1969-11-13

ROUTINE PROCEEDINGS


Hon. George Hees (Prince Edward-Haslings):: Mr. Speaker, I ask leave, seconded by the hon. member for Peace River, to move the adjournment of the House under Standing Order 43 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the serious increase in unemployment during the past month from 5 per cent to 5.3 per cent seasonally adjusted, the culmination of the steady rise which has been taking place for the past four months because of the failure of the government to control inflation and thereby keep Canadian products competitive with foreign goods, and to pursue an aggressive export drive to sell Canadian products in the world market.


Mr. Speaker:: As I understand it, the hon. member is seeking unanimous consent to adjourn the House to discuss this matter. Under the provisions of Standing Order 26 it seems to me there is basically and procedurally something wrong with the proposed motion of the hon. member. I would think it is in order for the motion to be moved under Standing Order 43, but I would not think that the hon. member can, under the provisions of Standing Order 43, make a motion which would normally be made under the provisions of Standing Order 26. I suggest to the hon. member that the motion he has proposed to the House in those terms is not in order. If it were, he would require the unanimous consent of the House.
To facilitate things for the hon. member I might at this point ask whether there is unanimous agreement to move the adjournment of the House for the purpose suggested by the hon. member.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Apparently there is not
unanimous agreement, but I have to-


An hon. Member:: Struck out again, George.


Mr. Speaker:: -caution the hon. member that the motion is not properly worded in that it seems to circumvent the provisions set out in Standing Order 26.



CONSUMER AFFAIRS


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I rise to ask the House, under the provisions of Standing Order 43, for unanimous consent to move a motion regarding the inflationary increases in Canada, particularly the increase in fuel oil prices by the oil companies, which the Minister of Consumer and Corporate Affairs agreed yesterday "was obviously inflationary and obviously damaging to the economy". Therefore I ask leave, Mr. Speaker, under the provisions of Standing Order 43, seconded by the hon. member for Regina-Lake Centre, to move the following motion:
That a Standing Committee of the House of Commons to be known as the Standing Committee on Consumer Affairs be established to inquire into and report upon the trends in the cost of living in Canada and factors which may be contributing to changes in the cost of living.
And that, further, as first order of business, this committee be authorized to meet forthwith and proceed as quickly as possible to investigate the recent price increases of the oil industry and their effect on the inflationary situation in Canada.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There is not.



ORAL QUESTIONS


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, may I direct a

November 13, 1969
Inquiries of the Ministry question to the Minister of Regional Economic Expansion. Since unemployment increased between September and October by 35,000 people, that figure including an increase of
11,000	in the province of Quebec and 10,000 in the prairie provinces, is the minister ready to announce any programs to alleviate the serious increase in unemployment already apparent in these regions? Apparently the rate of unemployment is likely to increase this winter.


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, the officials of my department are now negotiating with the representatives of all the provinces, especially with those of Quebec and the provinces affected by unemployment, in order to carry out as soon as possible the programs agreed to, to create new jobs and fight the unemployment referred to by the Leader of the Opposition.


Robert Lorne Stanfield: Mr. Speaker, may I direct a supplementary question to the minister. Is the government accepting congratulations upon the success of its program to create more unemployment, particularly in regions of slow growth, in order to overcome the problem of inflation-


Mr. Speaker:: Order, please. I doubt whether the question as asked is in order. The Leader of the Opposition is asking whether the government is accepting congratulations. I am not sure whether that is all that urgent.


VIOLENT DISTURBANCES
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is for the Minister of Justice. Since the Montreal bylaw passed yesterday banning demonstrations clearly invades the domain of criminal law and has the effect of superseding traditional forms of the exercise of the right of free public debate and assembly-


Mr. Speaker:: Order, please. The hon. member cannot make a statement. He has to ask a question.


Francis Andrew Brewin: I will ask it, Mr. Speaker. Will the government take steps to have the constitutional validity of this bylaw referred to the Supreme Court of Canada as soon as possible?
[Mr. Stanfield.!


Hon. John N. Turner (Minister of Justice):: Mr. Speaker, I have nothing to add to what I said on Monday in the House.


An hon. Member:: Zero plus zero is zero.


Francis Andrew Brewin: A supplementary question, Mr. Speaker. The minister said in the House that he could not deal with the matter because the bylaw had not been passed. In view of it now having been passed, will he not answer my question?


John Napier Turner: Mr. Speaker, we now have a copy of the text of the bylaw as it was before it was submitted to city council. As I said on Monday, we are studying it.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, may I direct a supplementary question to the Prime Minister. When Mr. Saulni-er met him a few days ago, did he discuss the terms of the bylaw with him?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I do not think it appropriate for me to disclose that which was discussed by Mr. Saulnier and myself at a private meeting.


Mr. David MacDonald (Egmoni):: Mr. Speaker, may I direct a question to the Minister of Justice. After the law officers of his department have had a chance to review the bylaw passed by Montreal city council, will the minister make a statement on motions in order to clarify this very important matter?


John Napier Turner: Mr. Speaker, it is not usual for the Attorney General of Canada to give opinions on constitutional matters since these are still questions that are ordinarily decided by the courts.


CANADIAN BROADCASTING CORPORATION
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, yesterday when I asked the Secretary of State if he was aware that a CBC employee had taken the liberty of phoning a separatist at the Rouyn CEGEP to ask him to organize a demonstration against Bill 63 of the Quebec National Assembly, he answered that he would find out whether there was any truth in my statement.
November 13, 1969

Would the minister tell us whether he has been in touch with the CBC management about that matter?


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, as a matter of fact, I have asked for information on this allegation made by the hon. member. Apparently, the latter was mistaken as far as the date is concerned, but the investigation is still going on.


David Réal Caouette: On a question of privilege, Mr. Speaker. Last evening, the C.B.C. French network newscast ran my interview with Mr. Michel Gaudet about a question I had asked in the House. After the interview, the regular announcer, Mr. Pierre Nadeau, explained that the news had not been given on the 11 p.m. newscast on October 30 and that, obviously, my statement was not quite true.
Mr. Speaker, I inquired this morning and found out that the C.B.C. did broadcast the said news at 11 p.m. on October 28. The C.B.C. employee did phone a separatist at the Rouyn CEGEP during the afternoon of October 28 and urged him to send the students out for a demonstration.
Now on October 28, there was no demonstration in Rouyn, but in fact, on October 29, there was one in the morning.
Mr. Speaker, I simply ask that Mr. Nadeau-and this is my question of privilege-stop garbling the news in order to deceive the population-


Mr. Speaker:: Order, please. I must remind the hon. member that pursuant to Standing Order 17(2), he must normally give notice to the Chair of such a question of privilege.


David Réal Caouette: Mr. Speaker, on a point of order.
Since the minister has just said that he has been informed that my question was unfounded, because the date of October 30 was not involved, am I not entitled to give the necessary explanations so that the minister, parliament and even C.B.C. announcers may know the truth?


Mr. Speaker:: Order. The question is
hypothetical.


NORTHERN AFFAIRS
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Prime Minister.
21362-49J
Inquiries of the Ministry Has the government given its approval to purely token participation in self-government on the part of the inhabitants of the Yukon and Northwest Territories? I ask this question, Mr. Speaker, in light of the reforms in territorial government recently announced by the Minister of Indian Affairs and Northern Development. The elected representatives total only 9 of the 14 members of the council and only one of four executive members. I also ask this question, Mr. Speaker, in light of the Prime Minister's oft-repeated desire-


Mr. Speaker:: Order, please. I have to intervene at this point. The hon. member knows that questions should be for the purpose of seeking information. At the present time the hon. member is conveying information to the House. That is not in order. I suggest that the hon. member should now ask his question.


Wallace Bickford (Wally) Nesbitt: Thank you, Your Honour, for your very wise advice. I will, of course, be delighted to abide by it. I put the question this way, Your Honour. Has the government given its approval to the announcement of the details of participation in self-government on the part of the inhabitants of the Northwest Territories and the Yukon? This announcement was made yesterday, Your Honour, by the Minister of Indian Affairs and Northern Development.


Pierre Elliott Trudeau: Mr. Speaker, I am a little bit confused by the question. Perhaps I could repeat what I said yesterday and the hon. member may ask a supplementary and perhaps clearer question. I said yesterday that the general principle, laid down by the minister, was government policy and, in broad terms, the government policy is that the Yukon and the Northwest Territories are not yet ready for any form of provincial status. This is the government's position. If it is the position of the opposition that they should have provincial status, we should like to hear argument on this point at some time.


Wallace Bickford (Wally) Nesbitt: I am sorry the Prime Minister was confused and misunderstood my question. I am aware, of course, of the statement he made yesterday. But my question today-and I will try to make it clear if I can-is: has the government given its approval to the details-"the details", not the general policy-of the experiment in democracy in the Yukon and the Northwest Territories as announced yesterday by the Minister of Indian Affairs and Northern Development?

November 13, 1969
Inquiries of the Ministry


Pierre Elliott Trudeau: Yes, Mr. Speaker, we did give our approval to the principle and to the details, but with regard to whether those details were stated exactly by the minister in the Northwest Territories, I don't know. I said, yesterday, that I had not read the final draft of his speech, nor have I done so since then, but I do not think the government is bound by every comma in what he said. However, the principle is government policy, and this is what the government is intent on implementing.


Mr. Frank Howard (Skeena):: Could the Prime Minister convey a request to the Minister of Indian Affairs and Northern Development to be in the House tomorrow and make a statement on this matter in order that in this same arena other Members of Parliament may have an opportunity to comment?


Pierre Elliott Trudeau: I will gladly convey that request to the minister.


Hon. W. G. Dinsdale (Brandon-Souris):: supplementary question with reference to any statement the minister may make in the House on motions. Bearing in mind the strong protests made by the elected council of the Yukon Territory arising from this announcement, would the Prime Minister suggest to his colleague responsible for northern development that in the course of his statement he might refer to the strong resolutions passed by the council with reference not to provincial status but to greater autonomy and increased responsibility?


Mr. Speaker:: That is really not a question but a suggestion made by the hon. member to the Prime Minister.


POST OFFICE
Mr. Bernard Dumont (Frontenac):: Mr. Speaker, according to the roster, the Postmaster General and Minister of Communications should be in the House today. In his absence, I am forced to put my question to the Prime Minister.
Could he tell us if his government intends to emulate the United States and grant special postage rates to non-profit publications by amending the Post Office Act?


Gérard Pelletier: Mr. Speaker, as the Postmaster General and Minister of Communications could not be in
IMr. Nesbitt.]
the House today, he asked me to take notice of any questions that might be directed to him, and I am pleased to do so for the hon. member's question.


BROADCASTING, FILMS AND ASSISTANCE TO THE ARTS REQUEST FOR FACILITIES FOR COMMITTEE COUNSEL
Mr. J. P. Nowlan (Annapolis Valley):: My
question is directed to the Secretary of State, Mr. Speaker, as the minister responsible for the Company of Young Canadians. Would he consult with his colleagues and, in particular, with the government House leader, in order that his good offices or the collective good offices of hon. gentlemen opposite might be used to provide an office and secretarial help for counsel appointed by the parliamentary committee at present inquiring into the affairs of the CYC?


Mr. Speaker:: The hon. member will
recognize, I think, that this question should be directed to the administration of the House. Perhaps the hon. member would like to make his representation in the usual way to the Chair for consideration.


John Patrick (Pat) Nowlan: I should like to ask the Secretary of State whether he would consult with the chairman of the parliamentary committee which is inquiring into the affairs of the CYC in order that the pending resignation of counsel does not take place tomorrow?


FINANCING OF SALE OF LOCOMOTIVES TO YUGOSLAVIA
Hon. D. S. Harkness (Calgary Centre):: have a question for the Minister of Industry, Trade and Commerce, Mr. Speaker. In his absence I propose to direct it to the acting minister, whoever that may be. Will the minister look into the reasons why the Export Development Corporation has failed to provide financing for a very considerable sale of diesel locomotives to Yugoslavia? Further, in view of the fact that considerable unemployment will be caused unless this sale goes through, would the minister make sure that the matter is reconsidered by the corporation?


Hon. Robert Stanbury (Minister without Portfolio):: I shall be glad to bring this matter to the attention of the minister.
November 13, 1969


EXTERNAL AFFAIRS
[Stage Direction]
Mr. Stanley Knowles (Winnipeg North
Centre): Mr. Speaker, may I direct a question to the Prime Minister. In view of reports that Murray Hill Limousine Service of Montreal cancelled certain arrangements they had made to supply buses for trips from points in the United States to Washington by Americans wishing to participate in the demonstration where on Saturday because of representations made to Murray Hill by a Canadian Member of Parliament, can the Prime Minister say whether this was done with the knowledge and consent of the government?
Pierre Elliott Trudeau: It was not done with my knowledge or consent, Mr. Speaker, nor have I any reason to believe that it was done with the consent of any other minister.


Mr. Knowles (Winnipeg North Centre):: May I ask a supplementary question, Mr. Speaker, which I should like to direct to the Minister of Justice. In view of statements made by Murray Hill that one of the reasons for breaking this arrangement was that they did not want their files examined by the FBI, may I ask whether there are any arrangements under which private companies in Canada can have their files investigated in this way?


Mr. Speaker:: Order. I would think that this supplementary could well be placed on the order paper.



AGRICULTURE


Mr. R. E. McKinley (Huron):: Mr. Speaker, I have a question for the Minister of Agriculture. In view of the fact that dairy producers are left in the dark annually in regard to the government's forthcoming dairy policy, would it be possible for the minister to announce the next dairy year policy well in advance of the beginning of that dairy year instead of a day or two before it commences?


Hon. H. A. Olson (Minisier of Agriculture):: Yes, Mr. Speaker. There was an attempt to do this last year and it would have been done had there not been some major changes in dairy production that became known just a few days before April 1.
Inquiries of the Ministry


Robert Elgin McKinley: A supplementary question, Mr. Speaker. While the minister is on this subject, could he give the House an assurance that there will be no further cutbacks in the government's allotment to the dairy producers in the coming year?


Horace Andrew (Bud) Olson: No, Mr. Speaker.



POST OFFICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Postmaster General, but since he is not in the House and he has no parliamentary secretary, though he does have 15 task forces, may I direct my question to the Acting Postmaster General. It concerns the Committee for Fair Postal Rates, composed of representatives of many important non-profit publications seriously injured by existing postal rates, who met with the minister earlier today. May I ask whether an assurance was given to this important group that they could expect, not a free rate, like the National Liberal Federation, but a much better rate than they are now paying?


Mr. Speaker:: Order, please.

WHEAT-DIRECT SALES TO EASTERN FARMERS tTranslation]


Mr. Speaker:: Order, please. I think the hon. member has a supplementary.


David Réal Caouette: Yes, Mr. Speaker, I wish to ask the Minister of Agriculture a question.
Can the Minister tell us whether he is considering altering his policy with regard to the western wheat farmers so that they can sell their wheat direct to another province without having to go through the Wheat Board in Winnipeg?


Horace Andrew (Bud) Olson: Mr. Speaker, I am not quite sure I understand the question and I would like to take it as notice so as to give a more precise answer. However, I do not believe it is the intention of the government to relax the regulations respecting the movement of wheat across provincial borders.

November 13. 1969
Inquiries of the Ministry



SASKATCHEWAN PROPOSALS RESPECTING WHEAT AND POTASH

Mr. John Burton (Regina East):: Mr. Speaker, my question is directed to the Prime Minister. Can the Prime Minister indicate to the House whether he has now had a meeting with the premier of that province of Saskatchewan and whether any progress has been made on questions involving that province's wheat barter proposals and potash problems?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I can so indicate to the House, but no, I have not had any meeting with Premier Thatcher.



THE CANADIAN CONSTITUTION


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Prime Minister whether the Minister of Communications was stating the position of the government of Canada when he said in Toronto last night that nine of the ten provinces of Canada are making very little contribution to constitutional discussion, and that nothing of substance has come from these provinces? Is this the position the government is taking?


Pierre Elliott Trudeau: Mr. Speaker, this is not a matter of policy; it is a matter of opinion.


Robert Lorne Stanfield: Mr. Speaker, I gather it is not the opinion of the government.


Pierre Elliott Trudeau: Surely, Mr. Speaker, I could not answer that with a yes or no. Some provinces are contributing more and some provinces are contributing less. This is a matter of opinion.


An hon. Member:: How about the federal government?


Robert Lorne Stanfield: Mr. Speaker, I take it that the Prime Minister is disassociating himself from the remarks of the minister-


Some hon. Members:: Order.


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: I should like to ask the Prime Minister whether-


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask a supplementary question. Let me ask the Prime Minister whether it is the view of

Canada, as expressed by the Minister of Communications, that the Confederation for Tomorrow conference called by Premier Robarts in 1967 was a "grandstand play", and whether it is also the view that-


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: This may be great fun to my hon. friends opposite, but is it also the opinion of the government, as expressed by the Minister of Communications, that only the province of Quebec is making any positive contribution to these discussions and that the others have lost interest?


Pierre Elliott Trudeau: Mr. Speaker, I can be quite firm about this. We certainly do not take the position that Premier Robarts embarks upon grandstand plays.


Robert Lorne Stanfield: Another supplementary question, Mr. Speaker.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: In view of the fact that the Minister of Communications seems to be embarrassing the government and is also a liability to the country, will the Prime Minister consider appointing him to the National Parole Board or some other refuge for retired-


Mr. Speaker:: Order, please.


Stanley Howard Knowles: Cancel his parole.


Some hon. Members:: Hear, hear.


An hon. Member:: It would be too hard on the Tories who came before the board.



CONSUMER AFFAIRS


Winona Grace MacInnis: Mr. Speaker, in light of the similar increase in fuel oil prices announced today by BP Canada Limited, following yesterday's inflationary increase by Shell Canada Limited, I should like to ask the Minister of Consumer and Corporate Affairs to indicate whether the Combines Investigation Branch is looking into the collusive nature of these price increases?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have said on many occasions that the Director of Investigation and Research under the Combines Investigation Act watches significant price movements and can be expected to fulfil his statutory duties under that Act.
November 13, 1969


Winona Grace MacInnis: Mr. Speaker, is it possible for him to end the watching process and go ahead with the stopping process?



THE CANADIAN ECONOMY


George Harris Hees: Mr. Speaker, I should like to ask whether the Minister of Consumer and Corporate Affairs will take the first opportunity on motions to outline to the house what success the Prices and Incomes Commission has had since it was established in persuading management to hold down prices and labour unions to hold down wage demands? Also, what is the program of the commission for the immediate future?


Stanley Ronald Basford: Mr. Speaker, the chairman of the commission has been making a number of statements. I will discuss with him whether in his view it would be useful for me or himself to make an additional statement in answer to the hon. member's question. The commission is carrying out its program which the Chairman has announced in various statements. I hope the hon. member joins with me in wishing him success. I have complete confidence in the members of the commission, and it would be of great value to the Canadian economy if people would co-operate with them so they may be successful in this undertaking.


George Harris Hees: Mr. Speaker, if the successes of the commission are to be measured by the public statements about its activities so far, will the minister not agree that the commission has been a complete failure, and would it not be a good idea to wrap it up, dismiss it and save the taxpayers' money?


Mr. Speaker:: Order, please.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, in view of the fact we are not getting much action from the commission as it is now set up, will the minister give serious consideration to reconvening the committee on consumer prices which proved so effective the last time?


Stanley Ronald Basford: Mr. Speaker, I dispute the implication in the question. The commission has undertaken a program of work, research and inquiry in co-operation with economic interest groups in the country. I cannot
Inquiries of the Ministry accept the implication that it is not doing anything.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Prime Minister another question in view of the difficulty we are having as to when ministers are or are not stating government policy. Was the Minister of Consumer and Corporate Affairs stating government policy yesterday when he indicated that in his opinion any price increase constitutes a violation of the principle of restraint?


Mr. Speaker:: Order, please. I am not sure whether the Leader of the Opposition is referring to a statement made in the House or a statement made outside the House. Certainly it is not in order for a member to ask whether a statement made in the House by a minister represents government policy.


Max Saltsman: Mr. Speaker, I should like to ask the minister whether it is his intention to reconvene the committee on consumer prices as a way of dealing with these increases which are taking place?


Stanley Ronald Basford: Mr. Speaker, at the end of the last session there was an order on the Order Paper somewhat along those lines. I am currently having discussions with my friend the House leader as to an appropriate motion for the Order Paper, and how it might be fitted into the Parliamentary program.


Robert Lorne Stanfield: Mr. Speaker, I should like to rephrase my question to the Prime Minister. Is it his view or the view of the government that any increase in prices constitutes a violation of the principle of restraint being pursued by the government?


Pierre Elliott Trudeau: Mr. Speaker, I do not know whether this is a moral judgment or an economic judgment, but if a proposition can be defended in logic I would think it should not be left to stand alone. As a general principle I see nothing wrong with it.


George Harris Hees: I have a supplementary question.


Mr. Speaker:: Order, please. We have already had a number of supplementary questions on this point. I realize that-


George Harris Hees: Just one.


Mr. Speaker:: The hon. member says he has just one, but the hon. member for Skeena and the hon. member for Waterloo are also anxious to ask just one. If we have time we

November 13, 1969
Inquiries of the Ministry will return to the subject. I must caution hon. members that there are a number of members in the third and other rows who are anxious to ask questions and who will blame the Chair if they do not have an opportunity to do so.



OFFICIAL LANGUAGES


Bernard Dumont: Mr. Speaker, I should like to direct a question to the Secretary of State.
Could he tell us if the $3 million spent for the Public Service Language Centre are included in the $50-million grant offered to Canadians for language teaching?


Mr. Speaker:: It seems to me that the hon. member's question could be put on the order paper. If there is any urgency, the question could be debated at the time of adjournment.


Bernard Dumont: At ten o'clock, Mr. Speaker.



INQUIRY OF THE MINISTRY

Hon. Martial Asselin (Charlevoix):: Mr. Speaker I have a question for the Prime Minister.
Does he approve of the attitude of the Quebec Liberal party leaders, particularly Messrs. Bourassa, Laporte, Wagner and Le-sage-


Mr. Speaker:: Order. I do not believe we can hear the hon. member's question. Furthermore I suggest that in its present form the question is out of order.


Martial Asselin: Mr. Speaker, have I your permission to word it in another way?
Does the Prime Minister approve of the attitude of the Quebec Liberal party which, according to information published this morning, intends to vote against the motion for third reading of the Quebec National Assembly Bill 63?


Mr. Speaker:: The new wording is not more agreeable than the first.


Martial Asselin: On a point of order, Mr. Speaker.
Could I ask the Prime Minister whether, as a citizen of Quebec, he approves of the principle of the languages bill-


Mr. Speaker:: Order. The hon. member cannot ask questions of the Prime Minister in his quality of citizen of a province.



AGRICULTURE


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, in light of the fact that a great many foreclosure actions have been taken or threatened in parts of northern Alberta and Saskatchewan, including one by the Farm Credit Corporation against a man with ten children, and in light of the fact that thousands of honest farmers are unable to meet their obligations as they fall due because of the peculiar situation this year, I should like to ask the Minister of Agriculture whether the government is considering accepting its responsibility by passing legislation to re-acti-vate the Farmers' Creditors Arrangement Act to protect these people?


Horace Andrew (Bud) Olson: Mr. Speaker, as far as foreclosures by the F.C.C. are concerned, I have asked for a report regarding their actions in respect of every single case. I am advised that information like the hon. member has given me is not common to the foreclosure actions that have been undertaken. Indeed, there were something less than 15 out of 562 in the entire area and there will be no evictions of anyone who has made any attempt whatever to look after his indebtedness and is still living on the land.
So far as the other part of the question is concerned, I am unable to answer it. I think this kind of legislation falls in a department other than agriculture.


Gerald William Baldwin: I have a supplementary question. Will the minister and his officials not review the provisions of the Farmers' Creditors Arrangement Act and the very useful service it performed after being passed by a previous Conservative government to see whether it could be re-enacted in order to cover the present circumstances?


Horace Andrew (Bud) Olson: My hon. friend misinterprets that act-


Mr. Speaker:: Order. This is fast becoming a partisan debate which would be of no interest to the House of Commons.



POST OFFICE


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I have a question for the Minister of Communications but first I wish to
November 13, 1969	COMMONS
thank him for rushing back to the House in time for the last part of the question period. In view of the representations made to the minister today by representatives from the Committee for Fair Postal Rates, is the minister considering granting some relief under Section 12 of the Post Office Act in respect of postal rates for regular publications of nonprofit organizations? If not, will he give an undertaking to the House to review all such publications and the postal rates they are charged?


Hon. Eric W. Kierans (Postmaster General and Minister of Communications):: I thank the hon. member for the question and for explaining my earlier absence from the House.


George Harris Hees: Were you making some tapes?


Eric William Kierans: The meeting was called by Mr. Bill Dodge of the Canadian Labour Congress. He was not present, unfortunately, but I did meet with a group. We discussed the matter very carefully and I explained that my colleague the Minister of Consumer and Corporate Affairs is subsidizing the consumers-


Mr. Speaker:: I hesitate to interrupt the minister and I realize it may not be easy to give a short answer to a long question. However, I do not think he should make a statement of policy.


Eric William Kierans: Mr. Speaker, in brief my answer is that if these magazines would put up their subscription rates by amounts varying from 8 cents to 34 cents they could cover all of the increased postal rate.



INQUIRY OF THE MINISTRY

David Réal Caouette: Mr. Speaker, I have a question for the Minister of Justice.
In today's Montreal Matin, one could read the following:
Mr. Real Caouette, N.D.P. leader, asked In the Commons whether the C.B.C. had authorized one of its employees to phone the Rouyn CEGEP from Montreal.
Since this newspaper calls me the leader of the N.D.P., does the minister feel I have the right to bring an action for libel against it?
DEBATES	773
Inquiries of the Ministry TRADE



IMPORT OF COTTON THREAD-EFFECT ON VALLEYFIELD PLANT

Hon. Theogene Ricard (Saint-Hyacinihe):: Mr. Speaker, I should like to direct a question to the Minister of Labour.
Has he received from the United Textile Workers of America, local 110, in Valleyfield, a letter informing him that the entry into Canada of cotton and thread compels the Dominion Textiles plants to lose one or two weeks of work each year, which is prejudicial to the workers of that company?


Hon. Bryce Mackasey (Minister of Labour):: The letter would be better directed, Mr. Speaker, to the minister in charge of manpower than to the Minister of Labour.


J.-H.-Théogène Ricard: Mr. Speaker, I should like to direct this question to the Minister of Manpower and Immigration.


Mr. Speaker:: May I remind the hon. member that there are only a few minutes left before the end of the question period but perhaps we could allow him to repeat his question.


J.-H.-Théogène Ricard: Then I direct my question to the minister concerned and I hope that he will be kind enough to answer it because it interests a lot of people who will be out of work if the government does not assume its responsibility.


Mr. Speaker:: Order. We are running out of time. The hon. member for South Shore.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: I wish to direct a question to the Minister of Justice. Is the minister now ready to table his report on the findings of the Standing Committee on Fisheries and Forestry relative to the seal industry?


John Napier Turner: Mr. Speaker, the hon. member asked me what action I was taking with regard to the report of the Standing Committee on Fisheries and Forestry. The third recommendation was that the Department of Justice be advised of

November 13, 1969
Inquiries of the Ministry
unresolved conflicts in the testimony of some for a so-called bash to celebrate their Klon-witnesses. The record of the testimony given dike activities, would the minister or his by certain witnesses who appeared before the Parliamentary Secretary check to see why committee is under investigation by the Edmonton, which has carried on the tradition RCMP. Upon completion of the investigation of the Klondike and Klondike days, has not it will be a matter for the appropriate provin- been included in this so-called slush fund? cial authorities to determine whether the evidence is sufficient to warrant prosecution ^r' Speaker: Order, please, under the Criminal Code.



BILINGUALISM AND BICULTURALISM


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I should like to direct my question to the Prime Minister.
Could he say whether Bill 63, now before the Quebec National Assembly, meets the aims of integral bilingualism in Canada set by the 1968 Constitutional Conference in which the present Prime Minister participated?


Mr. Speaker:: I doubt very much that this question is in order. The hon. member is asking the Prime Minister to express an opinion and I feel the question is out of order.


Georges-J. Valade: Mr. Speaker, may I ask the Prime Minister whether Bill 63 is contrary to the guidelines issued at the 1968 Constitutional Conference, which he himself presided.


Mr. Speaker:: I believe that I should again express the same opinion. I hope that I am not mistaken, for the matter, of course, is very serious. However, I feel that the hon. member is asking the Prime Minister to express an opinion and, in that respect, the question is out of order.


Georges-J. Valade: Mr. Speaker, on a point of order. May I call Your Honour's attention to the fact that the Prime Minister rose to answer the question?


Mr. Speaker:: That of course does not alter the fact the the question is out of order.

The hon. member for Edmonton Centre.



INQUIRY OF THE MINISTRY

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I wish to direct this question to the Minister of Indian Affairs and Northern Development or in his absence to his parliamentary secretary. In view of the government having allocated $2 million to major cities



SELECTION OF COMMITTEE CHAIRMEN

Mr. James A. McGrath (St. John's East):: Mr. Speaker, this question is for the government House leader. In the interest of making committees more autonomous vis-a-vis the government, would the government House leader follow the excellent example set this morning by the Committee on Privileges and Elections in electing a member of the official opposition as vice-chairman so that perhaps on some of the other committees a member of the official opposition could be elected as chairman?


Mr. Speaker:: The hon. member for
Saskatoon-Biggar.



CASH ADVANCES ON UNTHRESHED CROPS- INQUIRY AS TO LEGISLATION

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. In view of the minister's statement to the House on November 7 to the effect that legislation will be brought forward to provide for cash advances on unthreshed grain in disaster areas similar to advances provided under the Prairie Grain Advance Payments Act and in view of the urgency of the situation, can the minister inform the House when such legislation will be brought forward?


Horace Andrew (Bud) Olson: No, Mr. Speaker, I cannot give the exact date when it will be introduced.



CANADIAN BROADCASTING CORPORATION


Mr. Colin D. Gibson (Hamilton-Wenl-worth):: Mr. Speaker, may I direct a question to the Secretary of State. In view of the public interest over current disarmament negotiations and in Canada's role at the United Nations, would the Secretary of State consider requesting that the CBC consider
November 13, 1969	COMMONS
programs dealing with Canada's role at the United Nations?


Mr. Speaker:: Order. The hon. member has made a suggestion or representation to the minister. It is not a question.



TRANSPORT


David Samuel Horne MacDonald: Mr. Speaker, I have a question for the Prime Minister. Could he indicate to the House whether or not he has conveyed to the Premier of Prince Edward Island that the government of Canada may be reconsidering its decision, made earlier this year, not to build the Northumberland Strait crossing and, if not, whether it has made available to the Premier much of the preliminary data acquired in the earlier surveys and work?


Pierre Elliott Trudeau: No, to the first part of the question, Mr. Speaker, and as to the part about the data I am not aware. I shall have to ask the departments concerned, especially the Department of Public Works.



PUBLIC ACCOUNTS


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the government House Leader if he could bring in promptly the necessary motion to enable the Public Accounts Committee to proceed with its very important work?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, I will be meeting the House Leaders this afternoon at five o'clock to discuss this and other related matters.
[DOT] (3:00 p.m.)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, November 12, consideration of the motion of Mr. Gray (for Mr. Basford) that Bill C-135, to amend the Canada Student Loans Act, be read the second time and referred to the 21362-50J
DEBATES	775
Canada Student Loans Act Standing Committee on Trade, Finance, and Economic Affairs.
Mr. Speaker:: The hon. member for Battle River.


Mr. Cliff Downey (Battle River):: I had concluded my remarks on the Student Loans bill, Mr. Speaker.


Mr. Speaker:: Is the House ready for the question? If the minister speaks now he will be closing the debate.


Hon. Herb Gray (Minister without Portfolio):: Mr. Speaker, I am rising merely to point out that another hon. member, if I am not mistaken, was rising.


Mr. Speaker:: I understand the hon. member was rising for the purpose of leaving.


Herbert Eser (Herb) Gray: Mr. Speaker, I think members would expect me to attempt to respond briefly to some of their questions and to deal, at least in a preliminary way, with some of the very interesting comments they have made in this debate. I thank them for their contributions to it. I am sure we could go into the matters that have been raised so far in the debate in greater detail when this bill is before the standing committee.
The hon. member for York-Sunbury (Mr. MacRae), who has a distinguished record as an educationalist, asked why the requirement with respect to a declaration of residence is proposed to be deleted in the draft bill. I think that the explanation is to be found in the fact that essentially the bill calls for the maintenance of the requirement of a year's residence but stipulates that the person applying for a loan, who is not a citizen, must be a landed immigrant. It is my understanding that to become a landed immigrant a person must declare he has the intention to reside permanently in Canada. Therefore, it would seem to me that achieving the status of landed immigrant would be a more definite indication than the signing of a simple declaration that the person wishes to remain in our country as a permanent resident and make his life here.
The basic purpose of this provision is to make clear that those who come here with student visas are not intended to be covered by the Canada Student Loans Act. The reason for this is that by definition a person with a student visa is someone who has demonstrated he has the financial resources available to him to pursue the course of studies he has in
November 13, 1969

Canada Student Loans Act mind in this country. So, I think the point which concerned the hon. member is covered by requiring that someone who is not a citizen not only must reside here for a year but must become a landed immigrant in order to become eligible for a student loan.
The hon. member also asked for some explanation of the payments made to the province of Quebec, and of how they are made. He seemed rather concerned when I indicated, I guess by a shaking of the head, that it was a transfer not by way of fiscal equivalent but a real payment.
The details of the formula can be found in section 12 of the Act. It is a rather complicated formula and I will not take the time of the House to read it, but to use the words of the annual report it may be summarized as follows: The alternative payment made to a province which does not participate is based upon two factors, the actual payments by the minister to lenders for interest and other charges, and the population aged 18-24 in a non-participating province relative to the size of the same age group in participating provinces.
This formula permits determination of the amounts,that have been paid over the years to the province of Quebec. The total paid to the province of Quebec since the inception of the plan in 1964 is in the amount of some $7,334,000, and the payment in the year 196869, which is part of this total, was in the amount of some $2,900,000. We should recall that the federal government itself does not provide the moneys for the loans. As hon. members know the moneys are provided by the banks and certain credit unions. The federal government pays the interest on the loans made to students from the participating provinces during the period of their postsecondary studies and for six months thereafter.
Various members have commented upon the criteria for determining eligibility for loans, for example, the hon. member for York-Sunbury, the hon. member for Brandon-Souris (Mr. Dinsdale) and the hon. member for Battleford-Kindersley (Mr. Thomson). Some, like the hon. member for York-Sunbury, referred to the test to determine eligibility for loans in a way that was somewhat more sympathetic than other hon. members, including some in his own party. I do not quarrel with that because that is part of the process of debate in our parliamentary system. However, I would like to point out that the criteria for eligibility for loans are

not set forth in the Act itself or in any regulations made under the act by the federal government.
Basically, the Act says in effect that loans can be made only where a student presents a certificate of eligibility which is issued by an appropriate provincial authority, and to get such a certificate he has to demonstrate to that authority that he has attained a satisfactory scholastic standard and that he is in need of a student loan. As I have said, the criteria for need are not defined in the Act itself or in the regulations made under it, but instead in a set of criteria which reflect basically the provincial consensus on these matters. To reply to a very interesting point raised by the hon. member for Battleford-Kindersley, this means that the act itself, so far as I am aware, does not define what would constitute an independent student, and therefore a change in any definition of such a student would not have to be carried out through amendment in the act itself but instead in the administrative criteria which have been worked out by the provinces.
Decisions on eligibility for loans and on amounts of loans are not made by any agency of the federal government but instead by provincial authorities who apply these criteria. Therefore hon. members who have raised problems that have been brought to their attention by students whose applications have been turned down, or who have received loans in amounts they do not consider satisfactory, should make attempts to see that the appeal procedure which is provided for in these criteria is used. This will enable those not satisfied with the decisions of the provincial authorities to have these decisions reviewed. I again stress that there is an appeal procedure set forth or called for in these criteria which have been developed through provincial consultation.
The hon. member for York-Sunbury (Mr. MacRae) also expressed the fear that many millions of dollars which have been paid out under student loans would prove uncollectable. However, I think the experience to date should provide some reassurance. If one looks at the annual report one can see that a number of students have already begun repaying loans. About 93 per cent were meeting their obligation on a regular basis. About 3.5 per cent encountered difficulties in meeting regular payments due to a variety of circumstances such as illness, or lack of steady employment, only about 3.5 per cent of those
November 13, 1969

now responsible for their repayment obligation seem to have tried to avoid their responsibility in some way. I think this speaks quite highly of the integrity and common-sense and of the soundness of the general approach by our young people who have taken advantage of the student loan program. In my opinion, it augurs well for the attitude of students in future who have not yet come to the stage of repaying their loans.
The hon. member for Wellington (Mr. Hales) stated that he felt the chartered banks should be called upon to make sure that those students-and I am saying again, Mr. Speaker, that the percentage so far is very small- who have not been meeting their obligations are required to do so. He asked whether there was some procedure followed by the federal government to make sure that the banks were doing all they could in this regard. I am happy to inform him that there is in fact an established procedure, which has been worked out between the guaranteed loans administration of the Department of Finance and the lending institution, whereby a series of steps have to be completed by the lender before it can submit a claim for payment by the federal government. I am not going to discuss these steps in detail, but they begin with the bank sending a letter and can culminate with court action and judgment taken by the bank against the defaulting borrower. Should one or more of these steps be omitted, a responsible officer of the bank must explain why to the government. In all cases where a claim for payment is submitted to the government, the bank officer must sign a statement to the effect that the loan is uncollectable at the present time.
I should point out, Mr. Speaker, that while the government does pay interest on student loans until the end of the sixth month after the month when the borrower ceases to be a full-time student, should a loan be defaulted, the government pays to the bank the outstanding principal amount but only any past due interest. This total amount, however, becomes a debt due the Crown and follow-up procedures are begun to attempt to recover these funds from the borrower. The federal government does not pay interest indefinitely to the banks on past due loans which they are not attempting to collect. I know the hon. member for Wellington (Mr. Hales), as chairman of the Public Accounts Committee, will be interested in having this reassurance.
Now, Mr. Speaker, the hon. member for Oshawa-Whitby (Mr. Broadbent) made some
Canada Student Loans Act very interesting comments on the social desirability of the student loan program and also made some reference to the Liberal program of 1963. As I recall, in so far as that program covered this area, it had basically three parts: One, a system of youth allowances; second, creation of a student loan program, and third, a scholarship or bursary program. I think it is well to recall that two of these three programs have been implemented. The youth allowance program is in operation as the student loan program and of course we also have had for several years a program under which the federal government has been paying half the operating costs of postsecondary education. This program is costing the federal government hundreds of millions of dollars. Comments have been made about the social desirability of student loan programs and how they should fit into the general spectrum of student aid.
I might say that I, personally, do not consider that student loan programs will turn out to be the final word on the subject of efforts by governments-and I use the word in the plural-to make certain that all who are capable and desirous of post-secondary education have access to it. Canadians generally have been increasingly willing to support, as a desirable and necessary goal, steps to insure that everyone is able to get all the education desired, irrespective of personal financial resources. However, to achieve this goal calls for effort by more than one level of government. Since under our present constitution education is essentially a provincial matter, this means that any federal activity in this field must take into account this fact of Canadian life. Aside from what the present Canadian constitution provides in this area the provinces appear to have strong views as to the extent that the federal government should attempt to operate in what presently appears to be essentially a field of provincial jurisdiction. It seems to me that our movements toward this goal have to be made within this particular context. In saying this, one should not forget that the Canada student loan program has helped many students get post-secondary education who probably would not have otherwise had the resources to do so. I think this is demonstrated by the facts of the operation of the program. In 1964-65,
42,000	students received loans under the program. In the past year, this number increased to 107,000.
We could of course talk at length, Mr. Speaker, about improvements that could possibly be made to this program but I think we
November 13, 1969

Canada Student Loans Act should not forget that what has been done represents a real allocation of resources by the federal government to student aid. If this plan were not in existence, these resources might possibly have gone into other areas of priority. The federal government has not simply guaranteed payment of loans. Since the beginning of the plan in 1964, a total of some $23 million has been paid for interest, the relatively small amount of claims and alternative payments to Quebec. And certainly these amounts for interest and so on can be expected to increase in future years.
A number of hon. members, Mr. Speaker, have made suggestions for changes in the plan, for addition of different categories of students or changes in the maximum amounts that may be borrowed. For example, several hon. members called for the inclusion of parttime students in the plan. It is true that at the moment the plan only provides for loans to full-time students, but it should not be forgotten that its main purpose is to assist students to obtain education through full-time study so that the education need not be dragged on over several years. In many cases, part-time students hold employment which would assist in paying costs. At the time the plan was originally presented and adopted by Parliament the intention was that it cover full-time students only.
It should be kept in mind when looking at the question of broadening the plan or including other categories or changing the general approach, that when it was introduced in 1964 it was as a broad general measure in the student aid field. It was not intended to meet all the needs of all students seeking postsecondary education but was designed to supplement resources available to students from their own efforts and their families as well as other private or provincial student aid funds. As a reflection of this fact, the maximum individual loan amount of $1,000 did not, even in the first loan year, meet the entire average cost of a student's attendance at a post-secondary institution. As hon. members have pointed out, it is true that costs have increased since that time and $1,000 will now finance a relatively smaller portion of the total costs involved. One should not forget, however, that in 1964-65 the Canada student loans plan was the only major government measure in the student aid field. Since then there has been a dramatic increase in the volume of student aid made available by provincial governments which has helped offset rising costs.

The demand by most students, educationalists and others has been for increased grant aid rather than loans in order to minimize the loan burden on students. Programs of student aid in several provinces have been moving in this direction. One should keep this in mind when calling for an increase in the maximum amount of loans, annually or in total. I think at least one hon. member called for such an increase. However, other hon. members pointed out the problem that could be created if students should graduate with a heavy burden of debt. The maximum loan amount that could be obtained by a student for his postsecondary education under the plan was fixed originally with a view to taking into account the problem that could be created by imposing on the student an undue burden of debt after he graduates.
[DOT] (3:10 p.m.)
It is my understanding that the provinces are in the process of reviewing, together with the council of ministers of education, the whole field of student aid. The federal government has said that, if invited by them, it would be pleased to take part in this review. Therefore, in spite of the very interesting arguments made by various hon. members with regard to changing in some significant way the structure of the Canada student loans plan, it would not seem appropriate, in view of this ongoing review, that consideration should be given to making basic changes in the program until this review has been completed.

Mr. Speaker, the hon. member for Champlain (Mr. Matte), and the hon. member for Hillsborough (Mr. Macquarrie) have raised the question of maximum amounts under the Canada Student Loans Act.
I want to say that the purpose of the bill is to guarantee sufficient money to meet loan requirements and this is why we are asking the House to approve the increased loan provision.
According to my information, the federal government has always taken the necessary steps to make sure that there is enough money to meet student loan requirements throughout Canada. It is the main reason why the government is introducing this bill now.
As far as I know no student has ever been refused a loan because provincial allocations were insufficient.
November 13, 1969
These allocations have always been adjusted so as to meet needs of students everywhere in Canada.

Dealing with another point raised by the hon. member for Hillsborough (Mr. Macquar-rie), I seem to recall him making references to age limits in the Canada Student Loans Act. There is, I should like to assure him, no age limit in the act as far as eligibility for loans is concerned. Perhaps he noted the reference in my remarks to the 18 to 24 years age group. This reference was made solely to help to describe the formula which was used for determining the division of the total amounts permissible in the participating provinces.
The hon. member for Vancouver-Kingsway (Mrs. Maclnnis) has brought to the attention of the House the problem of people who have encountered difficulty in meeting repayment terms for various reasons. She mentioned a case where one person was not able to make payments because he was not able to find permanent employment. I should like to assure her and this House that such situations are in fact provided for by the regulations. There exists in the regulations a considerable degree of flexibility in setting the terms of repayment to fit the ability of the borrower to repay or for changing them where the borrower's financial circumstances are, for one reason or another, upset. In addition, there is considerable consultation between the guaranteed loans administration and the lending institutions where genuine cases of hardship are encountered. The important thing for the borrower falling into this sort of difficulty to remember is that he should consult with the bank as soon as possible. I am informed that almost in all cases where complications arise for borrowers in this category, they do so because they have failed to advise the lender of their circumstances. So, the existing regulations do appear to provide sufficient flexibility to take care of the types of cases the hon. member has raised. Therefore, it would not appear necessary to call for an amendment to the act itself to deal with such problems.
To conclude, Mr. Speaker, may I say by way of conclusion, to hon, members that I would be very happy to receive any questions or complaints they may have brought to their attention from time to time about the operation of the Canada student loans plan.
Small Businesses Loans Act
If the matters in question happen to fall within that aspect of the plan which is directly under federal administration, that is matters having to do chiefly with the relationship between the government and the banks which make the loans, I would be happy to have them looked into and, if possible, dealt with in a satisfactory way. If they deal with aspects that come under provincial administration, including aspects dealing with questions of eligibility which I have outlined, I would be very happy to inform hon. members as to the steps they should take to have them reviewed by provincial authorities; or, if they prefer, I would be happy to make sure myself that these matters are looked into by provincial authorities. I hope hon. members will feel free to avail themselves of my willingness to assist them in dealing with problems of this type.
I will conclude, therefore, by saying that we have certainly had a very good discussion during this second reading stage. I look forward to going into other aspects which I have not had the opportunity to deal with at this point when the bill is before the committee. I hope it will be agreed that, on the basis of my own initial presentation, and the discussion that has followed, this bill deserves the support of this House on second reading.


Mr. Speaker:: Is the hon. member for Bat-tleford-Kindersley rising to ask a question.


Mr. Thomson:: On a point of order, Mr. Speaker, the Minister without Portfolio two or three times in his remarks referred to the hon. member for Battleford-Kindersley. I think he probably meant to refer to the hon. member for Battle River (Mr. Downey). I have not taken part in the debate on this bill. I make this slight correction for the sake of the record.


Herbert Eser (Herb) Gray: Mr. Speaker, I stand corrected. Both hon. members are active in the work of this House, and perhaps my mistake therefore was a reasonable one to make.


An hon. Member:: You'll go a long way, Herb.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


Herbert Eser (Herb) Gray: that Bill C-9, to amend the Small Businesses Loans Act, be read the

November 13, 1969

Small Businesses Loans Act second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, in this bill are proposed a number of amendments to the Small Businesses Loans Act. The small businesses loans program is one of a group of three commercially oriented guaranteed loans programs under federal government auspices. They are designed to make available federally guaranteed term credit from private financial institutions to small businessmen, farmers and fishermen, to enable them to undertake a wide variety of expansion and improvement projects. The companion acts, therefore, to the Small Businesses Loans Act are the Farm Improvement Loans Act and the Fisheries Improvement Loans Act.
The Small Businesses Loans Act, first passed in 1960, provided for an initial three-year lending period. The act has subsequently been amended from time to time to provide for additional lending periods. Under the legislation, businessmen engaged in a number of fields of activity can obtain loans of up to $25,000 to finance a large number of business improvement projects. A small business is defined in the Act as one which has estimated gross revenues of less than $500,000 in the year in which it applies for the loan and which is engaged in one of the following forms of business activity: manufacturing, retail trade, wholesale trade, provision of services, construction, transportation and communication.
[DOT] (3:20 p.m.)
Borrowers may use the proceeds of loans to finance the purchase of fixed or movable assets or equipment or for the purchase, construction or improvement of business premises. Small business loans must generally be secured by a first charge on machinery or equipment purchased or a mortgage on business premises. In addition, the borrower must sign a promissory note and the bank may, if it considers it advisable, require further securities to be given in order to secure a loan. Loans may be repaid over a period of up to 10 years. The act does not place the banks under any obligation to make such loans. In fact, it is a requirement of the legislation that they exercise the same care in the making of small business loans as they do in the general conduct of their business.
Lending under the Small Businesses Loans Act has proved to be relatively stable, ranging between $20 million and $26 million in


each year since the beginning of the program, with the exception of 1967 when the volume of loans declined to $11 million. From the time this program was started until November, 1968, the maximum rate of interest which banks could charge on loans made under the program was established under the regulations at 5i per cent.
For some time prior to 1968, however, the general level of interest rates had been moving steadily upward and during 1968 this movement accelerated. The result of this was to make the 5J per cent maximum rate unrealistic in relation to other avenues of investment which were open to lenders. In November of 1968 an order-in-council was made which changed the basis on which the maximum rate for small business loans was determined. This rate is now established twice annually, April 1 and October 1, and is based on the average of certain government of Canada bond yields over the preceding six months, plus a margin of 1 per cent. For the current period, October 1 of this first to March 31 next, this maximum rate is 8J per cent. Since the interest rate procedure was implemented, lending has returned to levels closer to the levels of past years.
I now wish to outline the amendments to the Small Businesses Loans Act proposed in Bill C-9. These amendments parallel changes which have been made to the Farm Improvement Loans Act and the Fisheries Improvement Loans Act in the past year or so. If the present amendments are adopted by Parliament, these three programs will operate on a consistent and comparable basis. The amendments will enable trust companies, insurance companies, mortgage loan companies as well as credit unions, Caisses Populaires and other co-operative credit societies to apply to the Minister of Finance (Mr. Benson) for designation as eligible lenders under the Small Businesses Loans Act. This will parallel changes made in other guaranteed loans legislation and considerably broaden the types of financial institutions from which small businessmen may seek financing under this act.
The current lending period would, in the absence of amendment, expire on December 31 of this year. Among the amendments being proposed, therefore, is one which will add an additional 18 month period which will expire on June 30, 1971. This will result in the lending period under the Small Businesses Loans Act ending at the same time as the current lending periods under both the Farm Improvement Loans Act and the Fisheries
November 13, 1969

Improvement Loans Act. This will enable the government to review these three very similar programs as a group when they next come up for renewal. Possible changes in each can then readily be assessed in light of the implications which it holds for the others.
Under the Small Businesses Loans Act there is a two-fold limitation of the extent of the liability of the Minister of Finance for loans made. The first of these relates to the aggregate value of loans made by all lending institutions in a lending period. For the current lending period this over-all maximum was established at $300 million. During the new lending period established by these amendments, this amount is to be set at $100 million in respect of loans made by all chartered banks and $50 million in respect of loans made by all other eligible lenders.
The second part of the minister's liability deals with its extent to an individual lender. Currently, the liability is limited to an amount equal to 10 per cent of the gross value of loans made by any one lender. Since only the chartered banks had been eligible lenders in the past and since each had a sizeable amount of loans under the act, this in practice amounted to a 100 per cent guarantee as 10 per cent of the aggregate loans made by each was more than enough to pay out in full balances owing to banks on defaulted loans.
This provision could, however, expose a lender with only a few loans to the risk that if there was to be default on even one or two of them, there would be insufficient guarantee to cover the entire amount of the loss to the lender. In order to minimize this possibility, the liability of the minister to an individual lender will now be set at an amount equal to 90 per cent of the aggregate value of the first $125,000, 50 per cent of the amount between $125,000 and $250,000, and 10 per cent of the amount in excess of $250,000 of loans made by that lender. It is hoped that this revision will encourage the making of small business loans even at the low volume of lending by the individual classes of lenders who will be eligible to do so under the proposed amendments.
In conclusion, I wish to say it is the government's hope that these amendments will be of help to the small businessmen in Canada who constitute an important element of our economy. While lending under this program has never approached the volume under the Farm Improvement Loans Act, it has none the less been a useful source of term financing for the
Small Business Loans Act small businessmen. Since its inception some
20,000	small businesses have obtained financing of almost $190 million under this program. The proposals in Bill C-9 will ensure that this kind of credit facility will continue to be available to assist small businessmen in Canada.


Cliff Downey: On reading Bill C-9, an act to amend the Small Businesses Loans Act, one finds that section 1(a) extends the definition of a bank within the meaning of the Act to credit unions, caisse populaire, trust companies, loan companies and insurance companies. When the Bank Act was revised in 1966, the government refused amendments defining the business of banking in such a way as to bring credit unions and institutions of this type, carrying on all the functions of banking, under the control of the Bank Act. Yet, in this bill the government is deliberately amending an Act so as to define these institutions as banks. I have no quarrel with this, but it does give me the feeling there is some inconsistency in planning by the government.
The thought occurs to me, why should trust companies be included in this bill? I wonder whether they have actually sought the change to allow them to engage in this business or if this is merely wishful thinking on the part of the government. With a measure of this kind, it is necessary to examine how effective it has been and how many people are making use of these small business loans. I now wish to refer to the annual report of the Small Businesses Loans Act. I find that in the period 1961 to 1965, the total of the loans remained constant at $26 million per year. In the period 1966-1967, this amount decreased to $20 million. In 1968, the figure decreased to $11 million, or slightly more. I think we can draw a parallel to this, to some extent. If hon. members will look at the report on the operation of the Farm Improvement Loans Act they will find there was a gradual build-up to a point at which something between $200 millions and $212 million was being lent in the years from 1965 to 1967. Then, in 1968 it dropped to $40 million, or a little more, which represents a far greater decline than is evident even in small business loans under the legislation we are considering.
[DOT] (3:30 p.m.)
It is interesting to compare these figures with those of the Industrial Development Bank operating in an area where the interest rate has been allowed to rise. We note at once
782	COMMONS
Small Business Loans Act the absence of a similar decline in the amount of money lent. The current I.D.B. rate of interest is something like 10 per cent on amounts less than $50,000, whereas the rate for the small business loans would be 8J per cent. Knowing the demand which exists for credit at the present time it is obvious there must be definite reasons for the sharp decline in the amount of money lent under the Act now before us.
Three reasons come to my mind. First, the Act could be too restrictive-it might not seem to be, but possibly it could be interpreted by the banks in terms which are too restrictive. It may be we should broaden the scope of this Act so as to cover more types of business, or more lines of credit. We should certainly encourage the use of loans of this type. I am sure hon. members looking back to their ridings, would agree it is much better to have 50 businesses employing 20 people each than to have one business employing 1,000.
Another reason, and one which in my view can be advanced with a greater degree of certainty, follows from the fact that no loan can exceed $25,000. While this may have been realistic back in 1961, it is not even in the ball park today. I do not intend to discuss the changes in the price structure and in the cost of living index since 1961, because we are all familiar with this situation, but I will say that a maximum figure of $40,000 or $50,000 would be far more in line with the credit requirements of business today. The I.D.B. figures certainly indicate that loans in the higher category are more generally required.
The third reason which occurs to me, and I believe it is probably the main reason, is the reluctance of the banks to lend money under this Act. This situation might be partially corrected by the amendment which would increase the percentage of the guarantee for banks whose aggregate amount on loan under the Act did not exceed $250,000. Nevertheless,
I cannot but feel there is a reluctance on the part of the financial institutions to lend money at the current rate of 8i per cent when it is possible for them to do considerably better.
We are all aware that the banks have an obligation to this country and to its citizens. When Parliament granted them a charter to service the money market and create credit they accepted this obligation. I submit, from our experience of the operation of this Small Businesses Loans Act and of the Farm Improvement Loans Act, that they are not

DEBATES	November 13, 1969
living up to their obligation. We can see the demand for loans generally is increasing. But instead of fulfilling their obligations under their charters, our banks are simply going after bigger profits. They are going after the dollar, that is all it boils down to, and they are not concerned with small business; they are not concerned with the people. They would much prefer to put their money where there is no risk and where interest rates are higher than to lend it under this small loans legislation. It is time the minister put his finger on the banks and told them: Live up to your obligations to the citizens of this country or maybe we should revoke your charter.
The banks have a responsibility and it is the duty of the government to see they live up to the terms of their charters. If we allow the present situation to continue we could eventually find the banks lending all their money to the large corporations. General Motors, for example, could use far more capital than is needed for all the small business and farm improvement loans put together. I believe the banks are tending to look at the situation in this light. They are not conscious of any pressure on them to fulfil their obligations, and they are by-passing small borrowers. Look at the amounts set aside for guarantees as compared with the amount used under this Act-something like $100 million set aside for each year, and only $11 million used last year. We know the demand is there, so we can only conclude that a great deal must be wrong in this area.
Last week the Minister of Finance (Mr. Benson) put his finger on the small businesses of this nation. His white paper on taxation said, in effect, to small businessmen, the middle class of this country: Live up to your obligation to the poor. But he is not doing anything to affect the real wealth of this country. The tax rates to be imposed on certain income levels will be dropping from 80 per cent to 50 per cent. If the minister is willing to put his finger on small businesses and private entrepreneurs, I say he should be willing to put his finger on the banks and tell them to live up to their responsibilities, too.
When we look at the financial statements of the banks we find they are not suffering any hardship. I have a statement here from the Royal Bank of Canada from which I note that in the last three years, from 1966 to 1968, net profits rose from $27 million to $35J million. There is certainly no reason for the banks to complain about their profit margin. They should be forced, if necessary, to go out into
November 13, 1969

the market and extend credit where it is needed.
I do not believe one can consider this bill adequately without at the same time taking into account the ramifications of the white paper on tax reform, if and when they are implemented-and there is every indication from the government that they will be. Most of the small businesses that will obtain loans under Bill C-9 are what the white paper describes as closely held corporations, and for taxation purposes will be taxed at rates similar to those applied to unincorporated businesses. When a small businessman takes a loan under this Act-the same can be said of farmers taking farm improvement loans-a contract is entered into for a period of time. I believe the time limit on small business loans is up to ten years. In many cases, these loans will extend into the period when the proposed plans in the government's white paper on taxation come into effect.
[DOT] (3:40 p.m.)
Present borrowers are contracting to repay their loans in a given period knowing that the tax rate under our present corporate structure is 21 cents on the dollar on amounts under $35,000, the sort of loans we are mostly concerned with here. What happens to these businesses when the government changes the rules in the middle of the ball game? The borrower who has contracted to repay his loan at the current taxation rate is suddenly put into the position of being called upon to pay 130 per cent of his present rate of taxation. By way of additional burden, he may also be paying 50 per cent tax on paper profits supposedly accrued from a misplaced valuation date.
In short, Mr. Speaker, I say that these amendments will do absolutely nothing for the small businessman unless the finance minister puts his finger in present banking policy. May I also say there is little benefit bestowed by legislation that we hope will encourage small businesses and private entrepreneurs when there is already on the drafting board a systematic program that will lead to the eventual destruction of such private enterprises.


Roderick J. (Rod) Thomson: Mr. Speaker, I should like to draw to the attention of the Minister without Portfolio (Mr. Gray) that this time both the hon. member for Battle River (Mr. Downey) and the hon. member for Battleford-Kindersley
Small Business Loans Act are participating in the debate, and since it is reasonable to suggest that he may become confused perhaps he should not quote us directly.
First of all, may I put a direct question to the minister in the hope that he will reply to it when he closes the debate. My question concerns how the Department of Finance intends to supervise and guarantee loans that are made by authorized corporations. The reason I raise this question is that an insurance company, authorized under provincial legislation in Ontario, recently went bankrupt with particularly messy results. In this case many investors lost their money. I would not want to see any federal taxation money going down a similar type of drain, so perhaps the minister will explain how he intends to supervise companies who lend money under a federal guarantee in accordance with the terms of the act.
As we all know, Mr. Speaker, there has been a trend in recent years for small businesses to be swallowed up by the large corporations. Sometimes small businesses are bought up; on other occasions direct competition has been successful in forcing the small businessman to the wall. I hope this bill will provide him with some relief in this regard. Certainly, the small businessman needs capital, and in a time of inflation and tight money it is extremely difficult to find.
I suggest this bill can be likened to a piece of string. Although you can give the string some leeway, and let it out a little, you cannot exert pressure on it. Similarly, you cannot persuade a small businessman to borrow money unless he wishes to do so. Neither can you force a bank to lend him that money. I wonder whether the minister would consider this legislation in that light, because perhaps a little leeway on the string might be required as far as credit institutions are concerned.
The small businessman frequently finds himself in the awkward position of passing on increased costs to his customers. In times of continually rising interest rates, he finds himself in a more awkward position in this respect than do some of the larger firms. I think some consideration should be given to the fact that small businesses are less able to pay high interest rates than the big corporations.
I also wonder whether something could be done for the small businessman by way of training. Let me give an example of what I mean. Take the man who is an exceptionally
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Small Business Loans Act able automobile mechanic. Soon, he is promoted to shop foreman, and then eventually, having saved money and perhaps borrowed some from his relatives, the bank, or the credit union under this particular legislation, he purchases the business and goes into business for himself. He is now in a completely different field; no longer is he repairing automobiles or tractors. From experience I have had with others, I feel it would be useful to establish some sort of business management training scheme. Although we have training schemes for mechanics that want to turn to some other trade, to my knowledge there is no adequate government-sponsored training offered in the field of business management.
As a farmer, I was once a member of a farm management club, and I am fully aware of what membership in that club did for me as a small businessman. I suggest the government should consider establishing, either by bringing pressure to bear on provincial governments or in co-operation with provincial governments, a management training scheme for small businessmen who are required to manage businesses. This is particularly necessary when a man leaves a trade and enters the field of business management. Whether these people are in the newspaper business, are workers in garages, tinsmiths or plumbers, most of them have moved up the ladder through their trade, and I think something of the kind I have outlined should be done for them. It is tragic when men who have saved money for 25 years and who have borrowed money to go into business lose all within five years, plus five years off their lives. I know people to whom this has happened, and all they really needed was a little more management skill.
There has also been quite an expansion of the franchising field recently. I think that this sort of business enterprise has considerable merit. In some cases it provides more efficiency, and it offers the individual an opportunity to participate at the local level. I think it is good to have franchising rather than having big companies run everything from the top. I am happy to see the expansion. It is not always the best thing, in so far as price competition is concerned, to have this difference in the positions of the two elements. Frequently, the local businessman finds he has to work long hours for little or nothing, making sacrifices to make ends meet, whereas the big company has arranged to be in a protected position. Perhaps we should have legislation which offers some protection to the man who

DEBATES	November 13, 1969
finds himself in competition with a big company. There are many in this position and the number is apt to increase. Perhaps the minister would consider legislation of this nature.
[DOT] (3:50 p.m.)
Let me make one or two comments in respect of small businessmen generally. In our small prairie communities, these people have an equity in the community and they are interested in its welfare and well being. Frequently, they attempt to move heaven and earth to improve business and the community generally. We should give them credit where credit is due. If by offering credit in an economic sense we can help them to establish businesses, I suggest we ought to do so. I am in favour of this bill but I have some reservations as to how effective it might be. I hope the minister will answer the question I have asked in respect of supervision of provincial organizations.


Mr. Mark Smerchanski (Provencher):: Mr. Speaker, I should like to speak in favour of these amendments to the Small Businesses Loans Act. They will allow small business enterprises to avail themselves of more competitive loans from various banking institutions. Prior to this, a small businessman was only able to get a loan from a bank. The horizons will now be such that he can get a loan from a credit union, from a trust company and the like.
It is not fair to suggest that the trust companies had a hand in proposing these amendments to the Act. In any event, more money will be made available to the small businessman. The purpose of the Small Businesses Loans Act has been forgotten in recent years. Perhaps this is the result of the establishment of the Area Development Agency program which has provided a certain amount of necessary funds to small businessmen in Canada.
The present bill is an excellent one and is an indication that the Act has served its purpose. The fact that the number and amount of loans have decreased is also an indication of this fact. The suggestion that chartered banks are not prepared to take a risk in respect of small loans is not in accordance with the facts. This suggestion cannot be made simply because banks make loans in the normal course of business and ask for guarantees against default. The income of any bank has little or no bearing on the amount of money being made available under the terms of this Act and I think it is unfair to suggest that
November 13, 1969

banks have been reluctant to make such loans.
Let me also draw attention to the fact that the current taxation payment of 21 per cent on the first $35,000 will remain unchanged. It is not correct to say that after valuation day small businessmen will be penalized in relation to the big corporations. It will be open to the small businessmen, after valuation day, to pay himself a salary or fees which will be subject to the normal tax rates. Therefore, he does not have to pay double taxation. A small businessman can elect to follow this course under the present legislation and he can elect to do so after valuation day.
Let me caution some hon. members who have spoken about this subject. There is no difference in the terms or percentage that the small businessman pays under the existing law up to the $35,000 limit and what he will pay under the proposed changes in the white paper. The proposals in this bill will increase the number of banking institutions, including mortgage companies, trust companies and credit unions, to which the small businessman in Canada can go for a loan. These institutions will be prepared to assist in the same way the banks have done. This is an excellent change to the present Act. It will help the small businessman and encourage him. If this measure is operated in conjunction with the ADA program, it will be of tremendous advantage to the small business communities in Canada.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my remarks on the proposed amendments to the Small Businesses Loans Act now before us, will, of necessity, be brief. There is little purpose in discussing at length a question that may very shortly become purely an academic one if the tax reform proposals so recently advanced by the Minister of Finance (Mr. Benson) are adopted by parliament.
In my view the minister's plans, as they affect small businesses and family enterprises, with which this bill is concerned, will effectively remove this segment of business from the national economy. In a few years such legislation as this Small Businesses Loans Act will be unnecessary because there may well be few small businessmen left to apply for loans and no small businesses needing money.
As far as this Act itself and the amendments proposed to be made to it are concerned, I have not criticism. Indeed, I think it is commendable to extend the body of loanmaking institutions and to make more money
Small Business Loans Act available to small businesses on more generous terms. But, if the government's intent is to drive the small operator out of business, as the proposed tax reforms would appear to indicate, then what is the purpose of amending this Act or of having it on the statute books at all?
[DOT] (4:00 p.m.)
I was amazed to read Anthony Westell's quotation of a statement by the Minister of Finance (Mr. Benson) in the Globe and Mail of November 8. The minister was quoted as saying that his tax reform program was all for the little man. Such a statement may be politically astute, but it is hardly believable when we take a close look at the minister's proposals with regard to the little man in his role as a businessman. Small companies will be faced with the progressive rise in the tax on corporate income from the present fixed and tolerable 21 per cent on the first $35,000 of earnings to a level of 50 per cent on all income. In these circumstances it will matter little to a small businessman that, thanks to the passing of the amendments now before us, he can apply for a small business loan to a credit union, a caisse populaire, a co-operative credit society, insurance company, trust company or loan company.
Today's small operator, already being ground between jarring economic factors such as inflation, high interest rates, soaring federal, provincial and municipal tax rates, is scarcely likely to be excited by amendments to this Act designed to encourage lending by small-volume lenders. With the tax proposals hanging like a cloud over his head the small businessman in Canada today simply will be looking for a way out. All one needs to do is to take a look at what faces many small businesses and family businesses that revolve around one principal. Should this principal die, his heirs would be confronted by an estate tax that can run up to 50 per cent; a full capital gains tax that, including the provincial tax, could reach a rate of 56 per cent on any profit over the figure established on the proposed valuation day.
The excuse the Minister of Finance has given for singling out small businesses for such harsh treatment is that it is a method of stopping up the loophole of personal incorporation, a device by which some individuals sought relief from taxes by incorporating themselves. But where does that leave legitimate small businesses? Surely, some simple legal provisions could be made that would
November 13. 1969

Small Business Loans Act
prevent tax avoidance by self-incorporation without victimizing legitimate individual business enterprise and initiative. The minister is using a cannon to kill a mouse. He proposes to penalize many to get the few.
In today's Globe and Mail, I. H. Asper, in a very perceptive and thought-provoking article on the proposed tax reforms, asks several pertinent questions-"Does Ottawa want everyone to go public" and "Is there no place left for family or individual ownership?" These two questions go to the very heart of the legislation now before us. If Ottawa does in truth want everyone to go public-that is get out of small business and leave the whole field to large public corporations.-then these amendments and the Act itself are redundant. If, as Mr. Asper suggests, there is no place left for family or individual ownership, then the same thing applies and we are wasting our time discussing this piece of legislation.
It is my firm belief, Mr. Speaker, that the philosophy of this present government allows no place in the national economy for small enterprises of any kind. The whole tenor of government statements and action since taking office has been to emphasize the fact that individuals, small businesses, independent operators of any kind, particularly those that make up the bulk of Canada's agricultural community, are not wanted, are nothing but a nuisance to the planners and the tax gatherers and have been, in effect, declared expendable by this government.
In conclusion may I say I support this legislation but believe it is odd that, although this legislation is of great value to the small businesses in the relatively depressed areas, these businesses should be faced with this tax cloud hanging over their heads.


Mr. W. M. Howe (Wellington-Grey):: Mr. Speaker, I should like to say a few words in respect of Bill C-9 to amend the Small Businesses Loans Act. It is rather interesting that I do not entirely agree with my colleague the hon. member for Dauphin (Mr. Ritchie) when he says that small businesses are disappearing. It is interesting to note how many variety stores spring up in small towns and in this city. Many of these variety stores are open long hours. They are still doing business and must be prosperous. Their premises are well maintained and they provide a service to those of us who forget to get what we need before the large stores close at six o'clock. I do not have the statistics with me but from the statistics I have seen from time to time it

would appear that small businesses are able to carry on in Canada today, despite the fact that there are such tremendous organizations as the chain stores and large department stores with which they must compete.
I am happy to support this legislation. The amendments simply add certain other lending institutions to those which are presently available to provide loans to small businessmen who require them. I should like to remind the House and the people of the country that the government of which I was a member in 1961 brought this Act into force in the first place. We were proud to do that because previously there had been no lending area in which a small businessman could borrow money for the purpose of enlarging his establishment, improving it or putting in new facilities. This legislation was of great assistance to him. The report for the year 1968 shows that almost 20,000 small businessmen have taken advantage of this legislation over a period of years. An amount of approximately $108 million has been lent, since the inception of this legislation. I believe this fact was mentioned earlier. It is interesting to note that in 1968 the number of applications and the amount of the loans made dropped by almost half. This fact brings to my mind the situation that has developed in connection with farm improvement loans in my area. When the bank interest rate became so high, the bankers were not interested in lending money to farmers. The same situation applies in respect of small businessmen. When the lending institutions can get 10 per cent for their money in other areas they are not interested in giving money to small businessmen or farmers at an interest rate of 8f per cent. I understand the interest rate applicable to this legislation at the present time is 8f per cent.
This brings us to an area which I think is important in respect of this legislation. I have reference to the rate of interest which is now so high. When this legislation was brought in, I believe the interest rate was around 5 per cent or at the most 6 per cent. Now, however, it is 8f per cent. Under present conditions, this may not seem to be too high, but how high is high. I think interest rates are something which should be looked into by this great commission we have set up to make a review of prices, wages and costs.
Perhaps the Bank Act could be altered in order to place a ceiling on the bank rate. Just the other day a banker whom I know said to me that he would be very happy to see the bank rate go back to 6 per cent because this
November 13, 1969

would be of great assistance to the people of Canada and would have a tremendous impact on the cost of living. Everybody is affected by the inflationary pressures that take away from the value of our dollars. This situation worries the old age pensioners and those who are retired on fixed incomes because they find they do not have adequate money to buy the things they need. I maintain that the high interest rate has had a tremendous impact on the cost of living. As I said before, I believe the government, through the wonderful new commission which has been set up, should examine the interest rates and if possible come to the conclusion that a reduction in the interest rate will combat the high cost of living and reduce the inflationary pressures in our nation.
[DOT] (4:10 p.m.)
There is one other thing I would like to speak about, and one other suggestion I would like to make in connection with this particular legislation. I notice the people who are eligible for loans are those who are in manufacturing, wholesale trade, retail trade, service businesses, construction, transportation or communications. I come from a small community of around 1,200 people which serves quite a large farm area, and we find it difficult to attract professional people who will set up businesses in the community. Would it not be possible to include professional people under the act such as doctors who want to build medical offices or medical centres from which they would service the area, and accountants, dentists and lawyers? I know these people are in the high income brackets, but hon. members who have small communities in their ridings know how difficult it is to attract professional people to them, people whose services are necessary.
Would it be possible for the Minister without Portfolio (Mr. Gray) to look into this suggestion, and give consideration to the possibility of loans being made to these types of people so that they would find it attractive to move into small communities and provide the services that are so greatly needed? In conclusion, Mr. Speaker, I support this legislation because, as I say, it was promoted by our party when we were the government and it has served a tremendous need in the nation ever since its inception.


George Harris Hees: Mr. Speaker, I would like to participate very briefly in this debate and to speak in support of this legislation because, as the last
Small Business Loans Act speaker has mentioned, it was brought in by our Party when we were in office. We considered it sound at that time and it is equally sound today.
For a few moments I would like to comment on a proposal contained in the White Paper on Taxation which affects small businesses. The Minister of Finance (Mr. Benson) and the Prime Minister (Mr. Trudeau) have submitted that white paper to the country so that it may be commented upon over the next few months, and I would like to make a comment on it now which I hope will be noted by the Minister of Finance through his colleague, the Minister without Portfolio (Mr. Gray). I feel sure he will bring this suggestion to his attention.
I feel it would be a great mistake to introduce the cancellation of the provision which presently exists, the 21 per cent rate on the first $35,000 of profits, and replace it with the 50 per cent rate on all profits. I feel this way, Mr. Speaker, for the following reasons: This 21 per cent rate of tax for the first $35,000 of profits has been of great help to small businesses in two important ways. First of all, the ability to retain a far larger share of the first $35,000 of profits has encouraged many creative men with drive and ability to get into business for themselves, and the country and the economy have benefited greatly thereby. These small businesses have often grown into large operations, with the resultant growth in wealth and employment for our country.
The second reason is that the lower rate of tax on the first $35,000 of profits has encouraged many small businesses to plow much of their earnings back into the business, and this has provided them with expansion capital which they badly need. This is particularly important for small businesses which have the ability to expand but find it hard to do so because of the difficulty in borrowing the capital which they need for their expansion operation.
As we all know, small businesses find it much more difficult than large businesses to borrow capital because of their size and because of the fact that in many cases they have not been long established. If they are able to borrow they often have to pay very high and sometimes exorbitant rates of interest, something which they can ill afford to do. Therefore, Mr. Speaker, I strongly recommend to the Minister of Finance and to the government, through the Minister without Portfolio (Mr. Gray) who is in attendance

November 13, 1989
Small Business Loans Act today, that they give serious consideration to retaining the 21 per cent tax rate on the first $35,000 of profits which as I say, has been of tremendous benefit to small businesses in the past, and will be in the future. If that measure is retained, I believe that small businesses will in the future be able to continue to grow and prosper with great benefit to our country.
Mr. Jack Marshall (Humber-St. George's-St. Barbel: Mr. Speaker, I just want to say a few words on Bill C-9 to protest the evidence of discrimination which, in my opinion, exists in relation to the availability of funds for some parts of Canada under the Small Businesses Loans Act. I refer in particular to the Atlantic region, especially the province of Newfoundland.
The more I look at this Small Businesses Loans Act and at two other similar ones-I refer to the Fisheries Improvement Loans Act and the Farm Improvement Loans Act-the more it is brought forcibly to me that they are not worth much, if I assess correctly the benefits that are supposed to be derived from the legislation in some areas of the country. But more important is the fact that the lending institutions, specifically the banks, are shirking their responsibility in carrying out their duty to all those for whom the benefits are intended.
We spend hours and hours debating the various Acts and the amendments thereto proposed in this House but I have yet to understand why we waste time debating them when, as is apparent, the government does not seem to follow up what happens after they are passed. I have no hesitation in stating that the principle of the Small Businesses Loans Act is a good one, but if we keep passing these bills we must assume responsibility for seeing that the benefits which should flow from them are extended to all Canadians. Furthermore, we should make sure that those agencies which are responsible carry out the responsibilities with which they are charged under these Acts. Instead, we print reams and reams of copies of these bills and file them away for posterity.
I would like to refer to a news release issued by the Department of Finance on October 21 giving a list of the loans made in 1968 and part of 1969. In 1968, for a six months period under the Small Businesses Loans Act, there were 742 loans granted in Canada totalling an amount over $7 million. However, only one loan was granted in Newfoundland for an amount of $25,00. In a six months

period in 1969 there were 769 loans granted in Canada totalling over $8 million, and again only one, amounting to $4,380, to some applicant in Newfoundland.
The same situation applies with regard to the Fisheries Improvement Loans Act. In the 15 years since its inception, only 18 loans were granted in Newfoundland. Under the Farm Improvement Loans Act, in 1968 only one loan was granted in that province, amounting to the grand sum of $1,280 out of a total for Canada of over $30 million. It is easy to see the trend, Mr. Speaker. Newfoundland must be on a quota system for these loans, a quota of one per year. This is a preposterous and ridiculous situation, and it should be the duty of the government to investigate the reason for this situation.
If the object of this Act is to provide funds for loans to small businessmen to start or improve various types of businesses and to help those with initiative and resourcefulness who might not be able to borrow money under ordinary circumstances, then someone is denying Newfoundlanders this right or else Newfoundlanders are not trusted. If this is not so, then I would like to get some answers. I want to know if Newfoundlanders are treated on the same basis as people in the rest of Canada. Since coming to Ottawa I have recommended the availability of various government loans to many constituents in my province seeking help to start businesses, and of the many who tried to obtain loans all have failed with the exception of one. He must be the quota for this year. He was granted a loan, but at an interest rate of 11 per cent. Even though he applied under this legislation, he was not given the benefit of the lower rate of interest. A few months ago, as a result of frustration, I wrote to the Minister of Finance (Mr. Benson) with regard to Fisheries Improvement Loans asking for some explanation of the fact that 99.9 per cent of applicants from Newfoundland were being turned down. I received a three page reply and this is what I was told in effect.
[DOT] (4:20 p.m.)
As you know, all these guaranteed loans programs require the lender to exercise the normal procedures used by him in the course of the conduct of his own business. A lender has the authority under the legislation to refuse a loan if a manager feels he would not make a normal bank loan to the individual concerned because of past experience with the customer or if he considers the credit risk too high. He further went on to say that he
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did not think it would be proper for him to interfere in these aspects of the programs. If this is the case; Mr. Speaker, that the banks can refuse a government guaranteed loan just as they would a normal bank loan, then what do we need the legislation for or what is its purpose? I can only deduce, Mr. Speaker, on the basis of past performance which is so evident from the information in the breakdown of loans, that the lending institutions are destroying the initiative of small business in the deprived regions of Canada absolutely and intentionally. Unless a new appraisal of the situation is made in good faith, this bill will not benefit all Canadians as it is supposed to do.


Frank Howard: Mr. Speaker, it was very interesting, and disconcerting too, to listen to the remarks of the hon. gentleman who just preceded me and to understand from them that the great benevolent banking system in this country is not really that interested in some parts of Canada. Obviously, the government of the day and its predecessors who have made occasional changes to the Small Businesses Loans Act are not that interested either.
We all know that the intention and the purpose of the Act was, in theory anyway, to provide an opportunity for small businesses to acquire the capital that had previously been denied them. We know, too, that the presumption of the law when it was initially introduced was that the forces of the Canadian government and the Canadian Parliament, not only in an underwriting sense so far as loans were concerned but in a moral sense as well, were to underpin the position of the small businessman all across the nation. According to the remarks of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) that has not been the case in Newfoundland. I think it probably shows that the banking fraternity in Canada, as is the case with institutions in other fields,, is interested in making a buck, making a profit. The factor of service and availability of facilities to areas on a moralistic or economic basis is purely incidental.
One would think, Mr. Speaker, that this government, which is purported to have some concept of the just society, would take cognizance of this reluctance on the part of banking and lending institutions to involve themselves more intimately in the areas of Canada most in need of assistance. To that extent, and in the light of the proposal before us, I consider this government to be derelict and
Small Business Loans Act delinquent in its duty to Canadians interested in developing, promoting or establishing a small business.
When it comes to reading the fine print and putting the law into force, some of the reasons for the legislation seem to have gone by the board. One of these reasons was to put the small businessman in a relatively competitive economic position with regard to big business, the corporate entities. We all know that larger corporations have more financial resources which make it easier for them to engage in research, etc. We know that it is easier for a large corporation, vis-a-vis a small business or company, to engage in the sales and advertising techniques necessary to promote the product which it produces or distributes. It is easier for them to find their finances internally or to borrow money by debenture or raise it by the sale of additional shares or the issue of warrants. Small businesses cannot take such measures, however. The large corporations can carry a large inventory. As witnessed in the last day or two by the announcement of Shell Oil and Gulf Oil, who will not be the only two companies to increase prices, it is easier for large corporations to control prices.
The presumption of the law when it was first introduced in the Canadian Parliament was that it should be used to place the small businessman in a better position with respect to his total activities in the fields of production, advertising, sales, creation of money, capital and the like. Mr. Speaker, this does not seem to be the case. It seems that the Act is more for propaganda purposes than to render aid. Mind you, it is true that some businesses have acquired loans from banks under the Act and no doubt some will in future. I think the minister said that the loans ranged somewhere between $20 million and $26 million a year, but the chances are that many of the businesses concerned could have acquired a loan from the bank even had it not been guaranteed under the Small Businesses Loans Act, so the full force and value of the legislation is not really reflected in these figures.
One of the prime costs of doing business today is the interest rate. The Small Businesses Loans Act deals with this and at the moment the rate is pegged at 8J per cent. By April 1st, next,, it is likely that this will have increased because interest rates on government bonds will probably increase. This is partly due, I think, to the publication of the White Paper on Taxation and the issuance of the current Canada Savings Bonds series. To
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Small Business Loans Act draw an analogy with the Canada Savings Bonds, the government has said to the Canadian people that for the next five years they can expect interest rates to be as high if not higher than they are at the moment. The Government has taken the course of borrowing money through the issuance of Canada Savings Bonds and has guaranteed to pay interest rates averaging 8 per cent over a nine year period and ranging upward of 8J per cent in the latter years of the life of the Canada Savings Bonds. The government would not presume to do that if it expected interest rates to decline. The White Paper on Taxation which was issued a week ago indicates that there is a likelihood of interest rates increasing.
[DOT] (4:30 p.m.)
It seems, from the way the stock market reacted last week to the white paper, that much money in this country is to be invested in the stocks of Canadian corporations. If that is the case, then part of that investment money will be re-invested; it will be taken out of bonds and put into the common shares of companies. Clearly, if the attractiveness of bonds is to remain, then the interest rates of government, municipal, provincial bonds and the like will have to be increased in order that investors will want to invest money in bonds. If that is to happen, as seems to be the case, it simply means that interest rates are likely to increase further. The prospective figure of 8J per cent interest or thereabouts that is to apply to small business loans may increase to heaven knows what; we do not know to what extent rates will have increased by next April. I submit that this sort of thing is certainly not helpful to the total economy of the nation. It reflects a mismanagement of the entire monetary system in Canada. Also, it does not help the small businessmen of this country, those who are supposed in theory to benefit from the Act we are amending.
The amendment, I submit, is relatively insignificant. It simply seeks to extend the group which may lend money, to extend the time during which the Act will be in force and to make an extension with respect to amounts. But the amendment does not get to the core of the problem. It does not, in the true sense, place those small businessmen who are the backbone of the rural part of the country in a position that is different from the one they are in now.
One would think that with the so-called concern expressed by the Prime Minister (Mr. 
DEBATES	November 13, 1969
Trudeau) and members of the government about the position we are in, it would have been possible to develop legislation that is more attractive, worth-while and valuable to the small businessman than is the bill we are currently considering.


Bernard Dumont: Mr. Speaker, we have been advised that the government would introduce Bill C-9 entitled "An Act to amend the Small Businesses Loans Act", which reads in part:
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1. Paragraph (a) of section 2 of the Small Businesses Loans Act is repealed and the following substituted therefor:
"(a) "bank" means
(i)	a bank to which the Bank Act applies,
(ii)	a credit union, caisse populaire or other cooperative credit society that is designated by the Minister on the application of that society as a bank for the purposes of this Act, or
However, when we get in touch with the officials of credit unions or caisses populaires in the province of Quebec, we realize that they have not even been consulted before the bill was amended. The officials of those organizations, which have provincial juridic-tion and are provincially-chartered, fail to understand why they were not even consulted before the Small Businesses Loans Act was amended. They see the federal government intervene in the preparation of legislation about which they expect to be consulted.
In view of such intransigence on the part of the federal government, which does not even bother to consult provincially-chartered organizations, we of the Ralliement Creditiste cannot understand why a meeting was not held in order to avoid friction between the federal and the provincial governments.
Our responsibility as members is always to consider first the orderly conduct of the nation's business. I think I should point out that there may be disagreements, but they are not always due to the provinces; bent on centralization, the federal government often forgets that certain areas come under provincial jurisdiction. That is why we ask that what belongs to Caesar be given to Caesar and that some effort be made to reach prior agreement with credit unions.
I would like to remind the House that we, of the Ralliement Creditiste, have been asking for many years that the Bank of Canada be put at the service of small businesses by
November 13, 1969

granting them low interest loans, or merely on the basis of the administration costs, because several small businessmen are compelled today for all practical purposes to pay up to 10 per cent of interest.
In my opinion, the request made by our organization for over 50 years has certainly not been put into practice, and this interferes with the operation of some small businesses which, because they belong to the private sector, should be helped in co-operation with the Bank of Canada granting loans at interest rates of 1J or 2 per cent.
Quite often, our opponents tell us: "Yes, but if the Bank of Canada provides interest-free loans to small businesses, that would be senseless. I will now take the liberty of referring to a statement as reported in Hansard for April 28, 1959. It is a statement of Mr. Cardin which I will textually quote, in order that we may note that in 1959, under a Progressive Conservative government, the opposition criticized. With a reversal of the situation, criticism sometimes comes from the other side of the House.
Therefore, one realizes we are not the only ones who ask that the Bank of Canada, and not the caisses populaires and credit unions, make loans to small businesses. The claims of others are sometimes more convincing, specially when those others belong to the opposition.
Here is what Mr. Cardin said, and I quote:
As I say, I think it is clear that the Conservative government has in fact decided to monetize its defiicit. I admit that I had to look into the matter of monetization and in my research, I came across an article in the Commercial and Financial Chronicle of April 23-
I will now quote from that article, signed by Mr. Robert B. Anderson, Secretary of the United States Treasury:
"There is little understanding of fiscal matters, even among those who are eminent and on the whole otherwise well informed. I realized this one day when a visitor to my office told me: 'Mr. Secretary, you refer to the dangers involved in monetization. Do you know, I just don't believe any danger is involved, probably because I don't quite understand what monetization means'." Here is the Hon. Robert Anderson's explanation:
"I replied: "Let us suppose I want to issue 100 million dollars worth of cheques by tomorrow morning, but the Treasury has no more funds. If I called a bank and said: "Would you lend me $100 million at 3j per cent payable in six months if I sent you a promissory note?", the banker would probably reply: "Yes, sure."
Where would he find the $100 million to credit to the U.S. Treasury? Would he take them from someone else's account? Surely not. He would simply create this sum of money on condition
Small Business Loans Act that he would not encroach on the prescribed reserves-in crediting it to our account and in accepting the government's note as an asset. When $100 millions worth of cheques had been issued, the operation would have added this amount to the aggregate currency in circulation. This is monetization to about the same degree as if I had called the Mint and had asked them: "Coin me $100 million of bank notes and send them to me before tomorrow."
Mr. Speaker, if the Secretary of the Treasury of the United States was able, in 1959, to make such a statement and if, last week, in the Finance, Trade and Economic Affairs Committee, a German expert in "indebtedness" was able to tell us that the real cause of the disappearance of some industries lies in the increase of interest rates up to 10 per cent, it might be a good idea to take into consideration the proposals made by the Creditistes.
In the United States and in Germany, small businesses succeed because the money they need to survive is printed by hundreds of million dollars.
The Americans can afford to purchase the product of the Canadian economy. We have seen this, especially in the province of Quebec, with regard to the Ski-Doo industry which has developed in the last few years.
Ski-roule, a Canadian company, has just been sold to Americans for an amount of $28 millions. No wonder since they print money, $100 millions at a time. They come and buy Canadian industries while we hurl accusations at each other and refuse to accept the suggestions that the Creditistes have been proposing for 50 years.
The German professor who visited us last week demonstrated that everything was just fine in Germany and that his country, as well as the United States, has taken a leaf from the Social Credit's book without saying so, and allowed State banks to lend money to small industries, sometimes at low rates or by means of other clearing devices, which enables them to buy some Canadian industries.
It is time, I think, that all Canadians join forces because if, as the Secretary of the U.S. Treasury stated, Americans can print $100 millions in order to buy Canadian small industries, it is time, I say, that we should join forces and print money against production guarantee, so as to help small businesses and lend them money at interest rates much lower than those now in force.
As a young student working in credit unions, I was taking courses where I was told
792	COMMONS
Small Business Loans Act that co-operation was a marvellous thing to prevent the exploitation of man by man.
We had composed a very popular song against the exorbitant interest rates of 10 per cent imposed by some finance companies while credit unions required only 3 per cent The song was entitled: "un jour les voleurs confus s'en iront". (Some day, the confused thieves will go away).
Well, Mr. Speaker, since we are paying 10 per cent interest at the present time, I say that this is legalized robbery, and that many industries will disappear unless we follow the example of other countries which print money according to their needs, without telling us about it. Besides Mr. Cardin added, and I quote:
Then, it is quite difficult to understand how, according to the Minister of Finance-
-a Progressive Conservative then'-
-the highest bank rates in Canada's history can be helpful to the provinces and the municipalities. We recall all the speeches that were made by members of the government and all the crocodile tears that were shed about the financial plight of the provinces and the municipalities and the fact that they were so greatly in debt it was very difficult for them to get out. We also remember the promises that were made that the provinces and the municipalities would have a greater share of the tax dollar and that borrowings would be made far more easy.
If such statements were made in 1959 about the municipalities and provinces, I submit that today, for the benefit of the smaller industries, we must accept the proposed amendment to the act, subject to the reservations I made at the beginning, because the caisses populaires and the credit unions have not even been consulted. As I said, it is high time we joined hands to grant low interest loans, because at the present time, even with Bill C-202 designed to help small businesses, if these are unable to borrow even at low interest rates to go into business, we fail to see the purpose served by this bill.
It seems that money is scarce almost everywhere, as evidenced by an obvious increase in the interest rate. We have to borrow on the New York market, and also in Germany, because the German people pursue the policy of issuing paper money.
Therefore, I urge the government to amend the act so as to enable the Bank of Canada to grant loans to those small businesses, in order to bring prosperity back to Canada.

DEBATES	November 13, 1969
[DOT] (4:40 p.m.)


Mr. Andre Fortin (Lolbiniere):: Mr. Speaker, I should like to make a few brief remarks on Bill C-9, entitled an Act to amend the Small Businesses Loans Act, tabled and sponsored by the Minister of Finance (Mr. Benson).
Needless to say, I support the remarks just made by the previous speaker, the hon. member for Frontenac (Mr. Dumont). Indeed, he dealt with the fundamental problem now facing private enterprise, the small businesses in particular, that is the exorbitantly high interest rates over which the federal government has no control, which it uses to favour big finance instead of private enterprise. There lies the fundamental problem: should we continue to encourage private enterprise or, through all kinds of measures, under the pretext of helping it, should we "sink" it, as the saying goes?
In the last five or ten years, private enterprise in Quebec is in a very precarious situation. In fact, from one year to the next the number of bankruptcies keeps increasing.
The federal government will say that it is aware of the problem, of the increase in unemployment, and of the ensuing economic and social problems. The minister will say that Bill C-202 is intended precisely to remedy those problems.
I feel that Bill C-202 really tackles the problem of economic and regional disparities, but I also believe we should pass a measure to protect small businesses, to enable small plant owner to modernize their operations, to improve and increase their production and services and also to provide work for the unemployed family men with four, five and six children.
I have in mind-that is why I am taking part in this debate-six small industries in the municipalities of Victoriaville and Prince-ville-both in my constituency-that got in touch with me to get federal assistance for they were in such a serious situation that failing immediate help, they were doomed to disappear from the business world.
In fact, three of those six businesses have failed already with the resulting lay-offs. Now, the government has to pay those people unemployment insurance and welfare benefits.
With the present system, it seems that we would rather pay people for doing nothing than pay them for producing something.
I now come to the matter I want to deal with, namely that the small enterprise owners
November 13. 1969

and people as a whole are badly informed about the legislation entitled "An act to amend the Small Businesses Loans Act".
If the owners of small Canadian businesses were the subject of a survey and were asked what advantages they can draw from the legislation, one would be surprised to discover their ignorance, and this, not because they want this state of affairs, but because the government agencies do not convey to them this information.
Last year, for example, I requested precise information from the officials responsible for administering this legislation in order to communicate it to my constituents, rather than simply giving them a copy of the text of the legislation.
It took a month and a half to get an answer and when it came, it was too late for the owner had lost interest in carrying on his business and was about to close.
Every time my colleagues or myself have tried to get information as to the application of the act, the number of concerns that were able to avail themselves of its provisions, nature of such concerns or the location of the regional offices, we have repeatedly been disappointed.
Valuable as the legislation may be, information is always shown in coming. We could pass every day a number of excellent measures but if they cannot reach the people through every channel available, they might make the legislators happy but from the point of view of economics, they are just nil.
It so happens that the law is not all that good for it results in putting the small businesses into a very difficult position. Without help, they are bound to disappear. And even if they do get that help, they will still disappear, sooner or later because of the increasing interest rates and because of the doings of big business which is trying to get hold of them, particularly if they are located in Quebec.
I do not want to put the blame on the federal government only but also on the provincial government; both fail to assume their responsibilities, thus causing the majority of French Canadian businesses in Quebec to fall into the hands of Americans.
I could mention the case of the Gateaux Vachon Company from Beauce. What is happening to that business? If my memory serves me right, it has been taken over by Americans. If it has not happened yet, it is a matter of days or hours perhaps.
Small Business Loans Act
Not far from home, there is another very flourishing French Canadian business, established at Wickham in the riding of the Minister of Industry, Trade and Commerce (Mr. Pepin). It is called Ski-roule. It has been sold to American interests and French Canadians will have to keep on working for them.
I do not object to the fact that other countries come to our assistance nor do I have any objection to Canada helping other countries. But our provincial and federal governments should assume their responsibilities and prevent these businesses from collapsing under the weight of big finance which prescribes its own interest rates to the government, which pays into the election fund of the governments in power, in Quebec as well as in Ottawa, so that, little by little nearly all our businesses disappear. It is the responsibility of our members to put this matter before the House.
It is not a matter of creating a scandal or a storm in a tea-pot nor of blaming unnecessarily the government for that situation but we must simply raise the matter in the hope that we will stir up the interest of government members to the extent that they will espouse the cause of our citizens and private enterprises.
As I was saying earlier, people are misinformed. Let us assume for a moment that this legislation under consideration is perfect. If people are not adequately informed as to the advantages of such legislation if they do not understand its terms, or its implications, how can we expect our small businesses to benefit from it?
In my riding, I know that six firms were trying by every means to obtain long awaited information that was quite incomplete. I wonder whether it would not be appropriate to conduct an investigation throughout Canada in order to determine if this act is actually enforced or if it does not serve only a few privileged people.
I have been wondering about this. If this legislation were truly serving all Canadians, no one would be afraid to give it publicity accordingly, no one would be reluctant to speak about it, to provide government services to small businesses, in an attempt to make private enterprise truly progressive.
Mr. Speaker, I conclude my remarks with the hope that the minister will not consider them completely derogatory. I would like to tell him that we cannot accept his policy on interest rates, which keeps increasing inflation and unemployment, and tends to destroy the small business.
November 13, 1969

Small Business Loans Act Furthermore, I would urge him to promote increasingly the establishment of a complete information system between the government and the people, the legislators and those who may benefit from the act, otherwise we shall be led to believe that it is intended for friendly supporters of the government, and not for businesses which really need it.
I would suggest to the minister that if he has any money left and if he really is interested in helping small businesses, the Lot-biniere constituency would need some help. He might empty his coffers there.
[DOT] (4:50 p.m.)


Mr. Speaker:: Is the House ready for the question?


Bernard Dumont: Mr. Speaker, I raise a point of order.
Several members of the Creditiste party have not been able to take part in the debate on this bill because they were attending and are still attending committee meetings. They would like to make some comments this evening, if they were allowed to do so.


Stanley Howard Knowles: It is five o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: 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 Winnipeg North Centre (Mr. Knowles)-Pensions-retired	C.N.R. employees-inquiry as to increase; the hon. member for Surrey (Mr. Mather)-Public Service-alleged lack of equal employment opportunities for women; the hon. member for Frontenanc (Mr. Dumont)-Language schools.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, Private Bills, Notices of Motions or Papers and Public Bills.



PRIVATE MEMBERS' MOTIONS FOR PAPERS


Frank Howard: That an Order of the House do issue for a copy of the document, entitled "Report of Working Group I -Indians to the Executive Committee" which working group had its terms of reference set out in February, 1968 and which was formed to examine and outline the problems relating to Indians and to make recommendations concerning strategy, policy and programming.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Is the House ready for the question?


Some hon. Members:: Question.



QUEEN ELIZABETH II TELESCOPE


David Orlikow: That an Order of the House do issue for a copy of the Committee Report, headed by Dr. D. C. Rose, on the Queen Elizabeth II telescope, presented to the government in August, 1968.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?
[DOT]	(5:30 p.m.)


Donald Stovel Macdonald: On a point of order, Mr. Speaker, may I say to the hon. member that I understand the document is now available for tabling, if he would like that.
Division


David Orlikow: That is precisely what I was going to say. I was told the government was prepared to table the document, and I am quite willing to forgo a speech.


Stanley Howard Knowles: Is
the motion carried, Mr. Speaker?


Mr. Speaker:: Is the motion carried?


Some hon. Members:: Yes.


Mr. Speaker:: I gather that the motion is to be deemed to be carried.


[Stage Direction]
Motion agreed to.


David Orlikow: That an Order of the House do issue for a copy of the cost-benefit study on rainbow trout farming referred to by the Minister of Fisheries and Forestry in the June 23rd press release of the Fisheries Research Board of Canada.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion? Those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Is it the wish of the House that we ring the bells or that we take the vote now?


Some hon. Members:: Now.


Some hon. Members:: No.


Mr. Speaker:: Call in the members.
The House divided on the motion (Mr. Orlikow) which was negatived on the following
division:	YEAS
	Messrs:
Aiken	Caouette
Alexander	Coates
Alkenbrack	Code
Baldwin	Crouse
Bell	Danforth
Benjamin	Dinsdale
Burton	Dionne

November 13, 1969
Division
Dumont	McIntosh
Flemming	McKinley
Fortin	Marshall
Gleave	Mather
Grills	Monteith
Harkness	Moore
Hees	Nesbitt
Horner	Nystrom
Howard (Skeena)	Orlikow
Knowles (Winnipeg	Paproski
North Centre)	Peters
Knowles (Norfolk-	Ricard
Haldimand)	Ritchie
Lambert (Bellechasse)	Saltsman
Laprise	Simpson
La Salle	Southam
Latulippe	Stanfield
MacEwan	Tetrault
Macquarrie	Thomson
MacRae	Valade
McGrath	Winch-54.
 NAYS Messrs:
Badanai	MacGuigan
Basford	Mackasey
Bechard	McBride
Beer	McNulty
Boulanger	Mahoney
Brown	Marchand (Langelier)
Chappell	Marchand (Kamloops-
Clermont	Cariboo)
Cobbe	Morison
Comtois	Murphy
Cote (Longueuil)	Noel
Cyr	O'Connell
Danson	Olson
Davis	Orange
Deakon	Osier
De Ban6	Otto
Drury	Pelletier
Dube	Penner
Emard	Pilon
Forget	Portelance
Francis	Pringle
Gendron	Prud'homme
Gervais	Richard
Gibson	Robinson
Gillespie	Rochon
Givens	Rock
Gray	Roy (Laval)
Greene	Ryan
Guay	Serre
(St. Boniface)	Smerchanski
Guilbault	Smith (Saint-Jean)
Harries	Stafford
Honey	Stanbury
Kaplan	Stewart (Cochrane)
Lachance	Sullivan
Laing	Tolmie
Langlois	Trudeau
Laniel	Trudel
Lefebvre	Turner (London East)
Legault	Turner (Ottawa-
Lessard (LaSalle)	Carleton)
Lessard	Wahn
(Lac-Saint-Jean)	Walker
Loiselle	Whelan
Macdonald (Rosedale)	Whicher
MacEachen	Whiting-88.


Mr. Speaker:: I declare the motion lost.


Donald Stovel Macdonald: Mr. Speaker, I wonder if the House might be agreeable to calling it six o'clock.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It being six o'clock, I do now leave the chair.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Gray that Bill C-9, to amend the Small Businesses Loans Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Henry Latulippe (Compton):: Mr. Speaker, I am pleased to take part in this debate on Bill C-9, because it has to do with industry and improvements to the small businesses loans program.
Some of these amendments will enable the caisses populaires to participate in this loans program.
Presently, I do not see how the problem could be solved this way.
Certainly we are facing a financial problem we will not solve by creating new debts, by granting new loans, by setting prohibitive interest rates.
As an example, I will take the Industrial Development Bank which is now making loans to industries at an 11 or 12 per cent interest rate. Is it by maintaining this practice, in the case of Caisses Populaires or other institutions lending under similar conditions, that we will solve the industrialization problem? The only thing we achieve this way is to encourage industry to incur further debts it cannot repay. In fact, its production costs will increase so much that it will be unable to distribute its production because the consumers will never have the necessary purchasing power to buy the surplus production.
November 13, 1969	COMMONS DEBATES	797
Several industries would not need capital at the present time nor would they have to pay prohibitive interest rates, if they could find a market to sell their products. We can finance production as much as we want to, but if we do not finance consumption, we will only aggravate the existing uneasiness.
But industry is compelled to finance consumption and buyers because the latter have no buying power. And industry is bound to do this for five, six or twelve months and to secure repayment bit by bit or to force the debtors to pay. That is one of the reasons why industry can no longer operate: it has to pile up stocks, to enlarge premises and to support consumers.
That explains why important reserves of capital are necessary to run an industry. When capital has to be borrowed at present interest rates which are exorbitant very little progress is possible in industry.
Here is how this will come out: we are going to help industry fill its warehouses and sell on credit even more. But one of these fine days, there will be all kinds of bankruptcies. Small business in particular will go bankrupt because they will be unable to sell their products and will have to pay too much interest to keep their inventories and their buyers.
There is the rub. Many small businesses could well do without such charges if they were able to sell out their products and get paid. That is one of the reasons why I wanted to rise and speak on this bill.
Our problem is of an economic nature. It is one of distribution, rather than one of production, because, at the present time, in 1969, our gross national product amounts to $72 billion. Canada has consumed $40 billion of it, and with $40 billion we want to purchase $72 billion's worth of goods. It is impossible. Consumers should pay $40 billion for products valued at $72 billion. This is where we should intervene. This is where adjustments should be made. This overproduction costs nothing to anyone. It is a surplus of the society at large, a surplus for all Canadians who are shareholders of their country, a surplus which should be distributed under the form of compensated discount in order to reduce prices and bring them in line with the purchasing power. This is what I wanted to say. There surely are solutions.
[DOT] (8:10 p.m.)
At the present time, instead of trying to remedy the situation, we aggravate it. The more we apply the system, the more 21362-51
Small Business Loans Act unbalanced becomes our economy. What is needed is a balanced economy which we will arrive at by adjusting prices rather than setting them. This is where we should intervene.
Production represents $72 billion and consumption is equivalent to $40 billion. Production is equal to consumption. Consumers should pay $40 billion for that production. That is the point where prices should be adjusted. Otherwise, we will no longer succeed in balancing a productive, active, mechanized and technical economy, from which would issue an automated production requiring no employer.
We shall not settle the problem by granting loans. We are not against loans. We want the small industries to carry on. We very well know that the problem will remain the same and that the burden of the debt will simply increase.
The desired goal will only be reached through the implementation of a banking policy designed to provide the necessary funds both for the production of the goods that our human and material resources make physically possible, and for the proper distribution of all our national production or the equivalent.
If there is no money to make production possible in order to meet human and normal needs, and if it becomes plentiful when production and means of production are requisitioned to pay soldiers and to make deadly weapons, it is because the present monetary system is imposing decisions instead of proudly reflecting the facts resulting from the free action of free producers and free consumers. So this is why we should get to the heart of the problem and find appropriate solutions.
The first proposal is aimed at insuring maximum purchasing power by achieving a balance between consumer prices and the total amount of money available to purchasers.
If production is to achieve its end, which is consumption, it is necessary to establish a price adjustment machinery, instead of fixing prices. It is up to the producers themselves to determine their cost prices, for they know their production costs.
During the last financial year, the country's production has reached $72 billion and consumption $44 billion, in round figures. The $72 billion production has then cost the country $44 billion. The $28 billion must be supplied by another source, not by the buyers. The monetary system should see to that.
November 13, 1969

Small Business Loans Act
In other words, there should be a general compensated discount which would be the contrary of a sales tax and this compensated discount should be applied to all the retail prices for the duration of the financial year which is beginning. At the end of each financial year,, the general compensated discount should be calculated in the light of consumption and in relation to the production volume.
Thus we would come as close as possible to the ideal purchasing power. This operation would be called a compensated price or discount, because the money which the seller does not get from the purchaser owing to that discount, he would get later on from the national credit board. This compensation granted to the seller so that he may get his full cost price, safeguards all interests and benefits everyone through the easy flow of goods to meet the needs. Production is intended to be sold.
If industry is to be reorganized, it is impossible to do so simply with loans in the case of private industry. Here I distinguish between private industry and capital stock industry.
Private industry has to reimburse its capital, pay interest and pay its taxes, and the loans it raises result in bankruptcy for 99 per cent of the small companies.
So what is the use of creating such a situation, organizing industries in such a way that they cannot prosper. All our present efforts are useless. Share-capital industries, since they do not have to reimburse capital, can manage to scrape through, although many of them will be unable to make it.
So what we are heading for is socialism, centralization, an appalling slump, utter destruction of private enterprise. With the present tax pattern, no private industry, no merchant can manage to pay debts as well as provincial, municipal, school and other taxes.
In these conditions, it is impossible for a small industry to become prosperous and to make profits if it cannot dispose of its products. Even though we invest more in industry, we do not inject into it more purchasing power because our investments are used to pay for the machinery and the buildings. They are "dead" investments which hardly contribute to put money in circulation.
Nowadays, an industry which employs 10 people can be compared to one which employed 200 people 20 years ago, taking into consideration automation, science and progress.
I would have a lot more to say but I think that other hon. members wish to speak on this

matter. As for me, I consider that I have done my share.
I am sure that the increase in the amount of these loans will not improve the economic situation of industry.


Herbert Eser (Herb) Gray: Mr. Speaker, I think in winding up this debate on second reading of the bill hon. members would expect me to respond briefly-


The Acting Speaker (Mr. Bechard):: Order, please. I must advise the House that if the minister speaks at this time he will close the debate.
[DOT] (8:20 p.m.)


Mr. Adrien Lambert (Bellechasse):: 
The Acting Speaker (Mr. Bechard):: Order. I would like once more to point out to the House that by taking the floor at this stage the hon. minister would close the debate.

Order, please. If the minister speaks at this time, he will close the debate.


Herbert Eser (Herb) Gray: Mr. Speaker, it would now appear appropriate for me to rise and finalize this debate on second reading by attempting to reply to at least some of the points raised by hon. members earlier in the day. The hon. member for Battle River (Mr. Downey) made a comment regarding the wording of the amendment which makes it possible for credit unions, caisses populaires, trust companies and other credit societies to take part in the small businesses loan program. I should stress that in spite of the form of the wording used, the act does not purport to make these institutions into banks for all purposes. The effect of the wording used is simply to enable the institutions in question to participate in this guaranteed loans program. I suggest there really is no conflict therefore with the policy of the government at the time the Bank Act was studied by Parliament. We must remember that as its name implies this is a guaranteed loans program under which the government guarantees that the institutions which make the loans shall not suffer loss. It would appear that the effect of having a more flexible interest rate formula has been to encourage banks to make more money available for loans of this type. This is implied by the most recent figures which are available.
Some hon. members have suggested that the Minister of Finance (Mr. Benson) should take some kind of action to have the banks make even more money available for the purpose of this program. However, as far as I am aware the Bank Act does not give the Minister of Finance the type of authority under which he could order banks to participate in this or any of the other guaranteed loans program to any particular extent. However, the banks may be interested in noting the view expressed by hon. members in this debate, to the effect that they have not been living up to their responsibility to the community by making sufficient funds available for loan to small businesses.
November 13, 1969

Small Business Loans Act
Several hon. members have used this debate as a vehicle through which to express their views regarding some of the proposals in the government's white paper on tax reform. While these views are very interesting, I think the degree of concern expressed may well be proven excessive after hon. members have experience of the impact of the proposals on small businesses. I shall not attempt to debate these proposals at this point. I am sure there will be many opportunities to do so either before the standing committee or when the government presents a bill to the House following the report of the standing committee on the proposals.
I think it is worthwhile for hon. members and the public generally to very carefully study them before reaching definite conclusions about their possible effects. As I have said, it may be that the initial reactions to the proposals which were reflected in some speeches this afternoon may not have indicated exactly what the real impact of the proposals will be on small businessmen.
Several hon. members advanced interesting suggestions regarding changes in the small businesses loans program. Therefore I would like to point out that the basic effect of having the lending period under the program terminate at the same time as the two other government guaranteed loans programs will be that the government will make a thorough review of the effectiveness of the small businesses loans program together with its two companion guaranteed loans programs. I am sure it will be possible in the course of this review to give consideration to the suggestions which have been made.
[DOT] (8:30 p.m.)
Some hon. members have argued, in effect, that the proposals before us will not really do anything to help small businessmen. However, we should recognize that if this bill is not supported by the House it will not be possible to carry on a small businesses loans program at all once the current lending period ends. If this bill is passed it will mean that the program can continue for a further lending period. As the hon. member for Wellington-Grey (Mr. Howe) has pointed out, some 20,000 loans have been made under this program to date. This is an indication that it has been playing a useful role in helping small business to exist and, hopefully, to expand and thrive. I might add that the presentation of the amendments at this time is a demonstration that the government is .certainly not against small business.


The hon. member for Battleford-Kindersley (Mr. Thomson) asked me how the Department of Finance intends to supervise loans which, if this bill is adopted, would be made by trust companies and other institutions under provincial jurisdiction. The approach the department will be taking is that when an application is made by a provincially incorporated or provincially chartered institution for designation under the program, the application will be referred to the Superintendent of Insurance for his comments and consideration of the institution's financial soundness. Only after his report has been received would a decision be made as to whether the provincially incorporated institution in question should be designated for the purpose of the act. Once approval had been given, the appropriate branch of the Department of Finance would keep an eye on its work through a series of established practices with the aim of seeking to avoid the type of problem to which the hon. member referred.
Finally, I can say that the Canada Deposit Insurance Corporation can give coverage to provincial institutions and I am informed that almost all the provincially chartered trust and loan companies are in fact under the supervision of that corporation. And although Quebec-based companies are under a provincially supervised program as far as deposits in that province are concerned, their deposits outside the province fall under the federally created Deposit Insurance Corporation.
As I said earlier, I shall not attempt to comment on all the interesting suggestions which have been made; these matters can be dealt with in the course of the review of the program which the government intends to carry out, as well as in the discussions before the standing committee.

I believe I should also answer the question of the member for Portneuf (Mr. Godin). The credit unions and caisses populaires have been authorized to grant loans to students since 1964, to fishermen since 1965, and to farmers since 1968.
Bill C-9 will enable them to participate in this small businesses loans program if they so desire. I have been advised that the Department of Finance has received absolutely no complaints so far, concerning the proposals put forth by this bill.
In addition, the bill does not force provincial institutions to participate automatically in the program. It is up to them to ask that
November 13, 1969	COMMONS
they be designated as eligible to grant loans to small businesses. If they do not wish to be designated, they will not be, and will have nothing to do with the program. Moreover the hon. member for Lotbiniere (Mr. Fortin) asked for greater advertising of that program and I think the idea should be considered. I believe some advertising is already being done. For instance, I have seen pamphlets describing the program.
I also wish to thank the hon. member for Belleehasse (Mr. Lambert) for having drawn my attention to the question of investment funds. I will answer him by pointing out to him the wording of clause 1 of bill C-9, and I quote:
Paragraph (a) of section 2 of the Small Businesses Loans Act is repealed and the following substituted therefor:
-and in subparagraph (ii), one can read:
-a credit union, caisse populaire or other cooperative credit society that is designated by the Minister on the application of that society as a bank for the purposes of this Act, or
(iii) a corporation that carries on the business of a trust company within the meaning of the Trust Companies Act, the business of a loan company within the meaning of the Loan Companies Act,-
I can therefore tell him that if the investment funds may be included in the provisions set out in clause I of the bill, I believe it will be possible for them to do something under this small businesses loans program.
We may consider that question more thoroughly as we study this bill in the committee on finance, trade and economic affairs.

To conclude, I should like to say again to hon. members that I hope they will feel free to bring to my attention any problems they feel their constituents are having with regard to the application of this program; I shall be happy to have them looked into. We can engage in further discussion of the bill when it reaches the standing committee. I would now ask the House to support the motion for second reading.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

Herbert Eser (Herb) Gray: that Bill C-7, to authorize the provision of moneys to meet certain capital
DEBATES	801
Provision of Moneys to CNR and Air Canada expenditures of the Canadian National Railways system and Air Canada for the period from the 1st day of January, 1969, to the 30th day of June, 1970, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and certain debentures to be issued by Air Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
He said: Mr. Speaker, this bill is similar to bills for the financing of Canadian National Railways and Air Canada which have been before Parliament in past years. These bills, including the present one, have been introduced annually with the exception of the 1963 bill which covered 1962 and 1963, and the 1966 bill which covered 1965 and 1966.
The present bill has seven main objectives, most of which have taken a similar form in previous legislation. First, it would authorize capital expenditures by Canadian National Railways not exceeding $201,700,000 during the 1969 calendar year. This level of expenditures compares with $189,400,000 authorized previously for 1968, excluding the amount required in that year for investment in Air Canada. The bill also contains technical provisions authorizing Canadian National Railways to make expenditures not exceeding $82 million between January 1 and July 1, 1970, for obligations incurred prior to January 1, 1970, and to enter into contracts before July 1, 1970, for capital expenditures not exceeding $113 million, for which payment will not come due until after 1969.
[DOT] (8:40 p.m.)
Second, the bill contains a provision authorizing Canadian National Railways to borrow $19 million for financing all branch line construction. Up till recently each special statute for construction of a branch line has included authority for financing its construction, and branch lines not requiring special legislation have been financed out of selfgenerated funds. In addition to covering all branch lines, the provision in the resolution and the bill based upon it are consistent with the intent of reflecting in the financing and guarantee bill all the financing authorities which Canadian National Railways require.
Third, the bill would provide for the continued purchase by the Minister of Finance (Mr. Benson) of Canadian National Railways' 4 per cent preferred stock through to the end of the calendar year 1970. This continues the practice of previous financing and guarantee
November 13. 1969
802	COMMONS
Provision of Moneys to CNR and Air Canada acts. The 1968 financing and guarantee act extended to December 31, 1969, the expiry-date ot the authority granted by Canadian National Railways Capital Revision Act of 1952 for the purchase of such stock equivalent to 3 per cent of the company's gross revenue.
Fourth, and for the same reasons, the bill would extend until the end of 1970 the moratorium on interest on the government loan of $100 million to the railway company authorized by the capital revision act of 1952.
Fifth, as in previous years the bill would provide authority for the government to make temporary loans to Canadian National Railways and Air Canada to meet deficiencies in operating revenues up to June 30, 1970. Any such loan is repaid later from revenues of Canadian National Railways and Air Canada or, if these prove insufficient, the loans are written off through parliamentary appropriation.
Sixth, the bill contains an option similar to that contained in the 1968 financing and guarantee act which would enable Air Canada to borrow $165 million either directly from Her Majesty or by means of a guaranteed public issue.
Seventh, the bill would provide for the appointment of the firm of Touche, Ross and Co. of the cities of Toronto and Montreal, chartered accountants, as auditor of Canadian National Railways for the calendar year 1970.
Finally, I would point out that the present bill makes no provisions for enlargement of Canadian National Railways' authority to refinance, which at present stands at $680 million and is considered adequate for the period covered by the bill. I would commend to members of this House second reading of this bill.


Mr. J. H. Horner (Crowfoot):: Mr. Speaker, in debating Bill C-7 we are adopting in essence, as the Minister without Portfolio (Mr. Gray) has stated, what to many is a customary and standard procedure. The opportunity to discuss this bill in the House is timely in view of the confused state of railroading and transportation in Canada. It gives us the chance to examine the financial budget and expenditure both of Canadian National Railways and Air Canada.
I note at the very beginning of my remarks that money for these companies has already been appropriated for the year 1969 and most of the $201 million being appropriated by this bill has already been spent. I think it is poor


administration from the legislative point of view to examine a bill appropriating money that has already been spent. But this being the case, all we can do is to ask whether the money has been spent well. It is from this point of view that I propose to examine the bill. I want to determine whether the money has been spent wisely, and whether or not Air Canada and the CNR have met the obligation imposed upon them of satisfying the transportation needs of all Canadians.
Canada today finds herself involved in the great emotional question of whether she can survive as a nation. Is Canada a viable entity? What part does transportation play in holding the country together? To my mind, transportation without doubt is still the key to the economic survival of Canada, particularly in that part of Canada in the proximity of the 49th parallel. I see in Canada today great concern and unhappiness with our transportation complex. The costing system that has been approved by the Canadian Transport Commission is being appealed to the Supreme Court. Passenger traffic is in a state of complete chaos and so is air passenger traffic, with which I will deal later in my remarks. The three major components of our transportation industry-freight and passenger rail traffic and air traffic-are in confusion. For the moment I exclude trucking and pipelines.
1 have with me this evening a poem that was written some time ago by a well known resident of Alberta. I think it correctly spells out the difficulty in which we find ourselves in Canada today. If the House will bide with me for a moment or two I should like to read this poem, because I think it puts rather clearly before Canadians the picture of our railroads today. The poem was written by a person called "Ferg" James and is called "Farewell to the Old Iron Horse". It reads as follows:
They opened up a continent,
They brought the settlers in They colonized a nation,
With every kith and kin.
They did a yeoman service,
Their laurels they have won,
Now the giants of the frontier Have made their final run.
We miss their belching smokestacks,
And their whistle's moan and scream We miss the throbbing pistons,
And the hissing clouds of steam.
But their days were surely numbered,
They have vanished one by one,
And the grand old railroad steamers Have made their final run.
November 13, 1969

The water tanks stand empty,
Along the right of way The round house is foresaken,
Where the monsters used to stay.
The coal docks are a memory,
Their days of service done,
Since the big steam locomotives Have made their final run.
A sleek new shining diesel,
Came down the line today
And it makes you kind of wonder
Are these units here to stay?
With progress pressing onward,
And their era just begun As history keeps repeating Will they make their final run?
As we gaze into the future,
Of a hundred years or more
What scientific marvels
This old world may have in store.
A weird fantastic monster,
Getting power from the sun With ten million pounds of payload May be on their daily run.
I feel that that poem spells out the problems facing Canada today in the railroading and transportation field. If Canada were a small, compact country, transportation might not be a problem; but Canada is a great country stretching from the Atlantic to the Pacific and, as I said at the beginning of my remarks, transportation is the key to our economic survival. If Canada is to maintain a sound and viable economy, we must pay great attention to our transportation problems. If we take transportation for granted and allow our railroad companies to become conglomerates, paying no heed to the obligations they undertook in return for certain privileges granted to them when we started to build this country, we as legislators are failing in our duty.
[DOT] (8:50 p.m.)
We see a host of expenditures here and, as I mentioned, the money has already been spent. Let us examine how it was spent so we may know whether it was spent wisely. Is the CNR to remain a "next year" railroad? Will we forever have to examine deficits of $29 million in 1968 and an estimated $25 million for 1969? This bill is a measure to cover that deficit. Will the railroad forever be coming back asking this government to pick up its deficits? During my speech I intended to ask the government to have this whole question referred to the transport committee. It should study costing, the question of branch line abandonment and freight rates, all of which are tied together. It should decide whether we need passenger service, and what is our air policy. All these things should be subject to a
DEBATES	803
Provision of Moneys to CNR and Air Canada comprehensive study by the transport committee.
It may well be suggested that the committee studied these matters a number of years ago. I know that it studied them, but if Canada is to remain economically solvent we must be on guard in respect of expenditures by our transportation systems. We must decide whether they are directed in the right way or whether they will make the CNR a "next year" railroad and Air Canada a "next year" air line.
What is our air policy? This question has been puzzling many people recently. We notice in this legislation a number of expenditures. Last year $79 million was spent by the CNR for passenger travel alone. In its application before the Canadian Transport Commission the CNR claimed it lost $11,600,000. How great a role has the Canadian Transport Commission played in respect of transportation in the last two years? One cannot say it has played a magnificent role, because it has not changed things. It has adopted a costing formula which has not satisfied the railways; they are appealing it to the Supreme Court. In other words, the Supreme Court must analyse the situation on the basis of research carried out by somebody; it must decide whether the railroad's costing system is better than the system proposed by the Transport Commission.
The Canadian transportation bill which this House passed a few years ago provides in principle that if a loss can be proved, the government will grant up to 80 per cent of that loss. If one is a shrewd businessman, as I know the CPR and CNR managers are, it is good business to appeal to the Canadian Transport Commission in an attempt to prove a gigantic loss. I have questioned this principle and I will continue to question it in my remarks tonight.
Let me re-emphasize the importance of this whole question being referred to the transport committee. I point out that the whole costing procedure is in question today. We must decide whether passenger train service is necessary and whether this was spelled out in the old Act of Parliament of 1881 which established the CPR. I have it before me and could read it. I may do so before I am through.
Is passenger service still necessary, and should the government pay 80 per cent of these fictitious losses which the railways present to the commission? We must also consider the whole question of our air policy. This
November 13, 1969
804	COMMONS
Provision of Moneys to CNR and Air Canada question was considered at a recent meeting in Ottawa of the Air Transport Association of Canada. At that meeting the Minister of Transport (Mr. Jamieson)-that very amiable fellow-tried his best to spread oil on troubled waters. What has taken place? Let me quote from the Globe and Mail of November 6 of this year. This is a report of what took place at that meeting of the Air Transport Association attended by people involved in all aspects of air traffic in Canada, including regional carriers and I suppose Canadian Pacific. The article states:
The Air Transport Association of Canada in an unprecedented action yesterday moved a vote of no confidence in the air transport committee of the Canadian Transport Commission.
The Air Transport Committee is a body set up by this Parliament, yet the Transport Association says it has no confidence whatsoever in that body. We as members of parliament ought to be the watch-dogs of Canadian legislation. We should immediately have brought the members of the Air Transport Committee before the transportation committee of this House so that we as elected representatives could properly decide whether what is said in the article in the Globe and Mail is accurate. It suggests that directives have been made which cannot be carried out and are incapable of enforcement. Let me read further from this article:
The membership was told at that meeting the transport committee's general orders were considered unenforceable by the Transport Commission because of a Supreme Court of Canada decision last year that ruled that the Air Transport Committee did not have the power under the Aeronautics Act to issue orders.
Even the transport committee is making no attempt to enforce these directives. I spoke to the minister privately about this matter and suggested this was a deplorable situation in one of the fastest means of transportation in the country. He said he had been made aware of the situation and thought he had it covered. Where has he been? Where has the government been? I quote from the 1968 34th Annual Report of the Air Transport Association of Canada. This is what the chairman said over a year ago:
I would be remiss if I did not record the disappointment and frustration of this industry resulting from the confusion existing regarding government policy. Not only has there been no implementation of previously enunciated policy governing the mainline and regional carriers, but no extension of policy governing other segments of the industry has been developed. Virtually all Canadian air carriers are suffering under a tremendous handicap


in the development of plans, acquisition of new aircraft, and the continued operation of their companies on a profitable basis as action is delayed in providing effective air policy.
One could go on and read the whole 1968 annual report, but that is what was said in 1968 about the Air Transport Committee. I read from the Globe and Mail and what it said about this matter in 1969. One could also read from the 1967 and 1966 annual reports. Air passenger traffic and air freight have increased very rapidly in the last three or four years, but the air transport aspect of the Canadian Transport Commission has not kept up to date. The evidence of this is there for anyone to see. The bill now before us provides for another $165 million. We note that Air Canada is attempting to lower fares from Canada to Europe. If this is justified, where is all the money going? Certainly the people in the air transportation business do not know the answer to that question. They suggest that we do not have an air policy and that the policy we used to have is not enforced. Surely we should do better than this as elected representatives of the people of our great country.
Let us take a brief look at the passenger situation. As I mentioned, this bill covers the budget for 1968-69. The CNR has budgeted $79 million for passenger services in 1969. In 1968 it budgeted $81 million for passenger service. That is a lot of money. How does this compare with the situation in the CPR? Both the CNR and the CPR have submitted a long list of applications in respect of passenger services. They have asked the Board of Transport Commissioners to allow them to abandon these services, or if not to pay them the losses they incur. As I mentioned before, they have tremendously increased these losses. It is provided in the act under which they operate that if they can prove then-losses the government may grant them a subsidy in the amount of 80 per cent of those losses. The theory is that if they suffer the other 20 per cent of the loss it will help to keep them competitive and desirous of providing additional services. Is that really the case? We have an act which encourages the railways to go out of business. How does it do that? The railways must lose money on then-passenger services because then they can collect a subsidy. If they get a subsidy, then that is their bread and butter.
[DOT] (9:00 p.m.)


An hon. Member:: Eighty per cent is a lot of bread.
November 13, 1969	COMMONS


John (Jack) Henry Horner: Yes, 80 per cent is a lot of bread. As I have said before,, I believe the railways deliberately downgrade their services. We heard evidence before the committee to suggest this is the case, that is, that they do it deliberately in order to create a deficit so that they can ask for a subsidy. This is a deplorable situation. This is what the Transport Act suggests they do. When the Transport Act was passed by this House it said in effect that $110 million worth of subsidies would be cut out, but if the railways could prove they were losing business on any particular line they could come back to Parliament and would be granted 80 per cent of that loss. Since the end of centennial year, the year in which passenger services were profitable, the railways have attempted to prove that they are losing money on all their major passenger lines.
Let us study the two railways briefly. The CNR has four times as many passenger miles as the CPR. Revenue passenger miles are calculated by multiplying the number of paying passengers by the mileage they travel. The CNR has something like 2,246 million passenger miles; the CPR has something like 500 million passenger miles. It is obvious that the CNR carries over four times as many passengers over four times as much mileage. One would therefore think that if the passenger business was losing money, the losses of the CNR-according to their figures-would be four times greater than the losses of the CPR. The CPR has some very profitable lines and some short lines which are paying well. The CNR appears before the Canadian Transport Commission and files applications to discontinue some regional services on which they say they are losing $11.6 million. The CPR appears before the same board-and bear in mind it is travelling one quarter the distance-and says it is losing $30 million.


An hon. Member:: Shame.


John (Jack) Henry Horner: Now, from a quick look at these figures one will realize that the CPR is quickly building up a case for a huge subsidy. There is in the Financial Post dated November 15, 1969, a very interesting article on transportation and railways. I should like to read one paragraph:
CN President N. J. MacMillan told a House of Commons committee this spring that the two railroads and the Canadian Transport Commission have a study under way toward the development of a "coherent" national rail passenger system.
DEBATES	805
Provision of Moneys to CNR and Air Canada
With this vividly on the record it is obvious that we can hardly study CNR passenger traffic without studying CPR passenger traffic because the two, whether or not they admit it openly, as more or less in cahoots in an effort to create an atmosphere that they are losing huge amounts of money on their passenger services. I do not doubt that they may well be losing money on some lines. But should we as representatives from every region in Canada say that if they are losing money in one region they can discontinue the service? We are running a national, government-owned railway. Can we say that one region should not have passenger service and that all other regions should? I do not think we can do that.
We might ask ourselves what is the situation in respect of the CPR, what it was granted in 1881 and what obligation was placed upon it. When Mr. Sinclair appeared before the committee in 1966 he said that they accept their obligation, but in order to meet the obligation here must be an effective demand for the service. He said there is no point in living up to an obligation when people do not travel on the trains. I made the point earlier that the CPR have deliberately downgraded their services in order to create the fictitious figure of $30 million. What has really happened? What obligation is there upon the railways to create effective demand? If we are in business we must advertise in order to create an effective demand. So I say there is an obligation on the CPR and the CNR in this regard. I commend the CNR for its past action in respect of lowering fares and improving passenger services. From 1962 on a really good effort was made to encourage more passenger traffic on their trains. The CPR, however, has done exactly the opposite.
Back in 1881 when the government of the day was attempting to tie this great nation together, it started to build a railway line. It was given to the CPR. At that time the railroad that had been built was worth something in the order of $37 million. The CPR officials were told that they would be given a lot of right-of-way and a lot of money if they would complete the railroad. I shall not go into all the detail; it is to be found at page 1198 of the proceedings of the transport committee for the year 1966-67. What happened? The railway was completed by the CPR. The total amount of government money the CPR received, both direct and indirect, was $228 million. This was a lot of hay, particularly in those days when a dollar was a dollar.
806	COMMONS DEBATES	November 13, 1969
Provision of Moneys to CNR and Air Canada
[DOT] (9:10 p.m.)
However, the inflated egos of the present government have inflated the value of money so that a dollar is not what it used to be. We are all aware of that. The point I am making is that the CPR continued to sell townsites all along the railway line. Prior to June, 1916, it sold land for townsites through the southern prairies and into British Columbia worth $123 million. This was land we gave the CPR. We encouraged the CPR to build and to develop Canada. I am not condemning that. It did a pretty good job. But now it comes along and says, "We have no further obligation. We sold the land for those townsites, but we have no obligation to continue passenger service for the people in those towns." I say they are reneging on the moral concept of the 1881 agreement, and I hope that the CTC, Parliament and the government will look into the whole question of the CPR.
I could go on and tell the House of the mineral wealth of the CPR and of the tremendous acreage granted to it. I do not need to tell you what the CPR has done with it. It now has Canadian Pacific Investments and Cominco, founded on the mineral wealth it was given under the original agreement. The CPR would like us to consider passenger service as a separate entity. I point out that railroads today are becoming conglomerates throughout the United States and Canada. It is good business sense that they should do so. I am not objecting to the CPR becoming a conglomerate, but I say it does not have the right to renege on the moral concept of the original agreement.
Can you imagine the whole southern half of the prairies being left without railway passenger service? It might be said that air service would fill the gap. But is there really air service for the little towns, with airplanes now getting larger to the point where the runways at some of the major prairie centres are not big enough to handle them? In this respect I think of the town from which the Minister of Agriculture (Mr. Olson) comes, Medicine Hat, a thriving community, an old community in the province of Alberta; yet it is having a difficult time maintaining any kind of regional air transport service.


Mr. Souiham:: And it is a designated area.


John (Jack) Henry Horner: It is a designated area, and perhaps it should be. As airplanes become bigger and faster they will make fewer and fewer stops. The major concern in the future will be the location of airports. Even now

there is a fairly large body of opinion that Toronto and Montreal should share an airport located somewhere between them. But how will people get to such an airport? This was a project thought of a couple of years ago by a former minister of transport. Passenger service by the CNR and CPR is still necessary in many regions. Since 1962 the CNR has done a commendable job to attract passengers, but as I read present-day signs it is going to attempt to discontinue its drive toward that end and has now applied for a $11.6 million subsidy.
I say that the CNR should be something like the Post Office Department. It should not necessarily pay its way. It should provide service for Canadians in Newfoundland, Alberta, the Peace River country and in every part of our land. This is also the obligation that the CPR has to accept. It has a duty to provide a service because it was built under a special agreement; it was built with the money of Canadian people and it has a moral obliga'ion to them. As I say, I see signs that the CNR is discontinuing its drive to attract passengers. Just look at the great province of Newfoundland and what is happening to its rail service. We have to examine the whole problem, Mr. Speaker.
The Minister of Transport (Mr. Jamieson) is sponsoring legislation to provide for standardization of safety in automobiles. Why are we concerned about automobile safety? It is because of the overloaded traffic on our highways? If the railroads modernized their services they can and will provide very effective commuter service and cut down on the number of automobiles on our highways. They can do so if, to use the common expression, they get with it.
What about the question of pollution? The Economic Council has dealt with it at length, particularly pollution in major population centres caused by automobiles. This is one of the major problems in areas of dense population. A fast, economical railroad commuter service would relieve the congestion on our highways and cut down the pollution caused in major centres throughout Canada such as Toronto, Montreal, Winnipeg and Vancouver. These cities are already examining the problem of pollution caused by carbon monoxide being emitted from automobiles.
Let us look at the cost of branch line services. Under this bill provision is made for the building of 140 miles of branch lines, at a cost of $19 million. Some $2J million are to be spent on building a railroad out to Robert's Bank. I suppose this is a good expenditure,
November 13, 1969	COMMONS
but it is a pretty narrow one in the sense that the Robert's Bank port will handle only coal while on occasion the port of Vancouver is congested with grain ships. We are spending $2J million to build a railroad to Robert's Bank on behalf of the Kaiser Corporation so that it may sell coal to Japan. If Burrard Inlet were able to handle all our other traffic, this would be good, but it is not able to do so. We have had plenty of evidence over the years that it is not.
[DOT] (9:20 p.m.)
Surely we should attempt sooner or later to do a little for ourselves. I believe that Canada is a great nation and will someday acquire that stature in the nations of the world. The whole question of branch line abandonment deals specifically with costing. To me it is a matter of regret that when the Canadian transportation legislation was passed a few years ago we did not realize that these regulations would allow an appeal from that body to the Supreme Court. I know there is provision for appeal to the minister but I do not believe that the original intention was for appeal to the Supreme Court. This procedure could be detrimental in setting precedents which may not be wise in regard to transportation and costing. Railroad costing is a most complicated subject. The railroads have perfected a system which the Canadian Transport Commission did not accept completely.
Mr. Speaker, I hope the railroads lose their case in the Supreme Court. Having said that,
I believe we must examine the whole question of rail line abandonment from the point of view of need and subsidies and whether we can abandon rail lines holus-bolus without any regard for the necessity of the service even if it is losing money. It may be that there is provision for them to obtain a subsidy for loss incurred on a branch line. I believe, Mr. Speaker, that this whole question should receive exhaustive study and witnesses should be called, particularly from the CPR, before the transportation committee of this House.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: Then the elected representatives of the people of Canada could decide whether these two railroads are living up to the moral commitments they have made over the years. Another question that must be gone into thoroughly is the enforcement of the rulings and directives of the Air Transport Committee. In the case of air passenger
21362-52J
DEBATES	807
Provision of Moneys to CNR and Air Canada service and charter flights there is plenty of evidence to suggest that air travel agencies as well as sub-agencies have been booking charter flights; then suddenly the Air Transport Committee wiped out the effectiveness of the sub-agencies. A travel agency was allowed to charge 5 per cent of the fare as commission and the sub-agency was allowed to charge 7J per cent. It then gave 5 per cent back to the agency under which it worked. But suddenly the Air Transport Committee ruling suggested that the sub-agencies would have to cancel their bookings. This was after they had gone out and earned the 2-J- per cent commission on their own initiative. We should be encouraging Canadians to do this sort of thing; there are in our society too many things which tend to discourage initiative.


Gerald William Baldwin: Like Benson's white paper.


John (Jack) Henry Horner: That is a very good example. I have a file here which I think suggests that Air Canada is making an honest effort to put charter flights out of business. Whether or not they should be in business is not the question we have to decide tonight, but I think Air Canada should be called before a committee and the whole question of charter flights, travel bureaux and sub-agencies of travel bureaux should be thoroughly explored. If Bill C-7 initiates a debate across the country and in this House which decides that the whole question of transportation should be examined by the transport committee, I shall be very pleased indeed.
I urge everybody in this House, Mr. Speaker, to examine the question fully, because in a country as broad and as wide as Canada transportation is the key to future economic survival. I believe it is the duty of every member of this House to watch and examine carefully the direction taken by this industry.


Stanley Howard Knowles: Mr. Speaker, when the Minister without Portfolio (Mr. Gray) who has this bill in his charge introduced it, he said it was like other bills that we have had year after year. I believe there are one or two differences, particularly in that part of the bill which relates to the financing of Air Canada, but the point I should like to make at the outset is that I think we should resist this business of being asked year after year to vote this money without being given any clear picture as to where we are going in this country in terms of a transportation policy.
November 13, 1969
908	COMMONS DEBATES
Provision of Moneys to CNR and Air Canada
I know, Mr. Speaker, that some of us have been rather critical of the number of reviews launched by this government. There seem to be many issues where we think action should be taken but instead we are getting reviews, studies, consideration and so on. But here is an area which does call for an over-all review before our whole transportation picture winds up in one awful mess. The fact that we are in danger of moving in the direction of an awful mess has been highlighted by the recent applications made by Canadian National Railways and Canadian Pacific Railway for the abandonment of most of their passenger services in this country.
May I say that few of us think that it would actually come to pass that passenger trains would cease to run in Canada. There is no sign that they will cease to run in the United States or Europe and other parts of the world, and it is terribly true that we do need passenger train services to help hold this country together.
I think it is clear what is taking place when an organization like Canadian Pacific Railway, parallelled by the Canadian National Railways, applies for permission to abandon passenger service. They are trying to get out of that part of the transportation business which is unprofitable in order to devote all their energies to those portions of the transportation business where they can make money.
[DOT] (9:30 p.m.)
Some day the Government of Canada, and I do not know whether this government will do it, must look into the question of public versus private ownership in many fields, and in particular in the field of transportation. This government, in common with past Conservative governments, often pays tribute to the idea of public ownership up to a certain extent. They support public ownership where it is needed, but the record is clear that they do not really believe in it. They only bring it in when private enterprise is not able to fill the bill.
Here we have a proposition that transportation, which has many aspects including passenger service and freight service, air line service and all other related services that are tied into it can, in certain areas of our market economy, make money. So private enterprise wants to be in that part of the transportation business to make all the money it can out of freight traffic and those areas of transport that are profitable, and agrees to take on the

passenger services. Hon. members will remember the famous wording in the agreements of 1881 and in the Canadian Pacific Railway Act of 1881, which talked of that company providing railway service in Canada thereafter and for ever, which talked about perpetual operation and about service being provided in perpetuity. That is what organizations like the Canadian Pacific Railway Company and the other railways that eventually failed and had to be taken over as part of Canadian National Railways agreed to do in order to obtain a corner of our economy in which profits were to be made. Now, as the years have gone on, it turns out that no railway company in the world operating over any extended area makes a profit out of its passenger business; but there are profits to be made in freight and other portions of the transportation industry. So these organizations, these conglomerations that were prepared initially to promise service forever, want to get out of that part which is unprofitable but enjoy the gravy that is to be made in other sections of industry.
One can hardly blame these people too much for taking that view. That is the view private enterprisers take generally. But we of this party blame the government for not realizing that transportation is so basic and essential to the life of this country. We must resolve this issue. I think the government should change its stance, because it seems to be saying, "All right; we will subsidize private enterprisers in the unprofitable part of the operation. If necessary, we will take over the unprofitable part of the operation, but we will bend over backwards to make sure that private enterprisers are given every opportunity to make all the money they can out of the profitable sections of the industry."
In the case of Canadian National Railways, huge batches of figures and tables are thrust at us. My friend and colleague, the hon. member for Timiskaming (Mr. Peters), has been reading some of the tables he obtained from the library. He asked me to explain them. I cannot explain them to him, nor can he explain them to me. Sometimes people say that we own Canadian National, but when I look at all the figures and the way the railway's debts are mounting, I think Canadian National owns us. The amount of our wealth we have to apportion to pay the interest on this ever-growing debt portends ill for the future. It is getting us nowhere.
Why is this done, Mr. Speaker? The reason is that this government wants to maintain a
November 13, 1969
regime under which the profitable parts of the transportation industry are left to private enterprise. Transportation must be looked at as a whole industry, and if our private enterprisers are not prepared to operate the industry as a whole in the spirit of the 1881 agreements entered into by the Canadian Pacific Railway and others, then the public should take the industry over as a whole.
As a result of pressures that the Canadian Pacific Railway and the Canadian National are exerting, the day will come-and it may not be far off-when a real threat to close down passenger lines will tie this country up far more than any industrial strike has ever tied it up. That will result in the government saying, "We must have passenger service, so we will take over that unprofitable part of the business and run it but we will let you fellows go on and retain the freight service; we will let private enterprise acquire more and more of the air line business and all those other services, the hotel, financial and other services that are part of the conglomerate known as the Canadian Pacific Company. Then we the government, we the people, we the taxpayers will pay the shot for that part which happens to be unprofitable."
Either these people are in the transportation business, or they are not. If they are in it, they should be obligated to run the whole of it. If they are not prepared to run the whole of it and give us the kind of service that has been promised over the years, then they should get out of it and let the Canadian people, through the well tried medium of public ownership, take it over and run it in their own interests.
Some people who do not like this kind of reasoning will say, "Are not we going to run ourselves into debt if we run the unprofitable part of the services?" Please note, I am saying that we should have the profitable parts as well as the unprofitable parts. Of course, some members of Parliament may say, "Maybe we should not run the part that is unprofitable." The truth is that all this is a piece of bookkeeping fiction, if I may call it that.
The running of passenger train services in the market place economy seems to produce a loss. But the country does not lose because we have passenger train services; the country does not lose because we are all tied together with these bands of steel. And now, of course, we have air line services and all the rest of it. The country does not lose because it costs money to maintain a postal service, and
Provision of Moneys to CNR and Air Canada because we have docks and wharves and roads and all sorts of services that we must provide socially because they cannot be provided either individually or on a profit-making basis. If, as no doubt we all agree, Canada needs and will continue to need a whole transportation industry, which includes railway passenger service, for a long time to come, I submit that this should be the responsibility of the government itself. I would not be doctrinaire and insist that we are not prepared to let our private enterprisers have their share of the industry if they want to take it over. But, no; they do not want it all. They want only the profitable parts and are prepared to let the rest of it be owned by the public. As the previous speaker pointed out, and I think we are all aware of this, both the major railways of this country have a record of downgrading their passenger services-particularly the Canadian Pacific Railway-so that people will not use them and rely on them. The railways then turn around and say it is costing them money, and that they need to be bailed out.
[DOT] (9:40 p.m.)
Something should be said about the bill of goods that was put over on us a few years ago when this arrangement was made for the 80 per cent subsidy on a loss. The railways can get this by applying for the right to discontinue passenger service. It seems now that we just built into the legislation an open challenge to these railways. It is strange how the one we do not own and the one we do own seem to work together. When one applies for abandonment, the other applies for abandonment, and so on. We seem to have built into our legislation a challenge to the railways to come along a few years later and apply for an 80 per cent subsidy, thereby putting us on the spot. They know the people of Canada, the Parliament and the government of this country realize we must have passenger service and if they threaten, as they do, to abandon it the government will pick up the tab or take over that service.
I speak as strongly as I can, Mr. Speaker, against moving in that direction. I refer not only to the direction of paying 80 per cent of the losses that these companies may designate but in the direction of taking over only the passenger operation and allowing this private enterprise outfit to carry on with the profit making part of the whole business. I submit if there is an area of our national life that calls for a review and an in-depth survey, it is this

November 13, 1969
810	COMMONS
Provision of Moneys to CNR and Air Canada one to which no attention seems to have been given. I think I know the reason for this. It is because those in power today do not want to disturb this situation in which profits can be made on part of the industry. As for passenger service, it will not be allowed to drop because the country needs it. This is no way to run things. This is no way to talk of giving leadership or of accepting responsibility for the life of this country. I call upon this government not to just come along year after year with this bill and stand up and tell us in a seven minute speech that it is the same bill we had last year, the year before that, the year before that and the same bill we will probably have next year and the year after.
Surely transportation is important enough to the life of this country that we should analyse, review and resolve it in rational and sensible terms. I thought that was what we were going to get a few years ago when Mr. Pickersgill introduced that bill of his. He gave us a long preamble to the national transportation policy. It was a great speech. He made it clear that he was such an expert in the field that he was able to take the job provided by the bill, but of course that is all water under the bridge. I remember when he spoke I had the feeling that maybe the time had come when we were going to get a critical examination of the whole subject of transportation in our country. However, we did not get that. All we got was a reshuffling of the financial arrangements without changing the basic concept under which transportation is still operating, namely, let the private enterprise people have all the profit they can get from the profitable phases, and let them come to us crying poverty as far as the essential services are concerned and we will pay the deficit or take over the service. That, Mr. Speaker, is not good government.
When the Minister without Portfolio was proposing this bill I had the feeling it would be good if we had a Parliament with enough people in it with the guts to refuse to pass the bill.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: Some people say we cannot deny the CNR this money because the trains would stop running tomorrow morning if we did not pass this biU.


An hon. Member:: Some have.


Stanley Howard Knowles: As
my hon. friend points out, trains have stopped


running in an important part of Canada. Not too long ago, Mr. Speaker, there was a real crisis in this House because the CPR was going to discontinue the "Dominion". It was going to reduce train service across Canada to one train a day instead of two. This matter was referred to committee and we had a great discussion on the matter. The CPR kept the "Dominion" running because it was centennial year. Some members said this showed the way the wind was blowing. We said it would not be long until they would want to discontinue the "Canadian" as well. Now we see this happening.
We should not worry that the effect of any action we might take will result in the stopping of train service. The railways themselves are doing this. If we had a Parliament with enough people in it with the guts to say no to this kind of legislation and refuse to pass it, it might bring home to the government the realization that it has not examined transportation policy. The government does not have a policy that is good for the sixties, which are almost over, no policy for the seventies and certainly no policy for the final decades of this century. We go on year after year with the same bill.
There is only one thing we have not had tonight which we usually have when this bill is presented, namely, a little homily about it just being a financial bill respecting the CNR and the fact that we should not get into speeches about CNR policy. No one tried to impose that stricture at this time because the threats to cut out passenger service have brought the whole thing to a head in the minds of hon. members and the public. If we had a Parliament that would not pass this bill, the government might realize the jig is up and that they cannot go on perpetuating this mess. This is a completely unsatisfactory situation. We must resolve the whole transportation picture.
I want to say a word about the effect of this policy on the workers of the transportation industry. I come from a city which is a major centre for employees of Canadian National Railways and Canadian Pacific Railway. These employees have been going through a good deal of agony for the last decade or more, wondering what is happening as services are being cut one after the other. They are also wondering what is happening now. I submit that this is part of the responsibility of an industry such as the transportation industry. This industry has no moral right to talk about discontinuing these services without realizing what it can mean to those who
November 13, 1969	COMMONS
are working in the industry and who have helped to build it up to the strong, effective industry which it has been over the years. The government has no concern for these people.
When it gets to be ten o'clock, I believe we will have a late show. I may have a surprise for some hon. members tonight. I will be on the late show to speak on the subject of pensions. I will be speaking on the pensions of CNR employees. There, again, is an example of the failure of these outfits. Both the privately-owned CPR and the might-as-well-be privately-owned CNR ought to be concerned about the services this country needs, the condition under which their employees work and the pensions of those who have retired.
I do not know what we are going to do to get the government to realize that a crisis point is being reached. The workers, the country and the people who depend on train service know this. Most of us as private members in this House know it. I think that goes as much for private members on the government side as those on this side. But what does the cabinet do? It brings in the same old financing bill, gives us a seven minute speech telling us it is the same except for a couple of years when we had two years instead of one and with no indication at all of their awareness of the seriousness of this whole problem.
[DOT] (9:50 p.m.)
Another aspect of this which matters has been brought out in the bill before us, and which shows the failure of the government to realize the seriousness of this whole problem, relates to air transport. This bill provides for the interim financing of Canadian National Railways and for loans to Air Canada. I believe there are some differences in the bill as compared with similar bills of a few years ago. Those differences seem to me to portend the direction in which the government is moving, namely, that of farming out all the profitable aspects of air travel to Canadian Pacific and other private air lines while cutting down the amount of business available to the public utility.
We heard a speech the other day from a backbencher on the Liberal side who argued that this should be done. Why, he asked, should the people of Canada be shareholders in Air Canada compulsorily as taxpayers; why not put the shares on the market and let those Canadians who want to be shareholders in Air Canada become shareholders by buying shares in the company? It is very
DEBATES	811
Provision of Moneys to CNR and Air Canada plausible, put that way, but it is the same old story. When air transport was new, and needed to be built up-


Mr. Mather:: Where was private enterprise then?


Stanley Howard Knowles: That is a good question. I was here. I will tell you where private enterprise was then. It was not interested. But now there are phases of the air transport industry which are starting to show a profit. And the government line is: let us give these to private enterprise and we will keep up the essential services; we shall probably go into the red doing so, but we shall get away with it. This has been government policy with regard to transportation for a hundred years-to pay the shot wherever there are losses but to let private enterprise take the profit where there is profit. This is what has bedevilled the whole of our transportation picture as far as the railways are concerned, and it will bedevil it in the air in just the same way unless we can do something to bring these people to their senses.
My hon. friend and colleague asked where private enterprise was when Air Canada was starting out. I was here in 1944, I think it was, when the Right Hon. C. D. Howe brought in a measure having to do with air policy which resulted in the setting up of Air Canada as a completely publicly-owned corporation. I said 1944, but perhaps it was in 1945 or 1946-it was around there somewhere. Mr. Howe was asked why it had to be a completely publicly-owned proposition; why the others had not been let in. And he, the apostle of private enterprise, organizer, entrepreneur, pragmatist as he was, stood in his place and said he had tried his best to get the CPR to come in along with the CNR in joint ownership, but failed. This was in the middle forties at a time when there was nothing to be made out of it; the others did not want any part of it, so this great public set-up was the result.
Mr. Howe said, when some of us supported his move, that he intended to make the corporation so strong that nothing could be done by either its enemies or its friends-that was a crack at us-to upset it. But we all know what has happened since then. I realize I am rambling, I am reminiscing, but I think I am not far from the truth about this whole transportation system and its history in Canada for a full hundred years. We have never been able to sit down and look at transportation as being an essential service which the country needs and which should therefore be provided

November 13, 1969
Business of the House
by the people, preferably through public ownership, but if not, through a system of joint ownership. Anyway, it should be regarded as an essential service, not as an area in which huge profits should be made.
We have all made our street corner speeches-others call them that. We have our wild-eyed opinions. We have declared many times that this is the direction which greedy, private-enterprise capitalism takes. We do not have to say it in street corner terms. It is happening. The Canadian people today are faced with the prospect of losing something which is essential to the life of this country, that is, passenger train services, simply because the principle to which I have referred has been followed for a hundred years. When are we going to put a stop to it? When will we get a government which instead of bringing in this bill year after year decides to face up to the need for change in the whole policy?
I hope this debate will be one in which many hon. members will take part and express their views. I shall not mind if my views about public ownership are criticized from the right or from across the way, but for heaven's sake let us have some policy for coping with our transportation problem founded on the basis that transportation is a service, instead of patching things up for a year at a time. Let us, instead, come out with a policy which will see us through the years and the decades which lie ahead.
I believe it is ten o'clock, Mr. Speaker.



BUSINESS OF THE HOUSE

Gerald William Baldwin: Might I ask the President of the Privy Council (Mr. Macdonald) whether he has consulted the ouija board, and if so, whether he can tell us the business for tomorrow?


Donald Stovel Macdonald: The business for tomorrow will be a continuation, very briefly, I hope, of the bill we have been discussing, to be followed by the completion of the bill to amend the Canada Corporations Act. Then I would think we might change the order of business to the extent of calling as the third item the Elections Act resolution. As for the business for next week, one of the aspects of the ouija board was speaking while I was engaged in consultation, so I had better make an announcement tomorrow or at a better opportunity.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Stanley Howard Knowles: Mr. Speaker, on Friday, November 7, as reported in Hansard at page 646, I asked the following question:
Now that Christmas is only 48 days away, may I put a question to the President of the Treasury Board. Is the minister hopeful that a decision regarding pension increases for federal superannuates will be made in time so that these people might enjoy a happier Christmas than is in prospect for some of them?
The following exchange then took place:


Hon. C. M. Drury (President of the Treasury Board):: I think the hon. gentleman knows I am always full of hope.


Mr. Bell:: Like Scrooge.


Stanley Howard Knowles: Mr. Speaker, may I direct a supplementary question to the Minister of Transport? I should like to ask him whether he is hopeful that something might be done to increase the pensions of retired employees of the CNR, also before Christmas.


An hon. Member:: Are you full of hope, too?


Hon. Donald C. Jamieson (Minister of Transport) :: Yes, and more of it.
That was a double-barrelled question directed at two ministers, so I suppose it gave me a choice as to which of them I might summon to a late show. Well, anyone would make the choice I have made: when one minister tells us he is full of hope and another says he has even more of it, we call on the one who has more of it.
[DOT] (10:00 p.m.)
Therefore, Mr. Speaker, I thought I would engage tonight a minister who is more full of hope than anybody else, the Minister of Transport (Mr. Jamieson). Apparently it is not possible for him to be here this evening, but I see his genial parliamentary secretary. The Minister of Transport is a big man. His parliamentary secretary is, I think, even bigger, so perhaps he has more hope in his system than the minister himself. In any event, I hope that confidence will be expressed this evening.
November 13. 1969	COMMONS
As the House well knows, I have been pressing this question of increased pensions for retired CNR employees for many years. I have had expressions of hope and confidence from a long string of ministers. Without going back into ancient history, there was the present Solicitor General (Mr. Mcllraith) when he was Minister of Transport; there was Jack Pickersgill when he was Minister of Transport; and there was the present hon. member for Trinity (Mr. Hellyer). Then for a while the present Minister of Supply and Services (Mr. Richardson) had the responsibility. We now have the hon. member for Newfoundland as Minister of Transport.
Quite frankly, I have felt that this minister is more concerned about this question than were some of the others. I think it bothers him that time goes on without this question being resolved. I like the things he said to me on the "late show" some months ago-on Thursday, June 19, 1969, to be precise. We were discussing this issue on that occasion and he expressed sympathy and concern. He said he knew what poverty was because he had only to think about the fishermen along the coast of Newfoundland. He went on to say that some of the CNR pensioners were at least better off than Newfoundland fishermen.
I interrupted him at that point with the words, "It is still poverty", to which he replied:
I cannot agree more with the hon. member that is far from adequate. But I am sure he also realizes that while this group has had a good deal of attention in terms of increases in the old age pension, we do wish to do more; and I believe that we will do more.
Those are the words of the Minister of Transport when addressing this House on the night of Thursday, June 19, 1969, as recorded in Hansard at page 10451. He said:
-we wish to do more; and I believe that we will do more.
I know that this problem is linked to the problem of pensions of retired civil servants and all the other people on federal pensions; the whole question is tied together. But surely somebody in the government has to make a break somewhere, and I can think of no one better to make that break than the Minister of Transport. I hope he has deputized his parliamentary secretary tonight to say that this break will be made, that these pensions will be increased, and that this will be done before Christmas.
DEBATES	813
Proceedings on Adjournment Motion [Translation]


Mr. Gerard Loiselle (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, first I must congratulate the hon. member for Winnipeg North Centre (Mr. Knowles) for his tenacity and his perseverance regarding the pensions of old people, retired civil servants or retired C.N.R. employees.
As a matter of fact, while going through the records, we see that in 1964, when Mr. Pickersgill was Minister of Transport, the hon. member for Winnipeg North Centre asked a question similar to this ope tonight, as well as to the question he raised last May and to which the Minister of Transport (Mr. Jamieson) replied on June 19. The hon. member has just read part of the minister's reply.
The Minister of Transport is quite worried, as I am myself, about the present situation of the C.N.R. pensioners. We sympathize with them, we share the fears of the hon. member for Winnipeg North Centre who worries and who is sorry for those people with Christmas coming. Unfortunately I do not have the favourable reply he was hoping to hear tonight, even if the C.N.R. authorities were to hold consultations and meetings with the pensioners. I was told this afternoon that talks are held now and then in an attempt to find some form of agreement formula which has yet to be achieved.
It must also be recognized that the government, in increasing the old age pension a few years ago, in granting it to persons of 65, has enabled many C.N.R. pensioners to avail themselves of these advantages and also of a supplement of $30 a month. This supplement is granted, as a general rule, to all retired employees, to all Canadian citizens of 65 and over who are in need of it and who can prove that their financial means are limited and that they are eligible. A few of these pensioners are getting part of this supplement of $30 and I think some must receive the greater part of it, because, in some cases, certain C.N.R. employees receive a meager pension. Unfortunately, that pension was paid for thirty or forty years ago, and then money did not have the same value as today. One readily admits that the amount is insufficient.
The government would like to please everybody. For my part, I represent a working-class constituency in Montreal. Already, I have received requests for Christmas parcels. I wish I could fill them.
The government would like to be able to say yes to all the requests made by citizens
November 13, 1969

Proceedings on Adjournment Motion from the various social levels and even to requests from hon. members of the opposition. It would be much more agreeable to say yes and to accept suggestions than to say no and refuse-


Mr. Speaker:: I regret to have to interrupt the hon. member who had scarcely entered his peroration.


Stanley Howard Knowles: Just
say "oui".


Gérard Loiselle: Just say "oui"! Where do we get the money? Do you want to bankrupt the government?



PUBLIC SERVICE-ALLEGED LACK OF EQUAL EMPLOYMENT OPPORTUNITIES FOR WOMEN

Barry Mather: Mr. Speaker, the other day during the question period I raised a question about the inequalities of salaries and employment advancement opportunities for the women of Canada who are employed in the federal public service. This question was inspired, if I might use that word, by a recent and excellent speech by Mr. Carson, chairman of the Public Service Commission of Canada. I addressed my question to the President of the Treasury Board (Mr. Drury), who I am delighted to see with us this evening. Possibly I did not phrase my question accurately enough to convey my real interest because the minister replied that he would be glad to send me a copy of Mr. Carson's speech. I did not consider that this was an adequate reply and I asked the minister whether he would consider taking a really serious look at the situation which is one that affects a great many women in Canada both in the public and private sector. This has been well outlined as far as our federal women employees are concerned by Mr. Carson.
I want to take advantage of the adjournment debate tonight to put a few more facts forward in illustration of what seems to be a need for a stepped-up effort on the part of our government to rid the employment service of this old and outworn prejudice against women in executive or foremost positions in the public service. Let me quote from the speech last week by Mr. Carson, the chairman of the Public Service Commission of Canada, in which he said:
In 1967 for example, almost 60 per cent of all men In the public service made less than $6,000 a year, but no less than 90 per cent of all women ... so employed were under that level.

He also states, as a result of a study undertaken on a comprehensive basis of men and women employed in the public service:
Our study has computed that a male has 100 times the chance of reaching an annual salary of $14,000 than does a female in the public service.
[DOT] (10:10 p.m.)
I suggest these two quotations indicate that economic discrimination exists throughout the public service in respect of female employees. I am sure many people would agree with me when I suggest a similar prejudice exists in the private sector. I know, and I am sure the minister or whoever speaks tonight will say, that efforts are being made to meet the situation in the federal public service field and that the prejudice which involves women and retards their advancement to a higher salary or position is an intangible one. It is also said that this hangover from past ages has nothing to do with legislation. I agree, but I am sure the women across the country would agree with me when I say the federal authority in this field, representing the public of Canada, should be expected to give a lead in this regard and speed up efforts to correct the situation which prevails. If this is done, then I think the federal government will set an example for the rest of the country in accelerating the progress of women toward economic equality in our country at least so far as salary and employment are concerned.
In concluding my remarks I should like to remind hon. members that in reply to a question I asked in 1966 on a similar subject, the former prime minister, Mr. Pearson, at that time said unequivocally yes to me when I asked whether appointments to bodies such as the Atlantic Development Board, other boards, the Economic Council of Canada, the judiciary, the diplomatic corps and the CBC would be made by the government on the basis of a due proportion being filled by qualified women. Three years ago Mr. Pearson said yes on that particular point. We have yet to see any real action to back up that undertaking. I wish to say to the minister and others that we do appreciate that the chairman of the Public Service Commission is aware of the situation in the public service. I ask the minister to do everything possible in supporting the chairman of that commission and expediting equality for women in the employment service.


Charles Mills (Bud) Drury: Mr. Speaker, like the hon. gentleman who has just spoken we subscribe both
November 13, 1969	COMMONS DEBATES
to the analysis and views expressed by the chairman of the Public Service Commission. I think this is an excellent analysis. As the hon. member suggests, we will do all that is reasonable to see that these hopes and aspirations are furthered. In quoting from one passage the hon. gentleman suggested, perhaps inadvertently, that there was inequality of salary between men and women, inequality in the sense that men on a quantitative basis draw higher salaries than women in the public service. Perhaps this carries the implication that women might be paid less than men for equivalent qualifications or equivalent jobs. I am sure he will appreciate this is not so. The law is quite explicit on this point. There is equal pay for equal work as between both sexes in the public service. There is no complaint on that score.
Apart from this I would be glad to say that, like Mr. Pearson, we want to see a greater participation by those of the fairer sex in the public service, and as the chairman of the Public Service Commission has indicated, he is conscious of the problems to be faced and is putting forth his best efforts to see that this proportion is increased.



OFFICIAL LANGUAGES-INCLUSION OF COST OF SCHOOL IN GRANT FOR BILINGUAL PROGRAMS

Bernard Dumont: Mr. Speaker, I asked the Secretary of State (Mr. Pelletier) today if the amount of $3 million earmarked for the building of the Civil Service School of Languages was included in the $50 million grant promised by the Federal Government for the bilingual programs.
I suggest this is an urgent question, because a great many Canadians are worried about the manner in which this amount of $50 million is going to be spent.
In view of the amount of money involved in learning a second language in Canada, this allocation of $3 million makes us wonder if the expenditures made in view of turning Canada into a bilingual country have been provided for or if the grant of $50 millions to bilingualism programs will be used also for the construction of language schools.
Speaking about Canadians' concern, a British Columbia citizen stated, and I shall quote an article published in Le Soleil of November 11th which was entitled: "The $50 millions from Ottawa should be used to improve the
Proceedings on Adjournment Motion condition of the French-speaking minorities in this country", and I quote:
We will have to see to it that the $50 millions Ottawa will contribute in order to promote bilingualism are not used by English-speaking provinces to help English-speaking Canadians to become bilingual but to improve the condition of their French-speaking minorities.
This is the view expressed last week-end by a British Columbia French-speaking visitor to Levis-
Mr. Romeo Paquette, secretary of the British Columbia French-Canadian Association, was speaking especially of his province-
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At the present time there is no adequate machinery to ensure that the French Canadians will be properly represented on the school boards.
Mr. Paquette wonders how the French-speaking people in his province will be able to work towards self-determination if the institutions are English and if English-speaking people decide on the solutions to the problems of the French-speaking people.
If western citizens are concerned about the disposal of the $50 million made available to Canadians, Quebecers are also justified in being worried and in asking questions which urgently require answers.
According to Quebec Minister of Cultural Affairs, Quebec had told Ottawa that if it intended to provide technical and financial assistance, it would naturally have to consider the whole situation, namely the efforts Quebec had made to set up an educational system favourable both to the French and the English people.
He added, and I quote:
As for the premier, he concluded: In Toronto, the Education Minister (Mr. Davis) stated the government policy, at least some principles of the Ontario government, and he asked for retroactivity. If this has a retroactive effect, in Quebec, it will have to be for more than a hundred years.
All this, Mr. Speaker, to tell you that there is much to be done in the field of linguistic research, in order to do justice to everyone, because, in my opinion, individuals and peoples should not be judged according to how well they speak or write.
However, language remains, in my opinion, a privileged instrument for the moulding of the mind and character. A cripple or a sick person can be endowed with very lofty qualities. We must not conclude that physical disability is unimportant and that the spread of illness should be encouraged. To speak incorrectly and to write poorly is not only a discourtesy towards others, but a sin against oneself, according to Plato, who had nothing in common with a silly bluestocking or of a
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Proceedings on Adjournment Motion man for whom hair styling and whiteness of teeth are more important than friendship and courage.
As for that specific inquiry directed to the minister concerning the manner in which the amount of $50 million will be spent, I would like to quote what a professor of Matane-a town located east of Quebec City-Mr. Via-teur Beaupre said, and I quote:
The quality of the language is closely connected with a people's economic and political life. It is certain that our present federalism seriously threatens our culture and our language because, as an increasingly centralizing magnet, despite our protests, it strives consciously and unconsciously to establish unity and uniformity. The English-speaking majority cannot but work to build the country in its image and transcendence. The melody is sung by English tenors; French Canadians, Eskimos and others are asked not to spoil the concert or to learn the right lyrics. If we want to sing our own song, they will tell us that we cannot carry a tune and must have faith in them because, they say, we are fond of your "Alouette, gentille alouette" and we promise it will be respected from coast to coast. On a single condition: that you shall not sing another song while we are teaching "Alouette" in the Prairies and Baffin Land.
But I will not insist on this aspect of the question, although it is of utmost importance. Whatever the political status of the province of Quebec, we will always have to make a gigantic effort to save the French language in North America. It will be saved or irreparably lost in a few years hence. And let there be firmly believed that if Ottawa proffers its hand, it is to grasp it later with both hands and compel us to follow its own dance. If we dance well, to the English rhythm, the French-Canadians outside the province of Quebec will be allowed to keep their folklore-


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


Gérard Pelletier: Mr. Speaker, the answer to the first part of
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the question of the hon. member is no. The cost of the Language Center of the Civil Service Commission located on Carson Road is paid from the budget of the Public Works Department.
The Department of Public Works bought the Saint-Jean Marie Vianney seminary last summer for $2,700,000. Renovations will bring the total cost to roughly $3 million by the end of the 1969-70 fiscal year.
The budget of the Public Service Commission provides for expenditures of $5,777,000 for language training in the year 1969-70. Operating expenses for the Centre are included in that amount.
With regard to the $50 million I mentioned here on November 6, that amount will be used to set up federal-provincial programs for the teaching of the minority language, that is the mother tongue of English minorities in Quebec, and of French minorities in the other provinces, and, as an adjunct to this, for the teaching of English and French as second tongue.
The hon. member may rest assured that the amount used for the purchase and the amount to be used for the operation of that new Public Service Commission Center were not taken out of the money voted towards the federal-provincial programs for the teaching of languages.


Mr. Speaker:: The time has now come for the House to adjourn, and hon. members are invited to take up arms again tomorrow, at eleven o'clock in the morning.

Motion agreed to and the House adjourned at 10.26 p.m.

Friday, November 14, 1969