator at the moment of his birth and not by a human power of any kind. And to find the best proof of that, we need only look at a four or five month-old baby in his cradle. At the time I still had young children at home, I took pleasure in giving my child something which he would grasp as if saying: I own something. And whenever I tried to take away the thing I had given him, he clung to it in order to keep it; he would scream, cry and resist precisely because he felt dispossessed.
Mr. Speaker, this goes to prove that the state should endeavour to preserve such a right so as to allow for the greatest possible number of people to own something.
Yet, the mind of this child is still not much developed. Nevertheless, as I said, he is already endowed with an instinct of ownership. The family also is getting every day more dispossessed. Fewer and fewer heads of family are able to own their homes and to say at night when they return from work: there is no place like home. They can hear it on radio and television, but they cannot join in the chorus since a home is beyond their means due to a system which does not make ownership possible.
Families are less and less in a position to own anything that really belongs to them,

DEBATES	March 18, 1969
which is the best insurance against communism. A property owner is much more willing to fight for his country in time of war. He feels genuinely proud and patriotic because he owns a small homeland which is part of the over all country and worth every sacrifice.
My own idea of a just society is that of a society that would operate like a normal family. Now, what is a normal family? And what does the family do for its members? Well, in a normal family where there are a number of children, the primary concern of the father and mother is to provide for the needs of the younger, the weaker of the family.
Let us have a look at the family table. The youngest, the weakest sits between his father and mother and they both see that he eats properly. They know that while the other children around the table eat more, they can manage and help themselves. If the little one had enough to eat, the others will have more, but they are not concerned as long as the baby can eat at its heart's content, they have done their duty.
The same applies in society. The state must show concern first of all for the weakest by guaranteeing the family, the human beings who compose it, their basic needs through a minimum income.
If we do not reach that decision, we will never stand up efficiently and maintain law and order, and peace in society against the onslaught of revolutionary forces.
Wordly goods are destined by Providence to guarantee individuals, families, what they need to develop normally through life, and to serve the commonwealth.
There are two ways in which the family head can obtain what is necessary to meet the needs of his family. First of all, through his own work which I favour personally as a man and as a responsible citizen. I use all my energy to stand up for the people because I consider that work is not a punishment but a blessing. One need only read the many letters received-I imagine the same goes for all hon. members-from people who are unemployed and who beg us to do something so that industries can develop in their area and they might have work and thus contribute through their work to the development of the country.
Now, if the first means is work, on the one hand this work should be remunerated fairly, and on the other hand the state should not
March 18. 1969	COMMONS
levy such taxes that the individual is left without enough income to discharge his family obligations.
Present day personal income tax is much too high; the basic exemption should be changed to guarantee a married couple a minimum tax free income of $5,000.
To the current price of building materials are added a federal tax of 11 per cent and a provincial tax of 8 per cent. How is it possible, then, for the small wage earner to have a house of his own? Furthermore, the government has allowed interest rates to increase, alleging as a pretext that lending institutions would not lend money at more reasonable rates of interest.
I blame the government for giving in to banking institutions. But in order to realize that those in control of money and credit are the masters of our lives one only has to look at the 1969-70 budget. It can be noted that the item relating to the public debt shows an increase of over 150 million dollars for servicing the public debt, to such an extent that we are paying $1,604,200,000 in interest alone.
The ordinary factory worker has a five-day week and is paid for 40 hours of work. However, those who are in a position to control money and credit and to draw interests are being paid, not for 40 hours of work but for 365 days a year and 24 hours a day. Mr. Speaker, therein lies the difference between consideration given to capital and labour.
Whenever big financial interests submit requests to the government, it cannot say no. But when requests come from the little man, such as workers or farmers, the government does not hesitate to refuse. This has been evidenced when some bills were considered by the house during the present session.
Therefore, I urge the government to seriously consider, without delay, a better distribution of personal and corporation income tax in order to be more equitable in this field. It is time families were ensured of an adequate income to enable them to obtain food and clothing, to have the necessary medical care and to receive education without having to depend always on welfare associations which are very costly for the community.
[DOT] (5:20 p.m.)
I will be told there are a great many pieces of legislation for the benefit of families and one of these deals with housing. I agree with that, but how could a worker whose income
DEBATES	6771
Use of Bank of Canada to Ease Tax Burden over $2,000 is subjected to taxes, and considering the 9 and 10 per cent interest rates, build his own home?
National production of a country is not aimed solely at increasing more and more the wealth of a few citizens, but rather at ensuring the well-being of its population as a whole. Society cannot call itself Christian if its working class is condemned to unemployment during periods of artificial economic crises or to a considerable decrease in income in case of illness or accident.
Society must try to provide its members with a sufficient income to meet the requirements of a decent standard of living. And it is at this point that comes into the picture the second means for giving some assistance to the head of family who has used up every other means to attain a decent life. The state must then fill the gap by drawing from the joint capital this citizen's work has built up, because he has a right, like everybody else, to benefit from it. The state must then make up the difference by insuring a supplementary income, since it is in a position to do so. And the best proof of it is that our granaries, our stores and our warehouses are overflowing with products.
So, Mr. Speaker, why take an antisocial attitude and deprive a portion of the population of things which are essential in life, at a time when there is such a high rate of unemployment.
What would you think of a father who would tell his children at the family table: Eat your soup and just one potato, nothing more, because, even if the cellar is jam-packed, we are faced with a technological problem: there is no staircase leading to it.
Mr. Speaker, more generous family allowances should be added to the income of the family head and this is possible thanks to the progress of science.
I would like hon. members to consider, as I do, what the Minister of Finance said in his budget speech on October 22, 1968.
If you consider tables 1 and 2, you will see that personal income tax in the' financial year
1967-	68 amounted to $3,650 million and that corporation income tax amounted to $1,821 million, that is $1,829 million less for corporations than for individuals. However, in
1968-	69 the difference will be even greater, as personal income tax will give the federal government the fair amount of $4,190 million against $2,210 million from corporation income tax, or a gap of $1,980 million. Whereas
March 18, 1969
6772	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden large corporations are less heavily taxed, the worker is treated less favourably as he is more taxed. That is, Mr. Speaker, what 1 wanted to point out to the government.
According to the Dominion Bureau of Statistics, in 1967, corporations would have benefited from a tax exemption on capital gains totalling $7 billions, under the heading "reinvestment and capitalization". I think it is unfair that a capitalization exemption should be granted to corporations and that a mechanic who is working in a garage, for instance, should not be able to benefit from a rebate on his equipment. Indeed, an individual who buys his own tools is never able to allow for his equipment in his expenses for that is not admitted by the legislation. He cannot capitalize, yet it would be an advantage for him to do so, the same as for corporations. If the individual were able to capitalize to get himself a home, that would be as logical and as profitable for the country, because if it is fair to give special treatment to corporations manufacturing material goods for people, it should be recognized that the family, on the other hand, provides the greatest resource of all, the human capital which makes the strength of the country. Indeed, if we take away our human capital, there is not much left. It is because of the vital role of our human capital, which comes from the family, that I urge that the sacred nature of the Canadian family be recognized and that the family be given the possibility to live a normal life.


The Acting Speaker (Mr. Bechard):: Order. I regret to interrupt the hon. member but his time is over, and he cannot continue with his remarks unless he has unanimous consent. Does the house agree?


Some hon. Members:: Agreed.


Joseph Adrien Henri Lambert: Thank you very much, Mr. Speaker. Your watch must be much faster than mine, presumably because you have time to check more closely on my speaking time, but I wish to thank all my colleagues anyway.
If I defend the case of the little man, it is because I myself belong to that class of people and I am here to speak on their behalf.
There is also the society of scholars, who are not very numerous but who get along very well. These are the specialists, the people with diplomas, the ministers, etc. ... They are not the least bit evil, however. They do

not want the people to be unhappy and miserable, because they are not aware how much the people suffer and that the little man is not always treated fairly.
There is a wall in this parliament, and it does not exist because of differences between the parties, or in languages, but it stands between the learned men and the living men. There is a lack of communication between these two groups. We are not on the same wave length and cannot understand one another.
In this very rich country there is a large number of poor people, as the Economic Council of Canada report points out. I am not making up anything. In fact, those who say it are federal civil servants hired to study such problems.


David Réal Caouette: Scholars!


Joseph Adrien Henri Lambert: Exactly, scholars, as the hon. member from Temisca-mingue says. From 1946 to 1966, Mr. Speaker, it was figured that in greater Montreal, the number of poor people had gone up by 6 per cent. In fact, they represented 27 per cent of the population in 1946 while in 1966 the figure has gone up to 33 per cent or 736,830 people. In the city of Montreal, 105,800 families, or 55.6 per cent of the population, live in poverty, and 1,062,200 persons earn less than $5,000 a year in the metropolitan area, where salaries are supposed to be the highest.
Am I not right then to claim a basic exemption of at least $5,000, since we find the same type of situation in this area as the one I have just described.
Moreover, 72.5 per cent of the million of workers I have just mentioned depend for their livelihood on finance companies. Some families have even raised up to 5 loans at interest rates varying from 24 to 50 per cent.
Some will tell me, Mr. Speaker, that even with a better government and in a more just society, there will always be less talented people, unable to manage their own affairs.
I agree on that of course. However, what I fail to understand is that the number of poor people exceeds 50 per cent.
[DOT] (5:30 p.m.)
It looks as if the task of ministers and of learned people is to protect the wealthy and the educated.
It is high time, I think, to stop boasting of the advantages of our economic system. It
March 18, 1969	COMMONS
is a system effective in the field of production, but which has poor results in the field of distribution. It is unsatisfactory. Our economic system will be reformed by law-abiding people or else it will be destroyed by others.
We have witnessed bombings. Previously, when we read in the papers that such things happened elsewhere, in Mexico, in Spain, or in other countries who went through a revolution, our hair stood on end. However, the same thing is happening now in our own country, in our own province and people seem to accept it as a normal way of life.
Mr. Speaker, I believe that if we take the trouble to think things over a bit, to try and find solutions to these problems and to organize the economic life so as to allow people who still want to work in order to take care of themselves-and thank goodness, there are still a great many of them, even though if we like to say that those who receive social welfare benefits are not worth their salt-I still believe in this young society. And if we give this young society the opportunity to use its talents, it is still capable of putting it to work for the benefit of this country.
As a first phase, in drafting a solution, I would suggest we reduce the personal income tax and alter the corporation taxes to establish a better balance between taxes on revenue from labour and revenue from capital.
Secondly, in order to help the bread winners, whose dependents are 13 million Canadians without income,-that is the children, the sick, the disabled, the women who are not earning a wage but who stay home and are working nevertheless,-there is need to increase family allowances as the hon. member for Champlain (Mr. Matte) stated it and as the hon. member for Winnipeg North Centre (Mr. Knowles) was saying yesterday, to increase the old age pensions and those of other classes of citizens, without imposing any additional taxes.
That is the reason why we suggest that the government make use of the Bank of Canada to provide new credits based on the work and production of the Canadian people, on which there would be no need to pay interests, since they would be our own and would rest on a production effected by Canadians for Canadians.
Canada has a great deal of credit as an asset; the point is to socialize it in order to ensure every citizen his fair share of the national income. On this point, I call the attention of our hon. friends of the Progressive
DEBATES	6773
Use of Bank of Canada to Ease Tacc Burden Conservative party, whose program, in 1958, aimed at establishing a just society that would ensure every person his fair share of the national income. The concept is still part of their program, although everyone's fair share of the national income is still a thing of the future.
However, we are giving them opportunities and means to achieve the goal through the establishment of a purchasing power equal to the needs of the community, and which should be readily avilable by way of a balanced discount and a national dividend, which was termed as communism in the past.
Today, people recognize that this is not communism. The system is logical. The dividend was advocated by major Douglas. The theory comes from England, but, nevertheless, it has its merits. Such ideas, no matter where they come from, provided they are worthwhile, should be implemented in such a way, Mr. Speaker, it will be easier to establish a just society.


Mr. Oza Tetrault (Villeneuve):: Mr. Speaker, I will be very brief in making my few remarks. I think members on this side have touched on almost every aspect of Social Credit theory, but I should like to say a few words about the financial problems facing Canada at this moment.
We all know that our national debt is $23 billion and that the interest alone is $1,700 million annually. Let us stop for a moment and ask whether the taxpayers of this country can continue to go deeper in debt every year? I think our Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Benson) are both intelligent people, and I suppose they understand perfectly well the functions of the Bank of Canada. However, perhaps they are paid not to understand. Money was never made to control the nation and its people; it was created as the best medium for the exchange of goods and services.
Today we would all admit that money is, in effect, only a paper and ink or ledger credit. Some 95 per cent of all business transactions are transacted by the use of cheques. Let me give the Minister of Finance an example of this. Suppose that I owe five different companies $200. I go to my bank to borrow $1,000 and the manager or accountant agrees to lend me this amount. I sign a note with the bank. Then, without actually touching one single dollar from anybody's savings account, the accountant will give me a small bank book to
March 18, 1969
6774	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden which $1,000 has been credited. As a result of this pen and ink credit entry, I am able to write five cheques for $200. The payees will deposit the cheques, then the bank will debit my account and credit the accounts of my creditors. It is very easy to understand our banking laws. Something is created which did not exist before by a simple stroke of the pen.
We all know that government money in Canada is short. If it is possible for the chartered banks to create this kind of "figure money", why does not the federal government use the Bank of Canada for governmental requirements, whether they be provincial, municipal or federal? The government of Canada should ascertain whether the Canadian people have sufficient products to maintain a high standard of living. If the government were to do this, I believe they would discover we have plenty of everything in Canada. The only thing we are short of is buying, power.
We of the Social Credit really believe that the real wealth of the nation should be monetized in order to maintain a functional balance between actual production and consumption, to the direct benefit of all of the people of the nation. Some will ask how this can be done. It can be done by placing in the hands of consumers sufficient purchasing power to move that which is being produced into the hands of those who can and need to use it. This would not bring inflation. Inflation is the result of having more money in the hands of consumers than is necessary to purchase the total amount of goods produced. Likewise, a depression is the result of having more goods for sale than there is purchasing power among the consumers to purchase those goods.
[DOT] (5:40 o.m.)
It is obvious, Mr. Speaker, that Canadian citizens have a right to shave in the wealth of Canada. If you receive a dividend from some company in which you have invested, no one will consider this a dole. Canada is one of the wealthiest of nations in natural resources. May I quote now from the official record of the Banking and Commerce Committee of parliament which sat in 1939. Mr. Graham Towers, governor of the Bank of Canada, was on the stand giving evidence. He was asked this question:
Would you admit that anything physically possible and desirable can be made financially possible?
Mr. Towers answered, as recorded at page 771 of the committee record for that year:
Certainly.

A further important question was asked as recorded at page 394 of the committee record:
Will you tell me why a government with power to create money should give that power away to a private monopoly and then borrow that which Parliament can create itself back at interest to the point of national bankruptcy-
Mr. Towers answered in part as recorded at page 394 of the committee evidence:
Now, if Parliament wants to change the form of operating the banking system, then certainly that is within the power of Parliament.
In closing, Mr. Speaker, I wish to add this. He who does not love his brother whom he has seen cannot love God whom he has not seen. We have this commandment. He who loves God should also love his brother. Let us look forward to a better Canada for our Canadian citizens. We will all be proud to live in this country once we have established a better system where each individual will not be deprived of his share of the wealth of our nation.


Mr. Leonel Beaudoin (Richmond):: 
Some hon. Members:: Hear, hear.
[DOT] (5:50 p.m.)


Léonel Beaudoin: The report of the task force on housing and urban development recommends that, and I quote:
The federal government should seek to encourage and co-ordinate the efforts of private lending institutions to meet the vast majority of Canada's residential mortgage requirements by setting annual targets, by canvassing these lenders twice annually-
Can you picture the white-collar gang on the construction sites?
-to ensure that their investment intentions are adequate to meet these goals, and by paying particular attention to the needs of the various regions of Canada a special effort should be made to enlist the increasing participation of Canada's rapidly growing pension funds in the field of residential mortgage financing.
Mr. Speaker, can you see people using the pension benefits they managed to pile up to support a system which I submit is crazy? Is it not a public scandal? Could we endorse such a recommendation and thus let the people that we represent be exploited, as has been the case in recent years, by private lending institutions, in particular insurance and trust companies? I suggest the government is shirking its responsibilities towards the people by tolerating such a situation and by forcing people to pay for their properties five or six times what they are worth when applications for loans are directed to those institutions.
Mr. Speaker, I maintain that the present system offers no solution and I repeat what we, of the Ralliement Creditiste, have always advocated, namely that the Central Housing and Mortgage Corporation could atone for its past by using the services of the Bank of Canada or other similar institutions to lend money at interest rates covering only administrative costs to those who want to build a

home. To that end, it would be necessary to create new bank credits making up capital designed for the social welfare of the country which would not come from the private sector which forces the borrowers to repay two, three, four and even five times the amount of the loan.
To illustrate this procedure of the social credit system, one can look at the banks when they decide to put up a building. We could proceed like they do in the private sector to see what would happen.
Banks start by opening themselves credit in a current account; they thus give themselves some credit and they do not charge any interest on it. It is an entry costing only the ink used to make it. Then it is decided to build new premises. And the construction is started no matter the cost since only the capital is repaid. Once the construction of the building that will house the offices of the bank is completed, space is rented at a monthly or yearly rate. After 30 years, the credit has been paid back. It is surprising to see that the procedure works well for banks, but not for individuals. That is something that I find myself unable to fathom.
So Social Credit creates to destroy credit which, while it lasts, plays the part of real money, that is the part now played by the banks, according to the powers granted to them.
Thus, the bank would loan the funds required to purchase the land and to build, in accordance with accepted standards. After an examination of the reimbursement possibilities of the family or of the new owner who is to purchase the said building, the bank would set the monthly payment to be made. Such loans would bear interest at a very low rate, just enough to cover the risk of nonpayment and administrative costs. These monthly payments could be spread over a period of 20, 30 or 40 years, depending on the quality of the materials and on the reimbursement capacity and, as a general rule, this monthly rent could be set at 20 per cent of the owner's income.
This system would allow thousands of families who are now tenants to become homeowners and thus become a stabilizing factor in our society, while creating sources of income for the municipality where this house would be built-
Mr. Speaker, may I call it six o'clock?
March 13, 1969



BUSINESS OF THE HOUSE

Thomas Miller Bell: Is the government house leader in a position to state the business for the remainder of this week and next week?


Donald Stovel Macdonald: I can announce it for the next two days. It will be our proposal to return tomorrow to the government reorganization bill and deal with all those parts that have not been dealt with, with the exception of the part relating to regional economic expansion. It is assumed we might be able to finish with those other parts by tomorrow's adjournment. On Thursday, we hope to deal with the question of regional economic expansion and carry the bill through to conclusion.
Notice will be given this evening of a bill proposing to amend the Maritime Freight Rates Act. We will seek the unanimous consent of the house to abridge the period of 48 hours so that the bill may be given first reading tomorrow. We hope it will be given quick passage on Thursday, in view of the general interest in having that bill being carried into law.
The business for Friday will be as announced last Thursday. We will start with the superannuation bill, which I understand will be returned tomorrow from the Standing Committee on Finance, Trade and Economic Affairs. The second item of business will be Bill S-15 with respect to the Food and Drugs Act. The third item would be the bill to amend the Financial Administration Act. On Thursday, I will make an announcement for the coming week after we have had an opportunity for certain consultations.
[DOT] (6:00 p.m.)


Thomas Miller Bell: May I just ask the minister if he can be certain the evidence on the superannuation bill will be ready for Friday?


Donald Stovel Macdonald: My understanding is that it will be, but of course the calling of the bill on Friday would be subject to the evidence being available. I think it will be available tomorrow or the next day.


Stanley Howard Knowles: The
committee proceedings on this bill were completed this morning, so it should be possible to have the evidence available.


The Acting Speaker (Mr. Bechard):: It being six o'clock I do now leave the chair, to resume the same at eight o'clock this evening.
At six o'clock the house took recess.
Business of the House AFTER RECESS
The house resumed at 8 p.m.



GOVERNMENT ORDERS


[Stage Direction]
ALLOTTED DAY. S.O. 58 (4) (a)-UTILIZATION OF BANK OF CANADA TO ALLEVIATE TAX BURDEN
The house resumed consideration of the motion of Mr. Rondeau.
Léonel Beaudoin: Mr. Speaker, before six o'clock I was indicating how this government could implement a program if it wished and I was encouraging it to do so.
Many wonder where to get this money? It would come out not from personal taxes but from the secret reserves of public or private corporations.
It would all take place without any increase in prices, costs, on either personal or corporation incomes but simply by taking out of the reserves the amounts required not considered as taxable gains. Let these amounts come from companies, banks or any other kind of institutions, private or public.
In this way, these families will live in homes really belonging to them, and enjoy a healthy comfort and a freedom which would enable them to better provide for the maintenance and education of the children.
It should be noted that this system is not as farfetched as one is enclined to believe, because the task force on housing and urban development mentions it in one of its recommendations in his report of January 1969, as follows:
In existing circumstances, it can provide a valuable source of liquidity for present lenders and for other investors seeking to acquire mortgage holdings.
These are not my words; they are recom-mandations of the Hellyer task force.
Therefore, the task force recommends that serious consideration be given to the establishment of a Central Mortgage Bank to provide additional liquidity for existing lending operations and as a necessary prerequisite to the creation of new mortgage institutions.
Would that task force become creditist in order to really alleviate this situation as it says so well.
March 18, 1969
6778	COMMONS
Use of Bank of Canada to Ease Tax Burden
I continue:
The need to act while reasonable action is still possible. Many Canadians, whose needs are of yesterday's, want adequate housing today and not tomorrow.
However, my criticisms concerning the present policies are not confined only to the economic aspect of the issue but to the aspect which to me is most important, since it relates to the moral, psychological and sociological allied problems.
Mr. Speaker, instead of always thinking in terms of getting richer at the expenses of the small wage earners, why would the government not give them a chance to contribute to the development of the country and therefore to that of the family, that cornerstone of society?


David Réal Caouette: Mr. Speaker, the members of the Ralliement Cre-ditiste were given the opportunity, through the hon. member for Shefford (Mr. Rondeau), seconded by the hon. member for Champlain (Mr. Matte), to introduce a motion blaming the government for its inefficiency, its failure to take a stand about the use of the Bank of Canada for the purpose of alleviating the taxation burden which weighs upon Canadian taxpayers at every level of public administration.
Of course, Mr. Speaker, some Liberal, Progressive Conservative or New Democratic party members do not accept our motion. But we don't know why.
The hon. member for Bellechasse (Mr. Lambert) explained the reason rather clearly this afternoon. We live in a world of living people while some live in a world of scholars. The latter believe they know but as a matter of fact they know nothing. They assume they know and understand everything, except the financial question.
Members from all sides of the house talk about improving the situation of farmers. We understand we must improve our production and take the necessary steps to increase it. Everybody understands that. The Prime Minister (Mr. Trudeau), the ministers, the Leader of the Opposition (Mr. Stanfield) as well as the leader of the New Democratic party (Mr. Douglas) understand that. All members understand, even if they have never seen a carrot grow, that we must improve the agricultural system and help the farmers.
In the labour field, it is the same thing.


The Minister of Labour (Mr. Mackasey) clamours that relations between employers and workers must be improved.
As concerns the health field and the field of justice, we must improve conditions and legislation.
As far as industry and commerce are concerned, especially as regards foreign trade, everybody understands that we must take the necessary steps to bring about needed improvements. Nevertheless as soon as we talk about the financial system everybody stands gaping. They have no more the right to understand or to speak, they merely have the right to look at themselves and play the fools. That is all that happens. Nobody has enough courage to speak against finance.
Today, the hon. member for Edmonton West (Hon. Mr. Lambert), another bright scholar, was telling us that using the Bank of Canada could lead to all kinds of misuse, that it could grant illimited and unconsiderate credit, which would be a threat to the health of our economy. What does the member for Edmonton West know about the subject? The reason why, he says, the government of Alberta did not apply for those loans was because the municipalities had done so. Does he really believe Alberta is the only place where such things happen?
Just have a look at the City of Montreal and see what is going on there. Officials there go, crawling on their knees, to France, to Belgium, and to the United States, begging for loans. We are able to make anything here in Canada but when it comes to money matters, we fall on our knees, in front of the United States. Have you ever seen the United States borrow from anybody? Not I. But everybody borrows from them: the Canadian government, the municipalities and the provinces.
We borrow on behalf of Hydro-Quebec, we borrow on behalf of Hydro Ontario, and to meet the needs of Canada. We beg for American patronage. We do not even have the stamina to start working in order to improve the financial conditions prevailing in our country however much we realize the importance of improving every field of administration or every federal department.
Mr. Speaker, people understand everything except finance. The Creditist motion is not seconded, save by my 13 colleagues.
The representative of the NDP said that he did not share our opinions. So did a Progressive Conservative member.
March 18, 1969	COMMONS
When the Minister of Finance (Mr. Benson) takes the floor he will say that he does not share our opinions. We are aware of that fact. Some Liberals sometimes wonder where are the economists in the ranks of the Cre-ditists? Well, we simply do not need them.
The Liberals, since they came into power, are like puppets in the hands of the economists. You can see the results across Canada. Unemployment is growing, nobody feels safe; everybody is afraid.
Our high school and university students wonder whether they will be able to find a job, once their studies are completed. They will not, in spite of the fact that we have capable economists and scientists to inform and advise the government.
Before this government took office, the Conservatives were in power. An hon. member said that under the Progressive-Conservatives things were running smoothly. Still, in 1961 and 1962, for the first time in the history of Canada, we had a million unemployed. What did they do from the financial point of view? No better than the Liberals.
On the other hand, what does the New Democratic party suggest? Take away from the rich to give to the poor, and therefore have more poor. You cannot take away from the rich to give to the poor. So, instead of improving living conditions, you will lower them in an attempt to fatten a certain group. This cannot be done.
Mr. Speaker, the problem in Canada is not a lack of programs; everyone creates programs for the government. It costs hundreds of millions of dollars a year to pay the program "makers", and the results are always the same.
[DOT] (8:10 p.m.)
The present Prime Minister wrote in 1963 that the Liberals were "idiots". He was right, Mr. Speaker.


An hon. Member:: He certainly was.


David Réal Caouette: So the Prime Minister took over the leadership of the "idiots" in Canada, that is why today he no longer speaks of finance as he did in 1943, 1944 and 1945. Not only has the bottom been reached, but the bottom of idiocy.
Mr. Speaker, the Creditistes put the finger on the sore spot, on the source of unrest in Canada. We are not worried about wealth,
DEBATES	6779
Use of Bank of Canada to Ease Tax Burden about natural resources to develop; everyone knows they exist. The problem is a financial one, a matter of knowing how to finance the development of our natural resources. That is the question. It is a monetary one and the only one we cannot tackle. Why not? We are not the first to accuse those who control money and credit. Others have spoken about them before us.
I have here a document from which I shall quote. It has to do with the Rothschild Brothers of London who wrote, without any qualms whatever:

The few who can understand the system (check money and credits) will either be so interested in its profits, or so dependent on its figures, that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burden without complaint, and perhaps without even suspecting that the system is inimical to their interests.

They knew what they were writing about when they said the system will be interesting to one group because of its profits and that the others will depend so much on this system that they will be unable to offer any opposition.
Mr. Speaker, electoral funds replenished by people such as the Rothschild brothers have governments of their own choice elected. These governments then become mere puppets in the hands of those people. I will quote what Meyer Arsene Rothschild said, in days gone by:

Permit me to issue and control the money of a nation, and I care not who makes its laws-

The Minister of Finance is laughing because he read about that. He understands the situation and that these people-


Edgar John Benson: On a point of privilege, Mr. Speaker, I was not laughing, I was just smiling because I enjoy hearing my friend speak in English so effectively.


David Réal Caouette: It is very kind of the hon. minister to say that I am talking well in English, and I hope that the Leader of the Opposition (Mr. Stanfield) enjoyed this at the same time.
6780	COMMONS
Use of Bank of Canada to Ease Tax Burden [Translation]
Mr. Speaker, such statements were not made by members of the Railliement Credi-tiste; those are financiers who are condemning themselves or who, at least are showing off their power and the control they exercise in the United States or in Canada. It is known that in Canada, slush funds depend on large corporations. After election time, governments naturally feel obligated. Ministers, prime minister and leaders of the opposition are not being transported from one ocean to the other free, gratis and for nothing, just to get a government elected. No sir! In fact, after the elections are over, lobbying begins. Whether the Administration is blue or red-the only kinds we have had since Confederation-it has to bow to pressure groups.
Mr. Speaker, others claim they are not Creditistes, as it were, but they condemn the financial system because, I shall say it again, it is the root of all evil.
I see that my hon. friend from Levis (Mr. Guay) does not seem to agree. In his own riding, the problem is not to build ships in Lauzon, but rather to obtain money to build them, as it is a matter of funds shortage-


Mr. Guay (Levis):: What are we going to do with the ships?


Mr, Caoueite:: Put them in your own backyard with the backward people.
Mr. Speaker, what is to be done with the ships, they ask. There is a shortage of them right now on the Pacific coast for shipping wheat to the Chinese, to help the nice little Chinese. Mr. Speaker, at one time we used to buy the Chinese in Canada. Now we go and feed them in their own country. Things have changed. Here is what Abraham Lincoln said and I quote:
[DOT] (8:20 p.m.)

The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolvent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.

It is a fact. That is what happens when we speak of Social Credit. I know something about it, for I have been speaking of it for 30 years. Some of my colleagues have been doing

DEBATES	March 18, 1969
so for the same length of time, yet as soon as someone speaks of Social Credit, reporters are heard to say it is a money printing machine or funny money. Why do they say that? Abraham Lincoln gives us the explanation. It is because that power conspires against the public, against the nation in times of ad< versity.
Mr. Speaker, we speak of Social Credit and monetary reform not in order to glut the world with money, but to put money at the service of the individual, rather than the individual at the service of money, in short, to make money available when we want to use it for the benefit of the people.
We have highways, hospitals, schools to build and all kinds of things to do. If those things are not done, it is due to a lack of money. There are numerous unemployed who ask only for work, but money is short. Then they are paid retraining courses and have to take courses in the 8th, 9th, 10th and 11th forms. They become educated unemployed. They are more educated; that is the only difference. The government does not suggest any solution. When we propose the monetary reform and the use of the Bank of Canada, the government laughs at us.
Mr. Speaker, a former American president, James A. Garfield, said the following:

Whoever controls the volume of money in any country is absolute master of all industry and commerce.

Let us do that right here.
The prime minister, who is a very intelligent man-and everybody agrees with that- comes and tells us that money does not grow on trees. An hon. member finds that very funny; it is his leader who talks like that. If his leader tells him that money does not grow on trees, he will repeat it. As if we did not know. Where does it grow then? Nobody tells us. Could the hon. minister of Finance, who will speak after a while, tell us where money grows, so that we will know? But we know and we speak up. It is a matter of technology, as my hon. friend from Belle-chasse was saying; technology prevents us from knowing where money grows. However, we know that it grows when there is a war and that it "ungrows" when there is peace. That much we know. When there is a war, there is no monetary problem. Surely not. There is no question of shrinking the big ones to make the small ones bigger. Did you
March 18, 1969	COMMONS
ever hear a minister of Finance say: "Our tanks are too big, let us make them smaller to make our rifles a little bigger". Never! They keep on making rifles and tanks as big as possible, and that is the end of it.
In Canada, in the economic field, they say: "We should make the big ones smaller so that the small ones will grow bigger". We tried that and the result was the present stagnation at all levels of government. Let us take a look at the premier of Ontario who, since he introduced his recent budget, is scratching his head, does not know where to go, and then comes to Ottawa, claiming that he should get a bigger slice of the tax basis. Quebec does the same thing, as well as the Maritimes, and the Prairies. Everybody says there is no money. The Minister of Finance of Canada, the Prime Minister and the government answer: "Money does not grow on trees."
Another individual, Henry Ford, who may not have been an economist or a reputed professional, but who nevertheless knew about these things from experience, said:

Money is only one part of our transportation system. It moves goods from man to man. A dollar bill is like a postage stamp: it is no good unless it will move commodities between persons. If a postage stamp will not carry a letter, or money will not move goods, it is just the same as an engine that will not run. Someone will have to get out and fix it.
So said Henry Ford.


Some hon. Members:: Hear, hear.


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


Some hon. Members:: Carry on.


Edgar John Benson: Mr. Speaker, this is really too good to stop. We on this side will be very pleased to have the hon. member continue.


David Réal Caouette: Mr. Speaker, I thank my hon. friends for their courtesy. I notice the Minister of Finance is particularly moved by the examples I am giving him now and by the statements made by people who held prominent positions in their lifetime.
Therefore I thank the Minister of Finance for his good words and I shall endeavour to inform him as best I can, so that he will be able to tell us tonight that he does intend 29180-4291
DEBATES	6781
Use of Bank of Canada to Ease Tax Burden
to direct the Bank of Canada to serve the interests of the Canadian economy and to enable Canadians to benefit once for all from the tremendous wealth in our country.
A few minutes ago, I saw my friend, the Minister of Agriculture (Mr. Olson) and the Minister of Finance who were smiling. As to the Minister of Agriculture, he knows what I am talking about, because he has already made in this house statements which in every respect were similar to the one we are making today. I am convinced that behind the curtains, he is saying to the Minister of Finance: "Caouette is right, what he says is right." I am convinced of it.
Mr. Speaker, the member for Winnipeg-North-Center himself has just said that I am right. One would not expect that from a socialist member. The socialists themselves acknowledge that we are right.
Mr. Speaker, someone else who was not necessarily a Creditist, the ex-king of England, Edouard VIII said:
[DOT] (8:30 p.m.)

There is no scarcity of commodities. It is I think at the consuming and distribution end, that failure has occurred and it is useless to produce goods, that cannot be sold.

That is the situation. Let us go and visit seriously our Canadian industry, our wholesalers and retailers, let us go around any city, town, or village anywhere in Canada and we will realize how tremendous is the production of goods and services in Canada.
We received by mail, bulky catalogues from the T. Eaton Company, Simpsons-Sears Limited, Opera Diamond, from another wholesale company in Winnipeg. There are as many products as we may want; there is plenty of everything.


An hon. Member:: The Hudson's Bay Company.


David Réal Caouette: The Hudson's Bay? The Hudson's Bay Company.
We have oodles of everything. There is no production problem here. When I hear a minister say that we have able planners, economists, sociologists, I wonder if the government needs such sociologists and economists instead of psychiatrists to find out what those people are really thinking about.
Mr. Speaker, production exists, and it can be multiplied almost indefinitely in Canada.
March 18, 1989

Use of Bank of Canada to Ease Tax Burden Farmers are complaining that their products are not being sold, and industries that their warehouses are overflowing. Therefore, they must lay off some people and let them go tc work somewhere else after 15, 20, 25 years of faithful services. They are laid off under the pretext that we have overproduction. That is the situation. There is overproduction. Sales are made everywhere. Let us go to Ottawa, to Hull, at Freiman's or Simpsons-Sears, everywhere there are special sales. No sooner have we received a catalogue for one season than the next one advertising sales is delivered to our home.
Production exists, but unfortunately consumers do not have the purchasing power.
The government lacks the money to develop our natural resources and create new industries. Our country must constantly go and beg financial authority abroad to develop something that belongs to us, with our own materiel means. That is what we cannot accept.
That is why I told the Progressive Conservative government in 1962: A system that keeps financing production in Canada cannot be tolerated any longer, because there is no shortage of production. Instead of financing production, let us finance consumption, so that consumption can finance production. That would be logical.
In that respect, some have said that we are promising unattainable things. I told the government: Do make an experiment. Some joint experiments were made; nuclear tests, tests of weapons, aircraft, in short, in every possible field, except the financial one. They did not dare. I have suggested such a thing in the past, together with my colleagues of the Ralliement Creditiste. I shouted my suggestion all over, on television, on radio, at meetings: Do make some experiments. I do not believe that they should be started afresh every month, but let us try.
If the government and the Minister of Finance decided to distribute a $100 national dividend to every Canadian citizen tomorrow morning, it would be a $100 experiment. Not of $100 per month, but of $100 all at once, and they could check the consequences of the results. A family of ten would get $1,000, a family of five, $500, a family of two, $200, and an individual $100. That would amount to $2,100,000,000, hardly half a billion more than what is spent at the present time for national defence. This money would be in the consumer's hands. A poor family of 10 in Quebec would receive $1,000. A family of five

in Montreal would get $500. This purchasing power, Mr. Speaker, would enable people to buy clothes, food and requisites. What would this create? It would create demand; stores would be emptied. They would get new stocks through orders placed with industries. Men would be re-employed. This would reduce unemployment. Canadians by the thousands would obtain employment and our economy, thanks to consumers, would undergo a new expansion. This is most logical. Let us try it and if it proves unsuccessful nothing prevents us from putting an end to it. Nothing prevents us from withdrawing from circulation the two billions if it encourages laziness or causes people to lose their soul. Nothing could prevent us from doing that. However, if the experience is successful I am already sure that it is the only solution which will bring about the recovery of Canadian economy. Instead of remunerating "programmers" as I stated earlier, let us give consumers a chance to purchase products made for them and Canadian producers will then be able to sell their goods.
Mr. Speaker, this national dividend of $100 would not create inflation. The interest required by the financial system is now creating inflation.
The hon. member for Bellechasse stated this afternoon that our workers are paid for 40 hours of work a week and that on the other side, the financial system, while being idle, is paid 365 days a year and 24 hours a day. It is true. However, nobody speaks about it. In all the government departments, all kinds of things are discussed, except the interest on the national debt. Everybody keeps quiet on that subject.
Mr. Speaker, I have here an article written by an American banker, Mr. Robert Hamphill, who said, and I quote:

Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create amp.3 synthetic credit, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible; but there it is. The banking problem is the most important problem intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and the defects remedied very soon.
March 18, 1969



An American banker said that. Moreover, Mr. Woodrow Wilson, the former American president, stated and I quote:

A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the world-no longer a Government of free opinion, no longer a Government by conviction and vote of the majority, but a Government by the opinion and duress of small groups of dominant men.
[DOT] (8:40 p.m.)

Woodrow Wilson said that:

The great monopoly in this country is the monopoly of big credits. A great industrial nation is controlled by its system of credit. The growth of the nation, therefore, and all our activities are in the hands of a few men who chill and check and destroy genuine economic freedom.
We have been dreading all along the time when the combined power of high finance would be greater than the power of the government.

A president of the United States said that; he was in office and had no intention of going against the power of the few men who control money and credit.
Mr. Speaker, I have often quoted in the house His Holiness Pope Pius XI who said:

The quotation is from those "In the Know".
The power of concentrated economic domination becomes particularly irresistible when exercised by those, who, because they hold and control money, are able to govern credit and determine its allotment. For that reason, by supplying and controlling the lifeblood of the entire economic body, and grasping as if it were in their hands, they control the very soul of production so that no one dares breathe against their will.
Pope Pius XI

Mr. Speaker, those are statements from people who are not known as Creditistes, but who know where the difficulties and the uneasiness lie and have the courage to throw light on them, as my colleagues of the Rallie-ment Creditiste and myself are doing, inside as well as outside the house.
I have often said outside the house that the businessmen, workers, farmers we meet listen to us because they want to understand,
Use of Bank of Canada to Ease Tax Burden whereas here we are talking to people who are paid not to understand. It is different, but at least we succeed in reaching the people who are more and more aware of the importance of a monetary reform.
Mr. Speaker, I say we should seriously consider the financial crisis that confront us. The provinces are doing everything they can to solve it and the municipalities suffer greatly from it.
Mr. Speaker, if we gave serious consideration to our financial difficulties and if we took steps to solve them, Canada would be in a less confused state. We would not see any of those linguistic wrangles, of those petty quarrels where it is argued that the central government spends more money for eastern Canada than for western Canada or vice versa. We would not assist to any bombings as in Montreal or in other municipalities. We would not assist to that display of hatred which is increasing in Canada.
Mr. Speaker, we would achieve a true national unity in Canada by making available to Canadians a logical monetary system which would enable every citizen to be himself. The system is to be blamed for all our disputes. Worry is what pushes people to look for any reason to stir up strife. This is all the more astonishing as there are in Canada Frenchspeaking and English-speaking Canadians and that the provincial premiers and Canada's Prime Minister met in Ottawa recently on the occasion of a federal-provincial conference.
On the first day, everybody was talking about the linguistic matter and they did not quite succeed in understanding each other. The English provinces do not want to acknowledge the French fact. There are some people in the province of Quebec who refuse to acknowledge the English fact, and everybody is at sixes and sevens.
On the second day, Mr. Speaker, all the people were talking the same language, that of money, since nobody had any. Only one language was spoken at that time, because it was realized that the monetary system was not French, English, Ukrainian, Japanese, Chinese, or Russian. The monetary system is in the hands of a few people who do not give a damn either for the Liberal party or the Progressive Conservative party, but who dread the thought of the Creditistes gaining ground in Canada for example. They are scared to death of the monetary reform we favour which would deprive them of their
March 18, 1989
6784	COMMONS
Use of Bank of Canada to Ease Tax Burden control over the economy and the life of the Canadian people. While we in the house are striving to maintain national unity the system endeavours to destroy it. The financial system thrusts one against the other. Its principle is to interfere in order to reign. While we are fighting in English and French, the financial system takes from both the English and the French. That is what they find profitable.


Some hon. Members:: Hear, hear.


David Réal Caouette: 
that certain developing countries were in a position to obtain loans at conditions a little more burdensome, and to satisfy that particular need, we granted a loan at an interest rate of 3 per cent, with seven years of grace and falling due in 30 years.
Mr. Speaker, will anyone have me believe that here, in Canada, in Prince Edward Island, for instance, and in the Maritimes in general there is not distress almost as terrible as that in the underdeveloped countries or elsewhere? The same situation prevails here in Canada. We do not ask for miracles. We do not ask the government to stop giving aid to those countries in need of it. Not at all. But we ask the government to offer the same services at the same conditions to our provinces and our municipalities.
We ask the government to see to it that money is at the service of the human being, of the provinces, of the Canadians, instead of being the master as is the case nowadays.
The financial difficulties facing the Minister of Finance, the Prime Minister and the government could be overcome provided enough courage could be mustered to do so.
As far as the Ralilement Creditiste is concerned, we will continue to fight for monetary reform, not because we want to steal from anyone but because we want to have the greatest number of people to own something in Canada. We really want to insure for all security and freedom. This will be possible in as much as Canada has an adequate monetary system.
Since Liberal and Conservative governments found billions of dollars to win wars, there is no valid reason in the world why billions of dollars cannot also be found for peace, harmony and understanding in Canada.
The people are willing to get to work in order to build and develop the country. It is up to the government to take up the challenge and to put finance at the service of Canadians so that they can share in the wealth of their own country.


Mr. Roland Godin (Porineuf):: Mr. Speaker, since I was first elected a member of this house, in the fall of 1965, I have been greatly impressed by the numerous publications which are made available to us by different government services.
Among those documents, there is one published every year which I consider the most valuable of all, and that is the Canada Year
March 18, 1969	COMMONS
Book because that publication agrees with all the proponents of the monetary reform advocated by the Ralliement Creditiste. It agrees with them in this sense that it reveals the true wealth of our country, such as our exports.
Proportionately to our population, Canada is already the fourth largest exporting country in the world. In fact, on this same basis, our exports last year were twice as high as those of the United States.
Mr. Speaker, in this country to which nature has been very kind, we do our best to administer our own business. In the field of public administration we have chosen experienced people. In the provinces, the members are not appointed; they are legally elected. This situation prevails, at the municipal level, for the choice of our mayors and aldermen.
In our school board, the chairman and the members were chosen. They were all elected by the population because the latter recognized them as men of merit and sound judgment.
To-day, we realize that the majority of those directors, while they are serving their fellow-citizens, are anxiety-ridden. The soundest minds become dizzy. The school boards wonder how they can possibly pay their teachers.
The mayor of the city of Montreal, supposedly a man of experience, recently had to make a closed retreat to find out his true vocation.
On the other hand, the mayor of the city of Quebec is wondering whether he will be able to pay for the sidewalks that were built under his predecessor's administration.
And the confessions made in private by some representatives of the province of Quebec would surprise many people, were they made public. Now, those representatives face some problems at the present time not because the Union Nationale party is in office but for entirely different reasons.
In New Brunswick the prime minister, though a member of the Liberal party, also finds himself in an impasse, as stated in the newspaper L'Action on February 4, 1969, and I quote:
In his ninth year as premier, Louis Robichaud, now aged 43, is trying to find a way out of this financial impasse which forced his Liberal government to reduce its capital' expenses, increase taxes and forget the federal-provincial medicare program for the time being.
-New Brunswick is not the only province to experience financial problems.
DEBATES	6785
Use of Bank of Canada to Ease Tax Burden However, that is the way people comfort themselves, Mr. Chairman. Things go wrong, but the victims are not alone, for it is the same everywhere. So the same system goes on and on.
The Minister of Finance for New Brunswick stated last spring that the debt had doubled these last two years and was totalling $273,900,000.
I quote another extract of that article:
In a small province with a population of 624,000 souls, the debt amounts approximately to $441 per capita and it cramps the style of the Minister of Finance on the bond market-
Last March, Mr. Des Brisay presented a budget based on
The financial situation of the province and of the country-
He quoted the high cost of loans as well as the rise in debt-
Mr. Speaker, we remember the statement of Mr. Paul O. Trepanier, mayor of Granby, (P.Q.) a well known member of the conservative party. In a rhetorical outburst he stated that most of the municipalities were on the brink of bankruptcy.
In an article published recently in L'Action of March 1, 1969, here is what Mr. Clarence White wrote:
Our tax-payers have reached the extreme limit on what is feasible and there could be no question of adding to their tax burden, be it an election year or not. Thus spoke yesterday Mayor Gilles Lamontagne when the budget was presented to the City Council.
Quebec has four or five very difficult years ahead if the provincial government does not come to the rescue of its capital city. Quebec cannot get out of its deficit alone and without the help of the government.
Mr. Speaker, in the educational field, difficulties are just as serious. I quote from La Presse of January 29 an article signed by Mr. Roger Champoux.
-ages ago, the province of Quebec reached the limit in the matter of income and property taxes. In addition, the government is unable to draw from other items of the estimates the necessary amounts to comply with the demands of teachers. Education is essential, but there are also roads, health, industry and a thousand other urgent needs.
And Roger Champoux adds further on: Every time the teachers have submitted reasonable representations, we supported them. When woman teachers were less paid than their colleagues, we denounced that stupid condition. When country people paid less than city people, we decided that a reform was essential. When there was some of talk of granting to the teacher the
6786	COMMONS
Use of Bank of Canada to Ease Tax Burden high prestige to which he is entitled, we went along with that claim related to the respect due to the human being.
But this time, it is impossible to ask the taxpayer what he is unable to give.
Property owners are hard pressed, tenants have created a league which will make a row, big trade and industry are constantly protesting against tax increases-all those taxes which knock them left and right-in short, there is no more room and nothing goes.
Mr. Speaker, we are living in a rich country and if we consider that in 1944, national production amounted only to $11,400 million and reached $68 billion in 1968, it means that national production has increased sixfold. Faced with so much wealth, our industrialist are not the only ones to be concerned, because all classes of society are also worried. People are realizing that they are missing something.
Farmers, who were long considered to be kings of the earth, wonder today how much longer they will be able to continue their payments to the Farm Credit Corporation.
Workers wonder how their employer will be able to keep them on the payroll, because to hire labour, one must have a business, an undertaking which is reasonably prosperous. At present businesses are not only in difficulty, but they are going bankrupt, and I quote an article published in Le Devoir of March 14, 1969:
More bankruptcies in January last.. . The number of bankruptcies sharply increased in January to 176 or more than in any preceding month since March 1968, report Dun and Bradstreet.
-not only did they increase in number in January, but the liabilities also rose to $12.6 million compared to $7.0 million in December.
Retail trade, construction and services were mostly affected by the greater number of bankruptcies between December and January and in comparison with a year earlier.
Total liabilities in the month of January increased.
The article goes on to say:
For retail trade and construction, it was a ten-month record, while the number for services tripled compared to December and reached a 15-month peak.
[DOT] (9:00 p.m.)
Mr. Speaker, in matters of bankruptcies, we are now using sport terminology. In Le Devoir of Friday, March 4, it is said that the record number of bankruptcies in January was a record.
Mr. Speaker, everybody knows that fewer employers mean more unemployed. In Quebec

DEBATES	March 18, 1969
alone, compared with the last two years, the number of people on welfare has increased by 40 per cent, and as a result of unemployment, the housing problem is getting more serious. Not only a tenant cannot choose his apartment because his income is insufficient, but even the owner is forced to sell against his will. In this connection, I shall quote an article published in La Presse on March 6, 1969 under the signature of Mr. Felix Corri-veau, of Montreal. He said:
Anyone going through the streets of Montreal looking for a family dwelling finds nothing but signs reading: House for Sale. Events speak for themselves. The true problem lies with the owner.
The owner is alone responsible for everything: he has to pay the municipal school tax, to put up the money, to pay his mortgage insurance, to look after his house, his lot-
If this costs a lot from the city hall's viewpoint, this is true also for the small owner.
As far as one-family dwelling owners are concerned, it is even worse; they are being penalized because they do not have any tenant; their property is assessed at its full value; they alone have to foot the bill. Most of them finally have to sell their houses for less than the assessed price or the cost of tearing it down. The law gives you no alternative: you must pay or quit. No need to be jealous of that man since he lives in a "taxed jail" even though he had a higher ideal.
Mr. Speaker, whether they are owners or tenants, fathers and mothers alike are worried about what will be left to their children.
The young people attending school are concerned because they wonder what society will be able to offer them this spring. Once again they will be leaving our schools and joining the ranks of the unemployed. We are retraining the workers by giving them allowances, but in those hard times we are experiencing now, what will become of the young people already well-trained? For how long yet will the young people be able to remain honest?
In order to appease the French Canadian people and keep them quiet, in Quebec some glib talkers have been hired to warn them that they are simply being robbed by the English people. All they have to do is to secede from the English.
In order to quiet down the English-speaking people from Quebec, the Minister of Labour (Mr. Mackasey) was saying on Wednesday, January 29, that the uncertainty that loomed over Quebec's economy, was really due to the Union nationale and the Quebec Liberals. Therefore, all that is needed is a change of party, a new group of responsible people and the English-speaking people will be patient. For them and for the other races scattered all
March 18, 1969	COMMONS
over the country, will commission reports which will remain on the shelves always be enough? I doubt it. Without any discrimination based on race, religion or age, from birth to death, the presence of a thief in the home has always left us uncertain. And if today the Canadian people suffer from economic uncertainty, it is because on March 21, 1967, the Canadian government opened the door to thieves, when it passed Bill C-222 which removed the ceiling on interest rates charged by banks, allowing them to manipulate the interest rates on their loans. When we know that the banks have the power to multiply 14 times the deposits of the citizens, we should not be surprised at their achievements at the expense of society.
From 1944 to 1967, the assets of the eight chartered banks was multiplied by five and during that same period, the dividends paid by those same banks rose from 6 per cent to 30 per cent. But that was only peanuts, Mr. Chairman, compared to what is happening now. Therefore I wish to associate myself with the words of the parliamentary reporter for Le Soleil, Mr. Amedee Gaudrault. In one of his articles published in Le Soleil on December 11, 1968, he wrote:
The hanks' fiscal year ends on October 31 and since the last revision of the Bank Act came into force on May 1, 1967, it is only in 1968 that we could understand fully the effects of such a legislation on the Canadian economy. It is a remarkable and indisputable fact that the banks' business has made a tremendous leap. The assets of seven great Canadian chartered banks has shown a 16 per cent increase in recent years.
Mr. Amedee Gaudreault also wrote:
As for profits, they have increased by an average of 37 per cent in the case of the 7 great banks of this country, the Royal Bank leading them all with a 48 per cent rise. Banks' revenues increased by 29.3 per cent-
Therefore, Mr. Speaker, we find a 16 per cent increase in assets, a 37 per cent increase in profits and a 29 per cent increase in revenues. Those figures are taken from the report on banks and were prepared by a Liberal supporter. I hope he speaks the truth and did not add anything. Such profits, such increases do not make sense to me and here again this is just a start for we must remember that last year banks were still working by themselves and since the beginning of the new session, they can expect real profits as a great number of federal public servants are now on loan to assist them in the collection.
Let me remind you that during this session we passed Bill C-110, where we can find in section 1(a), and I quote:
DEBATES	6787
Use of Bank of Canada to Ease Tax Burden (la) The Governor in Council may from time to time by regulation prescribe the rate or rates of interest to be paid in respect of any loan made under this Act.
A little later, Bill C-151; an Act to amend the Fisheries Improvement Loans Act was passed.
Here again, Mr. Speaker, I spare the house the details. The bill was intended to remove the 5 per cent ceiling. Then came bill C-152; "an Act to amend the Veterans' Land Act" The explanatory notes read as follows:
The purpose of this bill is to remove the present 5 per cent fixed rate of interest set out in the Act that relates to sales, loans or advances made in respect to veterans in the Act. And to authorize the governor in council to establish the applicable rate or rates of interest-
The National Law on Housing, allows the government to set the rates of interest every three months. It is the same with the Farm Credit Corporation, the government sets it every three months, at the banks' will. Bill C-110 enabled the government to remove the ceiling and with Bills C-151 and C-152, the government managed to remove two more.
Mr. Speaker, each time this government, with its clean shaven leaders, has passed a bill which will blast a category of Canadian citizens, the bearded chaps in Montreal have managed to lure the public opinion by blasting a little bomb. I realize now it was team work well worth being noted.
In the past, businessmen were supposed to do their dealings in the dark. Today, they are exposed to a glaring light. The Farm Credit Corporation, and the SCHL have become collection agencies, searching the pockets of the workers, of the farmers, for the wee bit they need to make a living and sentencing them, by virtue of law, to a long, slow death.
To my mind, royal enquiries and retraining are and will remain useless surveys and expenditures as long as the Canadian government remains in the service of financiers. The people have already had to pay the piper, and the financiers relied for a long time on the complicity of the information media to make the people accept the idea that the monetary system works against them.
Fortunately, banking operations are being brought to light. It is not necessary to have worn out one's breeches in schools of high learning to understand that the system whereby we exist by going further into debt is as stupid as it is unjust. We do not need transfusions of borrowed blood; we need new, debt-free blood.
March 18, 1969
6788	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden
[DOT] (9:10 p.m.)
The Canadian people have contributed enough, I think, to produce high financiers. It is high time the government assumed its responsibilities and offered the people who live in this young and growing country of Canada the advantages it offers to underdeveloped countries of the world which could teach us a lot from many points of view.
Niger for instance. I see here, in the Minutes and proceedings of the standing committee on external affairs and national defence for the sitting held on Wednesday, January 31, 1968, that we have helped Niger:
We know that Niger receives aid from our government.
Mr. Speaker, Niger can teach us first of all how to go about with ships; because Niger is a small and poor country which the rich country of Canada helps. Yet Niger has a merchant marine and its ships navigate in our Vancouver and St. Lawrence River waters. The come for the goods we have given them or they can buy with the credits we have offered them. Now, if new credits are allotted for the sale of wheat-


The Acting Speaker (Mr. Richard):: Order. The time allotted the hon. member has expired


Edgar John Benson: Mr. Speaker, perhaps I should interject briefly at this point. First of all, I would like to correct a statement I made in the house this afternoon when the hon. member for Edmonton West (Mr. Lambert) was speaking. He indicated that he believed the Canada Savings Bond issue had raised only $70 million in new money. I said, "Surely, you mean $700 million"? I now have the figures from the Bank of Canada. The net increase through the issue of the Canada Savings Bonds in November was $871 million, and the redemptions since that time have been $217 million, leaving a net cash position at this time of $654 million. That is net new cash out of the Canada Savings Bond issue of last November after taking account of all redemptions which are moving at a relatively normal level.
The main argument that the members of the Creditiste party have been putting forward is that in Canada the money supply is not great enough. First of all, I would like to indicate to the leader of the Creditiste party, and indeed to all hon. members of the house, that the Bank of Canada is at the service of the people of Canada. It is the duty of the

Bank of Canada to look after the money supply in Canada, and the monetary policy. Indeed, it is the responsibility of the Governor of the Bank to look after this particular task. It is a very difficult and important task in Canada, and I would like to say that we are fortunate in Canada in having Mr. Bas-minsky as head of the Bank of Canada, a man who is one of the ablest central bankers in the whole world.


Some hon. Members:: Hear, hear.


Edgar John Benson: The task of monetary policy, along with fiscal and other economic policies, is to seek to maintain a financial environment that facilitates the maximum sustainable growth of the economy. It is through the achievement of this objective that the greatest sustained flow of real resources becomes available to assist in the solution of specific economic and social problems, such as the problem of poverty.
In the course of providing an adequate monetary base for sustained economic growth, the Bank of Canada adds appreciably to its holdings of Government of Canada securities each year. As at March 12, 1969, the bank held a total of $3.8 billion of Government of Canada securities. Virtually all of the interest on these securities comes back to the government since the profits of the bank are, under the Bank of Canada Act, paid to the government. If the bank bought government securities on a greater scale than was necessary for sound monetary growth this would only add to inflationary pressures in the Canadian economy. Inflation worsens the position of the poor, particularly the older people on fixed incomes. The failure of monetary policy to resist inflation would jeopardize the sustained growth of the economy and would undermine the confidence of foreign investors in our capacity to manage our affairs. On both counts there would be a smaller volume of real resources 'available to Canadians and their governments to deal with our economic and social problems.
Here, I would like to agree with something that the Leader of the Opposition (Mr. Stanfield) said in a speech a week or ten days ago-'and it is very unusual for me to agree with him-that inflation is really one of the greatest problems we have in Canada. The reason we have high interest rates in Canada, indeed the reason interest rates throughout the world are very high, is the expectation of people that inflation will continue.
I should point out that the prime bank rate in the United States was raised to 7J per
March 18, 19G9	COMMONS
cent this week, which is the highest it has been in history, and the Euro-dollar rate is 8J per cent. Interest rates throughout the world are climbing and the reason is that people believe inflation is going to continue.
We in Canada, through the Governor and the Bank of Canada on the one hand, and through the government's fiscal and expenditure policies on the other, are trying to do what we can to control inflation in this country. I should point out that last year we were the third best in the world in this regard, after Germany and The Netherlands. But this is still not good enough. We in Canada, and indeed all western countries, must combat inflation and all of us as citizens, including members of the Creditiste party, must remember that we cannot take more out of the economy through increased benefits to ourselves than results from increased productivity in the country or else inflation is going to continue. This is what the Leader of the Opposition and I have been preaching in this regard.
The consequences of an unsound inflationary monetary policy would therefore be not only to thrust further burdens upon the poor and create even more severe problems of equity, but by undermining real economic growth it would reduce total and average incomes of all Canadians, and increase their tax burden.
Several other points were raised during the course of the debate and perhaps I should deal with a few of them. There was some mention with respect to contributions to the provinces. Indeed, the proposition in the motion was that the Bank of Canada buy up provincial and municipal debentures, presumably by printing more money because that is
DEBATES	6789
Use of Bank of Canada to Ease Tax Burden the only source of funds they have. I think a better solution to this is for the federal government to stay out of the financial markets as much as possible and thus make room for the available limited resources to move to the provinces and municipalities. Indeed that is what we are trying to do. In fact, that has been our aim for some time and continues to be our aim.
[DOT] (9:20 p.m.)
However, I should point out that the federal government has made and continues to make substantial contributions to the provinces in order to lighten the fiscal burden on their taxpayers and on municipal taxpayers. It is estimated that in 1968-69 the value of the federal contributions to the provinces, under conditional and unconditional transfer programs, will total some $2.8 billion. That is close to 30 per cent of provincial expenditures in Canada. Furthermore, over the years the federal government has vacated certain tax fields, principally the personal and corporate income tax fields and the estate tax fields, to permit the provinces to raise their taxes without, if they wish, imposing an extra burden on the taxpayers. It is estimated the provinces will raise an estimated $1.8 billion in 1968-69 through federal tax abatements to them.
Mr. Speaker, I have here, if hon. members wish to have them printed in Hansard, tables indicating the amounts of federal contributions by provinces and by program for the years 1967-68 and 1968-69.


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: 
[Stage Direction]
UNDER MAJOR TRANSFER PROGRAMS Estimated ($000's)
Nfld.	P.E.I.	N.S.	N.B.	Que.	Ont.	Man.	Sask.	Alta.	B.C.	TotalUnconditional Transfers Statutory Subsidies	9,656	657	2,132	1,745	4,023	4,624	2,137	2,151	2,955	1,672	31,752(0Share of Income Tax on Certain Utilities	851	150	1,438	77	1,527	3,575	626	25	6,548	383	15,200Equalization 	69,170	13,885	78,250	71,142	277,256	-	38,111	18,391	-	366,205Total	78,677	15,692	81,820	72,964	282,806	8,199	40,874	20,567	9,503	2,055	613,157Conditional Transfers A. Shared-Cost Programs in the Field of Social Policy Canada Assistance Plan (including categorical welfare programs) 	22,082	2,389	13,654	10,347	148,460(«	117,943	16,582	15,557	26,986	38,395	412,700(«Hospital Insurance	20,400	3,700	28,300	22,200	233,732(0	286,200	34,800	35,500	59,200	68,200	793,732(0Health Resources Fund	854	188	1,309	1,068	10,009	12,052	1,667	1,654	2,533	3,244	37,540(0General Health Grants	1,059	379	1,440	1,218	10,318(«	11,655	1,767	1,748	2,617	3,320	39,733(*Medical Care	-	-	-	-	-	-	12,000	-	23,000	35,000Sub-Total	44,395	6,656	44,703	34,833	402,519	427,850	54,816	66,459	91,336	136,159	1,318,705B. Shared-Cost Programs in the Field of Technical and Vocational Training Capital Assistance	2,102	821	9,114	8,543	50,532	10,461	9,350	115	9,391	100,684(0Sub-Total	2,102	821	9,114	8,543	50,532	-	10,461	9,350	115	9,391	100.684(0C. Shared-Cost Programs in the Field of Economic Policy	
ARDA	The estimate for the Atlantic	4,079	3,642	The estimate for the Western	18,000FRED	140	Region is $4,000 700 140	4,620	500	_	3,500	Region is $6,277	9,600Trans-Canada Highway	An up-to-date provincial breakdown is not available	45,212Sub-Total	
n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a. 72,812Total	
n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	1,492,2016790	COMMONS DEBATES	March 18, 1969
Use of Bank of Canada to Ease Tax Burden
III. Other Transfers
Post-secondary education final
transfer<l0>	9,398	2,049	21,674	11,634	133,146	226,603	22,033	24,006	51,709	44,742	547,264Total	9,398	2,049	21,674	11,634	133,416	226,603	22,033	24,006	51,709	44,742	597,264GRAND TOTAL	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	2,652,622
U>
Based on Revised Estimates for 1968-69.
<!>
Equalization attributable to post-secondary fiscal transfer is excluded.
<* Old Age Assistance, Blind Persons' Allowances, Disabled Persons' Allowances, and Unemployment Assistance.
(4) Denotes programs where "contracting out" occurs in whole or in part. For purposes of comparison, the whole federal contribution is shown although it may take the form of a tax abatement, tax equalization, and an adjustment payment.
<5>
Includes $305(000) for Yukon and Northwest Territories.
<® Includes $1,500(000) for the Yukon and Northwest Territories.
® The total figure includes $75(000) for the Yukon and Northwest Territories as well as $2,888(000) to be allocated to the Atlantic Provinces together* This amount is not included in the provincial breakdown.
Includes $4,993(000) not allocated to specific provinces, as well as $153(000) for the Yukon and Northwest Territories. Excludes an estimated amount of $933(000) required for commitments to fall due during the current fiscal year.
<*>
Includes $256(000) for the Yukon and Northwest Territories as well as an amount of approximately $20,684(000) originally allocated to other Adult Occupational Training programs (Revised Estimates for 196S-69, votes 5 and 10) but later transferred to Capital Assistance programs. The provincial breakdown is also on this basis.
<10>
Includes tax abatement, associated equalization, and cash adjustment payments. Both the total and estimates for individual provinces are based on Department of Finance estimates of the value of the tax transfer and associated equalization together with forecasts of cash adjustment payments made by the Secretary of State Department.
NOTE: All figures may not add up exactly to totals due to rounding off. Also, as noted above, totals may include figures for the Yukon and Northwest Territories and various amounts which cannot be broken down by province.
March 18. 1969	COMMONS DEBATES	6791
Use of Bank of Canada to Ease Tax Burden
March 18. 1969
[Stage Direction]
Use of Bank of Canada to Ease Tax Burden
Edgar John Benson: I should like to speak briefly on the problem of equity in taxation and the ability to pay principal. The federal government does try to see that the total federal tax burden is distributed fairly in accordance with the principle of the ability of individuals and corporations in our country to pay.
Because of its basic tax exemptions, $1,000 for a single taxpayer, $2,000 for a married taxpayer, $300 for dependant children eligible for family allowances and $550 for other dependants, and its graduated rates, the personal income tax is one of the main tools used by the government to redistribute income and promote a more equitable allocation of the national wealth.
Indeed I am hopeful that by June we will be able to produce a white paper and table it in the house for the examination of the members of the house and the people of the country which will lead to an even more equitable tax system in our country but an equitable tax system that does not stop the growth which is essential to the economy of the country.
The report of the Royal Commission on Taxation, in analysing the incidence of the federal tax structure, stated that it was slightly regressive in the very low brackets of income and progressive beyond. It gave much credit for the over-all progressive slant of the system in the personal income tax which it describes as progressive throughout the entire income range. Here, I would refer to the report of the Royal Commission on Taxation, volume 2, page 245.
The present structure of the federal tax, even including the Social Development Tax, is progressive. I should like to refer to the table which I indicated in my October 22 budget speech shows the amount and the per cent of income paid in the current fiscal year in terms of federal basic tax, both before and after the inclusion of the Social Development Tax for various income classes. The illustration is for a married taxpayer with two dependant children eligible for family allowances. With the permission of the house I would also like to have this printed in Hansard.


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's Note: The table referred to follows]
IMr. Deputy Speaker.]
Married Taxpayer-two children eligible for Family Allowance
Social
Develop-
	Present	ment			
Income	Tax	Tax	%	Total	%$ 3,500	$ 102	$ 16	0.5	$ 118	3.44,000	184	26	0.7	210	5.34,500	275	36	0.8	311	6.95,000	376	46	0.9	422	8.46,000	597	66	1.1	663	11.07,000	842	86	1.2	928	13.38,000	1,109	106	1.3	1,215	15.210,000	1,644	120	1.2	1,764	17.615,000	3,294	120	0.8	3,414	22.825,000	7,790	120	0.5	7,910	31.6This taxpayer pays no income tax	if his	incomedoes not	exceed $2700.	At $3000, his tax	is equalto only	1.5% of his	income,	. At	$5000,	his taxequals 8.4% of his income. At	$7500,	his tax grows	
to 14.2% of his income. At $10,000, it attains 17.6% of his income. Beyond $10,000 his tax rises sharply and at $25,000, it accounts for 31.6% of his income. This establishes quite clearly that the personal income is very progressive in this country and that it does play a significant role as an income redistributor.


Edgar John Benson: I should now like to say a few words about government programs which assist the poor and uphold the elements of a just and humane society which we, as a government, believe in and in which I think everybody in this House of Commons believes. Anyone who analyses and understands the whole complex of federal programs will be struck by the range and diversity of expenditures which have as their prime objective easing the burden of the poor and establishing a more just and humane society in Canada. We, as a government, do not take credit for all of them but I should like to say a few words about them. Indeed, if one includes Old Age Security Pensions and the guaranteed income supplement it can be said that well over 50 per cent of total federal expenditures of some $13 billion goes for programs of human and social betterment in our country. Basically, these social development measures have a twofold purpose: First, to effect a redistribution of income as between regions and individuals, for example from the high income regions and individuals to the lower income regions and individuals; second, to attack poverty directly or via joint federal-provincial actions.
Let me enumerate some of these measures. First of all we have assistance to the aged. A great deal of effort has been made to improve the Canadian old age income maintenance system in recent years, such as through the introduction of the Canada Pension Plan and the Canada Assistance Plan. The basic old age
March 18, 1969

security pension is now adjusted automatically in accordance with a pension index and the minimum eligible age has been lowered from age 70 in 1965 to age 65 by next January 1. Guaranteed income supplements give additional income support to low income recipients of the basic old age security benefits. By way of illustration of the funds involved, it can be noted that outlays under the old age security, including the Guaranteed Income Supplement Act, totalled $927 million in 196566 and are projected to total over $1.7 billion in 1969-70. This is one place the funds we are spending are going.
Through the Canada Assistance Plan, the federal government helps the provinces extend public assistance to all needy persons on the basis of their individual needs. These needs are determined by an evaluation of budgetary requirements as well as income and resources. The program permits the extension of federal sharing into a number of areas not previously covered under federal-provincial shared-cost arrangements, and provides for federal sharing of certain increased provincial costs caused by the extension of welfare services. It specifically allows for sharing of the costs of extending provincial welfare services to Indians on reserves.
Let us move from there to health measures. The two main programs here are hospital insurance and medical care insurance. The first program permits the federal government to assist the provinces in paying for public hospital insurance programs which extend coverage for specified hospital care and diagnostic services to some 99 per cent of the population of Canada. The federal government pays 50 per cent of the shareable cost for all Canada in such a way that low income provinces get more than 50 per cent of their cost from the federal government.
The medical care program permits the federal government to assist in the financing of provincially administered medical insurance plans which include all physicians services, provide universal coverage, and are portable between participating provinces. The federal contribution to each province is also calculated in a way that favours the lower income regions of our country.
Now, let us move on to education matters which really are a provincial responsibility. The post secondary education fiscal transfer program assists the provinces in meeting the costs of post secondary education, including university, other higher education and training and grade 13 in the province of Ontario,
Use of Bank of Canada to Ease Tax Burden through a transfer of fiscal resources related to eligible post secondary operating expenditures in each province. In 1968-69, the estimated value of the total transfer of fiscal resources is $502 million, of which $224 million is in the form of cash payments to the provinces.
To assist Canadians in meeting the challenges of a rapidly changing and developing economy, and to increase the productivity and economic well-being of the labour force, the federal government, under the occupational training of adults program, assumes the full costs of training eligible adults and also pays training allowances to adult trainees. In 1968-69, $114 million has been provided for training allowances and $81 million for the purchase of courses from the provinces. The federal government provides grants to individuals to assist them in finding new employment if there is no prospect of employment in an individual's home community. Grants are also provided to help meet the costs of moving and resettlement. Six million dollars has been provided in the 1968-69 estimates for this program.
[DOT] (9:30 p.m.)
Perhaps I should say a word about regional development. The new Department of Regional Economic Expansion will be contributing a great deal toward the alleviation of poverty in those parts of the country in which the level and rate of economic development are below an acceptable standard. Already the federal government has made contributions in these areas through ARDA, the agricultural and Rural Development Act; ADA, the Area Development Agency; A.D.B., the Atlantic Development Board, and other similar programs and agencies.
For example, under the Fund for Rural Economic Development, a program to assist in the implementation of social and economic development programs in specially selected rural areas where low incomes are widespread and where there is potential for development, the federal government has entered into an agreement with the Province of Quebec covering the Gaspe peninsula and Magdalene Islands. The agreement provides for a five year program of rural re-adaptation and development which is expected to cost in excess of $250 million, with the federal share estimated at $212 million.
Our social and economic development programs for Indians and Eskimos have as their objective the improvement of the levels of living and the widening of opportunities for
March 18, 1969

Use of Bank of Canada to Ease Tax Burden this particular group of citizens so that they will be more able to enter into the main streams of Canadian economic, social and cultural life. Our programs in this area, including provision for health, welfare, education and development services are growing rapidly and are estimated to cost over $225 million in
1969-70.
The federal government provides a wide range of subsidies which assist in the development of natural resources and facilitate the growth of primary industries.
In the field of fisheries there are subsidies for the construction of fishing vessels, assistance in constructing and equipping facilities for the storage of frozen fishery products, and many other programs, such as the recently announced program to assist the groundfish industry.
The Department of Agriculture has many programs of assistance, such as the agricultural prices support programs, the Crop Insurance Act, the Farm Improvement Loans Act, Prairie Farm Assistance Act, storage payments on wheat, and so forth. Transfer payments for 1968-69 under the Department of Agriculture are estimated at approximately $160 million.
In closing, I should like to again reiterate that the economy must continue to grow and prosper if we are to make real progress in any war on poverty and establish a better country for all Canadians, which I am sure is the aim of all of us. Income redistribution programs and direct attacks on poverty are important, but underlying them there must be high employment and economic growth and the broad levers of fiscal and monetary policy must first be engaged in steering our economy along the path of strong and stable growth, and you don't do this by simply printing money.
In their first review the Economic Council affirmed this basic position. They declared that:
Social progress obviously required balanced development in a number of fields, including social security, education and worker training, health services and standards, housing, and cultural and recreational opportunities-
We would therefore argue that the most important contribution which can be made to future improvement in social welfare will be successful attainment of our basic economic and social objectives, including the goals of high employment, rapid productivity growth and reasonable stability of prices.
This is one of the main problems we have in this country.

This concept of a proper blend of social and economic measures, which is the mainspring of the government policies at present, was emphasized again by the Economic Council in their fifth annual review. The council recognized that Canada already had in operation an impressive inventory of social and anti-poverty legislation, but it enumerated some principles which should guide future federal action.
Let me quote again. At the top of the list, the council notes at page 131:
The maintenance of high employment and strong and stable economic growth is crucial. No policies are more effective in helping to move families and individuals out of poverty than the combination of demand and supply policies required to sustain new job creation and the increasingly efficient use of manpower, capital and other productive resources. Without success on this front, other anti-poverty policies are unlikely to be of much avail.
I think this conclusion is absolutely valid, and bears repeating, even if it should be selfevident. Here, as elsewhere, the council makes clear the proper role of the sound and responsible fiscal and monetary policies which the government is pledged to follow, if the larger objectives of social progress are to be achieved.


Robert Lorne Stanfield: Mr. Speaker, I did not intend to take part in this discussion, but I could not possibly sit idle and allow the things the Minister of Finance (Mr. Benson) has said this evening to pass. I agree with him, of course, about the importance of the adequate rate of growth associated with a reasonable degree of price stability and employment. I agree also that there is no simple or easy way to achieve this.
On the other hand, I cannot agree with him when he suggests that the government has been carrying out a vigourous policy in this direction. I do not wish to take up the time of the house to go over the history of achievements of ministers of finance under this government during the past years. Let me simply remind the house that it took this government some eight or nine months to produce a white paper on the subject of inflation, which I am sure a group of officials could have put together in the course of a few days.
It has been conceded in this white paper that the tools employed by the government to provide inflationary controls and a reasonable degree of employment have been the wrong ones. There can be no question about this. It is stated also there has been, on the part of
March 18, 1969	COMMONS
this government and its predecessor, a tendency to appoint a continuing royal commission plus a committee of the house to study this matter. This is hardly a proud achievement for a government which, with its predecessor, has been in office for some five or six years. It should have had this problem under greater control. It should also have taken concrete measures by this time to-


Edgar John Benson: Do you have any suggestions?


Robert Lorne Stanfield: Yes, I have suggestions. The difficulty is that the suggestions I have been making for the past year have not really been listened to by the Minister of Finance (Mr. Benson).
It really took the resolution by an hon. member of the Creditiste party to give me the opportunity to speak to the minister in the house. I do not want to use too much of the time of the house, but I cannot allow some of the things said by the minister to pass by without comment.
The record of the government in respect of growth and inflation during the past few years has been poor. Indeed, the former Prime Minister, Mr. Pearson, stated this quite clearly in the house. The white paper suggests that the policies of the government have been failures, and the government has not produced any appropriate answers.
[DOT] (9:40 p.m.)
Second, when the Minister of Finance speaks about fairness in taxation, assistance to the provinces, and so on, I would point out that the minister has refused rather bluntly to co-operate with the provinces in financial matters. He has refused, not once but several times. There can be no question about this; it is a matter of record.


Edgar John Benson: It is opinion.


Robert Lorne Stanfield: It is not a matter of opinion. When I hear "No" I recognize it as "No". When it is stated, as the Minister of Finance is in the habit of stating it in response to the requests of the provinces for consultation, I understand what he means, as they understand what he means. Surely, Mr. Speaker, this government has been raising taxes on the relatively poor in the country, not only by its 2 per cent social development tax but by the continuation of inflation. By permitting this situation to continue, the government has automatically increased the burden on the poor people of the country.
I raise these points because the attitude of the Minister of Finance seemed to be a little
DEBATES	6795
Use of Bank of Canada to Ease Tax Burden too pious in this regard. I recognize that he faces difficulties. However, we must recognize that continued inflation to the extent that we have experienced it automatically lowers the real value of tax exemptions, and therefore automatically increases the burden of taxation on the relatively poor people of this country.
When the Minister of Finance quoted from the fifth annual review of the Economic Council of Canada in relation to the war on poverty, and so on, he was very selective in his quotations. That report is really a very damning indictment of this government for the abandonment of its war on poverty. It issues a challenge to the government of Canada to get together with the provinces and really start to combat poverty in Canada in an effective way. I do not think the Minister of Finance should get away with referring to the parts of the report that suit him. As I say, [DOT]this report is in fact a damning indictment of the abandonment by the government of its war on poverty.
The minister speaks about the new Department of Economic Expansion. I think it is proper to point out that it has taken the government eight months or so to even get this legislation before the house. If this is an indication of the sincerity and determination of the government with respect to the question of regional development, I do not think we should expect too much. It has taken eight months simply to get the bill before the house and create the new department. Lord knows how long it will take to get the new department in operation. Much of what the minister said with regard to transfer payments and health and welfare payments I had the pleasure of listening to yesterday. This is one advantage of being allowed in the house every day.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I heard the Minister of National Health and Welfare (Mr. Munro) recite most of these figures about welfare payments, and so on, yesterday and they are now well drilled in my mind. But let me point out that when the Minister of Finance and the Minister of National Health and Welfare talk about the annual adjustment in relation to the cost of living, as was pointed out by many members in the house yesterday-I say this only because the Minister of Finance was not in the house yesterday and perhaps no one has brought it to his attention-


Edgar John Benson: I have read Hansard.
March 18, 1969
B"S6	COMMONS DEBATES
Use of Bank of Canada to Ease Tax Burden


Robert Lorne Stanfield: -it is a very pitiful thing. I refer to the adjustment that is made each year in respect of the cost of living. It is a maximum of 2 per cent on the basic pension of $75 a month. I want to make sure that the Minister of Finance understands this. It is difficult for me to believe he does understand it, when he rises in the house and boasts about the kind of program the government has in operation.
Without taking more of the time of the house, Mr. Speaker, I simply wish to emphasize that the government has failed in its program with regard to stability and growth. It has damned itself in its own white paper in this regard. Second, the government has been damned by the Economic Council of Canada for abandoning its war against poverty. Surely, without going any further-


Stanley Howard Knowles: Just leave it at that.


Robert Lorne Stanfield: Perhaps I should be content to just leave it at that and say that it is a little discouraging, having been in the house even for the short time that I have been here, to see the continued short fall in economic growth in the country, the continued excessive inflation in the country, the continued lack of any effective war against poverty in the country. Yet, the Minister of Finance and other ministers of the government stand up day after day and pat themselves on the back. It is just a little discouraging, Mr. Speaker.


Edgar John Benson: Mr. Speaker, I wonder whether the hon. member would permit a question. He said very early in his speech that he was going to give me some suggestions as to how to control inflation, how to better look after the Canadian economy, how to get more money to transfer to the provinces, but he has not done this. I wonder if he would send me his suggestions.


Mr. Ricard:: He told you that you never paid any attention to his suggestions.


Mr. Deputy Speaker:: Order, please.


Robert Lorne Stanfield: I would think that a man as interested as the Minister of Finance in mastering these problems would take the trouble to read my modest dissertations on this subject. I would be very happy to send him one of my latest and most comprehensive dissertations in this respect.


André-Gilles Fortin: Mr. Speaker, in accordance with standing order 6(5) (a),

I should like to move, seconded by the hon. member for Compton (Mr. Latulippe), that the present debate on the motion of the hon. member for Shefford (Mr. Rondeau) about the business of supply, be extended until 11 o'clock in order to enable as many members as possible to participate in the discussion as there are still seven members of our party who would like to speak and who are ready to do so.


Mr. Speaker:: Have hon. members any comments to make in connection with this motion? Those who object or are opposed to the motion will please rise.
And more than ten members having risen:


Mr. Speaker:: More than ten members having risen, I declare the motion dropped.


J.-H.-Théogène Ricard: Closure.


Mr. Speaker:: The hon. member has now participated in the debate. Unless the house agrees, I must now recognize another member. On the other hand, if the hon. members do not object, the hon. member could now proceed with his speech, but he must admit that he has already participated in the debate. At any rate, I think there is agreement among the hon. members to have the hon. member for Lotbiniere (Mr. Fortin) proceed.


André-Gilles Fortin: I wish to thank you, Mr. Speaker, for your kind consideration. I shall try to use it wisely and not abuse it.
I was very pleasantly informed in the course of this debate on the motion introduced by the hon. member for Shefford (Mr. Rondeau) asking the government to consider the advisability of putting the powers and resources of the Bank of Canada at the disposal of the Canadian people with a view to eliminating poverty.
Mr. Speaker, I put question No. 636 on the orders paper. A few minutes ago, the Minister of Finance (Mr. Benson) said that poverty is on the way out in Canada and that the war against poverty was proceeding normally, and that everything was going very well indeed. On the subject of taxation, Mr. Speaker, he was, so to speak, off the beam, as the matter under discussion does not involve taxation but money. There can be no question of taxation if there is no money to be distributed.
March 18. 1969

[DOT] (9:50 p.m.)
Therefore, I am surprised to see a so-called competent man stray from the subject and unable to answer to the reasonable contentions made by the Ralliement Creditiste.
Mr. Speaker, question No. 636 was as follows:
1.	How many workers In Canada earn less than $3,000 per year?
2.	How many workers in Canada earn between $3,000 and $4,000?
The Minister of Industry, Trade and Commerce (Mr. Pepin) answered me, and I quote:
1.	2,440,819.
Total percentage of employees: 47.9 per cent.
2.	1,034,909.
Total percentage of employees: 20.3 per cent.
Mr. Speaker, if we take into account all wage earners in Canada who earn less than $4,000 per year, it amounts altogether to 68 per cent.
That proves, Mr. Speaker, that the government makes empty promises and fails to take steps likely to check unemployment, to eliminate poverty, to give every Canadian, as the honorable member for Temiscamingue (Mr. Caouette) said, an adequate purchasing power, by means of a national dividend, that would enable him to meet his needs, to promote the well-being of his family, of his children and, in short, of the human person, since this is precisely the case in point.
Mr. Speaker, when I moved that the sitting of the house be extended until 11 o'clock, I was very surprised to see that government members opposed it, since only last Thursday, when we were considering Bill C-173 respecting the reorganization of the government, the house sat until midnight, and in addition to sitting at the government's request, we willingly took part in the debate. That is why I do not understand this change of attitude today.
Mr. Speaker, we have serious problems in Canada-and unfortunately I must make haste-nevertheless, I feel that the motion moved by the hon. member for Shefford (Mr. Rondeau) is most worthwhile. It suggests an approach to such serious problems as unemployment, the housing problem, the farming problem and deals with the advisability of enabling our young people to take their place in a just society.
As a young member, I should like to remind the house that there are in Canada
4,900,000	young people under 18 who, tomorrow, will enter the labour market or be unemployed. In fact, what will be the differ-
DEBATES	6797
Use of Bank of Canada to Ease Tax Burden ence between the two categories? That will depend on the kind of legislation we will pass in order to allow these young people to really take part in the economy of our country.
A while ago, while commenting the very plausible assertions of the hon. member for the Ralliement Creditiste, the Minister of Finance said that when the Canadian economy has caused production to increase, it has achieved its aim.
I see the minister nodding approvingly. This shows how limited he is in his reflections. Indeed, any economy that does not achieve its aim has not served its purpose. And, in my view, it is a sick economy. If we work as hard as possible, if we produce, if we want to establish a family, we must also consume and our Canadian economy must achieve its aim, which is consumption.
I wish to say to the house, which thinks of itself as an august institution, but which, gives rather a poor performance when it comes to acting that the group of young people between the age of 18 and 24-and I consider I am in this category since I am only one year older-has increased by 13 per cent from 1951 to 1961. It is this group of young people who tomorrow will manage our economy. In other words, the population of Canada is getting younger and younger; unfortunately governments-whether they are blue or red- they are all alike-financed and controlled by the same high finance, are old-fashioned and do not try to incite young people to do anything constructive in the Canadian economy, to really participate to the building of our country.
Nowadays young people are enrolled in universities because there are not enough jobs for them. Mr. Speaker, I prophesy a serious crisis among students this summer all over Canada. We have not seen the end of bombings nor heard the last rumblings of the revolution. The young people of Canada are asking themselves more and more frequently whether it is really possible to live in Canada?


Mr. Speaker:: Order, please. As it is ten o'clock, it is my duty to inform the house that, in accordance with standing order 58(11), the debate on the motion is deemed to be concluded.
March 18, 1969

Proceedings on Adjournment Motion PROCEEDINGS ON ADJOURNMENT MOTION
A motion to adjourn the house under Standing Order 40 deemed to have been moved.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, the other day I asked a question of the Secretary of State (Mr. Pelletier) dealing with the subject of the progress or lack of progress in the work of the Canadian Film Development Corporation. This agency was approved by parliament over a year ago now and amidst a great deal of publicity, if not puffery, was supposed to be the answer to a problem that has existed in Canada over a period of at least 50 years. During this time producers and investors have suffered their way through optimism, disappointments, good intentions, hard work, chauvinism, and even occasional chicanery in trying to introduce into Canada a vital and a viable feature film industry.
Becently members of the house have been hearing a growing number of complaints from various associations connected with the production of films in Canada. Several briefs have come to hand. The Montreal branch of the Canadian cinematographers has been very active. This group and other groups concerned with film production in Canada have appeared before the committee on broadcasting, films and assistance to the arts, so we now have a better idea of the growing feeling of hostility between the agency that was supposed to overcome long standing problems-I refer to the Canadian Film Development Corporation-and the professional people in Canada who are charged with the responsibility of actually producing the feature films that will be made possible by financial assistance through the C.F.D.C.
[DOT] (10:00 p.m.)
The complaint is that there is no consultation between this new government agency and the actual producers of films. They have recently had assurance, as a result of growing complaints, that an advisory board will be set up to provide a vehicle for continuing consultation. Actually, 1 was most concerned with getting information from the minister as to when this advisory board would be established. Until it is established, the C.F.D.C. will certainly not be able to do the job parliament has charged it to do.

It has been discovered also that money will not solve the problem. The main function of the C.F.D.C. at the moment is to give capital assistance from the $10 million fund that has been authorized. One of the main problems is distribution. Distribution outlets in Canada are largely foreign dominated and until Canada grapples with this problem the C.F.D.C. is sounding brass and tinkling cymbals as far as assisting the development of a feature film industry is concerned.
It is also the complaint that the greatest difficulty comes from direct competition from the government agencies which have a monopolistic position in film production, that is the National Film Board and the Canadian Broadcasting Corporation. In the committee it was suggested that in view of these inadequacies a series of hearings should be held so the committee could work out a policy to overcome some of the obstacles that have been referred to by film producers.
I submit tonight that it is the function of the C.F.D.C., as the agency authorized by this parliament, to work out such a policy. I trust that under the guidance of the Secretary of State (Mr. Pelletier) with his special responsibilities in this regard, we might establish closer consultation between the C.F.D.C. and the film producers so that the corporation will be able to function as intended by parliament when it approved the legislation.


Mr. Robert Sianbury (Parliamentary Secretary to Secretary of State):: Mr. Speaker, as the hon. member knows the act which established the Canadian Film Development Corporation also made provision for an advisory group. The intention of the government at that time was that there should be the closest consultation between the corporation and the film industry, and this is still the intention of the government.
The corporation has been in close consultation with those interested in the feature film industry, contrary to the contention of some who, perhaps, have not been given the attention that they feel they deserve. I can report to the house that Mr. Michael Spencer, secretary of the corporation, has been engaged for some time in talks with the representatives of those groups referred to in the incorporating act as those who should be represented on the advisory board. On February 12, for instance, he met with a group in Toronto, and met with another group in Montreal on February 28. At this time, he is in Vancouver meeting other interested persons there.
March 18. 1969	COMMONS
I understand it is the intention of the corporation, after Mr. Spencer has completed these consultations, to recommend to the Secretary of State the establishment of an advisory group. I know that the Secretary of State is most anxious to have this group established as soon as possible. Under the act, however, it is incumbent on the Secretary of State to await the recommendation of the corporation before that is done. I hope that the Secretary of State will receive such recommendation in the near future, after consultation has been completed, and that this advisory group will be a useful vehicle for the type of consultation which we all think is very desirable.


Stanley Howard Knowles: Mr. Speaker, during the pact several days a number of my colleagues and I have received a large number of letters from registered nurses on the staff of Westminster Hospital at London, Ontario. No doubt hon. member of other parties in this house have received similar letters. In the main, these nurses are complaining about the alleged shortage of registered nurses on the staff of Westminster Hospital. They contend that because of this shortage, they are not able to give the kind of service they would like to give. They also contend that it is difficult to recruit additional registered nurses because of salary conditions, the freeze on employment at the hospital, and so on.
This afternoon I asked the Minister of Veterans Affairs (Mr. Dube) a question about this matter and Your Honour thought it would be better to ask it on an adjournment motion. That is why I am here tonight, and I am happy to see that the Minister of Veterans Affairs is here also. I hope for the sake of those of us who have asked these questions publicly and for the sake of members in all parts of the house who have received these letters and are concerned, that the minister has a satisfactory answer we can communicate back to the nurses in Westminster Hospital at London, Ontario. I invite his comment at this time.
[ Translation]


Hon. Jean Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, I have also receive this circular letter which was sent to me by a nurse from Westminster Hospital, a veterans' hospital in London, Ontario.
Besides, members from this city had already sent me newspaper clippings about a
DEBATES	6799
Proceedings on Adjournment Motion so-called shortage of registered nurses in that hospital. For the information of the hon. member for Winnipeg North Centre (Mr. Knowles) and others who may be interested, I wish first to explain that the number of registered nurses in that hospital has remained reasonably constant over the past two years.
It is true that the number of professional muses in that hospital has been subjected to some fluctuations, as is the case for the majority of the other Canadian hospitals, including those under my jurisdiction.
While there has been a moderate decrease in the number of full-time registered nurses, this has been compensated for by an increase in the number of part-time nurses employed. The actual number of professional musing hours of care available to our veterans has not materially changed, and this is the important point.
This institution has an average patient load of close to 1000 of which approximately 400 patients are in the psychiatric wing and 300 in chronic or domiciliary care facilities.
With these groups it is frequently possible to provide essential nursing services with auxiliary nursing staff supervised by a reduced number of professional nurses. There has been no evidence that any patient, even on the active wards, has not received a satisfactory level of nursing care.
On the subject of the nurses' salaries, I am informed that they are much the same as in other hospitals of that city and I have figures to prove it. At Westminster Hospital, salaries are between $5,400 and $6,420; at St. Joseph Hospital they go from $5,340 to $6,429 and at Victoria Hospital, from $5,460 to $6,840.
Just recently, at the beginning of the month, the Professional Institute has been certified as the bargaining agent for the Public service nurses and it is expected that the matter of salaries will be settled shortly.
Bargaining will commence soon and I am convinced that the decisions will be to the satisfaction of all those interested.
[DOT] (10:10 p.m.)


Robert Jardine McCleave: Mr. Speaker, earlier today I asked a question relating to housing in Oakville, Ontario. This involved1 an issue that I think would be of interest any place in Canada where there is a desperate shortage of housing, particularly housing -suited to people's purses.
6800	COMMONS
Proceedings on Adjournment Motion
The case of the boarded up houses on. Normandy Road in Oakville was presented on a national magazine television show on Sunday night. This was also dealt with quite thoroughly in the March 10 issue of the Oakville Daily Journal Record. In 1947, there were 37 houses built for military occupation, 10 of which are to be demolished this year. Oddly enough these houses became vacant because of unification. The minister responsible for the unification program now finds himself with the new "hat" of housing on his head. He is faced with the problem of what to do with these 37 homes. The argument has been made that these homes are quickly deteriorating, as they were built originally to last 10 to 15 years.
When news of the projected demolition of these homes became known to people in Oakville, the housing shortage in that area became a very serious issue. A public spirited citizen, Peter K. McWilliams, Q.C., first brought the matter to the attention of the public. He wrote the Minister of Transport (Mr. Hellyer) suggesting that these houses be rented on a monthly basis until there was a final decision on the total sale and redevelopment of that particular area. I would add that these houses could possibly be rented to people who could repair them when absolutely necessary.
In the Oakville paper to which I have referred, there have been references to people of humble circumstances who are forced to pay $185 for the monthly rent of town houses, and who find that this is really more than they can bear. So, naturally they regard these boarded up houses as a solution to their problems, if only for the short term. Incidentally, the way we carry out our redevelopment schemes in Canada, it will probably take years before something new could be put in their place.
I hope the reply from the government side will be that some common sense has intervened and that these houses will be available at the monthly rentals suggested under the formula that Mr. McWilliams advanced. This would do something a least to ease the problem in Oakville.
Finally, Mr. Speaker, may I quote from a letter written by Mrs. Juliana W. Burns which appeared in the March 13 issue of the Daily Journal-Record. She is the wife of a man who earns $90 per week and in her letter she says:
The houses we could have had are all above our heads rent-wise, when you consider that you have to pay for heat and hydro and the rent is
DEBATES	March 18, 1969
$150 per month that is nearly three quarters of a working man's salary. At this rate we could hardly afford to feed and clothe ourselves, and this is not living, we are merely existing from day to day wondering where our next meal is coming from. We can't move in with relatives as there is no room and the town would only put us out anyway.
Surely there must be someone somewhere who has something to offer, all we want is half a chance to live normally.
Mr. Speaker, there is someone somewhere who could give the Burns family of Oakville a chance to live at a reasonable rental if only for a short period of time, and that person is the Minister of Transport (Mr. Hellyer) or the Minister of National Defence (Mr. Cadieux). I hope the reply tonight will be favourable to Mrs. Burns.


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the Minister of Transport (Mr. Hellyer) reports that the question refers to 37 houses that were constructed in 1947 to house servicemen returning from World War II. The dwellings were designed and built for a life expectancy of from 10 to 15 years. Prior to completion of construction, the local military command entered into an agreement with Central Mortgage and Housing Corporation to rent the houses to serving members of the armed forces. That arrangement is still in effect. But, because structural components are deteriorating at an alarming rate, to the point where some are already uninhabitable, and because our engineering reports indicate that rehabilitation would not be economical, a decision was taken that six houses, all of which are vacant, should be demolished.
The Minister of Transport's views on demolition, at a time when every available dwelling is so urgently needed, are well known. Hon. members will recall that the report of the task force made the point rather vigorously. Because of this, and the strong representations made by the hon. member for Halton (Mr. Whiting), the Minister of Transport has asked Central Mortgage and Housing Corporation to engage the services of a firm of independent engineering consultants with instructions to make a further assessment of the physical condition of the houses, to advise us on the possibility of salvaging this living accommodation and, if so, the probable per unit and over-all cost.


Mr. Speaker:: This house stands adjourned until two o'clock tomorrow afternoon.
Motion agreed to and the house adjourned at 10.21 p.m.

Wednesday, March 19, 1969