1969-01-17

ROUTINE PROCEEDINGS


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, there have been certain discussions in various comers of the house with regard to the work of the committee on transport and communications. It has been agreed that it might be desirable if that committee were to make a detailed study on the spot of transportation problems in the Atlantic provinces. I therefore ask the leave of the house to present a motion in this regard.


Some hon. Members:: Hear, hear.


Donald Stovel Macdonald: I move,
therefore:
That the standing committee on transport and communications be empowered to consider and report upon the problems of transportation in the Atlantic provinces and that for the purposes of its inquiry the committee be empowered to adjourn from place to place within Canada and the clerk and the necessary supporting staff be authorized to accompany the committee.


[Stage Direction]
Motion agreed to.
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, on behalf of the opposition party I should like to say that we welcome this announcement very much.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Finance, and welcome him back to the house after his expedition last evening. Today I wish to ask him whether he is concerned about the advertising campaign of the chartered banks in
which they urge Canadians to borrow from the banks to buy convertibles and other items which they may desire, and to use bank credit freely for spending purposes.
In view of the inflationary pressures and inflationary psychology of the country, as well as the difficulty in the capital markets, is the minister concerned about this? If so, I should like to know whether the minister has discussed this with the banks and whether he believes it is in the public interest for the banks to be urging Canadian individuals to borrow for anything they may desire. I consider this question particularly appropriate when I notice the pressure of the banks in constantly urging Canadian governments to live within their means, and not to borrow freely.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I find the views of the Leader of the Opposition very interesting. As he knows, banks have been competing with one another and with other institutions very aggressively for consumer loans. I presume that part of the advertising to which he has referred, and incidentally I have not seen it recently-this morning, at least-is to attract business from other consumer lenders. The over-all effect of this has been a reduction in the rate at which consumer loans have been made to the public in the past year or so. As the Leader of the Opposition has mentioned, and the President of the United States has done this also, we have urged people in Canada not to spend freely. I was very interested in his comment that banks castigate governments for spending and then turn around and encourage the public to spend.



THE CANADIAN ECONOMY


Mr. David Lewis (York South):: Mr. Speaker, I should like to ask the Acting Prime Minister this question. In view of a speech made recently by the Secretary of State in New York, again emphasizing the need to protect Canadian economic independence, is the government considering legislation to implement aspects of the Watkins report to provide that Canadian firms, which are subsidiaries of American companies, are free to

January 17, 1969
Inquiries of the Ministry trade anywhere without being subject to United States laws? Has there been consideration of the recommendation to provide a state foreign trade agency, and of the other recommendations in the report to protect Canadian economic independence?


Hon. Paul  Keilyer@Acting Prime Minister: Of course these questions are under continuous review by the government. Any definitive policy decision will be announced in the normal way.



CANADIAN DEVELOPMENT CORPORATION


David Lewis: I should like to ask the President of the Privy Council when this house may expect the introduction of the bills dealing particularly with the government's reorganization program and the Canada Development Corporation?


Donald Stovel Macdonald: Mr. Speaker, I hope to make a general statement within a week or so about the intended legislative program between now and, I hope, the end of the session in June. Perhaps hon. members could wait until then, when I can be a little more definitive.



AIRPORTS


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I wish to direct a question to the Minister of Transport with regard to the selection of the site for the future international airport which is to be announced before the end of January. Can he tell us whether such decision will be taken by technocrats or by the cabinet?


Hon. Paul Hellyer (Minisier of Transport):: Mr. Speaker, the official decision will have to be taken by the government, which will be held responsible for it. Naturally the advice of the technical people will be taken into consideration. The government will have to base its decision on the advice it receives and the discussions which have taken place with the province of Quebec.


André-Gilles Fortin: Mr. Speaker, I should like to direct a supplementary question to the Minister of Transport.

Is the ballistic centre located in La Macaza a major and definite technical obstacle to the sites suggested north of Montreal along the Hawkesbury-Saint-Jerome-Rigaud axis ?


Mr. Speaker:: I do not think that the supplementary question is in order.



FAILURE TO LOAD SHIPS AT WEST COAST

Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Trade and Commerce or the Minister of Transport, whichever one is responsible. Why are ships being kept waiting for grain on the west coast during a time when there has been a drop of 18 per cent or 1,100 fewer carload-ings as compared with the same period in 1967?


Mr. Speaker:: I have the impression that the question as asked is argumentative, but under the circumstances perhaps the minister might be allowed to answer.


Hon. Jean-Luc Pepin (Minister of Trade and Commerce):: Mr. Speaker, if there are any specific cases the hon. member would like to bring to my attention I would gladly meet him after the question period and bring these to the attention of the Wheat Board and the grain transportation committee.


Stanley James Korchinski: Mr. Speaker, there are ships waiting at the present time and there have been 1,100 fewer carloadings than there were at the same time in 1967. This seems general in respect of any delivery point. I do not know what more the minister wants.


Jean-Luc Pepin: I inquire nearly every morning about this situation and I have been informed that the box car situation at the moment is as good as it can be. As I said, I will gladly take notice of any specific case to which the hon. member is referring.


Mr. Eldon M. Woolliams (Calgary North):: supplementary question, Mr. Speaker. I wonder whether the Minister of Industry, Trade and Commerce would discuss these problems with officials of the railways. These nine ships have been waiting many, many days for dry grain, of which we have an abundance in Canada. This is costing the nation as a whole and the farmers in particular a great deal of money. Would the minister be prepared to discuss the matter with the railways?


Mr. Speaker:: Order, please.
January 17, 19S9

Inquiries of the Ministry


Mr, Pepin:: I just said I would, Mr. to obtain from the hon. member the details of Speaker.	the particular case referred to. I would then
make further inquiries and consult my col-ESTATE TAX ACT	leagues on the point.



REQUEST THAT EXPLANATORY MATERIAL BE SUPPLIED TO OPPOSITION MEMBERS

Mr. Gordon L. Fairweather (Fundy-Royal):: Mr. Speaker, I have a question for the Minister of Finance. It is based on a newspaper account which might be accurate, but I do not propose to call for any files.


Some hon. Members:: Oh, oh.


Robert Gordon Lee Fairweather: Could opposition members of parliament be furnished with the explanation with regard to the new estate tax, which was allegedly given by the Department of Finance to backbenchers who support the government?


Edgar John Benson: Mr. Speaker, the explanation was not given by the Department of Finance but through my office. Yesterday I instructed my office to make it available to members in the opposition as some of them have requested.


Mr. Bell:: Is it helpful?


Edgar John Benson: It is very helpful and it shows how fair the estate tax is.


Some hon. Members:: Oh, oh.


David Lewis: Then why did you delay supplying us with the explanation?



SECURITY CHECK OF STAFF MEMBERS

Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I wish to direct a question to the government house leader because I do not know to whom else it should be directed. Would the government house leader be kind enough to advise the house now or later as to the procedure with regard to security checks on the staff employed by the House of Commons and Senate. I ask the question in view of the fact that there was this morning some kind of security check. It amazes me that secretaries who have been here as long as 16 years were stopped for a security check, when to my personal knowledge three new employees who were right ahead of me were not stopped for this check.


Donald Stovel Macdonald: Mr. Speaker, I would be glad


Mr. Baldwin:: Has there been another leak?



HARBOURS


Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, I have a question for the Minister of Public Works. On December 9 the minister stated that the Atlantic region engineers were making a survey of possible storm damage as far as harbours are concerned. Would the minister advise the house whether the engineers have completed their survey and whether any action will be taken?
Hon. Arthur Laing (Minister of Public
Works): We have a report, Mr. Speaker, that is fairly complete with regard to damage done by the storm in all areas. The damage was very widespread, however, and I think the information that we have could probably be disseminated to individual members with more value than by making a statement in the house. I will endeavour to get that information out at once to the members concerned.



SPACE EXPLORATION


Mr. Barry Mather (Surrey):: Mr. Speaker, I should like to ask the Minister of Transport a question in his capacity as Acting Prime Minister. Will consideration be given to extending Canada's congratulations to the U.S.S.R. on the completion today of an outstanding space achievement by that country?


Paul Theodore Hellyer: Mr. Speaker, I am sure all Canadians wish to congratulate the Russian cosmonauts on this really remarkable achievement. It is a further step in the exploration of space which lends new knowledge to that field of endeavour. It is a matter of interest and concern to all citizens of the world. I think that with the United States astronauts who performed such an amazing feat at the Christmas period, the Russian team deserve the congratulations and best wishes of all interested citizens of this country.


Some hon. Members:: Hear, hear.

January 17, 1969
Inquiries of the Ministry INDIAN AFFAIRS



TABLING OF STANBURY-FIELD REPORT ON INDIAN TAXATION

Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. Will the minister say when he will be tabling the Stanbury-Field report which analyses taxes paid by Indians in British Columbia to the government of that province?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I do not know what document the hon. member is referring to. I will inquire and give an answer in the house as soon as possible.



AIRPORTS


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I had a question for the Minister of Forestry and Rural Development, but in his absence I shall direct it to the Minister of Transport.
Is the decentralization policy often announced by the federal government taken into consideration for the location of the future Quebec international airport?


Mr. Speaker:: I think that the question as asked should be put on the order paper. If the hon. member feels that it is urgent, he could give notice to have the question discussed at the time of adjournment.



ESTATE TAX ACT


Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of Finance. In view of the serious threat to the continuance of family farms and businesses contained in the changes to the Estate Tax Act, would the minister give serious consideration to a review of these matters before bringing in the proposed legislation?


Mr. Speaker:: It seems to me the hon. member is asking a question which has been asked in the last few days, but in spite of this fact I am disposed to allow the minister to reply.


Edgar John Benson: Mr. Speaker, I would simply like to say that the presumption is unfounded.


Mr. John Burton (Regina East):: I have a supplementary question, Mr. Speaker. Since there are indications in the press that Liberal members of parliament have been provided with certain information on the new proposals, would the minister make this information available to all members?


Mr. Speaker:: Order, please. The question has already been and answered.



REGIONAL DEVELOPMENT


[Stage Direction]
Mr. Jack Marshall (Humber-St. George's-St.
Barbe): Mr. Speaker, I have a question for the acting minister of regional development. Could the minister advise whether he has received a report on the proposed development plan for western Newfoundland under the FRED program amounting to $305 million from the Newfoundland government, as announced in the local papers there?
Mr. Marshall:: Mr. Speaker, in view of the silence to the question I asked a couple of moments ago, I wonder if I may ask the Acting Prime Minister whether there is an acting minister of regional development, or what was formerly forestry and rural development?


Paul Theodore Hellyer: Mr. Speaker, he will be in the house on Monday.


Jack Marshall: Thank you for the answer. [Later:]


Mr. Maclnnis (Cape Breton-East Richmond):: On a point of order, Mr. Speaker. Hon. members realize that when they put questions to members of the government they are not necessarily entitled to answers. But because of the roster system introduced by the Prime Minister, and the fact that the Acting Prime Minister is probably fumbling around with the old list, the least courtesy which the government could offer the opposition would be to inform us whether there are acting ministers.


Paul Theodore Hellyer: There are, indeed, acting ministers, but today is not the day for the attendance in the house of the Minister of Forestry and Rural Development. I am sure he will be here on Monday; in case he should not be, the acting minister will be present.


Donald MacInnis: Who is the acting minister?
January 17, 1SS9



FISHERIES


Mr. Waller C. Carter (SI. John's Wesl):: Mr. Speaker, I have a question for the Minister of Fisheries but in his absence I will direct it to the Acting Prime Minister. Will he inform the house when we may expect a statement on the action which will be taken by the government to assist the east coast fresh and frozen fish industry?


Mr. E. F. Whelan (Parliamentary Secretary to Minister of Fisheries):: Mr. Speaker, for very good reasons the Minister of Fisheries is not able to be here today, but I will take the question as notice.



SHIPPING


Thomas Miller Bell: I have a question for the Minister of Transport with respect to the shipbuilding meeting on January 20 just announced by the Minister of Industry, Trade and Commerce. Will the Minister of Transport, in charge of the revival of the merchant marine, be invited and be fully participating at the said meeting?


Paul Theodore Hellyer: My colleague indicates by nodding to me that that is the case, and I can assure my hon. friend of my interest in that very important subject.


Thomas Miller Bell: I have a supplementary question. Will the minister give the further assurance that he and the government will keep in mind the promises made on June 17 in the heat of the election compaign by the present Minister of Forestry and Rural Development, who irrevocably promised a merchant marine for Canada.


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



RESEARCH


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a question for the Acting Prime Minister. In view of widespread public concern, is it the intention of the government to refer to an appropriate parliamentary committee at this session of parliament the matter of the use of animals for scientific research and other purposes.
Inquiries of the Ministry Hon. Paul Hellyer (Minister of Transport):
To the best of my knowledge, Mr. Speaker, there is no such intention.


Winona Grace MacInnis: I
have a supplementary question, Mr. Speaker. Is it the intention of the government to introduce in this session legislation to regulate the experimental use of animals, such as they have in Great Britain and the United States?


Paul Theodore Hellyer: Mr. Speaker, I think that
when the house leader reports to the house on the amount of legislation we have yet to deal with during the balance of the current session, my hon. friend will see that it will be virtually impossible to introduce any measures that are not contemplated at this time.



INQUIRY OF THE MINISTRY

Mr. Rene Matte (Champlain):: Mr. Speaker, I should like to put a question to the Acting Postmaster General.
I should like to know why there has been
an eclipse of the sun, the Quebec newspaper Le Soleil, in the reading room for about a month?


Mr. Speaker:: The honourable member's questions will be drawn to the attention of the House of Common astrologers.

ASSISTANCE TO NATIONAL SKI TEAM Mr. Andre Fortin (Lolbiniere): Mr. Speaker, earlier this week I asked the Minister of National Health and Welfare whether the
government had received a request for financial aid to our national ski team and I was told the matter would be looked into.
Can the minister in charge or the acting minister give us any information in this regard?


Mr. Rosaire Gendron (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the minister is now presiding over the federal-provincial welfare conference, and I believe that upon his return to the house he will be pleased to give the member an answer.



TELEVISION


Donald MacInnis: I have a question for the Acting

January 17, 1969
Inquiries of the Ministry Prime Minister. I would ask him whether the C.R.T.C. has held a meeting to discuss the ethics of a transaction between any minister or ministers of the Crown, and Geoffrey Stirling.


Paul Theodore Hellyer: Not to my knowledge, Mr. Speaker. The hon. member would have to provide better information than that before I could inquire.


Donald MacInnis: The Acting Prime Minister tells me, Mr. Speaker, that I would have to provide better information than that. As Acting Prime Minister, would he look into this question and have the internal fortitude to bring it forward?


Some hon. Members:: Oh.



REQUEST FOR GREATER DELIVERY OF DAMP GRAIN

Jean-Luc Pepin: I left three questions unanswered yesterday, Mr. Speaker. The first was from the hon. member for Mackenzie, having to do with the delivery of the three-bushel advance quota on damp grain. He asked whether farmers would be entitled to make this delivery before spring. I have now received an answer from the Wheat Board on this point: The Wheat Board is hopeful that such will be the case.



ABSORPTION OF DEMURRAGE CHARGES

Jean-Luc Pepin: The second question with which I should like to deal was concerned with demurrage charges on vessels waiting to load grain in Vancouver. I was asked by the hon. member for Regina East whether the government would absorb these charges. The answer is that this has never been done by the government. If I might be allowed, I would refer hon. members to a paragraph taken from last year's testimony of the chief commissioner of the Wheat Board, as follows:
The board believes it is better to take on the sales and to take the risk. If it then turns out that demurrage must be paid, it is one of the costs of doing business and, in the overall, represents a small part of the total costs of operation.
As a matter of fact, the whole page should be read.


Eldon Mattison Woolliams: May I ask a supplementary question arising

out of the reference the minister made to the statement by the chief commissioner of the Wheat Board? Will not the minister bear in mind that these ships are waiting, not for markets which have yet to be ascertained, but to supply markets which are already ascertained? These markets are waiting for the loaded ships to arrive. Is the minister aware of that fact?


Jean-Luc Pepin: Obviously the hon. gentleman is in great need of reading the page upon which appears the Chief Commissioner's explanation of how demurrage works.


Eldon Mattison Woolliams: We know how it works.


Jean-Luc Pepin: Shortage of box cars is not the only reason for delays.


Mr. A. P. Gleave (Saskaloon-Biggar):: Mr. Speaker, may I direct a supplementary question to the Minister of Trade and Commerce. One may expect-


Mr. Speaker:: Order. The hon. member should ask a question.


Alfred Pullen Gleave: In view of the fact that this year there are extraordinary circumstances both in the harvesting and in the movement of grain, would the minister not accept the fact that the approach to demurrage on these vessels would be different from that of previous years when movement was normal?


Jean-Luc Pepin: Mr. Speaker, I realize that I must circulate copies of the document referred to.



REQUEST FOR FINAL PAYMENT

Jean-Luc Pepin: The third question had to do with the final payment from the Wheat Board and it was asked by the hon. member for Lisgar. I might know more about that next week and, if so, I shall report to the hon. member and to the house.



COMMONWEALTH CONFERENCE


Robert Lorne Stanfield: I should like to ask the Acting Prime Minister whether the Prime Minister will be returning to the house on Monday and whether it is the intention of his right hon. friend to make a statement in the house with regard to his various activities abroad?
January 17, 1969


Paul Theodore Hellyer: Mr. Speaker, I expect the Prime Minister will be in the house on Monday. I have not had definitive word from him in respect to a statement, but I am almost certain that he will making a statement on Monday which will include reference to the Commonwealth conference and his trip to the Vatican.



COMMUNICATIONS


Mr. John Gilbert (Broadview):: Mr. Speaker, I have a question for the Postmaster General, but in his absence I will address it to the acting minister or the parliamentary secretary. In view of the fact that today is the last day for filing briefs opposing the proposed increase in rates by the Bell Telephone Company of Canada, has the government filed a brief and, if not, why not?


Paul Theodore Hellyer: Mr. Speaker, I am sure that the Postmaster General or the acting minister will be here on Monday to reply to that question. In the meantime I shall draw it to his attention.



NATIONAL DEFENCE


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, may I direct a question to the Acting Minister of National Defence and ask him whether he would inform the house as to the purpose of the discussions that will be taking place during next week in Paris between the Canadian chief of the defence staff and the French chief of the joint staff, reportedly on matters of strategy and procurement, and specifically whether this has any connection with the review of Canadian defence policy and implies either Canadian procurement of supplies in France or joint procurement projects between France and Canada.


Paul Theodore Hellyer: Mr. Speaker, I wonder whether my hon. friend would agree to wait until the minister is back in his place. I think he will be back some time early next week, if I am not mistaken, and he will have a chance to answer this question at that time.


John Angus MacLean: Mr. Speaker, that is quite agreeable if the Acting Prime Minister will
Inquiries of the Ministry bring my question to the attention of the minister.



INCOME TAX


André-Gilles Fortin: Mr. Speaker, I should like to ask a question to the Minister of Finance.
Has he received any favourable comments since the social development tax has been implemented?


Mr. Speaker:: The hon. member should put this question on the order paper.



CANADIAN BOX CARS ON U.S. RAILWAYS

Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I should like to direct my question to the Minister of Transport. In view of the great demand for grain cars in western Canada for the movement of grain, and in view of the fact that the president of the Canadian Transport Commission on November 28 said that the transport committee will be looking into the number of Canadian box cars on United States lines, could the minister say whether there is any unduly large numbers of Canadian cars on U.S. railroads?


Paul Theodore Hellyer: There are a considerable number, Mr. Speaker. I think this will be reflected in an answer to a written question which will be tabled next week. In addition to this I might add that most of the box cars in the United States are not those that would be suitable for the movement of grain. It is necessary to have both sets of figures, and I hope that both sets can be produced.


John Leroy Skoberg: May I ask the minister an additional question. Has he made the Canadian Transport Commission aware of the situation, and is he instructing them to look into the situation at all times?


Paul Theodore Hellyer: Yes, Mr. Speaker, they are very much aware. The Minister of Industry, Trade and Commerce is also in constant communication with them and we have undertaken, in effect, to do anything that it is felt is required to assist in the movement of grain.
January 17, 1969

Patent Act-Trade Marks Act



GOVERNMENT ORDERS


[Stage Direction]
The house resumed from Thursday, January 16, consideration of the motion of Mr. Basford for the second reading and reference to the standing committee on health, welfare and social affairs of Bill No. C-102, to amend the Patent Act, the Trade Marks Act and the Food and Drugs Act.
André-Gilles Fortin: Mr. Speaker, last night at the time of adjournment, I was dealing with bill No. C-102 entitled an act to amend the Patent Act, the Trade Marks Act and the Food and Drugs Act.
Among other things, I quoted a statement made by the former minister of finance (Mr. Sharp) in which he commented on the efficiency of two bills designed to lower the cost of drugs. In fact, the first abolished the sales tax on drugs and the second reduced from 20 to 15 per cent the custom duties on drugs, apart from curtailing tremendously the dumping duties on the imports of some drugs.
Since the coming into force of these measures, several months ago, we have noticed-


Mr. Speaker:: Order. Does the honourable minister wish to rise on a point of order?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, would the hon. member permit a question. Would he allow me to ask him for the precise reference to the statement that was made by the former minister of finance, the hon. member for Eglinton (Mr. Sharp), so that I can look it up?


André-Gilles Fortin: Mr. Speaker, I have the exact reference in my office. In any event, I can have it photostatted and copy of it sent to the minister after my speech, which will amount to the same thing.
I said that the federal government had adopted two measures with the view to reducing the cost of drugs. Now, what are the results? The cost of drugs has not gone down. Of course, it has for wholesalers and retailers, but not for the consumer.
The cost of drugs is still outrageous, prohibitive and unacceptable. Retail prices for drugs in Canada run $2 to $13 higher than


in the United States and in Europe. Canadians pay too much, Mr. Speaker, for the drugs they need. Everyone recognizes that, including the minister whom I wish to congratulate for being a realist.
[DOT] (11:40 a.m.)
What is the cause of this situation? It will be no news for anyone that drugs, with regard to their discovery, their brand names and their sale, represent a tremendous and almost sacred monopoly, which makes a handful of specialized people richer and which is detrimental to most Canadian people who have to use some drug or other as a cure. That monopoly, in my opinion, comes from the exclusive privilege provided for 17 years by a brand name.
Mr. Speaker, the patent could be considered as a reward to the inventors, in the form of a temporary monopoly but it is too long, in my opinion, as a reward for the service they render to society by making their discovery known. Furthermore, the attraction of that monopoly, because of its related material advantages, tends to strongly stimulate the creative mind and to protect the inventor.
Under legislation in force in almost every country of the world and according to agreements to which these countries adhere, a discoverer can, for a certain period of time, through patents, keep the exclusive property of his discovery, that is to say, he will benefit from a privilege which allows him to prevent other individuals or legal entities to make and even to use the object of those patents. Therefore, a monopoly is established which serves quite well the interests of the inventors and distributors but not those of the consumers.
Therefore, I welcome this bill, at least the part dealing with the restriction of that monopoly, since we are then in favour of private enterprise in Canada and we protect the consumer. Although technical advances allow of great hopes, this progress in some way depends, in every country, on the purchasing power. Furthermore, it directly contributes to an increase in the living standard and so, in quality. However, an improvement in the quality of life or standard of living triggers inevitably an increase in the cost of living. Whether we admit it or not, Mr. Speaker, we come back to the problem of prime importance, that is, the purchasing power which is in the pockets of the consumer or the taxpayer.
January 17. 1969

Supposing our standard of living were the most desirable and the best in the world, if our cost of living is the highest, there will still remain, because of the present financial system which serves the interests of the monopolies of high finance, too many poor people for us to be satisfied.
Therefore, we must use all the means at our disposal to lower the selling and the retail cost. At the present time, two things are drawing my attention, Mr. Speaker. The first one concerns the need to have drugs to get cured and even to save our lives. Indeed, it is no longer possible to do without drugs today, and research is conducted in order to improve the quality and the safety of these products. The second one, which I think derives from the first, concerns the ability to pay for these drugs which are absolutely necessary for our well-being, to get cured and to restore us to health. So, to get cured we must use drugs; then we have the problem of being able to pay for these drugs.
Here is the paradox of our society. We can be ill one day or another, but our financial system does not allow us this luxury, since the majority of Canadians have not the financial means to be ill and to get cured. Once again, we have to face a financial and economic problem, no matter how we look at it.
Mr. Speaker, considering our monetary system and due to the fact that the Canadian government has entrusted the chartered banks with its administrative powers rather than the Bank of Canada which belongs to the Canadian people and which, in our estimation, should regulate the purchasing power of Canadians, most of our citizens cannot afford the luxury of being sick or buying drugs.
The bill now under discussion is intended to promote more competition between the drug manufacturers and distributors. Therefore, it is intended, through an increased and healthy competition, to lower prices and to diminish a monopoly being exerted on people through prices which are evidently abusive. As a result of this competition, the government is aiming at the decentralization of the price levels now under the control of a handful of manufacturers and retailers. In our opinion, this is a commendable measure because we, of the Ralliement Creditiste, are opposed to any kind of monopoly, especially those of a financial nature.
We, of the Ralliement Creditiste, are in favour of the progress of private enterprise, small or large. We, of the Ralliement Creditiste, are also the proponents of free enterprise which, more than any other system,

Patent Act-Trade Marks Act encourages greater security and freedom whatever the Prime Minister (Mr. Trudeau), who has communistic leanings, may say.
Mr. Speaker, free enterprise must be encourage. Hence, this is an occasion for us to welcome this bill which is intended to bring about more competition among imported products. This is commendable because it might help-I say "might"-the Canadian consumer pay a little less for the drugs he needs.
I want the minister to listen to what we are saying to him. This bill, like others of the same kind, is nothing but a poultice on a wooden leg because it is not increasing the purchasing power of Canadians which they essentially and basically need, by all means, to buy drugs.
Mr. Speaker, far from helping the Canadian consumer by increasing his purchasing power, the present government is doing no more than the previous governments, including the Progressive Conservatives who did not bring about any changes either; both parties are the same, two different side of the same coin; only the colour changes. Such governments, which we have put up with for too long, are levying taxes from the taxpayers in every way through unintelligent methods:	voluntary taxes, non-voluntar'
taxes, direct taxes, indirect taxes, admitted taxes, unadmitted taxes, circumstancial taxes, social development taxes and social backwardness taxes. Mr. Speaker, these annoyances result in an economic regress which affects our productivity and our prosperity. They are causing, from month to month, from year to year, from one government to the next, economic regress instead of economic progress because people have less and less purchasing power. They are increasingly tied up with debts, credit and higher interest rates to which the present government applies the blind eye.
Those are the main remarks I wanted to make. As long as this is not understood, Mr. Speaker, we will not realize in what position are our people, those born in debt, living in debt, sick in debt, dying in debt and buried in a coffin bought on credit.
This system is working the wrong way; it does not settle anything because it is choking more and more the little people for the benefit of the rich people.
[DOT] (11:50 a.m.)
We support the present leglislation not because we think it will settle the whole
4422	COMMONS
Patent Act-Trade Marks Act problem, as it will be clearly insufficient, but because it will have the advantage of encouraging private enterprise; for that reason it is commendable, Mr. Speaker.
Before concluding my remarks, I would like to call the attention of the minister to the fact that the five measures announced in his speech of October 17 and aiming at fostering private enterprise are, in the principle, in our opinion, basically excellent; we would like to congratulate him for his inititive. In fact, for a long time we had been complaining that our governments did not take any interest in the pharmaceutical field. It is obvious, Mr. Speaker, that the PIDA, set up by the Department of Industry, and the Department of Trade and Commerce, can help private industry by means of direct or indirect subsidies, particularly direct subsidies, and by intelligent help, in order to enable our Canadian companies to manufacture a product whose safety and quality which will be envied by other countries.
However, Mr. Speaker, as one NDP member was saying yesterday, there is only $2 million left, which is surely not enough to help compete against foreign industry, improve the quality of drug products, and intensify research in Canada. In fact, in all Canadian pharmacy schools, universities and other institutions we have only 80 pharmacology students; this is less than sufficient. Also, the federal government granted a mere $350,000 for research in 1966-67.
Before I conclude, I ask the minister to direct more investment from his department towards research, to enable the drug companies to put on the market good products which will not endanger the health of the Canadian people. After all, it is the individual who must be considered in this bill and although I congratulate the minister for his initiative, I dare say this measure is far from enough; it is just a makeshift solution. It is high time that the minister should take an interest in financial problems, because such bills are merely drugs that lull the public and hon. members to sleep.


Rosaire Gendron: Mr. Speaker, the Minister of National Health and Welfare (Mr. Munro) would have been glad to take part in this debate but, as you know, he is presiding at the moment- with much skill and distinction, I daresay- over the federal provincial conference on welfare. In his absence, I shall try to express as faithfully as possible his philosophy about
(Mr. Fortin.]
DEBATES	January 17. 1969
this bill amending the Patent Act, the Trade Marks Act and the Food and Drugs Act.
My colleague, the hon. member from Vancouver Center, has made clear to you, in moving the second reading of Bill No. C-102, this government's deep concern about the high price of drugs in Canada. We are particularly concerned about the economic burden imposed by unduly high drug prices on the chronically ill and aged in our society.
Bill C-102 plays an important role in the fulfillment of this Government's pledge to the Canadian people to work towards a just society for all of our citizens. What aspects of the bill relate to health matters and thus fall within the jurisdiction of the Department of National Health and Welfare?
In order to place the legislation in proper context, what is the present status of the drug industry in Canada? In terms of business volume, the Canadian pharmaceutical industry is dominated by firms which are subsidiaries of giant foreign corporations-for the most part either in the United States or Switzerland.
These subsidiaries hold the Canadian patent on chemical processes developed by their parent firms. The majority of pharmaceuticals produced in Canada are manufactured from primary chemicals imported by these subsidiary firms, which are formulated in final dosage form in this country.
Under our present legislation, independent Canadian drug manufacturers can obtain a compulsory license which permits them to produce the primary chemical in Canada, and then formulate it into a finished dosage form. At first glance, this appears to provide competition to the firms which are subsidiaries of foreign companies. Unfortunately, however, the size of the Canadian market is not sufficiently large, in most instances, to permit the Canadian manufacturer to produce the chemicals at prices competitive with those at which the subsidiary can import them from its foreign parent firm. The net result, therefore is that the compulsory licenses have had limited practical value and the effective monopolies of the subsidiary firms have been maintained.
It is for this reason that we have introduced this bill-to inject competition at the manufacturing level, into the drug industry in this country, and thus reduce drug prices.
Hon. members will recall that when the predecessor of the present bill, Bill C-190, was introduced into the house last February, there were well-meaning, earnest and sincere
January 17, 1969

outcries that its end result would be to jeopardize the health of the Canadian people. Although Bill C-190 died with the dissolution of the house, I am sure hon. members are familiar with all of the arguments used by those who for various reasons were opposed to it. I can assure you that the Government has taken very much to heart the concern expressed by a number of individuals and organizations.
As a result, Bill C-102 differs from its predecessor in a number of significant ways, which are designed to prevent any deleterious effect which the passage of the legislation could theoretically have on the quality and safety of drugs sold in Canada.
Prominent among these changes is the fact that Bill C-102 includes an amendment to the Food and Drugs Act. Section 24 of this act will be amended by adding to it provision of specific authority to the governor-in-council to make regulations "governing, regulating or prohibiting" the importation into Canada of any drugs manufactured outside of Canada, or the distribution or sale of such drugs in Canada. Action taken under this section of the act would of course be based on the necessity to protect the public in relation to the safety and quality of imported drugs. I am sure hon. members will agree with me that this amendment provides, in the clearest and most unequivocal terms, the necessary authority to control imported drugs.
There is another section of the new bill which provides added health protection to the Canadian public. As hon. members are aware, section 3 of Bill C-102 provides for an amendment to the Trade Marks Act. Under this section, there is a new paragraph, 49A (2), which states that the amendment to the Trade Marks Act permitting the sale in Canada of a drug product manufactured by a company abroad under the same trade mark used by a related Canadian company, would not apply if the product manufactured outside Canada was sufficiently different in its composition to represent a hazard to health. Authority is provided for the publications in the Canada Gazette of a declaration by the Minister of National Health and Welfare relating to a specific pharmaceutical which has been imported and is being sold under a trade mark registered in Canada.
[DOT] (12 noon)
Some drug manufacturers have made representations to the Food and Drug Directorate of my department, pointing out differences in the composition of products, pro-
Patent Act-Trade Marks Act duced by their company and sold under the same trade mark in Canada and abroad. In no instance have they presented evidence that the differences in composition would present a serious hazard to health. However, should such a situation develop, the necessary authority to deal with it effectively has now been embodied in the legislation.
Bill C-102 also formalizes the present informal advisory arrangements between the Commissioner of Patents and the Food and Drug Directorate.
Section 1, subsection 13 of the bill requires the Commissioner of Patents to report all applications for compulsory license to the Department of National Health and Welfare. It will be obvious to hon. members that this provides an opportunity to the Directorate to conduct inspections, procure samples of the drug in question, review label claims, and carry out other investigations or examinations to determine if the drug product produced under compulsory license complies, or is likely to comply, with the Food and Drugs Act and Regulations. Furthermore, section 1, subsection 16 provides that nothing in any license granted shall be construed as conferring upon any person authority to prepare, produce, import or sell any medicine contrary to, or otherwise not in accordance with, the requirements of the Food and Drugs Act and Regulations.
Some have expressed concern that imported drugs are intrinsically inferior to those of Canadian firms. There are those who have gone so far as to raise the spectre of a veritable flood of inferior drugs appearing on our market, with disastrous consequences. The evidence does not support these dire predictions. Of the imported drugs in finished dosage form analyzed in 1967 by the Food and Drug Directorate of my department, 16 per cent were unsatisfactory for one reason or another. The percentage of domestically produced drugs in finished dosage form found unsatisfactory was identical-16 per cent. Thus the data provides no support at all for those who claim that imported drugs, as a class, are of inferior quality to those produced in Canada. The analytical results obtained by the Food and Drug Directorate are in line with other information which shows that the vast majority of drugs in final dosage form imported into Canada come from countries with advanced food and drug legislation and manufacturing standards.
Let me illustrate: as of June 1968, 329 firms had filed information with the Directorate on 2761 imported products in accordance with
4424	COMMONS
Patent Act-Trade Marks Act the requirement of the Regulations on Drug Notification. Of this total, 2215 products were produced by 168 firms located in the United States, 238 products originated in France, 146 in England, 83 in Germany and 46 in Switzerland. Of the remainder, 8 were produced in Denmark, 7 in Austria, 4 in Holland, 4 in Ireland, 4 in Hong Kong and 1 in each of Italy, Finland, Scotland, Sweden, Japan and South Africa. I should emphasize that this data relates to the importation of the final dosage form of the drug only and does not include bulk chemicals or partially processed pharmaceuticals.
We anticipate that most of the increase in drug imports resulting from the passage of Bill C-102 probably will be in the form of bulk drugs, which will then be formulated into final dosage form in Canada. Under these circumstances both the Canadian manufacturer and the Food and Drug Directorate- through its inspection and analytical programs-can exercise adequate surveillance.
The Food and Drug Directorate has taken a number of steps to assist foreign manufacturers to meet Canadian standards for imported drugs. A comprehensive Drug Manufacturers Guide has been prepared explaining the manufacturing facilities and control requirements of the Food and Drug Regulations in considerable detail. This Guide covers such items as Premises and Equipment, Sanitation, Personnel, Records and Samples, Quality Control, Product Information Records and Recall Systems.
The contents have already been discussed with pharmaceutical manufacturers and the Guide will be available shortly for distribution to the trade.
In addition, a draft has been prepared of a Guide on the Manufacturing Facilities and Controls of Imported Drugs. This document deals particularly with the interpretation of the Food and Drug Regulations as they apply to the information and evidence a drug importer must maintain about the manufacturing facilities and controls of his foreign drug supplier. This Guide will be ready shortly for distribution to the pharmaceutical industry. I am sure it will be apparent to hon. members that these two Guides-the preparation of which has been a task of considerable magnitude for officers of the Food and Drug Directorate-will be of considerable assistance to manufacturers.
They will also be of great value in obtaining voluntary compliance with the Food and Drug Regulations.

DEBATES	January 17, 1969
Regulations under the Food and Drugs Act have been amended to increase the control over imported drugs. It now is an offence for a person to import a drug in dosage form unless he has information available in Canada to show that the manufacturing facilities and control regulations have been met. Moreover, it is an offence for a person to import a drug in dosage form unless each lot or batch has been tested in Canada by an acceptable method to ensure identity, potency and purity for its recommended use, or failing that, satisfactory evidence is available to the Directorate that each lot or batch has been adequately tested in the country of origin.
Because a considerable number of drugs imported into Canada originate in Europe, the Directorate has taken an additional step to keep European manufacturers informed of the requirements which must be met before drugs can be imported into this country. A senior officer of the Directorate, who holds a Doctorate in organic chemistry as well as a degree in pharmacy, will be stationed permanently in Europe. As the Directorate's representative there, he will be able to provide valuable advice to European drug manufacturers who wish to export drugs to Canada, and will be in a position to evaluate their capabilities of meeting Canadian requirements. This arrangement will not only assist the Directorate in assessing the information and evidence supplied by European manufacturers but also alert the Directorate as to the standards of manufacturers in Europe.
For many years all foreign manufacturers of biological products such as vaccines, sera, toxoids and antibiotics for parenteral use, have been inspected at regular intervals by a senior officer of the department.
We look forward to the day when effective mechanisms have been established for the international standardization of requirements for manufacturing facilities and controls in drug plants. Until then, we are continuing to cooperate with the World Health Organization in its laudable efforts in this field.
A draft document on this important subject has been received from the World Health Organization and officers of the department have provided extensive comments on it. In addition, we are expanding our exchange of information with other governments regarding the quality of drug manufacturers in their country. For example, within the last two weeks an officer of our Food and Drug Directorate obtained extensive information on this matter at briefing sessions held with his
January 17, 1969

counterpart in the United States Food and Drug Administration.
It is clear that the Government has gone to considerable length to ensure that drugs imported into Canada will have to meet the same high standards of quality and safety required of domestic drugs.
It is legitimate to inquire, however, regarding the capability of the Food and Drug Directorate-on whose shoulders the added burden must necessarily fall-to monitor adequately any increased flow of drugs into this country which may result from passage of the legislation before you today. We have made a careful and soul-searching inquiry into the operational capabilities of the Food and Drug Directorate. In April 1968, 11 man-years were made available to the Food and Drug Directorate for the specific purpose of improving the Directorate's ability to maintain an adequate surveillance over imported drugs. I am pleased to announce that a further 22 man-years will be provided as of April 1, 1969 to improve the present level of surveillance of drug products. These man-years are being, and will be used to provide additional drug inspectors and drug analysts. Furthermore, additional funds and personnel have been made available to provide an increased capability for the review of new drug submissions as well as additional funds for the testing of drugs under research contracts for the next fiscal year. I should emphasize that these resources are over and above the necessary funds and man-years required by the Directorate to maintain its present level of service. This will, in effect, permit the Directorate to substantially improve the level of service in these areas.
As part of continuing studies on more efficient utilization of resources, the Food and Drug Directorate has begun a program of research on the feasibility of employing automated equipment to increase the analytical capabilities of the Directorate's laboratories.
It is anticipated that application of modern technology and instrumentation will markedly increase the analytical output of our chemists and technicians. One knows, for example, that by means of proper automation, it is possible to analyze from 10 to 50 times more of given pharmaceutical preparations in a day than can be analyzed by conventional methods. Procedures have been described in the scientific literature which permit analysis of up to 100 samples of certain drugs per hour. The equipment involved is complicated and considerable development work will be

Patent Act-Trade Marks Act required before automated procedures can be used routinely on a broad basis. Nevertheless, we are pressing ahead as rapidly as possible to take advantage of this significant technological advance, which, if successfully applied, will permit the Directorate to substantially increase the routine survey type of analytical work on drugs with a relatively small increase in staff. If we increase the number of drug samples analyzed, our chances of locating inferior quality drugs will of course be increased.
[DOT] (12:10 p.m.)
The Directorate's knowledge of drugs on the market has been markedly increased as a result of the drug notification program. The Food and Drug Regulations relating to drug notification require that a manufacturer must provide, within 30 days after the drug is first sold, information on its name, the purpose for which it is recommended, a quantitative list of the medicinal ingredients and the recommended dosage. Notification is also required when a drug formulation is changed or a drug is withdrawn from the market. Data on nearly 30,000 pharmaceutical preparations have now been received and stored in a mechanical information retrieval system. The Directorate thus has rapid access to data on the drugs on the Canadian market.
Hon. members have no doubt read about, and been exposed to, arguments relating to therapeutic equivalency of drugs. This issue- of which much has been made recently by certain drug manufacturers-boils down to this fundamental question: Will two drug products containing the same amount of the same active ingredient give essentially the same clinical effects. The answer to this question has great significance to physicians, manufacturers, Government and the public. If the answer to the question is "yes"-if, in fact two products with the same amount of active ingredients will give comparable clinical responses, a physician's choice between the two products may well be based on relative costs. If a less expensive product is equally effective, there is no advantage to prescribing a more expensive brand of the product. For the direct determination of therapeutic equivalency, the ideal method would be to compare two or more drug products containing the same amount of active ingredients, in the same dosage form, by measuring their capabilities to alleviate the symptoms or control a specific disease in
4426	COMMONS
Patent Act-Trade Marks Act human patients. Except perhaps in rare circumstances, such a comparison is neither practical or necessary. It would be extremely costly and very time consuming even if the required personnel and facilities could be found for such investigations. In many instances it would be contrary to medical ethics, since it would involve human experimentation under conditions in which a lack of therapeutic efficacy could have undesirable or even fatal results. Furthermore, objective clinical comparisons between drugs are notoriously difficult to achieve, because of differences between patients and differences in the symptoms or diseases under consideration. Therefore, our attention has been directed to use of an indirect measure of therapeutic equivalence-termed physiological availability. In determining physiological availability, the concentration of the drug being studied is determined in the blood and/or urine of human patients at intervals after dosing.
The problem of therapeutic equivalence-or the lack of it-received great prominence last year when it was found in the U.S. that certain brands of chloramphenicol, an antibiotic, gave reduced blood levels of the drug. These products also showed abnormal dissolution characteristics when examined in the laboratory. In Canada, our Food and Drug Directorate also found that one lot of chloramphenicol from each of two companies dissolved at significantly lower rates than that of the first brand of chloramphenicol marketed in Canada. Although this did not necessarily mean that these products were clinically ineffective, the Directorate as a precautionary measure advised the manufacturers involved to recall those lots of chloramphenicol from the market. The companies agreed and carried out a voluntary recall of the products involved.
The problem of therapeutic equivalence has been studied in detail by a task force of the United States Department of Health, Education and Welfare. A senior officer of the Food and Drug Directorate has served on one of the expert panels of the task force, concerned with the conduct of clinical trials carried out by various agencies of the U.S. Government to assess the biological equivalency of a variety of drugs. The task force in an interim report issued in mid-September of this year, concluded that instances of therapeutic nonequivalency have seldom been reported, and few of these have had singificant therapeutic

DEBATES	January 17, 1969
significance. The lack of therapeutic equivalency among drugs meeting all official standards for parameters such as identity, purity, potency and dissolution rate, has been grossly exaggerated as a major hazard to public health, the task force reported.
Despite the unequivocal nature of the task force's statement, so-called brand name manufacturers of drugs and their associations, both in the United States and Canada, have made much of the supposed therapeutic advantages of brand name products, for which they claim to have demonstrated evidence of clinical superiority. My officials, however, agree with the American task force. We feel that lack of therapeutic equivalency among drugs meeting all official standards has been grossly exaggerated as a major hazard to public health. With the exception of chloramphenicol, to which I have referred, we know of no documented instance of therapeutic inequivalence among drug products which are physically and chemically equivalent. Our views on this matter coincide exactly with those of Dr. Philip Lee, Assistant Secretary in the U.S. Department of Health, Education and Welfare, who testified to this effect recently to the Nelson Committee of the U.S. Senate. The question of therapeutic equivalence has been used as a convenient bogeyman by certain drug manufacturers in attempts to document unsubstantiated claims for therapeutic superiority of their products. They got a great deal of mileage out of the chloramphenicol incident, and have used it to make unwarranted generalizations about all drugs.
The plain facts-and they are abundantly documented in the scientific and medical literature-are that so-called brand name manufacturers of drugs do not have valid grounds for objection to so-called generic drugs on the basis of lack of therapeutic equivalence. Nor do they have evidence that brand name products are of better quality in other ways. The Director-General, Food and Drugs, testified in January, 1967 before the Special Committee of the House of Commons on Drug Costs and Prices (the Harley Committee) that on the basis of laboratory examination the Directorate had no evidence drugs sold under a brand name differed in quality from those sold under a generic name.
The Directorate's experience and views, have not changed since that time. It is clear that some so-called brand name products are lower in quality than they should be, and so are some so-called generic products.
January 17, 1969

Actually, it is our view that far too much emphasis has been given to the question of generic versus brand name drugs. Just to give one example, the Compendium of Pharmaceuticals and Specialties, Fourth Edition, 1968, published by the Canadian Pharmaceutical Association, Inc., lists seventeen acetylsalicylic acid products, manufactured by 14 different companies, all of which are sold under a brand name. Only 4 of these manufacturers are listed as member companies of the Pharmaceutical Manufacturers Association of Canada. I am sure that this Association and others who have been most vocal on this subject, would not be prepared to class the remaining 10 as "brand name" manufacturers or their products as "brand name" products. The truth is that practically all drugs sold at the retail level carry brand names. Thus any attempt to divide the drugs on the Canadian market into "brand name" and "generic name" products is an exercise in futility.
I referred previously to the fact that drugs which meet official standards may be expected to show therapeutic equivalency. One of the most important of these standards relates to the rate at which the drug dissolves in artificial gastro-intestinal fluids. An officer of the Research Laboratories of the Food and Drug Directorate is a member of a joint committee of the United States Pharmacopeia and the National Formulary, which is studying various procedures for measuring the rate of dissolution of drugs. In our own research program, we are giving high priority to the development of simple physico-chemical methods for dissolution which will correlate as closely as possible with the physiological availability of drug products.
Opponents of the proposed legislation have claimed that Bill C-102 provides an invitation to counterfeiting. There is no evidence to support this contention. Drug counterfeiting has been a much more serious problem in the U.S., where legislation similar to that embodied in Bill C-102 does not exist. Only one instance of the sale of counterfeit drugs in Canada is known. Last Spring the Food and Drug Directorate of my Department became aware of counterfeit tablets of a tranquilizing drug known under the brand name of Valium. Investigations carried out in conjunction with the R.C.M.P. showed that counterfeit Valium tablets were being peddled to pharmacists in the Montreal area in unlabelled bags and bottles. Analyses conducted in the laboratories of the Food and Drug Directorate
Patent Act-Trade Marks Act revealed that the active ingredient, diazepam, was present in the declared amount.
[DOT] (12:20 p.m.)
Furthermore, no impurities of significance were present. Therefore the counterfeit product was not a hazard to health but it was being sold in clear and obvious violation of the Food and Drugs Act and Regulations. Prompt action by the Food and Drug Directorate and the Company producing the genuine product brought the sale of these tablets to a halt, a few days after the counterfeit nature of the product had been confirmed. I should like to repeat that there is no evidence that the passage of this legislation will encourage the counterfeiting of drugs.
Finally I wish to refer to the reports of the Hilliard and Boyd Committees. It has been frequently said by opponents of this legislation, that if the recommendations of these two committees has been implemented, there would be no problem. Well, let me review the situation as it now stands.
As you will recall, the Hilliard Committee was appointed to examine the patent licensing arrangement with respect to drugs. The action taken to date on the report of this Committee can be summarized as follows:
1.	Under present procedures the Commissioner of Patents requests the opinion of the Food and Drug Directorate regarding the compliance of an applicant for a compulsory license with the manufacturing facilities and control Regulations under the Food and Drugs Act. Under Section 1, Subsection 13 of Bill C-102, it will now be mandatory for the Commissioner of Patents to give notice to the Department of National Health and Welfare of an application for a compulsory license.
2.	The intent of the recommendation that the definition of a "new drug" be amended to include a drug manufactured by a new process or if new or more serious side effects develop, has been included in modified regulations currently being reviewed by the Department of Justice.
3.	Drug manufacturers have been advised that prior to the issuance of a notice of compliance on a submission for a new drug for human use, a factual scientific document on the drug products, devoid of promotional material, must be available for distribution to physicians and pharmacists. This product monograph is to serve as a reference standard
January 17, 1989

Patent Act-Trade Marks Act against which subsequent labelling, professional literature and promotional material can be compared.
4.	The new regulations requiring importers of drugs to have available in Canada evidence of adequate testing of the drug to ensure its identity, potency and purity, I have referred to already.
I believe the actions which I have enumerated above, meet the intent if not the exact wording of the major recommendations of the Hilliard Committee.
The Boyd Committee was appointed to study the existing legislation on investigational drugs. Action taken implementing the recommendations of this committee are as follows:
1.	Regulations pertaining to the emergency use of new drugs were promulgated in November, 1966. These regulations permit the Director-General, Food and Drugs to authorize the sale of a new drug, for which a notice of compliance has not been issued, to a physician for use in a specified medical emergency.
2.	A draft of regulations pertaining to new drugs to include requirements for clinical pharmacology trials and therapeutic trials has been submitted to the Department of Justice for review.
3.	Drafts of guides outlining the general requirements for new drugs as well as guides for the preparation of submissions for the various trials have been prepared and will be sent to the pharmaceutical industry for comments and suggestions.
4.	A draft of separate veterinary drug regulations have been prepared.
Again, the action outlined above, meets in large measure the recommendations of the Boyd Committee.
Hon. members may also recall that the special committee of the House of Commons on Drug Costs and Prices (Harley committee) in its final report recommended "that the Food and Drug Directorate publish not less than once a month an informative bulletin to the medical procession giving complete details on drugs and their actions and reviewing major drug uses in Canada". The Food and Drug Directorate has now been provided with the necessary resources to carry out this project and the initial steps have already been taken to implement this proposal. I believe that this publication will be of considerable value to physicians, pharmacists and dentists as a source of factual information on drugs available on the Canadian market. Therefore I was

surprised to learn recently in a letter from the Pharmaceutical Manufacturer's Association of Canada this organization "entertain the gravest doubts as to the feasibility of such a report"-that is the bulletin recommended by the Harley Committee. This concern seemed completely out of harmony with a statement contained in a brochure entitled "Prescription Drug Industry Facts", published by the P.M.A.C. in September, 1968. The statement reads in part as follows:
"Pharmaceutical companies must ensure that every physician and pharmacist across Canada is kept fully informed about their products. This continuous medical information and marketing service, covering a scattered population over a vast area and conducted in two languages, is an essential operating cost accounting for approximately 11 cents of the prescription dollar".
In this same publication the average cost of a prescription was given as $3.46, and therefore the promotional cost amount to 38 cents per average prescription. The P.M.A.C. is apparently saying it is essential-and worth 38 cents added cost per prescription to the public-that they keep physicians and pharmacists fully informed of their products, but that it is not a good idea to provide these same physicians and pharmacists with factual data obtained in the laboratories of the Food and Drug Directorate on these same products. I think physicians, pharmacists and dentists will be interested in such information as well as in comparative costs of drug products. Certainly the Harley Committee, which consisted of members of this house, felt it would be a good idea, and the Department plans to implement this recommendation to the fullest possible extent.
I have taken a considerable amount of your time to explain in detail the steps taken by my department to ensure the quality and safety of drugs imported into Canada. The legislation before you today-Bill C-102-should have a significant impact in reducing drug costs in Canada, without jeopardizing in any way the quality of the drugs offered to the public. Our responsibility to the people of Canada in ensuring its prompt passage into law is clear.
Some horn. Members: Hear, hear.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to make a few comments on this complex bill. They will be general because the bill is going to committee where it can be carefully analyzed. Certain necessary changes have been made to the
January 17, 1969

bill since it last came before the house. The question arises whether the measure goes as far as it should in guaranteeing the safety and efficacy required to protect the Canadian people. I should like to put on the record what was said in an article which I picked up in a United States hospital this year. It is a very interesting article and is extremely apropos of what we are speaking about today. It reads as follows:
The entire science of pharmacy and biopharmaceutics is based on the well-documented scientific fact that even minor changes in the formulation or an inadequate or an inconsistent formulation of a drug product can and do have profound effects on the clinical response to that product.
[DOT] (12:30 p.m.)
To assume that drug products with the same active ingredient will always produce an equivalent clinical result is a scientifically unsupportable premise that has been repudiated by factual data and experience. No informed pharmacologist would deny that a variation in the formulation of a drug product, even though the active ingredient remained the same, could and often does produce a different biological and clinical effect. Since no two drug products have the identical formulation, varying clinical response can be expected. The very fact of standards and batch testing attest to this phenomenon, but even these are not sufficient. No official standards exist today that provide a biological performance test by which one can conclude that a particular drug product will perform as it is supposed to in the human.
I think this illustrates and points up the very difficult problem with which we are dealing here.
Now I would like to put on the record a report from the Canadian Medical Association Journal of July 27, 1968. It is interesting because of the fact that this bill is being brought in to lower drug prices. It reads:
Drug prices for both prescribed and over the counter preparations showed a decrease of 4.1 per cent during 1967, compared with a slight increase over the past ten years, averaging 0.7 per cent per year. This decline in drug prices occurred shortly after the 11 per cent federal sales tax on drugs was removed. Not all items registered decreases: antiseptics were up 3 per cent in contrast to decreases of 5.1, 4.8 and 4.7 per cent in vitamins, prescriptions and laxatives.
Yearly price changes for the range of drugs included in the index have fluctuated and show no definite trend, but changes have been moderate. It must, however, be kept in mind that the effects of the price levels of newly introduced drugs are excluded from these measurements.
Here we are dealing with another problem which I would like to bring up because Bill C-102 may be said to be basically an attempt to reduce certain retail prices in Canadian
Patent Act-Trade Marks Act stores through competition injected by cheaper foreign products. It seems to me questionable whether this is an objective which parliament should encourage. Since Canadian wages are among the highest in the world and since unit costs are also high, it follows that our cost of living could be reduced across the board by fostering the importation of cheaper foreign products of all types. I wonder whether the Canadian people want that. It is questionable whether such a step would be approved by Canadians generally. I wonder what the automotive workers of Oshawa, the textile workers in Montreal, the fruit growers in British Columbia and the dairy producers in Ontario and Quebec would say about this. This is something that we must think about. We must think of the economy in which we operate, of the sacrifices we are making and of what we are doing.
However, I believe there is a much more important aspect to the possible wider importation of foreign pharmaceuticals. I refer to the health of the users. We in Canada are accustomed to a very high quality in our drugs, manufactured under approved and inspected conditions by highly qualified Canadian pharmacists. I want to say here that in my opinion the Food and Drug Directorate, with the facilities it has at hand, has done an excellent job. The Minister of Consumer and Corporate Affairs (Mr. Basford) would like to substitute for these drugs-I think this is his point-drugs of lower cost manufactured in other countries. But we require the assurance of the Minister of National Health and Welfare (Mr. Munro) that the officials of his department have the facilities to ensure that such imports will be satisfactory in every way. Nothing less will do.
I am glad the minister referred to that because I made a few notes of what the preceding speaker said. I understood him to say that for the direct determination of therapeutic equivalency the ideal method would be to compare two or more drug products containing the same amount of active ingredients in the same dosage form, by measuring their capabilities to alleviate the symptoms or to control a specific disease in human patients. Except perhaps in rare circumstances, such a comparison is neither practical nor necessary. It would be extremely costly and very time consuming even if the required personnel and facilities could be found for such investigations. I think that deals with that point. I think there is no justification for
January 17, 1969

Patent Act-Trade Marks Act
spending the taxpayers' money in this careless manner. Why should the importer not pay for it?
Now I would like to deal with another point regarding a doubt which was expressed by officials within the department. The Canadian drug advisory committee of the Department of National Health and Welfare passed a unanimous resolution last fall expressing concern as to the ability of the Food and Drug Directorate to safeguard adequately the quality of drugs under Bill C-102.
Next I would like to say a few words about patents. There is no positive mechanism to date for the revocation of an in-force licence in the interest of public safety or to prevent abuse. For example, in July of last year over 2,500 bottles of an impure health salt had to be removed from the Canadian market. The manufacturer discovered this impurty and he felt it was his moral duty to report it. It was not the Food and Drut directorate that discovered it. Neither did they discover the counterfeit drugs that were sold in the city of Montreal. Let us be careful. But what about patent drugs arriving from some foreign country on which no one has the responsibility to report? I do not believe the Food and Drug Directorate has the staff to police this and I do not think they should be expected to do it. I feel that it does a good job, and I have said this before.
In introducing bill C-102 the Minister of Consumer and Corporate Affairs made certain statements. He claimed that the proposed government action on drug patents will break a monopoly and reduce drug prices. He knows better than that. This statement is not according to fact. Many patents have been broken by compulsory licensing in the last ten years, and he knows this as well as I do. Many Canadian manufacturers are operating under compulsory licences.
The minister said that the new legislation, if passed, will increase competition. Later he said that competition is present now. As a matter of fact, the bill may well destroy this competition by destroying the source of Canadian chemicals. The minister knows as well as I do that most of our chemicals are bought in Europe or Asia. Pharmacists buy those chemicals and have their contracts there. If foreign companies are going to manufacture more drugs they will require more of those chemicals. There is a danger there.
The minister also spoke about reducing drug prices, and then stated there was competition now. He mentioned that the owner of

a drug patent has a 17-year hold on a drug, but then he admitted that a compulsory licence can be granted at any time if the applicant qualifies. Although the minister is a nice guy, it is not quite cricket to play the game this way.
The minister also mentioned that the industry would give a loan to Canadian companies and he added: "But they will have to compete with imported drugs". What will this cost the taxpayer? How many more millions of dollars will have to go into this? Will the United States subsidiaries qualify for this loan? I would like to have an answer from the minister because under the automotive trade pact they did. Will the drug firms be treated in the same way if they establish their factories in incentive areas?
[DOT] (12:40 p.m.)
The minister stated that this bill was necessary because of the high cost of drugs. When the discussion was started some years ago this was true in that there was not as much competition in the open market as there is today. I want to draw attention to the fact that the minister's figures, the ones he used to substantiate this statement, are not correct today. They are not in accordance with the facts. He probably picked them up somewhere-I don't know where-but they are a few years old. The table which appears in Hansard at pages 1512 and 1513 on October 17, 1968 is very misleading. In the first place, no dosage is given; there is no indication of the strength of the drug. I do not think it is fair to make use of a table of that kind. Then again, no generic equivalent of the drug is given. I might say there are many Canadian firms which have begun to manufacture generic drugs which bear a brand name-and I can give details if I am asked to do so. They are manufacturing these drugs. They have made their own stamps and put them on.
Here is another paradox. The minister said the purpose of Bill C-102 was to reduce the price of drugs. Then he carefully indicated that he had no control over the doctors who write the prescriptions to be filled at retail level. I wonder what is behind this. Is it an indication that the government intends to take over and control the whole practice of medicine? Will the next step be to tell the doctor that he must prescribe a certain drug whether or not he believes it to be suitable? Is this what lies behind the minister's statement?
January 17, 1969	COMMONS
It might be wise to look at the question of patents. Here is another interesting aspect. I have checked the percentage of patents which are foreign owned because this is a good indication of the amount of research which is being done in each country. In the United States only 16 per cent of the patents operating in that country are not owned by that country. In Japan, only 34 per cent of the operating patents are not Japanese owned. In Germany the figure is 37 per cent, in the United Kingdom it is 47 per cent, and in Australia, a country quite comparable to our own it is 63 per cent.
What about Canada? Ninety-five per cent of the patents operated in Canada are foreign owned. We ourselves only own 5 per cent of our patent arrangements. If this is not the biggest mark against us for backwardness in research, I do not know what is. It is a sad reflection on research in Canada and it emphasizes the need for greater activity in this field, in short, for less reliance on research done by other people.
Turning to another point, again I find the minister's statement somewhat confusing, to say the least. Of the nine products listed in Hansard on October 17 I find that four are no longer covered by patent protection. Yet the minister puts forward this list in support of his argument on patents. The drugs listed do not necessarily sell today at the prices given in the list. Three of the patents will have expired by 1972, and only two of the products have significant remaining protection.
I want to take a closer look at this question. One of the arguments advanced in favour of this bill is that the patent laws as they now exist bring about increased prices. Itaiy has no patent laws. Consider the case of achromycin, one of the drugs listed on page 1512. In Rome, where there are no patent laws, achromycin sells for $19.50. In Canada, the price is $13.56. What effect do patents have there, I should like to ask the minister? Take the sulfa drug gantrisin. In Rome, the price is $3.75, in Berne, it is $4.34, and in Canada the price is $3.64. You know, Mr. Speaker, there are two sides to every story and in this case the minister did not ride the two horses. He gave us one side but he did not give us the other.
Next I wish to look at the position of the drug enovid. In Rome, the price quoted is $19.20. Here in Canada it is $10.50. What about that? Next we come to butazolidin or phenylbutazone. Here is an interesting thing. According to the list the price in Canada is 29180-280
DEBATES	4431
Patent Act-Trade Marks Act $5.57. Mr. Speaker, I could go into a drug store in Toronto and purchase the same drug for $2.15. I see the hon. member for Spadina is in the chamber, and he can confirm the truth of what I am saying.
Here in this list is premarin. The price in Rome is quoted at $9.85. Here in Canada it is $5.84. I could go on giving examples like these but I believe I have already said enough to show that the existence of patents does not always lead to higher prices.
I wish to refer now to the proposal for the enforced licensing of imports. Let me say this: a company obtaining a licence will likely choose the drugs for which there is the largest sale and upon which there is the biggest profit. This is a law of economics. It will leave to someone else the import of other products on which the profit is small and for which there is only a small demand. I wonder whether it is in this latter respect that the hon. member for Winnipeg North (Mr. Orli-kow) wants a Crown corporation to operate.
Manufacturers will buy the necessary materials from the cheapest source and will always seek to sell in the most lucrative market. This always works to the advantage of the copiers of those drugs which have the biggest market, but it leaves the work of discovery and development for somebody else to carry on and finance. This being so, a good many years are needed before expenditures on the original investment in research are recovered.
The hon. member for Winnipeg North told us that millions have been made on two drugs in particular; he referred to Chloromycetin and aureomycin specifically. I happen to know something about Chloromycetin. In fact, the losses suffered in connection with this drug were terrific because it was recalled from the market. For a number of years it was not sold at all except under certain strict regulations. Millions were lost over the production of that drug. It has been made up since-


An hon. Member:: How much had been made before it was withdrawn?


Philip Bernard Rynard: They did not make anywhere near enough to cover their original investment. If memory serves me right, I had a chance to look into this one time when I was in Detroit.
I should like to point out that the cost of pharmaceutical research in Canada amounts to about $18 million. More than 10,000 people are engaged in it, about 2,500 of whom are
January 17, 1969

Patent Act-Trade Marks Act university graduates. This is another aspect which I believe should be kept in mind. We should also remember that under the strict controls now applied in the United States and likely Canada 6 per cent of the drugs now in use will be rated ineffective within a short period and no less than two-thirds now require revision of the claims made for them. This is according to a statement by the National Academy of Science of the United States.
The minister is opening the border to imports. How many millions will it cost to police the clinical safety of the products imported? How much would it cost to arrange for the inspection of the factories in which the products are made? How many more people will it be necessary to add to the existing staff? If these products are to be admitted, the department will have to police them. Can this work be properly done at any price? And if it can be done, is the price likely to be too high?
[DOT] (12:50 p.m.)
What would it cost to follow the Harley commission report findings and inspect factories where these goods are manufactured? Of what value would it be if notice of the visit is sent beforehand? Is there enough trained personnel to do this job if such drugs are coming into the country, and will we have to pay too great a price? Perhaps we might be saddling the taxpayer with a greater burden than any advantage he might derive. Even the hon. member for Winnipeg North (Mr. Orlikow) had some doubts in this regard.
I have less confidence in this bill than I have in the Minister of Finance who said that he would balance the budget or he would put on his hat and walk out. He did not walk out but he certainly left the Canadian people holding the bag as a result of a mistake involving over $600 million. I do not want to be unkind, but we have done some things here that have been wrong and made some mistakes which have been pretty costly to the Canadian taxpayers. As I say, at the moment I have no confidence in this bill. I think it is window-dressing, and like a lot of other things that the government does it is misleading. Again the Canadian people will be left to pay the piper.
I believe that every member of this house wants to see the cost of drugs lowered. I am sure that statement is correct and I give everybody credit for their views. But we also have to protect the Canadian people. We have to be sure that foreign drugs are up to quality

and, second, that they are clinically efficacious for the diseases for which they are used. No Canadian should lose his life just because some drug does not measure up to the standard the doctor expects of it.
The hon. member who preceded me, if I understood the interpretation of his remarks correctly, referred to the fact that tests can determine what are the blood levels of a given drug. I agree that can be done, but I would like to ask him what this would cost.
Counterfeit drugs have been sold in Canada, and it was not the food and drug directorate that discovered the sales. It is my contention that the food and drug directorate does not have the personnel to do the job of protecting the Canadian people and affording the protection that this bill promises to give. If such protection should be provided, would its cost be much higher than any saving that might be achieved through lower drug prices?
I now come to my final conclusion in this matter. A survey was conducted in the province of Saskatchewan which showed that 50 per cent of the people over the period of one year had bought prescription drugs. It is estimated that roughly 25 per cent of the people of Canada find it difficult to pay for prescription drugs. Who are these people? They are the chronically ill, the unfortunates, the elderly, people who are sick, people on mothers' allowances, people on meagre pensions that inflation has eaten away.
I suggest to the government that if they really want to do something they should assist the people crying out for help to whom I have just referred. For example, the other day I visited a house where a man is keeping himself alive by drugs that cost him over $30 a month. He is receiving $107.50 a month and out of this also has to pay for his food and shelter. I suggest that the government should introduce a bill to provide for payment of the greater part of the cost of prescription drugs for people in this situation. Such action would bring some comfort and satisfaction to the hearts of those who today are beset with financial troubles and find life very difficult. Some are unable to buy drugs and as a result become ill and have to go to hospital, and hospitalization costs between $40 and $50 a bed a day, depending on where the bed is in Canada. Therefore, if the minister wants to show the people across Canada that he really wants to do something for them, let him do something for the 25 per cent of the population who find difficulty in obtaining the drugs that they need to live.
January 17, 1969	COMMONS


Mr. Allmand:: Mr. Speaker, would it be in order to call it one o'clock since it is so near the hour?


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


[Stage Direction]
AFTER RECESS

The house resumed at 2 p.m.
William Warren Allmand: Just before lunch, Mr. Speaker, I was listening to the hon. member for Simcoe North (Mr. Rynard), the chief spokesman, I believe, of the Conservative party, and I was very disappointed with what he said. From his remarks I found it difficult to determine exactly what the position of the Conservative party is on this bill in general and about the high cost of drugs in particular. I felt there were many contradictions in his speech and I will deal with some of them later. When the hon. member dealt with the table the Minister of Consumer and Corporate Affairs (Mr. Bas-ford) presented to the house on October 17, 1968, he indicated that the table could be misleading since it did not specify the strengths of the drugs listed, the implication of the hon. member's remarks being that this was unfair.
May 1 point out that the table introduced by the minister, which may be found on pages 1512 and 1513 of Hansard, was based entirely on the table forming appendix (f) to the report of the Harley committee. It is set up in the same way and the strengths of various drugs are set out in the appendix. Moreover, I understand the hon. member was a member of the Harley committee, supported its report and supported the form which this particular table took. The difference between the two tables, that is, between the table forming appendix (f) to the Harley report and the one presented by the minister on October 17, lies in the fact that the table presented by the minister has brought up to date the prices of drugs to retailers in Canada and in other countries that are listed. May I also point out that this table was used by the minister who introduced a similar bill last year. That table, in the form in which it appears on pages 1512 and 1513, has been used on three occasions. If anyone is being unfair and misleading in this matter I suggest it is the hon. member for Simcoe North. As a matter of fact, on page 29180-2801
DEBATES	4433
Patent Act-Trade Marks Act 1512 of Hansard the Minister of Consumer and Corporate Affairs clearly states that the table he is presenting is based on the table that was produced by the Harley committee.
The hon. member's remarks contain many red herrings and contradictions. At one stage he said, "We, in the Conservative party, would like to see drug prices come down." Other hon. members of his party applauded him. Later in his speech he said, "After all, generally speaking, most Canadians have a high standard of living and can afford to pay for drugs. It is only those people whose incomes are fixed or at the low end of the scale who cannot afford to pay for drugs." After hearing the hon. member's remarks one could not tell whether the Conservative party felt drug prices were too high. The party's position, to judge from the hon. member's remarks, is not clear.
[DOT] (2:10 p.m.)
At another stage he criticized the government for spending money on certain medical and drug programs and said the government was spending too much money. Later in his address he suggested that we subsidize drug prices for certain people. Again it was very difficult to know what was the policy of the Conservative party with respect to drug prices. They offered no alternative policy and I doubt that they have one.
In discussing this bill there are several points that must be emphasized and I would like to deal with a few of them. The first point which is most important is that drug prices in Canada are too high compared with drug prices throughout the world and with other consumer prices in Canada. The allegation that drug prices in Canada are too high is supported by three very thorough studies. This has been placed on the record previously. This conclusion was reached by the combines branch, by the Hall Royal Commission on medical and health services, and by the parliamentary committee on drug prices which sat for more than a year and received evidence from all parts of the country. All three of these reports said drug prices in Canada were too high and away out of line.
Certain examples can be given. One is with respect to a drug called prodnisone, which is a cortisone preparation that is sold to retail pharmacists at $17 for 100 units, whereas the same drug is sold to hospitals at $1.95 for 100 units. Many other examples like this have been put on the record and I do not think there are many people who will contest the
January 17, 1969

Patent Act-Trade Marks Act allegation that drug prices in Canada are too high.
As I say, three studies have backed up this allegation. The Harley parliamentary committee stated that drug prices in Canada range from two and a half to eight times higher than the corresponding lowest prices elsewhere, and the table which was filed by that committee, by the former registrar general and by the present minister indicates that generally speaking there is a great difference between drug prices in Canada and drug prices abroad.
Another factor which indicates that drug prices are too high is the rate of return on invested capital received by drug companies in Canada. It was shown that in the last 12 years drug companies made a 20 per cent return on invested capital compared with an average 10 per cent return by other manufacturing industries in Canada. There is quite a spread from 10 per cent to 20 per cent, and we all know that there are many manufacturing concerns in Canada which make an even smaller rate of return than the average 10 per cent.
Why are drugs prices so high in Canada? Some of the drug companies have suggested that the reason is that they have had to do a lot of research and development, and that if we want to have a progressive drug industry, new discoveries and so forth, we will have to pay for it. Again, Mr. Speaker, when we look at the evidence given in the different reports we find that this just is not so. It has been found that 30 per cent of the sales dollar received by drug companies goes into sales promotion and only 7 per cent into research work. There is not really that much being spent on research in Canada compared with what is spent on sales promotion. Sales promotion takes up four times as much as research by drug companies.
The various studies to which I have referred said that the reason for high drug prices was, first, sales and promotion costs and, second, a market situation in which the drug companies were highly protected. One of the reasons they are highly protected is due to the protection given by the Patent Act. Patents are meant to encourage development and research but in fact they have led only to a high price structure for drugs sold to the Canadian public.
It may be asked, why is it important that we do something about high drug prices? The hon. member who preceded me suggested that the great majority of Canadians could afford
[Mr. Allmand.l

these drug prices and that therefore possibly we should not stimulate competition and try to bring the prices down. But we must remember the very nature of the product involved. Drugs are designed for use by people who are sick.
When people are sick many of them have to meet high medical and other costs. Sometimes they lose their work owing to chronic illness. As a result their income goes down and their expenditure goes up. They spend a considerable amount to purchase the drugs they need. In addition, the older group in our society needs drugs much more often than other groups. There are many retired people in this group on pensions, on fixed incomes. As they get older they become ill more often and have a greater need of drugs. They find it hard to pay the high prices which drug companies and retailers are asking. Therefore there is a great necessity that we do something about these high prices.
The hon. member for Simcoe North said he did not know whether the Canadian people would accept this type of program that is designed to stimulate competition from abroad. He asked what the Canadian people would do if the same type of program were applied with respect to automobiles, textiles and several other products. To begin with, Mr. Speaker, the drug industry is necessary for people who are sick. Its product is a more essential one than the other products to which the hon. member referred. Second, the prices of these other consumer products are not as far out of line as are the prices of drugs in Canada.
This bill is not meant to be a single program to combat the high price of drugs. Originally it was placed before us along with four other measures. The former minister and the present minister said they did not expect any one of these measures alone would be able to bring down the price of drugs, but that acting in concert it was hoped they would. This was the recommendation made by the Harley committee and by other studies.
We certainly do not expect miracles from this one measure, but we think it will have a big effect along with other measures to which I refer. The others are the elimination of the sales tax on drugs, the reduction of the customs duty, and the program designed to have the Food and Drug Directorate keep Canadian doctors informed of the different drugs on the market and comparative prices so that doctors can prescribe a wider range of drugs,
January 17, 1969	COMMONS
especially drugs of equal quality selling at a lower price.
[DOT] (2:20 p.m.)
This bill, Mr. Speaker, is not a radical one. As a matter of fact some lawyers feel that the things it proposes to do could be done under the present law. The present law allows for compulsory licences on patents for drugs, but the director of patents has felt he could only grant such a compulsory licence for manufacture but not for import. As I said, many lawyers have disagreed with this. They felt the present law would allow compulsory licences for imported products.
The bill before the house, however, will make this point very clear. It will make very clear that the director of patents will be able to grant a compulsory licence for the importation of drugs. The whole purpose of the bill is that it is felt that by bringing in competition from outside the country we will force down drug prices through competitive measures. We know that drugs in other countries are sold at a much lower price than in Canada. The price often is one-third or one-quarter of what it is in this country. It is felt that if individuals or companies can import these drugs this will force the companies which make and sell drugs within this country to bring down their prices and that there will be a downward pressure on drug prices.
This measure is not very radical. Furthermore, when the Ilsley commission reported on patents it said that they should not be used as a tariff barrier to trade. Right now this is what is taking place. In many cases patents are being used as a tariff barrier to trade. If we look at the experience in other countries such as the United Kingdom and the United States, where there are similar procedures in respect of the importation of drugs which are under patent, we will see that the drug companies have not gone out of business. They did not stop doing research; they did not suffer very much.
I should like to refer to another point which has been raised by the official opposition, that is, the question of safety. The first speaker for the official opposition last night dealt primarily with the question of safety. I am referring to the hon. member for Athabasca (Mr. Yewchuk). He said that he would like to see lower drug prices but not if this meant unsafe drugs. This morning the hon. member for Simcoe North returned to that argument. He said that if this bill is passed we run the risk of having unsafe drugs.
DEBATES	4435
Patent Act-Trade Marks Act
I think it should be made very clear that the Patent Act and changes to it have no effect whatsoever on whether or not drugs are safe. The question of the safety of drugs in this country is determined by the Food and Drug Directorate. Whether or not this bill had been introduced we would want to see a food and drug directorate which would protect us against unsafe drugs. We would want to do everything possible to strengthen the Food and Drug Directorate. I and many other members of this house maintain that the question of safety lies with the Department of National Health and Welfare and the efficiency of the Food and Drug Directorate. It is their business to test new drugs which come into this country. We have been assured they would do this job well. This morning the parliamentary secretary to the Minister of National Health and Welfare again gave us this assurance which has been given on many occasions.
It has been pointed out that the policing of drugs and faulty drugs is not always done in respect of imported drugs. I believe it was pointed out last night by one member that very often the drugs which have been found to be faulty are drugs that have been produced by some of the major companies in Canada which have been producing drugs for a long time. So the policing of the drug industry will be carried out by the Food and Drug Directorate and will be done in respect of drugs produced in Canada and those imported under compulsory licences. But this has nothing to do with the Patent Act or changes to the Patent Act. I believe everyone agrees that everything must be done to protect the safety of the general public in respect of drugs. That will be done.
Objection to this bill has been expressed by those who say that if it becomes law it will affect research which is being carried on by the drug companies in Canada. They say that right now certain research is being carried on and that this bill could have the effect of cutting back on research programs and that much of this work will not be done in the future. Again I have not been convinced by that argument. I must say I listened to the many people who came to my office. Some of them are scientists working for drug companies and friends of mine. I have them sympathetic hearings. I invited their arguments in writing. Whenever I was approached by the officials of a drug company in Montreal I was asked if I would listen to their side of the story. I did so and told them that if they
January 17, 1969

Patent Act-Trade Marks Act could convince me they were right I would change my opinion. But the more I listened to them the more I became convinced they were wrong. I do not think this bill will in any way discourage those who are carrying on research in Canada.
When research is done by a drug company it is not done in respect of a drug which is to be used just in one country. It is done in respect of a new drug or product which will be sold throughout the world wherever it is needed. If a subsidiary of a particular drug company decides to do certain research work in Canada the reason they do it here has nothing to do with the patent laws of the country. If a new drug is discovered that drug will not be sold only in the country in which the research is done. It will be sold throughout the world.
In addition the bill provides that certain royalties will be paid to the holder of a patent when a compulsory licence is given. These are royalties which would be fair in an attempt to repay the developer of the product for the research that has been done. Furthermore, under the regulations of the Food and Drug Directorate new drugs are given a five-year period in which to operate without competition. In that five-year period there is an opportunity to establish a market and recoup the cost involved in the development of the product.
Therefore I really do not see how these companies will suffer too much with regard to research programs. Even if they were to suffer a certain amount, it would appear from their high rate of return, an average of 20 per cent on invested capital compared with an average of 10 per cent in other industries, that they could stand a little cutback in that area, although I do not think they will suffer that much.
A few other arguments were made this morning. The hon. member for Simcoe North stated that even though a compulsory licence is given in respect of import drugs the federal government has not indicated any program to make sure that the cheaper import drug will reach the consumer. He asked whether the government intended to control doctors when they write prescriptions. Of course this was a red herring. The government does not intend to force doctors to write particular prescriptions. The government made an announcement in this regard and the hon. member should have been aware of this. It announced that it intends to inform doctors on a regular
[Mr. Allmand.l

basis, through the Food and Drug Directorate, about all the drugs that are on the market and their comparative prices so that when a doctor writes a prescription he will have information in respect of certain drugs which he might not otherwise have. He will know whether a particular drug is as good as the one he usually prescribes, whether it sells at a lower price, and he will know when he is prescribing it for an individual who is not too well off that it will do just as good a job as a very expensive one.
[DOT] (2:30 p.m.)
In asking that question this morning I thought the hon. member for Simcoe North was being very unfair. He said that 95 per cent of Canadian drug patents were owned by non-Canadians and that this indicated a lack of research in Canada. He suggested that through this bill we would discourage research to a greater extent. If 95 per cent of Canadian drug patents are now owned by non-Canadians, this situation must have developed during the time the present patent law has been in force. This does not provide a licence for importing. If the present law was that favourable to research we would have in Canada a much higher percentage than 5 per cent Canadian ownership of Canadian patents. The fact is that this 95 per cent foreign control occurred under the present law. If we are going to have a greater amount of research in Canada in the drug industry we cannot expect it to occur under the law as it now stands. This will have to take place as a result of government assistance to research in the drug and medical fields.
In conclusion let me say that we should be very clear that the people of Canada are faced now with extremely high drug prices. This has been confirmed by several studies. Very often the people in this country using these drugs are those least capable of paying or prepared to pay the prices. These are elderly people, sick people, the chronically ill and those without work. For that reason this bill should be passed as quickly as possible. It represents an attempt in conjunction with other measures the government is putting forward to correct this situation, and there is strong evidence that it will.
I am a member of parliament from the west end of Montreal and I know that some of my colleagues from that area are not as enthusiastic about this bill as I am. As a matter of fact, in the west end of Montreal there are many drug companies and many pharmaceutical houses. They have tried to
January 17, 1969	COMMONS
convince us that this is not a good bill. I listened to them but they did not convince me. The drug companies in Montreal are doing very well as are drug companies generally in Canada. They will continue to do reasonably well. The major benefit resulting from the passage of this measure will go to the consumers in the west end of Montreal and in other parts of Canada. We will have a much more equitable and just price structure in the drug industry, and I think this should be achieved as soon as possible.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, before getting into the details of this bill I should like to make it perfectly clear that I have no quarrel with its purpose. The people of Canada would be happy with lower prices for all commodities, including drugs, and this is a worth-while end to strive toward. From a humanitarian point of view it is very worthwhile to strive for lower prices in the drug field.
This bill should be examined in light of three or four aspects. Is this measure going to reduce the cost of drugs? This measure will be referred to a committee at which time we will have an opportunity to examine many factors which cannot be properly examined at this time. We must ask ourselves whether this measure will lower drug prices and what will be its probable effect. No real study has been made in this regard.
Will this measure allow a high level of control in respect of drugs? I have in mind value, purity, strength and clinical efficiency. What effect will this bill have on the drug industry as a whole and will the effect be immediate? What do we as a nation want to do in respect of the drug industry? Do we want a drug industry at all? I am sure we all agree that we do, but what level should it attain here? The drug industry is largely international. What effect will this bill have on the introduction of new drugs developed in the future? Will it help or hinder the distribution of these drugs for the benefit of the health of Canadians?
I should like to make one or two comments about other matters dealt with by the minister. Much has been said about this measure in respect of reducing drug costs. Several factors make me wonder whether it will actually reduce the cost to the consumer. The cost to the consumer is comprised of the manufacturing cost, the distribution cost and the prescription cost at the local drug store. The average cost of a prescription in 1966 was $3.50 to $3.75. It was found as a result of a joint
DEBATES	4437
Patent Act-Trade Marks Act survey carried out by the Saskatchewan Department of Public Health and the Saskatchewan Pharmaceutical Association that the average cost for one month's prescriptions in a small town in Saskatchewan was $3.71. A breakdown of this amount indicates that approximately 51 per cent was retained by the local pharmacist to carry on his business.
Before deciding that local pharmacists are overcharging we must remember that many of them are going out of business. The profession is not attracting many people, and the corner drugstores are disappearing. Of this average cost, 35 cents to 40 cents was taken by the wholesaler who distributed the drug from the manufacturer to the retailer. This only left approximately $1.40 out of the original $3.50 to $3.75 the consumer paid to the drugstore. It seems unlikely, no matter how many drugs are introduced as imitations of existing drugs to drive down the cost of competition, that the consumer will benefit materially as a result of lower prices. It would appear that the best a patient could hope for is a reduction of 20 cents to 30 cents per prescription even with very fierce competition.
Factors in respect of this new pricing arrangement might work against the lowering of the price of drugs at the retail level. Local pharmacists would have to increase their volume of drugs. This would increase their stock. There would be more wastage as a result of more brands being left on the shelf. This would occur as a result of a greater variety. Whatever advantage there would be in the reduction of drug prices would likely be more than offset by the increased wastage at the local distribution level.
There are other factors which would prevent a marked reduction in the cost of drugs to the consumer. Brand-name drugs, as result of promotion, would gain a larger share of the market. The imitators, those selling the same drug under another name, would be scrambling for the balance of the market. It is not likely they would obtain more than 30 per cent to 40 per cent, and there would be very little profit. These people would likely sell under a brand name in order to make as much money as possible. After all, they are in business to make a profit.
In my estimation the cost of drugs will continue to increase. The factor that will cause an increase and which has had the most significant effect on the cost of drug prescriptions is the changing pattern of drug pricing at the retail level in the last few years. There has been practically no patient demand to
January 17, 19S9

Patent Act-Trade Marks Act reduce the cost of drugs. In other words, very few patients now say to their doctor, could you make this drug as cheap as possible as I have little money? This situation has been brought about by changes in retail pricing. I shall try to explain this, as I believe it is not of general knowledge.
Until approximately three years ago drugs were priced on a wholesale mark-up of approximately 100 per cent. A 75-cent prescription at the wholesale level for sleeping pills was being retailed for $1.50 and a $5 to $6 wholesale prescription for antibiotics was retailed at $10 to $12. A few years ago the pharmacists in conjunction with the industry-this was applauded by the government and all those in the health field-changed the pricing system. This was done by applying a dispensing fee to the wholesale cost of drugs. The fee varies in many parts of the country but in my province it amounts to about $1.90 at the moment, which I believe is about average. Nearly all sections of the country are slowly changing over to this method of prescribing. It has the advantage of reducing the cost of more expensive drugs to the patient in that a $5 wholesale price now becomes $7 but the cheap 75-cent prescription becomes $2.75.
[DOT] (2:40 p.m.)
This has caused an upgrading of cheaper prescription drugs and a downgrading of more expensive items. It has reduced the pressure on physicians to prescribe less expensive drugs and permitted them to prescribe drugs that are more expensive and which are in general considered to be a better product. There is now little point in not prescribing a more expensive drug. In addition, the practice has been growing of supplying drugs free to patients, but at government expense, in respect of those in the income group where the price of drugs is a significant factor. Five per cent of the people in my area are designated as indigent by the provincial government and under its medicare scheme they receive all forms of drug therapy free of charge. It is because of the chronically ill in this group that the most pressure exists for a physician to prescribe a cheap form of drug. This segment of the population has now been taken care of by means of government sponsored plans, and this has resulted in the pressure on doctors to prescribe cheaper drugs being not nearly so great. Indeed, doctors may be unfamliiar with the price of drugs, and therefore the relative cost of a prescription is of much less importance to 
them than is the case when the patient is himself paying for the drug.
If the cost of a prescription is only $3.75 to $4, the physician thinks that prescribing the more expensive brand of drug means a difference of only 25 cents. It is impossible for him to think of 14 brands of tetracycline and decide which one in a prescription will be, say, 30 cents cheaper than a more expensive drug that will cost about $5. I would also like to point out that the physician tends to prescribe brand name drugs because he knows them better and thinks they are the best. I am not saying that this is the fact, but it is generally the way the physician feels.
As an example, I noticed in a local drugstore about a dozen types of tranquillizer which might be given to a member of a family that had suffered a bereavement. One was a brand name tranquillizer costing a nickel each and another was not a brand name and cost only one cent each. This means that the brand name tranquillizer costs 60 cents a dozen and the non-brand name product only 12 cents, or one-fifth the price of the brand name drug. One was a good looking pill and the other was not, but they were both passed by the Food and Drug Directorate.
The second major factor of the bill is the effect it will have on the pharmaceutical industry of this country now and in the future. If it is our intention to dampen down the pharmaceutical industry and perhaps dispense with some of it, we should understand that this is the intention. Mr. D. H. W. Henry, when testifying before the Harley committee on February 7, 1967, stated that perhaps the first fundamental issue emerging in the committee's proceedings was whether a drug manufacturing industry ought to be preserved in Canada in its present form. To do so would require the continuation of the protective devices which the industry considers necessary to its viability but which deny Canadians access to less costly drugs. I question whether the change made in this respect will necessarily make less costly drugs available to Canadians. Therefore this is one of the points we have to consider.
I suggest to the minister that he should ask the finance, trade and economic affairs committee to recommend that some aspects of this question be referred to committee of the whole in order that we may decide whether the passing of the bill and the granting of compulsory licences thereunder will have a significant effect on the industry and, if so, is this what we want? I have an open mind
January 17, 1969

about whether we should or should not make changes which would seriously affect the industry. There is no doubt that the provision relating to compulsory licensing will have an effect upon the sources of supply of these drugs. It is quite possible that some manufacturers will become distributors to a greater extent than is now the case. Manufacturing would then tend to concentrate on those products which Canadians can produce.
I would like to point out that there is one drug company which is perhaps considered small in this country but is large in the world. It is based in western Europe. The name product which it produces is a tranquillizer but it also produces a few other lines in small volume. It is almost certain that these small volume lines will be produced elsewhere than Canada. The company has been considering this question and may decide it can import from Mexico the drugs it needs. It has plants in 24 countries. Its Canadian plant produces the largest selling drug. It is not considered to be as good a drug as their own.
I think it is of interest that the company produces a different quality drug in different parts of the world. Therefore they will wait and see what effect this bill will have on the industry.
The Canadian drug industry is made up largely of foreign companies based in the United States, Switzerland and Germany. This is the nature of the drug industry. It is a world wide industry which transcends borders, and its market is the whole world. It is in Canada a significant factor in our economy. Its exports run as high as $20 million. Its sales of packaged pharmaceuticals were $200 million in 1966. It employs 10,000 Canadians, of whom one-quarter are university graduates.
These large companies are for the most part subsidiaries of parent companies that are spread around the world. Whether we like it or not, these drug companies have brought us new drugs. Without the drug industry in the world as a whole many of our new drugs would not have been developed. Over 80 per cent of the new drugs that have been developed in the last 30 years have been developed by the industry. Penicillin is a classic example. It was known for many years, but it took the drug industry to process it to the stage where it could be prescribed as widely and as cheaply as it is now.
The question of safety is extremely important in connection with this measure. The parliamentary secretary to the Minister of 29180-281

Patent Act-Trade Marks Act National Health and Welfare referred to a long, complicated, detailed and technical study in respect of measures taken in an attempt to preserve the high level of safety sought in conection with drugs on the Canadian market. The thread running through the whole question of safety is that the Canadian Food and Drug Directorate will rely largely on their counterparts in various parts of the world when making decisions in respect of the safety of drugs. Hungary was disclosed as the country which produces the cheapest drugs. Italy, Japan and Hong Kong are areas in which a great many drugs are produced. In many countries drugs are not that highly developed and their safety leaves something to be desired. I think this is particularly so in respect of Hungary; and for many years the Italian drug industry was notoriously poor in that some manufacturers produced poor quality drugs. Therefore the Food and Drug Directorate is faced with a tremendous task in attempting to police drugs which are really only being touched on now.
If I understood properly the parliamentary secretary to the Minister of National Health and Welfare, he said that the Food and Drug Directorate will still rely largely upon generic equivalents in deciding whether a drug is as good as its makers claim. This, of course is a bone of contention. He also stated that it would be practically impossible to prove the clinical efficiency of drugs by blood levels and all the other means by which scientists ascertain whether a good drug is being marketed. There is nothing better than the good name of a company when it comes to deciding the quality of a drug.
The thread running through the whole question of drug safety is whether a clinical generic is the equivalent of the brand name drug. Those who argue that the generic equivalent is the same are generally people concerned with research in universities or the Food and Drug Directorate who do not deal with patients directly. Those who feel that there is a difference between generic name and brand name drugs are mostly those who deal directly with patients. It is interesting to note that the Russian drug industry, which cannot be accused of being profit-minded, gives brand names to the same drugs coming out of different factories. Apparently they believe that some factories make better drugs than others although supposedly they are all the same. It will be interesting to see in the committee whether it can be ascertained how effective these safety measures will be.
January 17, 1969

Patent Act-Trade Marks Act [DOT] (2:50 p.m.)
I think the matter of the introduction of new drugs in this country in the future should concern us. I understand that the Food and Drug Directorate will now require a five-year guarantee that the producer will be the sole maker and seller of a new drug in Canada. I welcome this because I believe it will foster the introduction of new drugs into the Canadian market as it will give the producer of new drugs at least five years during which time he will be able to exploit the market if he is successful and to ensure he will not have a competitor. I would like to point out that without this measure there will be little desire on the part of new drug manufacturers to introduce drugs in any great quantities if they feel there is a possibility these drugs could be picked up by their competitors as soon as they became popular and are promoted and established.
There is one area concerning which I would like to say a few words, and on this the success or failure of this bill will rest so far as its application is concerned. This legislation will put the drug industry almost wholly in the hands of the director of the Food and Drug Directorate. He will be the one who will determine whether or not new drugs and new licences will be issued. This is an enormous responsibility. It may well raise the question of delegated legislation because the number and brands of drugs that are to be introduced into this country will depend on whether or not the director grants import licences. The second person on whom much depends is, of course, the physician. It is he who will decide whether or not to prescribe a cheaper drug.
We should consider the effect of drugs and we should keep some perspective. I know of a hospital whose capital cost amounts to $1,200,000 a year. Their drug bill amounts to $30,000. Even with the most rigid economizing it is unlikely that its drug bill could be reduced by more than $5,000 or $10,000. When one considers that in a hospital employing 200 or more people all the patients are receiving one form of drug or another and probably 60 per cent of them receive regulated drug therapy, one must retain a sense of perspective concerning the cost of drugs. We can have cheaper drugs if we wish to have fewer of them or if we wish to have less effective ones or a greater variety and variance in their quality.
The Food and Drug Directorate apparently feels that the circulation of pamphlets to doctors would be of considerable value. I would like to remind the minister that doctors have

many circulars coming to their desks. It does not really seem to be very useful to add further circulars, particularly a drug price list. Most likely it will not be available when the physician wants it or could use it. So I think that this method of attempting to reduce drug costs is of doubtful value.
Finally, I would like to say that I am looking forward with particular interest to dealing with the clauses of the bill concerning the retention of efficiency in drug inspection when the bill reaches the committee.


Mr. Max Salisman (Waierloo):: Mr. Speaker, although this debate has just commenced the points made by a number of physicians in the house are emerging very clearly. It is fairly obvious that all of us are concerned about the high price of drugs and about the old, sick and weak in this country. But there seems to be some difference as to how the problem should be tackled. If I may be permitted to say so, the Conservative position may be summarized in this way. They say: "We are concerned about making drugs available to people who cannot afford them. Let us subsidize the industry, but for goodness sake let us not touch the companies nor affect their profits. They are sacrosanct. The government of this country must subsidize these companies, not bring the price down. That is wrong." This seems to be the Conservative position at the moment. I think they are men of good will who are concerned about those who are suffering in this country because they cannot afford the necessary drugs.
The Liberal position is similar, particularly the position taken by the hon. member for Notre-Dame-de-Grace (Mr. Allmand), who seems to have spent a good part of the time at his disposal soothing the drug companies and assuring them that their profits were not going to be affected very much by this legislation, that nothing terrible was going to happen to them, that nothing drastic was on the horizon, and that they did not have too much to worry about. I might say to the hon. member that he is one of the more courageous Liberals in the house. Here is a man who is willing to collide with the drug companies, which is more than can be said for some other hon. members in this chamber. We are all aware of the enormous influence that the drug companies have exercised on members of this house and members of the other place. I say this as a compliment to the hon. member for Notre-Dame-de-Grace, but it is still an indication that even that courageous man had to get up and defend the profits of the

January 17, 1969

drug companies of Canada and assure them that nothing drastic was going to happen to them as a result of this legislation.
We are going to support this legislation because we think that it brings a measure of improvement to the situation in that it will inject an element of competition which is much needed in the drug industry. Our position has been stated in the past. Hon. members may recall that our party was highly unpopular because of the position we took. The Liberals were scrambling to go to a convention and insisted that we stop talking about drugs. But we stayed here until we got an assurance from the government that this bill would come back. We are glad that we put pressure on the government at that time and that we received that assurance.
[DOT] (3:00 p.m.)
We are glad to see this legislation before us because there was a real danger that even this milquetoast piece of legislation would never see the light of day. I say this because it is an open secret that hon. members belonging to the Liberal party approached members on this side of the house asking them to fight for this legislation because they felt the same kind of fear. So, we are glad to see the bill before the house today, and glad it is to go to the committee.
Nevertheless, we also wish to say that the measure will not do the job which is needed and that the government should consider putting into effect the suggestion we made when the legislation was before the house earlier this session, namely, that a Crown corporation be established to market and, if necessary, to manufacture drugs for the benefit of the people of Canada.
I should like to believe that such a corporation will be established despite what may be indications that the government is not prepared to support a proposition of this kind today. So often in this house have we seen a pattern along these lines. I was interested to note that in reply to a question put to him during a television program on January 5 the Minister of National Health and Welfare (Mr. Munro) indicated that he would be willing to consider the establishment of a Crown corporation if the merit of such a course could be demonstrated. I hope we may receive the same kind of reply, or perhaps even a stronger statement in favour of a Crown corporation, from the Minister of Consumer and Corporate Affairs (Mr. Basford). In Canada,
29180-281 j

Patent Act-Trade Marks Act Crown corporations are an accepted instrument of national policy and development. Many Crown Corporations have been set up for different reasons at various times in our history. I suggest there is a compelling reason at this moment for introducing legislation to establish a Crown corporation in this particular field, namely, that the drug industry in this country is a national disgrace; it has miserably failed to meet the needs of the Canadian people.
The present situation is a clear example of the conflict between the goals of private companies and the public welfare. I am not saying that the gentlemen involved in the drug industry are bad people as individuals. As a matter of fact, I understand they are very nice. I hear they take great care of their children. Some of them like dogs. Some of them keep cats. They do not kick animals. They do not go around with gabby women. The integrity, as individuals, of those engaged in the drug industry is not the question before us. The point is that the aims of the industry as such are in conflict with the public need.
It often happens, I suppose, that people simply drop into a situation of this kind, and having done so there is little they can do about changing the pattern, even if they wanted to do so. Each company they compete with operates within the same terms of reference. The very character of the industry itself makes it hard for changes to be made. As we have heard, the industry spends something like 30 per cent of its gross income on advertizing and promotion. Any private company trying to compete would have to do the same thing. If a competitor sends out detail men, it would have to do the same. If a competitor gave away free samples, it would have to follow suit. If one made little presents at Christmas time, the other would be forced to do so.


An hon. Member:: Or an election contribution.


Max Saltsman: If one gave an election contribution or placed an advertisement in a medical journal, the other would have to do the same. So they are all on a merry-go-round, and even though certain people within the industry might recognize the inefficiency of these arrangements they would be unable to do anything about it.
How does one get away from such a situation? Obviously the industry cannot reverse its own course, nor can it correct its errors. It
January 17. 1969

Patent Act-Trade Marks Act is for this reason that urgency attaches to the setting up of a Crown corporation which would break through the present structure. If the situation is not corrected, if the Canadian people do not get the quality drugs to which they are entitled at the lowest possible prices, it is not the drug companies which are to be blamed. The United States corporations should not be blamed, the blame must rest directly with the government responsible for acting on the people's behalf.
Only the government carries such a responsibility. The private drug companies have a responsibility to their stockholders, and much as we may decry their higher than average profits, their terms of reference are to enlarge their profits and return as high a dividend as possible to their stockholders. But those are not the government's terms of reference. It is not the role of the government or of the opposition in parliament to worry about the profits of drug companies. It is their role to concern themselves with the welfare of the people of this country and to cease to be preoccupied with silly inhibitions as to the way in which the drug industry should be organized. The way in which the drug industry should be organized is the way which is best for the Canadian users of drugs, and I suggest the most useful thing to do in this connection would be to establish a Crown corporation.
Hon. gentlemen in the official opposition should not frown upon Crown corporations. If history is examined we see that most of the Crown corporations in this country were set up under the sponsorship of the Conservative party. I believe the Conservative party was responsible for the C.B.C.
I should like to quote the opinion of a former prime minister, Mr. R. B. Bennett, as expressed when introducing the bill to establish the C.B.C.
No other scheme than that of public ownership can ensure to the people of this country, without regard to class or place, equal enjoyment of the benefit and pleasure of radio broadcasting.
I understand that only one member of the house rose at that time in objection to the bill. Rarely has there been so harmonious a debate. Granted, Mr. Speaker, this was before the book by Judy LaMarsh had appeared. Nevertheless, it is an indication of the way in which this house has been willing from time to time, when faced with a national imperative, to make use of the services of Crown corporations.
[Mr. Saltsman.l

We have used Crown corporations to assist the businessmen of this country. We have set up an Export Credits Insurance Corporation to help businessmen insure their goods against loss through non-payment by foreign buyers. I approve of this measure. I think it is one we all support. We have set up an Industrial Development Bank, which also assists businessmen, because it fulfills a purpose, based on a need. For the farmers, we have the Canadian Wheat Board which has done a great job for western growers. It has easily demonstrated its value. In wartime when we were unable to secure adequate supplies of rubber for the war effort we did not hesitate to establish a special corporation. This corporation has become internationally famous as the Polymer Corporation of Canada. It has become profitable and has returned large dividends to the Canadian public. All attempts to sell it to private concerns have failed because it has demonstrated its profitability and value to this country. We have established crown corporations for somewhat less worthy reasons, albeit for reasons that were sound. The Canadian National Railways Company was formed to bail out investors. Instead of letting the investors fall flat on their faces, the Canadian government came to their rescue and we have been paying for it ever since. However, the action was justified at the time because it was part of the nation building process.
[DOT] (3:10 p.m.)
All kinds of crown corporations have been established in this country, and for different reasons. Only yesterday we discussed a bill to set up a further crown corporation to be known as the Freshwater Fish Marketing Corporation. Again this corporation is to be established for good reason: the marketing arrangements for our fishermen have been unfair and the new corporation is designed to correct the situation.
I think it would be instructive to quote the words of the Minister of Fisheries (Mr. Davis), who spoke last night about the reasons for asking the house to set up this corporation. As reported at page 4397 of Hansard he said:
The corporation proposed In this bill will do that. It will be doing it, I expect, in a more efficient manner than the slipshod, relatively primitive, and unorganized way which has characterized most of our freshwater fish operations.
I suggest we could characterize the drug industry in the same wav by deleting the
January 17, 1969	COMMONS
words "freshwater fish operations" and substituting "drug industry".
If we are willing to bail out investors, to establish crown corporations to assist businessmen, or farmers, or fish producers, then what is the inhibition about establishing a crown corporation to assist the people of Canada to buy drugs at the lowest possible price? Surely, there can be no argument against this if the government is willing to do it.
Perhaps the government will say, and I hope it does, that it is willing to set up a crown corporation in this industry if it can be indicated what the corporation's role will be, how it will operate, and how it will assist the Canadian consumer of drugs. To this end, I should like to make a number of points.
There is now considerable evidence that the drug industry requires some price competition. It can be demonstrated that there is a great deal of product competition; perhaps half a dozen different manufacturers make similar products. But I suggest this is really not true competition, particularly when so much of what the manufacturers call research goes into creating minor variations of drugs that can be labelled and identified as different one from the other. Rather than reducing prices, this kind of minor variation product competition increases prices. Too much of our energy and sales effort is expended in arguing the value of A over B, when both products are really much the same except that they are made by different companies. This is not the kind of competition that has any significance.
On top of that, Mr. Speaker, these companies have been colluding with each other. There are numerous examples of drug companies being brought before combines investigation boards because it is alleged they have conspired together internationally to artificially maintain prices. As time goes on this problem becomes more acute. As these companies become more and more internationalized and their roots spread, even free trade is no answer to the probem of lowering prices. With whom are these companies going to compete if they are making cartel agreements internationally? As I say, free trade offers no answer to this sort of thing.
I suggest that the only meaningful kind of competition that can take place in a situation of this type is that which comes from a crown corporation that will not play ball with the other companies; a corporation that is not internationalized and that is responsible to this parliament; one whose terms of reference
DEBATES	4443
Patent Act-Trade Marks Act are the service of people rather than the highest margin of profit. This can be the only significant kind of competition in light of what is happening internationally.
Drug prices, on many authoritative estimates, are at least 50 per cent greater than they need be. I listened with interest to the speech of the hon. member who preceded me. He talked about the hospital in his riding that spent only $30,000 on drugs; I think that was the figure. It did not seem a great deal in view of the total budget of the hospital. However, what he perhaps neglected to mention is that hospitals buy their drugs for a great deal less than the average consumer. Hospitals tend to buy their drugs in large lots, and usually in generic form. So, hospitals are in a different position.
One of the things that this bill will attempt to do, and I think it is a worthy attempt, is to inject some competition into the system by encouraging smaller manufacturers to compete with the giants. I hope the minister will recognize that simply making a few million dollars available to try to cope with a problem of this magnitude is not going to be enough. Not only that, the smaller companies already find it virtually impossible to compete with the giants except under very unusual circumstances.
I should like to indicate part of the nature of the problem with which the small drug manufacturer is faced by reading a portion of an article that appeared in the Globe and Mail of August 13, 1968. It is headed "Tiny Toronto drug operation Canada's biggest independent", and reads:
For his own industry, he would like government recognition and promotion. Paul Maney's biggest problem is fighting the big companies' whisper campaigns in doctors' offices-
Then, the article quotes a Mr. Cook:
"-We need the government to take an interest and endorse the companies who deserve endorsement."
[DOT] (3:20 p.m.)
Simply making money available to these companies is not going to solve that problem. That will not stop large drug manufacturers from frightening doctors with whispering campaigns. I do not suggest the doctor's position is not difficult, because it is. The doctor is responsible to his patient. Yet, when a fellow comes along the doctor has known for a long time, a fellow who gives him samples, who seems a decent sort, who does not kick animals and says, "Look, these little guys are dangerous," the doctor will listen to him.
January 17, 1369

Patent Act-Trade Marks Act After all, he does not know how long the smaller companies will stay in business. He has confidence in the man he has been dealing with and therefore continues to prescribe the drugs of the larger manufacturers despite the fact that equally effective and cheaper generic drugs are available.
A Crown corporation which would act as an independent marketing agent for some drug manufacturers would gain the public's confidence. The corporation need not be a manufacturer of drugs. Being a crown corporation, involved perhaps in the distribution and marketing of products in which the public could have confidence, it need not spend 30 per cent of the money it takes in pushing sales to doctors. A Crown corporation would have to act in a responsible way because, in the final analysis, it is answerable to the highest forum in this country, this house. The operations of such a corporation would mean that the smaller drug manufacturers could have their products marketed, with the public enjoying full confidence in the quality of those products. That would cut through the entire nonsense of present marketing techniques.
The operating costs of a Crown corporation would not be low because it would need to employ well paid, high calibre people. The great advantage to be gained from a Crown corporation, however, is that we could circumvent present spurious marketing techniques which undermine the public's credibility in drugs. People would have more confidence in drugs approved by the Crown corporation, and that is an important point to consider.
The hon. member for Notre-Dame-de-Grace (Mr. Allmand) demonstrated the fallacies in an argument raised by a previous speaker. He showed that 95 per cent of all drug patents do not originate in Canada. Any Canadian looking at the facts casually must be shocked. After years of having their own sweet way, the drug manufacturers have undertaken almost no research in this country.


An hon. Member:: Parasites.


Max Saltsman: My colleague from the west uses strong language, but I think it describes the situation.


Mr. McCleave:: You are thinking of
insecticides.


Max Saltsman: The language is becoming very strong. Perhaps I better continue with my argument.
IMr. Saltsman.]


Mr. Knowles (Winnipeg North Centre):: Tell
it as it is.


Max Saltsman: I will tell it as it is. Obviously, the major drug manufacturers will not conduct any research in this country. Let's stop kidding ourselves that they will. They will not, despite all the incentives we give them. Most of our drug companies are owned by United States parents, and it makes no sense for them to do research here. Why should our drug companies undertake research here? I suggest that most of the significant Canadian research has been undertaken within government agencies. After all, our government agencies have no United States parents.
Since our Crown agencies have no United States parents they undertake original research work. In fact, such research work has been undertaken only in our universities, Crown corporations and research institutes. Therefore let us stop kidding ourselves that if we allow drug companies larger profit margins we will induce them to undertake research. The value of a Crown corporation such as I suggest ought to be set up lies in the fact that it will undertake research. The money we are spending in support of research-so far that money has brought negligible results-will bring results, and original research will be undertaken in this country.
Canadians search for fields in which they can excel. We have specialized in the production of raw materials, such as forestry products. Canadian grown wheat is greatly admired all over the world. I suggest that we could excel in the production and distribution of generic drugs, which could be made available to the developing countries of the world. We could take a lead in this field, have the know-how, the personnel and the appropriate institutions in which such work could be undertaken. In conjunction with countries like Sweden, Germany, France and Italy we could work towards the objective of producing drugs at low cost to be made available all over the world.
Though drug prices are high in this country, we are fortunate in that drugs are available here. The people of many emerging countries who need drugs do not have access to drugs. If through a Crown corporation we managed to market high quality but low cost drugs in those countries we could break this international cartel that exists only for the purpose of making as great a profit out of us as it can. Any research the cartel does it does with a view to increasing its profits and not
January 17, 1989

to benefit mankind. I do not see why Canada should not specialize in the manufacture and distribution of drugs. I agree that it is necessary to make safe drugs, and possibly we could specialize in the manufacture of a selected number of drugs. The value of a Crown corporation is that it exists to serve people. I do not care whether companies in the drug field come under private or public ownership.
[DOT] (3:30 p.m.)
I have no hang-up about public ownership or private ownership. I do not think there is intrinsically any greater merit in one or the other. That is not my argument. It is not a philosophical argument I am making. The argument I am making is that a crown corporation would be more effective for serving the needs of the people of the country. It would be more responsive because it would be answerable to the people of the country in the way that these major international drug corporations are not. Surely, this must be the ultimate test of the value of an organization, the test of its responsiveness to the needs of people.
Therefore, Mr. Speaker, because the drug companies have failed the people of the country, because they have been preoccupied with their own interests, there is a vital need for the establishment of a responsive instrument, a crown corporation, for the manufacture and distribution of drugs.


Mr. Ray Perrauli (Burnaby-Seymour):: Mr. Speaker, two developments were predictable this afternoon. First of all our friends to the far left took credit for this legislation. Since 1933 the socialist party in this country has taken credit for almost everything that has happened in Canada with the possible exception of motherhood, and they made their contribution in that area. Before I leave this first point, may I say there has never been any doubt at any time that it was the intention of the government to proceed with this legislation after June 25 last year. This has always been enshrined in Liberal belief and policy. It did not require the pushing of any group in this house in order to inspire Liberal members to introduce this legislation again.
The other predictable development this afternoon was that our political medicine friends to the far left again suggested that the universal snake oil that cures everything is nationalization or the establishment of a Crown corporation. This medicine has been

Patent Act-Trade Marks Act splashed all over the country since the formation of that party and really, Mr. Speaker, it is impossible to simplify great national problems by merely suggesting that we nationalize an industry or establish a crown corporation. That bottle of medicine should be labelled "Dangerous if taken internally," certainly for some maladies. At the same time, Mr. Speaker, I think the government members are gratified that there is such a measure of support, at least on the part of some members in opposition, for the legislation that is before us.
I rise in support of this measure and I commend the responsible minister for his unswerving determination to fight the excessively high cost of drugs in this country and his determination to bring on this legislation early in the new year. Undoubtedly, this bill is going to encounter opposition in many sectors of Canada. Certain sectors of the community are going to suggest that there are dangers inherent in this legislation, dangers to health, dangers to freedom, dangers to research, but all of these considerations are outweighed by the advantages of this proposal.
There will be opposition from those who will provide frightening descriptions of a vital drug industry in ruins. There will be opposition from those who profess to be clairvoyant. They give us the picture of research scientists leaving Canada by the thousands, thus finishing research in this country. There will be opposition, some I am afraid by well-heeled lobbyists, who will assert that free enterprise is in peril and that somehow, if the government acts to protect the consumer of Canada in this way, we are going to do irreparable damage to the system.
One of the objects of the measure before us is to relax patent protection, as we know it, in order to inject more competition into the drug industry in Canada. It is hoped that this will bring down prices. The government is not suggesting price control; it is not suggesting nationalization. But this is the type of thing which is now being threatened in Sweden. Some hon. members may be aware of the fact that the Swedish government states it may nationalize the country's pharmacies to reduce the cost of drugs in that country, yet the Canadian prices of eight popular drugs are estimated to be 86 per cent higher than the prices of those drugs in Sweden. So, the government of this country is acting to make sure the Canadian consumers are not paying an excessive amount for vital drugs.
January 17, 1969

Patent Act-Trade Marks Act
In the weeks to come we can expect additions to the lexicon of fear literature and propaganda against Bill C-102. There will be opposition, some of it from those who are sincerely concerned about some of the implications or what they believe to be the implications of this measure. But I fear, Mr. Speaker, that at least some of the opposition to Bill C-102 emanates from those with a vested interest in soaking the sick. Their specious reasons for opposing this measure are rooted not so much in a concern for the consumers of Canada but in a desire to maintain a status quo which has seen Canadians spend far too much on certain drugs.
Those who remain unconvinced that excessive profits are being made in certain sections of the drug industry should read the reports which have been amassed in this country by three committees, which indicate that this fact exists.
There are few members of this assembly who can remain unaffected by the letters and telephone calls received from people on limited incomes, pensioners, retired civil servants, people living on very small incomes with their purchasing power diminishing day after day but who are saddled with a drug bill. I can recall one lady who phoned me over the Christmas vacation to tell me she spends over $75 a month for drugs.
Not only must we attempt to lower drug prices in this country but we should encourage provincial governments, where they have received substantial amounts of money under the terms of the national medical care plan, to proceed as soon as possible to provide a certain amount of drugs each year per family.
My telephone rang many times over the Christmas vacation and I was told the story of the effect the cost of drugs is having on many families in our country. Surely, a just society must be concerned about the ability of our people to maintain a decent level of health. And just as surely, if that level of health depends upon access to certain drugs at fair prices then an assembly of this kind must act to assure that drug prices are fair and that the drugs themselves are safe.
The brutal and tragic truth is that some families have been stricken by chronic illness, and there are thousands of them in my own province and across the country. As a result they have required large supplies of expensive drugs and have been virtually ruined by high prices. When it is demonstrated, as it has been, that many vital drugs are vastly over-priced, and when self-regulation by the

industry does not result in the establishment of satisfactory price levels for these drugs, any responsible government must act.
Some articles have appeared in national magazines on this subject. I have here Maclean's magazine for July 25, 1965, in which the president of one of the drug manufacturing companies wrote:
-the politicians and the public have to ask themselves if this is really in their own best interests-
Meaning the promotion of legislation of this kind.
If we abandon the patent system, we cannot expect Canadian companies to spend money developing new drugs. It is significant, I think, that all the important drugs have been discovered in the Western World and under the free-enterprise system.
He added:
One enormous advantage of the drug-patenting system is that it has encouraged a drug-manufacturing business in this country. Drugs are produced here under the regulations of Canada's Food and Drug Directorate and the manufacturer is responsible. If anything goes wrong, he's easily found and held accountable. There is a very grave risk that if all drugs were imported their general quality would go down.
[DOT] (3:40 p.m.)
This is the gist of the opposition to this measure which we have heard across the country. But it is not quite that simple. If we look at the report of the Harley committee we must ask ourselves the question, how much should Canadian consumers be required to pay for this so-called research. The report states:
The costs and benefits of alternatives must be weighed. The various inquiries re drugs have concluded that research on drugs in Canada is not significant, and that which does exist is not supported by the patent law.
Those are the facts, regardless of the public relations speeches made in this country. The report continues:
In terms of the manufacturer's dollar, 7 per cent is spent for research and development of all kinds as reported by 41 P.M.A.C. companies in 1964. This figure would be somewhat higher for 1965, possibly relating to increased tax concessions for Canadian research. If it can be assumed that the manufacturer receives only 50 per cent of the pharmacists' price to the consumer and the suggested list price for a specific drug was $5, then the consumer's contribution to research and development as a result of that particular purchase would be 17J cents-in any event, a fairly insignificant sum.
Then, we have the argument which has been cited that research will be endangered
January 17, 1969

by this measure. During the parliamentary session of 1966-67 hon. members will recall the special committee of the House of Commons on drug costs and prices received a report from the pharmaceutical manufacturers explaining the expenses of a group of 41 member companies in 1984. They sold $110,465,396 worth of pharmaceuticals and spent $32,977,561 on so-called marketing expenses. This figure included $16,844,633 for field selling expenses. In other words, the care and feeding of the detail men. Also included is an amount of $11,438,533 for advertising and promotional expenses. That includes medical exhibits, promotional samples and direct mail advertising. It might include a glossy pamphlet or a teak box containing a new tranquilizer. This is an item of $32 million to sell $110 million worth of drugs.
The question we must ask ourselves is whether this is really necessary in order to preserve the health of the Canadian people. I am not willing to accept the suggestion that is circulated around the country that this is a recognized and responsible practice in some sectors of the economy. Surely, a just society must be concerned about the ability of our people to maintain a decent level of health. The measure before us does not contemplate the need or the possibility of placing the drug industry in shackles. The measure has as its objectives lower prices, safe drugs and a viable and competitive drug industry.
A special committee of this house several months ago came to the conclusion that the people of this country pay far more for their drugs than they should and that our drug prices are among the highest in the world. It recommended that several steps be taken to ease the burden of the heavy drug bills many families must pay. The 12 per cent sales tax on drugs was abolished over a year ago. While this had a beneficial effect in some areas, some drug prices continued to rise. A report in one of the national newspapers last July stated that the average price of a prescription drug at that time was $3.62 as against $3.49 the year before. The report stated further that 49 per cent of the pharmacists are filling prescriptions with less costly generic drugs, while 43 per cent are using the same drugs sold under a brand name. The remaining 8 per cent use either, depending on the drug prescribed.
Action in the area of the sales tax has not totally corrected a situation which led three public inquiries between 1963 and 1967 to blame lack of price competition due to patent,

Patent Act-Trade Marks Act tariff and trademark protection among other things, for the unduly high prices of some drugs in this country. It is difficult to understand how there can be any serious opposition to a five point measure of the kind we have before us. We have already instituted the sales tax removal from drugs and reduced the customs duty on drug imports by 5 per cent to 15 per cent. Who in this house can in sincerity oppose a program of providing objective information to doctors about the properties and prices of drugs? Who in this house can in sincerity oppose a pharmaceutical industry development assistance program? There is the direct loan system under the Department of Industry to strengthen low price drug houses competing with major international drug firms.
Who in this house who is concerned about the health of the Canadian people can, in good conscience, oppose conferences with the provincial governments about ways to tackle the high cost of retail distribution of drugs? What about the dangers in respect of alterations of the patent law which have been referred to by some hon. members? Canadians are told that an alteration in the law- and I cite the Harley report-would clearly have a detrimental effect on the quality and the safety of drugs. Visions are conjured up of bootleg drugs being furtively imported into the Canadian market. We are given the vision of the drugs coming into Canada through the auspices of non-inspected distributors with a resulting lack of the degree of quality control that attends the Canadian manufacture and distribution of patented drugs under brand names.
What are the implications of these allegations? The first is that the so-called generic drugs, or non-brand name drugs, are unsafe. The second is that increased importation of them from overseas will result in a failure of the Food and Drug Directorate to be able to maintain the quality of drugs in Canada and, third, that drug products from overseas have some sort of sinister connotation and are to be distrusted because they are foreign. This is the suggestion to be found in some of the articles which are being written. We are given a vision of some unethical foreign company turning a fast pound, franc, lira or zloty by mixing a batch of ingredients in some dirty basement and putting the product in a plain brown wrapper for shipment to some fast-dollar distributor in North America. Arguments of this kind are rooted in prejudice, misinformation and perhaps worse.
January 17, 1969

Patent Act-Trade Marks Act
All members will agree that it is of the utmost importance that drug safety be a paramount consideration. Drugs that hazard health are intolerably expensive at any price; but let us consider the arguments which are advanced in some quarters in opposition to this bill. Patents have nothing to do with the quality of drugs. Assurance of quality depends upon the controls exercised by the Food and Drug Directorate and quality controls exercised by the manufacturer. All manufacturers must meet all the requirements of the Food and Drugs Act and regulations. The government cannot check every batch. That is clearly impossible. But new requirements went into effect in May. The require that manufacturers must have information available in Canada to the effect that all requirements relating to manufacturing facilities and controls are being met. The drug must either be analysed in Canada or the data concerning its potency must be listed and made available. The onus is on the manufacturer and the information must be available in Canada so that we will know exactly what is in the drug which is manufactured abroad and brought here.
Contrary to the implications of some, a patent confers no guarantee of quality. Indeed, let those who espouse this belief present evidence to indicate that quality declines in a product whose patent expires or is not patented at all. It is too bad that the people who appear on television and talk about the dangers of this legislation did not provide persuasive evidence to the successive commissions which invited them to do so.


Stanley Ronald Basford: They have not read the act.


Raymond J. Perrault: As the minister points out, they have not read the act. How did the Harley committee deal with this allegation? What the Harley committee said about this appears at page 12 as follows:
[DOT] (3:50 p.m.)
Unfortunately the brand name manufacturer often gives the impression that generic products are not safe.
The report of the committee then stated:
It is the opinion of your committee, however, that this viewpoint is not necessarily valid, it not only having been challenged by the generic drug manufacturers but also by purchasing agents of some hospitals and government departments who have ordered and continue to order ... drugs by their generic name.
Government agencies are using these drugs and this has been pointed out earlier today. I

ask hon. members to note the following, again from the Harley report:
The food and drug directorate made it clear that, in their opinion, based on the testing they performed, generic name drugs and brand name drugs are equally "safe".
Indeed, it was reported to this house earlier in a speech today that a percentage of the products, for one reason or another, labelling or contents, is the same in respect of drugs manufactured in Canada and those manufactured abroad. Drugs sold under a common or proper name do not differ significantly from those sold under a brand name according to tests conducted by the food and drug directorate.
The proposed amendment allowing the importation of drugs into Canada under compulsory licencing presents no new elements as far as the importation of the active ingredient and the preparation of dosage forms in Canada are concerned. At the present time, as hon. members know, there is no bar to the importation of non-patented drugs as basic chemicals into Canada for manufacturing into dosage forms. Both brand name and generic manufacturers are importing fine chemicals now for finishing into dosage forms.
Again, before the Harley committee, as recorded at page 2022, the question of domestic drugs vis-a-vis imported drugs was discussed by Dr. R. A. Chapman, director of the Food and Drug Directorate. He said:
In summary, then, we do not have evidence that imported drugs represent a significant hazard to health.
He then said:
However, we feel that to ensure that this situation prevails in the future it will be necessary to periodically assess the manufacturing facilities and controls of foreign firms exporting drugs to Canada.
This is the kind of action which is being taken. The importation of basic pharmaceutical ingredients under compulsory licence is not likely to be any different from the situation that exists at present.
In this house at the beginning of this debate the hon. minister gave the assurance- he is present and he has done an outstanding job in respect of this measure-that high standards would be maintained. In effect, he has assured this house on behalf of the government that if the importation of finished dosage forms from a wider selection of sources necessitates additional measures to ensure that these drugs meet all the requirements of the Food and Drug Act and regulations, these additional measures will be taken.
January 17, 1969	COMMONS
In effect, we are assured that if the Food and Drug Directorate is unable to elicit the necessary co-operation from foreign manufacturers, then their product will be excluded from the Canadian market. In this regard let it be noted that the Food and Drug Directorate already has the responsibility to ensure that drugs on the Canadian market including those from abroad meet all the requirements of the Food and Drug Act and Regulations.
The Hoffmann-LaRoche company of the Pharmaceutical Manufacturers' Association of Canada acknowledges the practice of generic manufacturers of maintaining adequate quality control as outlined in their statement again before the Harley committee. Let me quote from page 730:
-the copier has to have quality control all the time; he has to, to comply with the Food and Drug. Directorate and in order to stay on the market... If he is caught with bad drugs he will not be there-
The Horner company expressed a similar opinion when a representative said:
If the Canadian importer of raw materials is able to show that his compounded dosage form meets food and drug requirements for stability, disintegration and dissolution, there is no reason to think that the public will be exposed to any new or different risks.
The same principle shall apply, of course, to the importation of finished dosage forms.
In conclusion, I should like to say that the amendment to the Trade Marks Act should not in any way affect present levels of safety assured by the Food and Drug Directorate. Hon. members know that before drugs which are imported can be offered for sale, an arrangement is in effect whereby customs officers at the larger ports of entry hold drug shipments until the invoices have been checked and, where considered necessary, lots sampled.
There are other safety controls. Hon. members should be aware of the fact that the Food and Drug Directorate has the responsibility to ensure that drugs which have different formulae, but bear the same trademark, which are imported into Canada are as safe and as efficacious as those drugs which bear the same trademark and are manufactured in this country. In addition, all imported drugs must meet all requirements of the Food and Drug Act and regulations. These include the requirement that both the inner and outer labels shall carry adequate direction for use, a quantitative list of the medicinal ingredients contained therein, and a correct statement
DEBATES	4449
Patent Act-Trade Marks Act of net contents. By this regulation, the composition of imported drugs would be known to the pharmacists and, if the drug is not sold on prescription, to the purchaser as well.
Variations in the formulae of drugs imported into Canada which bear the same trademark as Canadian drugs will probably be minimal, but if they are sufficiently different to constitute a danger to Canadians hon. members know that under this legislation the minister can and will probably take appropriate action.
Safety and efficacy should not be maintained by conferring and perpetuating a monopolistic control over the drug market by large drug firms through patent and trade mark legislation. The obvious and sound technique, the technique contemplated in this measure, is to ensure safety by providing that drugs on the Canadian market, be they imported or domestically produced, meet all the provisions of the food and drug regulations.
I apologize to the house for racing through a speech which was scheduled to be longer than 25 minutes. Many aspects of this measure have been discussed heretofore in the house and I think it has been established that the case for action is unassailable. It is to be hoped that this measure will enjoy substantial support on the part of hon. members concerned about the welfare of Canadians, no matter where those hon. members may sit in this house.


The Acting Speaker (Mr. Richard):: Order, please. It being four o'clock the house will now proceed to the consideration of private members' business as listed on today's order paper, namely private bills, public bills and notices of motion.



BUSINESS OF THE HOUSE

John Angus MacLean: Mr. Speaker, before we proceed to private members' business perhaps the government house leader would place on the record the order of business for Monday and one or two other days of next week.


Donald Stovel Macdonald: Mr. Speaker, I thank the hon. member for his question and for this opportunity to outline the business for next week. There is a change in the order of business announced yesterday in view of the fact the item we have been discussing today has not been passed. As the first order of business on Monday we will call item 37,

January 17, 1969
Private Bills
the bill amending the Canada Evidence Act. The second order of business will be item 17, the bill in respect of the Historic Sites and Monuments Act. We will then return to the drug prices bill which is item 13, an act to amend the Patent Act, the Trade Marks Act and the Food and Drug Act which we have been discussing today.



PRIVATE BILLS


[Stage Direction]
The house resumed, from Tuesday, December 3, consideration of the motion of Mr. Cyr (for Mr. LeBlanc, Rimouski) for second reading and reference to the standing committee on Transport and communications of Bill No. S-12, respecting the Bonaventure and Gaspe Telephone Company, Limited.
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, when one reads this bill, which is private members' legislation, or public legislation in the hands of a private member, he will note that the purpose of Bill S-12 is to resolve the doubt as to whether the company may dispose of its undertaking to a company incorporated under and subject to the laws of any province of Canada. One might presume there is a legal problem involved, and that is the end of the matter.
This bill was discussed in the house on December 3, some weeks ago. I wonder whether the sponsor is aware of the fact that this is not a small company which started with a capitalization of a couple of hundred thousand dollars to provide local telephone communication in a small rural area, but that it is a company totally owned by the Anglo-Canadian telephone company which in turn is owned by General Telephone. This makes it a subsidiary of one of the largest telephone companies in the world. In fact, this is one of the largest corporations in the world with telephone communications in Australia, the West Indies, and across the United States. Therefore, the question involved is not whether there is a legal qualification in relation to the sale of this company. I say this is not the question because we can refer to previous debates in connection with the bill and see what was said about it. This house dealt with Bill S-33, respecting The Bonaventure and Gaspe Telephone Company, Limited. The

Senate dealt with the bill in 1968 and the following was said about it:
e (4:00 p.m.)
Honourable senators, the purpose of this bill is very simple-
I presume it is very simple for exactly the same reason.
-for, as shown by the explanatory note, attached to the bill, its object is to resolve doubts as to whether The Bonaventure and Gaspd Telephone Company, Limited, may dispose of its undertaking to a company incorporated under or subject to the laws of a province.
When Bill P-6, respecting The Bonaventure and Gaspe Telephone Company, Limited, was dealt with in the Senate in 1955, the following was said about it:
One of the main purposes of the bill is to ask parliament for authority to increase the authorized capital to $2 million, and to divide this into shares of a par value of $25 each. The par value of the present shares is $100, and the proposal is that existing shareholders will receive new shares in the proportion of four for one.
Then, it was said:
A further effect of the bill is to change the date of the annual meeting, which at present is fixed for the first Thursday of September in each year. The bill repeals section 8 of the act of incorporation and thereby makes the date of the annual meeting conform with the company's fiscal year-
And so on. Then, we find these words used in the Senate debate on the bill:
The bill would also give effect to the company's desire that amalgamation and acquisition or sale of property may be carried out with the consent of the majority of the shareholders, and under the supervision of the Board of Transport Commissioners. Since the present act was passed, parliament has given the Board of Transport Commissioners jurisdiction over telephone companies. The bill provides that all matters pertaining to this company shall come within the jurisdiction of the board.
Finally, the bill would give the company the right to furnish radio and television services and other improved means of communication, in line with the right enjoyed by other companies.
How the sale was to take place was outlined exactly in the debate which took place in 1968, when the following was said:
The special 1907 act which set up The Bonaventure and Gaspe Telephone Company, Limited- and I would refer honourable senators to chapter 64 of the 1906-1907 statutes-was amended by chapter 86 of the 1955 statutes in order, among other things, to empower the company to sell its business under the following conditions: first, the sale has to be approved by a meeting of shareholders called together for this purpose, at which meeitng two-thirds of the shares issued must be represented by shareholders present in person or by proxy; second, the sale cannot take effect unless first
January 17, 1969

approved by the Board of Transport Commissioners which, as the honourable senators know, has since become the Canadian Transport Commission.
It was originally agreed that this company should have the power-and that power was granted in the amendment of 1968-to sell or acquire additional property and to modernize its operations. The measure provided in the main that the company would, if necessary, be able to dispose of its undertaking. I understand that since that time the company has been able to sell all its stock, except four shares. These four shares are held by an estate and there is a small difficulty, not from a financial but a legal point of view, in transferring them. The remainder of the company is owned, operated and totally controlled by Quebec Telephone. I am sure that many people in the province of Quebec believe that Quebec Telephone is a provincial agency. This is not true, of course. Quebec Telephone, like British Columbia Telephone, is owned by Anglo-Canadian.
It is interesting to note that Anglo-Canadian is the Canadian counterpart of a number of subsidiary companies under the control of General Telephone and Electronics Corporation which hon. members will find, if they read Moodie's Public Utility Manual, is really a holding company with subsidiaries in many countries.
In July, 1966, General Telephone purchased Anglo-Canadian Telephone Company and made it a wholly-owned subsidiary. They acquired the controlling interest in Quebec Telephone Company, with 119,000 telephones. In 1967 General Telephone, together with a controlled subsidiary, Anglo-Canadian Telephone Company, controlled 50.24 per cent of British Columbia Telephone Company and 53.07 per cent of Quebec Telephone Company, with 835,000 telephones in British Columbia and approximately 126,000 telephones in Quebec as of the end of December, 1967. This indicates, Mr. Speaker-and I know that you have a great deal of knowledge of corporation law-a great difference between what this bill says and what is the fact.
[DOT] (4:10 p.m.)
If this bill is passed this company will retain an inter-provincial charter, and it will be operated by a company which almost totally owns its assets. Again, that company will be controlled by a 53 per cent ownership in the Anglo-Canadian Company which in turn is wholly owned by General Telephone and Electronics Corporation in the United States. So, we are not really dealing
Private Bills
with a small rural telephone system which needs to be upgraded and brought into another area. This is a major corporation power play in which we are involved, and we should look at it in that light. It may be advantageous for us soon to think about the amalgamation of all cur telephone services in Canada, not for economic reasons in particular but so as to bring together all the telephone systems that have linked up the various rural municipalities in the past.
In last night's Ottawa papers I noticed, as I am sure other hon. members did, a small announcement proposing that the shareholders of a company meet and make a decision concerning the sale of the Lever River Telephone Service at Masson, Quebec. I am sure that this also is a very small telephone company. They mention that they have only several thousand subscribers, and quite often the subscribers of this type of telephone service are also the shareholders in the company. We have hundreds of these small companies all across the nation and they are being gobbled up either by Bell Telephone Company, by General Telephone or by the American Telephone and Telegraph Corporation. My colleague says these are good shares to buy. Frankly, I would say that the shares of any of these telephone companies are good because they almost have the right to print money, and when they come before us to ask for an increase in rates they can always justify their request.
The house will remember that when we reduced long distance rates because of automation, very shortly thereafter we found that the company had increased the rates of the subscribers because their income had been lowered in one area and they had a need for profits in another.
Surely, members of parliament are aware that there are many disadvantages in allowing three major corporations to get involved in our Canadian telephone service. I think that this is where the difficulty arises. Anyone who has travelled very much across Canada would agree with me that there is no country in the world that is as well equipped to handle telecommunications as is Canada. This is something of which everyone in Canada should be proud. On the other hand, in the United States where the telephone companies have operated on a dog eats dog basis, it is very difficult to make connections with certain types of telecommunications equipment between one system and another.
It may be that the type of conversion of all systems in Canada makes it possible to make

January 17, 1969
Private Bills
a telephone call with any kind of equipment from any part of the country to almost any other system even when mobile, remote, satellite and radar communications are used. In the United States this is not always possible. There is considerable difficulty there in intercommunication. In England the system is chaotic. On the European continent it probably takes half a day to make a telephone call. This is also true in other countries.
I think one of the advantages that we have in Canada where there have been so many small companies with subscriber shareholders is that we have been able to unite them into a unfied telephone service across the country. If large units had been involved, we would have been using Northern Electric equipment in one area, automatic equipment in another and English Electric in still another. We would find then that these various pieces of equipment were not totally compatible and the difficulties in communications would have been compounded.
We in Canada are probably more dependent on telephones than any other place in the world. We are notoriously the greatest users of telephones in the world. Our per capita use of the telephone indicates a female tendency to long windedness, and therefore telephones have become a very important part of our everyday life. Therefore, I think it behooves us to be very careful in passing this type of bill, which I consider to be very dishonest. The bill does not say anything dishonest but it does not present the whole picture. Perhaps we cannot do much about it. It may be that we will soon have to face up to whether or not we want a monopoly in the telephone system in Canada. I believe we do. I believe that we satisfy provincial separatist traits when we allow the Northern Telephone to operate in northern Ontario, the Quebec telephone system to operate in Quebec, the British Columbia telephone system to operate in British Columbia and the Saskatchewan telephone service to operate in Saskatchewan. We may be fostering provincial pseudo nationalistic pride, but this will not really solve the problem of the establishment of the best type of telecommunication that can be obtained for the money available.
I am sure that when the Northern Telephone Company, which was one of the largest independent companies, was bought out, many methods were used to purchase the control of the stock. In effect, however, Bell Telephone now owns the Northern Telephone Company which might as well be called Bell

Telephone. The Quebec telephone service might as well be called General Telephone because that is what it is. I do not even think it should be called Anglo Canadian Telephone because that is a wholly owned subsidiary of the parent company, General Telephone. There is nothing wrong with this situation and I am not suggesting any dishonesty, but I do not think it is in the interest of the Canadian public. I presume that the problem facing the people in Masson today is that they have to make up their minds whether or not they will sell their stock and allow a large corporation to control their shareholder controlled company or whether they wish to participate in a larger corporation.


The Acting Speaker (Mr. Richard):: Order, please. I wish to advise the hon. member that the time allotted to him has expired.


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I rise to take part in this debate mainly because of some personal feelings I have about matters like this, feelings that I have held for a number of years, and also because I think I have some idea of how the members of my party right across this country feel about it. I also wish to take part in this debate because I am convinced that a fairly large number of Canadian citizens, some of whom do not necessarily support or do not belong to my party, would agree with the kind of arguments that my colleagues and I are putting up in this house on this measure.
We are told that the Bonaventure and Gaspe Telephone Company merely wants a slight change in the wording of previous legislation in order to eliminate any possible doubt that they can dispose of the remainder of their shares. We are also told by the sponsor of the bill, and this was said in the other place also, that there is not much to this request because after all 99.9 per cent of this company is already owned by the Quebec Telephone Company. Therefore, it is only a matter of arranging for the remaining one tenth of one per cent ownership.
[DOT] (4:20 p.m.)
Mr. Speaker, I suspect-I hope I am wrong-that if this is all that is bothering these various companies they would be unlikely to allow the small matter of a few words about which they are in doubt to prevent them from completing the transfer of ownership. Methinks there is more to this than meets the eye. Whether this is true or
January 17, 1969

not, I, for one, feel this bill will never pass this chamber. I say so for a number of reasons. For one thing, we are considering a measure which is concerned with United States ownership in the communications field, precisely the field in which there should be, at best, public ownership or, at least, Canadian ownership. Personally, I could not give a tinker's damn about the welfare and good order of various United States communications companies. I will not be a party here or anywhere else to improving the health and welfare of corporations of this kind.
I maintain that systems of communication, whether by telephone, radio, television or telegraph, should be completely and totally the business of the nation concerned, not entered upon or interfered with by any other nation. I believe, along with my hon. friends and members of my party across the country, that there must be no foreign ownership of telephones, radio, telegraph, television or similar methods of communication and broadcasting in Canada. It is bad enough that a telephone company should be privately owned. It is even worse that it should be foreign privately owned. As a Canadian I don't like it when I know that if I live in Gaspe or Rimouski and pick up the telephone it is really owned and controlled by a United States corporation. You may think, Mr. Speaker, that I am overly worried about foreign interests. Nevertheless I do not think it would too difficult for somebody in the C.I.A, for example, who wished to find out what a subscriber of the service was saying on the telephone, to arrange to listen to his conversations.
For these and similar reasons it seems to me no Canadian worthy of the name would have anything to do with the passing of legislation which allows the transfer of a Canadian communications business to foreign ownership. I do not envy the sponsor of this bill, the hon. member for Rimouski (Mr. LeBlanc). I feel sorry for him for having sponsored it. I would not touch it with a ten foot pole; I would not sponsor it in this house or anywhere else on a bet. The efforts of this company to complete its transfer to the Quebec Telephone Company represent nothing more than the consolidation of various United States companies owned and operated in Canada. We are told the present arrangement is causing extra expense, duplication of administration and so on. That is too bad. As I said earlier, I am not interested in improving the good order and financial position of
Private Bills
United States companies in the telecommunications industry in Canada.
The telephone is a public service and by its very nature such a service should be provided by public enterprise. This is a proper field in which public enterprise should operate. I hope that some day the government in the province of Quebec will say: Enough of this; we intend to take over all the telephone companies operating in Quebec and provide at cost, or as near cost as possible, a completely integrated and wholly publicly owned telephone service in the province. Three provinces have already done this. I do not altogether agree with the hon. member for Timiskaming (Mr. Peters) that the establishment of a nationwide telephone service operated by one company is necessary at this time. The system may one day evolve into that, but in the meantime it seems to me the ten provinces, owning and operating their own telephone services and integrating their long distance and microwave networks would provide not only a better and cheaper service for Canadian citizens, but a system-and this is even more important-which was owned and run by Canadians.
When I look at Moodies Public Utilities Manual and take a look at the entry concerning the General Telephone and Electronics Corporation, I am impressed by the fact that this is not a company one could easily feel sorry for. It is not ready to become a welfare case and it is certainly not one whose survival depends upon the transfer of supposedly one-tenth of one per cent of the shares of the Bonaventure and Gaspe Telephone Company. Its acquisitions go back many years. When one looks at the amount of debentures, both convertible and cumulative-preferred and subordinate convertible debentures, whatever those are-it becomes apparent that the company is not ready for the social welfare department. It cannot be said to need any part of the Quebec Telephone Company or the Bonaventure and Gaspe Company for the success of its operations.
In Moodies directory there is a map of the United States showing the extent of this corporation's holdings. They do not really consider the operation in Canada to be of sufficient significance to justify putting it on the map. I do not even know why they bothered with it. I suspect the main reason is that the corporation has plans for moving into the communications field to a greater extent in the future, not only in the telephone service but in the manufacture of communications

January 17, 1969
Private Bills
equipment in Canada. As far as I am concerned, we need more of this like we need a hole in the head. This corporation has proceeded to acquire not only telephone companies but organizations which market telephone and communications equipment. It has acquired ownership in telephone companies in some 15 states in the United States, including Alaska. It is by no means the largest international telephone or electronics corporation. A.T & T. is larger, as are one or two others. Bell of Canada would be larger than this one. But, as I say, I believe foreign communications companies have absolutely no business, in fact, no right, to be in this country. They should be hastily bought up and politely asked to return home, so that we can run our own telephone service.
[DOT] (4:30 p.m.)
In some respects I consider the private ownership of telephone services in Canada by companies such as Bell almost as bad, and that is saying quite a bit. I think there is an outrageous history of exploitation of the public in this regard. Because private enterprise holds a monopoly it has been able to exploit the public users of telephone services far beyond the point that could be considered reasonable. The profits and financial turnover of Bell are at record highs.
I could go on to talk about many other companies in various industries, Mr. Speaker, but I suspect that you would call me to order. Suffice it to say that I will oppose as vehemently as I can and for as long as necessary any legislation that seeks to place any part of a telephone or communications company's operations into United States ownership.
I say this firstly as a Canadian. It may sound strange for a democratic socialist to talk about a form of nationalism. In my opinion, before you can be a good internationalist you must be master in your own home. You cannot truly be recognized as speaking for the nation or truly be recognized as a nation unless you own the nation.
I cannot see that asking the parliament of this country to adopt measures such as this contributes in any way, shape or form to our nationhood. In fact, to me measures such as this contribute to the betrayal of our nationhood. I hope that other hon. members on all sides of the house will agree with me when I say that this kind of legislation is neither proper nor in the national interest. I hope that never again will any member of the house sponsor legislation in this house which

will contribute to the transfer of the ownership of Canadian industry to the United States or any other country. The betrayal of our nationhood has been contributed to in this chamber too many times in the past in previous parliaments. Too often has it been blithely and lightly done without examining the consequences for the future.
I am not saying that hon. members have done this deliberately, certainly not with any sense of disloyalty to their country. They have conscientiously done what they thought would be, if not in the best interests of the country, at least harmless to the country and at the same time beneficial to one or more enterprises. However, it seems to me that it is high time this sort of thing stopped.
I am afraid that in the future the government, led by the present Prime Minister (Mr. Trudeau), will arrange for this kind of bill not to be brought before the House of Commons, but for the courts or the other place to deal with it. I hope that this never happens, but I am afraid, in view of the battle that members of this group have put up on a number of issues in this particular hour of the business of this house over the past several years, the government will decide to deprive hon. members of the House of Commons of the opportunity of speaking to this kind of legislation.
I think much better use can be made of private members' hour. We could discuss the much more constructive legislation, resolutions and motions introduced by members of the house on all sides which await our consideration. Certainly, I hope no attempt is made to dispense with the introduction of private members' public bills, as I believe they are called, because these bills give private members of all parties the opportunity to bring instances such as this one into public view. As a result, perhaps foreign corporations will refrain a little more than they have up to now from attempting to gain further control of our national wealth and resources and, as a logical result, further control of our country.
I hope that members of other parties will speak out against this sort of nonsense. I know that this bill concerns a fairly minor matter that is pertinent to one particular company, but there are thousands of other bills like it which could be brought to this house, and which when viewed as a total package militate against a fundamental principle of Canadian nationhood. This is why all of us should speak out now
January 17, 1983


John Leroy Skoberg: Mr. Speaker, in reviewing Bill S-12 I went back to Hansard tor December 3 to see what the sponsor of the bill had to say when he introduced it. I should like to refer to part of what the sponsor of the bill said at that time. He pointed out that the purpose of the bill is to resolve doubts as to whether the company may dispose of its undertaking to a company incorporated under, or subject to the laws of any province of Canada.
The sponsor, in his explanation of the bill, went on to say that the disposal of the undertaking is allowed, subject to the approval of the shareholders and the Canadian Transport Commission. Then, I respectfully suggest that the real crux of the matter, the issue to which I take strong objection, appears in this paragraph, which is reported at page 3404 of Hansard:
We feel that the act passed in 1955 does not clearly grant the comapny the power to sell or dispose of its assets to a company which does not fall within the jurisdiction of the Canadian parliament.
I suggest that those words make this bill itself suspect, no matter which way you look at it. Those words in Hansard for December 3 certainly indicate a desire to remove this particular company from the jurisdiction of the Canadian parliament. Therefore, I take issue with those words.
The sponsor of the bill goes on to say:
-doubts concerning the power to sell or dispose of its assets to a company which does not fall within the jurisdiction of the Canadian parliament would be resolved if the following sentence were added to section 11 of the constitution:
The hon. member then spelled out exactly what he had in mind with regard to this proposed addition to section 11 of the constitution of the Company. It is as follows:
Such sale or disposal, whether of the whole or any part of the said undertaking, rights and properties, may be so made by the company to any company or person, whether within the legislative authority of the parliament of Canada or not, authorized to carry on a business included within the objects or powers of the company.
Once again, it is my belief that this clearly spells out the purpose and intent of the bill, and indeed of the sponsor who is attempting to put it through parliament at this particular time. The sponsor of the bill suggests that this alteration is being sought to allow the company, which holds a provincial charter, to dispose of its assets to Quebec Telephone Company. Nevertheless, I suggest it is time that hon. members of this house examined
Private Bills
bills like this to see exactly what is the ownership structure of companies coming before this house.
[DOT] (4:40 p.m.)
To learn something about this company I went to the library. I learned very little there and had to resort to the reports of hearings in the other place. Hansard for December 3 also contains some relevant information. What I learned gave me cause for concern, and I do not think this bill ought to obtain too easy passage through this house. From my research I learned that the Bonaventure and Gaspe Telephone Company is actually a wholly owned subsidiary of Quebec Telephone Company and is not the small company serving the relatively small community its name might suggest. To demonstrate the intricacies involved in unravelling the ownership structure behind the company may I read the remarks of an hon. member of the other place as reported on page 3441 of Hansard for December 3, 1968:
It is a matter of establishing clearly the power of The Bonaventure and Gaspe Telephone Company Limited, incorporated by a special act of the Parliament of Canada, to sell its telephone network to Quebec Telephone, a company incorporated in accordance with and subject to the laws of the province of Quebec.
Investigation revealed the further fact that, in the final analysis, the company in question is wholly owned by a United States parent company. Although I do not object to some ownership by our friends to the south of some of our companies, generally speaking I am not in favour of it. As the hon. member for Regina-Lake Centre (Mr. Benjamin) said recently, we must remain masters in our own house and keep enterprises in Canada under Canadian control. We must make sure that the ownership of our utilities remains in Canadian hands and that directors of such companies are Canadians. I am afraid that a number of hon. members here do not care whether control of our companies passes to our friends to the south. We must heed the recommendations of the Watkins report in order to deal intelligently with a number of bills similar to this one that will come before the house.
From my research I learned that Quebec Telephone Company obtained the stock of Bonaventure and Gaspe Telephone Company. Then, in 1955, Bonaventure and Gaspe Telephone Company sought authority from this house to sell its assets, having already sold them two years previously. That action was

January 17, 1969
Private Bills
highly suspect. It has been suggested that the company wanted to validate what had been done. If so, it acted incorrectly. The company ought to have gone before a committee and made all the facts surrounding the transaction available to members of the committee. If debates on bills like the present one are to be fruitful I think that hon. members of this house ought to know all relevant facts. Clearly, hon. members do not know everything they ought to know about this company.
For instance, it has now been established that the company in question is foreign owned. I maintain that quasi public utilities such as this one ought to be owned and controlled by Canadians. If hon. members are to vote intelligently on bills like this they ought to know whether the company in question is Canadian or foreign owned; because by their votes they will tell Canadians whether they are in favour of foreign or Canadian ownership of our assets.
If we want our utilities to be owned by Canadians we should look carefully at bill S-12. I am frightened by the implications contained in the bill, and I think it would be well for hon. members to know all the facts surrounding this situation before voting either for or against this measure. Even if the bill were to go to committee any witnesses who may testify would say only what they want hon, members to hear. I am sure that much information would not be divulged. As has been said before but not emphasized enough, perhaps, Bonaventure and Gaspe Telephone Company which serves the south shore of the Gaspe peninsula is a subsidiary of Quebec Telephone, which in turn is owned by a foreign company.
[DOT] (4:50 p.m.)
Actually, as suggested by my colleague, this is really the first chain of ownership. It indicates that this company is really part of an over-all chain, a part of something with which I believe not too many of us want to be associated. I agree completely with my colleague from Regina-Lake Centre (Mr. Benjamin) that a close look must be taken at everything that comes before us relating to the ownership of these particular companies.
We in this party, believe there are certain things that must be controlled by the public. The public must have a complete say so far as the setting of rates is concerned. I understand that this is the last day for lodging appeals against the increase in telephone rates

proposed by the Bell Company. This is a typical example of what will happen if we allow bills such as this to go through unchallenged.
I believe that any company wishing to do business in Canada, and not wholly owned by Canadians, must be rigidly regulated by the enforcement agencies which we have. I would like this bill to be explained further. I believe there are more facts with regard to it that should be considered. I believe hon. members feel something must be done to provide more facts with respect to such bills.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, there is not much time left for debate today on what might appear to be a very innocent looking bill, No. S-12. I have prepared some notes for my contribution and I presume I shall have to leave them aside for some other time because it had been my hope to trace the chain of ownership of this company in some detail.
It has been a shock to me since coming to Ottawa to find that frequently we see a move being made in bills of this type to hand over some of the small remaining portion of Canada to foreign ownership. If there is anything in Canada that should be publicly owned it is those monopolies which are complete monopolies, and the telephone system is one of them.
It is rather amazing to see a member of the government party advocate that we reach into, what should be the public sector of ownership, and turn it over to a foreign nation to control. We, in the New Democratic party, say it is time we called a halt to this. It is time these moves were exposed so that the Canadian people may be made aware of what is happening in this Canada of ours.
This bill tells us that the Bonaventure and Gaspe Telephone Company wishes to sell its assets to the Quebec Telephone Company. That is very innocent. The average citizen would say there is nothing wrong with it. He does not look beyond the first move.
On December 3 last the hon. member for Broadview (Mr. Gilbert) clearly traced the chain of ownership of this company and it led right down into the United States. The chain started with the Quebec Telephone Company, went to the Anglo Canadian Telephone Company and across the border to the General Telephone and Electronics Corporation in the United States. In my frank opinion, this information should have been given to the house by the sponsor of the bill and by the party he represents. Members on the
January 17, 1969	COMMONS
Liberal side of the house should be taking a stand on this matter.
We want to know whether other private bills will be introduced here to turn over other sections of our communications systems to the big foreign corporations that already dominate and control an alarming percentage of Canadian industry. This is basically the reason members of this party are determined to dig down, get more information, and expose the stupid and foolish trend to have the whole of Canadian industry controlled by people who live outside the borders of our nation.
If we are ever to become a strong nation in control of the destinies of our own people, we
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must take a close look at the problem of foreign ownership. Certainly Bill S-12 must be looked into very carefully.


The Acting Speaker (Mr. Richard):: Order, please.
It being five o'clock this house stands adjourned until Monday next at two o'clock in the afternoon. I hope you all have an enjoyable weekend.


Stanley Howard Knowles: The
same to you.


[Stage Direction]
At five o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, January 20, 1969