1969-02-06

Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, all hon. members know that a second meeting of the federal-provincial constitutional conference will take place next week in Ottawa.
At the first meeting, which was held in February last year, the heads of 11 governments participating in the conference agreed that the revision of the constitution they had undertaken was so important that it had to be attended to on a permanent basis until completion.
Unanimously, the Premiers recognized that, in view of the urgency of the task, the conference should not be adjourned but rather suspended to be resumed periodically. They also agreed that such an important task required the creation of a standing committee of officials who would be entrusted with the heavy responsibility of making investigations and reporting.
Moreover, they agreed that the scope of the undertaking entailed the establishment of a secretariat.

In February of 1968 there was unanimity in recognizing the perils that were besetting confederation, and in the importance of identifying and offsetting those perils by constitutional means. I have no hesitation in saying, Mr. Speaker, that the importance of this task of constitutional review has not lessened in the past 12 months. Nor do I hesitate to say that in my belief the task is even more urgent now than it was when we began a year ago. It would be folly of the most dangerous sort for us in 1969 to persuade ourselves that the discontent in French Canada which we all recognized in 1968-and the causes of which the first session of the conference dedicated
itself to removing-has in any appreciable measure disappeared. It would be hypocritical of us as legislators if we assumed, in the face of the steadily mounting evidence to the contrary in our society, that the individual human being needs no protection of his basic rights against the inroads of governments and the bureaucratic institutions and agencies which governments spawn. It would be an act of irresponsibility if we accepted the simplistic argument that there is nothing wrong with Canada that a revision of revenue sharing would not correct.
[DOT] (2:10 p.m.)
Prime Minister Pearson stated last February that at stake in this sweeping process of constitutional review and reform was nothing less than Canada's survival. I would not be candid if I did not say that today, one year later, the stake has not in my opinion changed. Canada's survival remains in issue.
If we are not able to take whatever steps are necessary to provide in this country equality of opportunity to all Canadians- equality which reveals no exceptions based on use of either of the official languages, or on regional economic disparities, or on basic individual freedoms-then we shall have failed. We shall have disappointed the expectations of the Fathers of Confederation. And we shall have disappointed as well the expectations of persons in many other countries who regard Canada as an example of a workable federal system in a co-operating bilingual community.
I believe that we shall not fail. I believe that we are capable of meeting successfully the challenge that faces us, which is no less than a systematic and comprehensive review of the structural framework of our Canadian society.

Such a review involves the establishment of priorities, as well as a selection of means which are necessary, according to the Canadian government, to carry them out. That is the subject of the document "The Constitution and the People of Canada" which sets forth the position of the federal government.
Mr. Speaker, I would now like to table English and French copies of this document.
February 6, 1969

Tabling of Government Papers [English]


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I hope I create no security problems for the Prime Minister by thanking him in public for his courtesy in providing me with an advance copy of the document he has just tabled. I appreciate his courtesy.
As the Prime Minister indicated, the document relates to the constitution, as some of us thought it might, and not to fiscal problems or problems of economic disparity which exist with the present constitutional arrangements. Although this booklet envisages a comprehensive review of constitutional problems, the proposals contained in it relate to a limited number of areas. There is a preamble which states purposes. The proposals of the booklet relate also to human rights, Senate reform and Supreme Court reform. Yet there is no specific proposal relating to the division of powers within the country. I presume that while the federal government is prepared to hear discussions on the subject, it is not making any proposals in this regard. Also, no specific proposal is made about any amending formula. The booklet is extensive in scope but nevertheless covers only a fraction of the constitutional problems and questions facing the country. Many of its statements seem to flow from previous statements of positions. There are some statements in it regarding provincial constitutions. The wisdom of putting into writing some of our unwritten conventions is questioned. We must be cautious in approaching this matter.
Perhaps the newest suggestions relate to the Senate and the Supreme Court. These suggestions are most interesting and I expect hon. members of the house and the people of the country will wish to study them carefully.
I do not rise at this time, Mr. Speaker, to emphasize any objections I might have to the proposals before us, or to express any differences of opinion. The document sets forth some limited objectives, and I must make it clear that I join with the Prime Minister in emphasizing the importance of the questions raised in it. It is important that we should succeed in having a constructive conference, one which will enable us to make progress toward strengthening the country. This is a subject of worry and concern, particularly in view of the seemingly small area in which agreement Was reached by the officials of the various governments, as disclosed by documents summarizing the conference they held.

So it would be difficult to exaggerate the importance of the outcome of the constitutional conference. I do not expect, and I do not think the people of Canada expect solutions to all our difficulties; but we hope and pray for progress.
As I said, Mr. Speaker, I did not rise to criticize or to express any reservations I might have or any differences of opinion that might exist with regard to priorities to be followed. Regardless of whatever difference of opinion there may be concerning these proposals, its great underlying purpose is to strengthen the country. I accept the conference on that basis; we all fervently hope this will be the consequence of its deliberations. I and my colleagues in this party extend our good wishes to the Prime Minister and his associates, as well as to the premiers of the provinces. We hope the conference will be noteworthy for its wisdom, moderation and understanding, indeed for the patriotism of those who participate.
I wish to make a statement which might possibly be misunderstood as implying criticism, but I put it forward after much consideration as a constructive argument. There is a reference in the document tabled by the Prime Minister to the importance of improving the spirit of co-operation between the federal government and the provinces with a view to reaching a genuine solution rather than suffering more from some of the difficulties which have occurred through the years. There is a grave uneasiness, Mr. Speaker, among the provinces regarding the willingness of the federal government to co-operate in solving fiscal and economic problems faced by the provinces.
The Prime Minister has emphasized this will be a constitutional conference, that fiscal and economic matters will be discussed in the constitutional aspects, but not with regard to their workings under the constitution as it exists. If this is the position, then I suggest it is of the utmost importance that the government give firm assurance to the provinces before the conference begins that it is prepared to co-operate fully in trying to reach solutions to problems which exist. The federal government should not merely give an assurance that it is prepared to confer fully and without restriction on these matters at an early date; it must consider taking some definite steps which would generate trust. There should be concrete terms and a genuine desire to consult and co-operate.
This government has proposed two tax measures which have not yet been adopted.
February 6, 1969	COMMONS
One of these is the estates and gifts tax, which is not a revenue item but is proposed as a measure of reform. This measure is resented by quite a number of provinces because of the lack of consultation, and one can make a good case in suggesting that the provinces ought to have been consulted with regard to this matter. I suggest it would be a concrete indication of the government's desire to cooperate, and might very well substantially improve the circumstances in which the conference meets, if the government were to say they would defer further consideration of this bill until there has been an opportunity for full consultation with the provinces.
I would also suggest that the government give further consideration to permitting the provinces to share in the so-called 2 per cent development tax. This is another source of real irritation. This is another way in which the government could take a concrete step which would give real and convincing evidence of its desire to co-operate in matters which strictly may not be before this conference, and yet may well have a very profound effect upon its success.
[DOT] <2:20 p.m.)
I do not put these suggestions forward lightly, Mr. Speaker. I realize that many of the suggestions which I am putting forward involve problems for the federal government, but I do emphasize the immense importance of the success of this conference upon the constitution. I do emphasize the need of the government of Canada to take every reasonable concrete step within its ability to create a belief among the provinces in the desire of the federal government to participate in creating a sense of confidence. I suggest that this is a wise course, and the government should not risk any failure in confidence resulting from a failure to take one or two steps I have suggested.


Mr. David Lewis (York South):: Mr. Speaker, I also want to thank the Prime Minister (Mr. Trudeau) for letting me have a copy of this document, as he did other leaders of other parties in the house. Of course, Mr. Speaker, it goes without saying that I wish him and his colleagues and the spokesmen for the provinces the very greatest possible success, in view of the importance of the conference, but I must say that I have some profound doubts about the approach which is revealed in the document the Prime Minister has tabled today.
DEBATES	5207
Tabling of Government Papers
First it must be noted-and the Prime Minister really recognized this-that it is a sad and disturbing fact that the constitutional conference which opens next Monday will open in a much less hopeful atmosphere than was the case a year ago. It also seems to me, and I am sorry to be driven to this conclusion, that the paper tabled by the Prime Minister, and his comments today, may not help to move the conference forward in a dynamic and fruitful direction.
The responsibility for this worsening situation is probably shared by all governments to some extent, but in my opinion it lies primarily with the federal government for reasons which I will indicate. Mr. Speaker, the document tabled by the Prime Minister, which I have studied very carefully, in my opinion discloses a myopic view of the Canadian problem, and is again an example of the purely legalistic approach which the government takes on so many matters. To me the document discloses a complete disregard for the basic social and economic storms which daily grow in intensity in Canada.
If you look at the paper you will find it deals with the instruments of government, with the Governor General and the cabinet, the House of Commons and the Senate, the Supreme Court of Canada and related matters. It reiterates the federal government's desire for an entrenched Bill of Rights-to which I will come back in a moment-but neither the paper nor, on the whole, the Prime Minister's comments contains any reference of substance to the problems of taxation, of revenues, of economic planning and development, or of the division of powers and responsibilities for the two levels of government.
If I may put it this way, Mr. Speaker, it seems to me that the provincial leaders come to Ottawa next Monday for bread, and in the spirit of Marie Antoinette the federal government insists that they have cake. No one denies-and I make this comment because I share with others great anxiety about the conference and the future of our country-no one denies the importance of considering the ways in which the instruments of government in Canada must be brought up to date. But instruments of government can be fashioned sensibly only in relation to the functions which they are to perform, and one of the two most important facts facing Canada today is the disarray of our economic and social condition as between the federal government and the provincial governments. The other is the question of language rights.
February 6, 1969

Tabling of Government Papers
I suggest that the overwhelming majority of Canadian people are concerned with finding new and relevant ways of meeting pressing social and economic needs, rather than with the structures of institutions, important though they may be. What I wish to emphasize is that the concentration in the paper on the structural framework may meet with indignant resistance from many if not all provincial leaders, and in my opinion such resistance will be justified.
The time has come for placing at the head of the constitutional discussions the role of the spending power of the federal government, the ways in which all provinces can be assisted to meet their pressing obligations to the Canadians within their borders, and the ways in which we can establish a system of comprehensive planning and co-ordination by both levels of government-planning with regard to priorities, tax rates, tax-mix, budgetary changes and even monetary policy. Nor is it reasonable to expect that these subjects can be discussed on a purely theoretical level. The opportunity must be given at the conference next week for a discussion which is relevant to the immediate problems, as well as to future developments.
I suggest that if the Prime Minister continues to insist that the discussion next week must be confined within a legal constitutional framework, the meeting will come up against insuperable difficulties and the responsibility will be primarily his. In order to succeed the conference next week will require effective recognition and meaningful discussion of the basic social and economic problems which bedevil the rich provinces, and frustrate the poor ones.
In one other respect the atmosphere in Canada has suffered some deterioration. A year ago it looked as if the equality of the two official languages in Canada, was on the verge of becoming a fact, as if the fears and objections had been, if not removed at least allayed. This now appears to have been too rash a conclusion. Perhaps the deterioration started with the ill-advised, shortsighted and rather bigoted actions in a few places in the province of Quebec where the language rights of the English speaking minority were seriously challenged. This is a great pity.
I do not see any reason for this development. Every Canadian, who believes as I and many of us do in the value and richness of bilingualism in Canada as well its contribution to Canada's future unity, cannot but deeply regret this retrogression in that great

province. But deterioration is by no means limited to the province of Quebec. It is evident in some other provinces as well, and was climaxed by the declaration of the three prairie premiers a few days ago with respect to the official languages bill which is now before parliament. I hope with all my heart the premiers of the prairie provinces will be persuaded at the conference to change their position on this point. It will require an immense effort of patience and understanding, in order to regain the ground lost in this aspect of our Canadian life. One can only hope the effort will be made, not only by the Prime Minister and federal spokesmen but also by many of the provincial leaders, in order that it may succeed.
[DOT] (2:30 p.m.)
Finally, on previous occasions spokesmen for our party have made clear our support of the idea of an entrenched bill of rights, including linguistic rights. I want to assure the Prime Minister that our party is firm in its conviction that such a provision in our constitution would enhance liberty and freedom in our Canadian society and deserves the continuous support of all thinking Canadians.
We are engaged in an exercise of monumental importance for the future of the Canadian people. The demand and the need for re-assessing the functions of the two levels of government and for reconstituting the instruments which serve them are recognized by all.
A Prime Minister and a federal government which has a broad and deep vision of the social and economic framework and of the need for fundamental changes can give dynamic leadership to this search. On the other hand, a government which confines itself within arid areas of legalistic argument and a purely structural framework, as unhappily now appears to be the case, can unwittingly shortcircuit an urgent national undertaking. I say these words, critical though they are and are intended to be, because of my anxiety about the present climate and the atmosphere in which the conference will meet, and the arid legalism with which alone the document tabled is filled.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker,
I only had a few minutes before this sitting began to look over this document just handed to us by the Prime Minister (Mr. Trudeau). This paper should create an impact and serve
February 6, 1969

as a working instrument during the federal-provincial conference beginning next week.
Mr. Speaker, I think that the federal-provincial conference which took place last year was a preliminary step to the one commencing next week. As a matter of fact, it has been considered by several persons that the first conference cleared the way on the question of bilingualism. I am of the opinion that the results achieved by the conference beginning next Monday will be proportional to the good will of the premiers and officials participating in it.
Like most people, I have noticed that some of the provincial delegates will be attending this conference with the intention of discussing financial priorities rather than the program proposed this afternoon by the Prime Minister.
This attitude leads me to believe that, for the provinces as a whole, the primary objective would rather be one of economics than one of languages or constitution. Therefore, as the working instrument offered by the central government does not, if I am not mistaken, deal at all with monetary or economic objectives, some provinces will be disappointed in the orientation of the talks.
In my estimation, due to the prevailing attitude, the priority objective is indeed of a constitutional nature, that is constitutional reform. However, I would think that efficient measures should be taken in order to achieve the proposed objectives.
On the matter of Confederation, the government is putting forward four objectives. I would like at this time to quote the third one which is as follows:
To promote national economic, social and cultural development, and the general welfare and equality of opportunity for all Canadians in whatever region they may live, including the opportunity for gainful
work-
Mr. Speaker, not only do I think that this objective has not been reached in our 100 years of Confederation, I even believe that we are still very far away from it, since we have now much too many unemployed, much too many Canadians who do not have jobs, or do not enjoy the comfort they are entitled to. Governments who for the last 100 years have followed one another, just as the present government, have denied them that right, and today again, we are making the same proposal, we are trying to reach the same objectives.
What is the government offering by means of this amendment to the Constitution, by this

Tabling of Government Papers constitutional review? What is it offering in order to reach that objective? I have not seen anything in the document, Mr. Speaker, and if the representatives of the provinces are coming to the conference next week in this state of mind, they will be very disappointed indeed, because the government is not proposing anything to improve the present situation.
I think that this aspect of the constitutional reform was forgotten and that it should be added on the order paper. I hope that the provincial delegates who are crying the loudest for fiscal benefits will at least propose a reform of our monetary system to the federal government, so that it might become what it should be, not a source of revenue to refloat departmental budgets and defray the cost of government administration, but a source of revenue designed to take the money from where it is not needed, when there is a surplus. However, this is not the case right now.
The provincial premiers will be here next week and they will be fighting to find out which level of government will be the first to take from the peoples' pockets the money needed for administrative purposes.
According to me, this is not the purpose of taxation. The government had better offer sources of income to them, which would enable them to administer the provinces, and then establish a taxation system in order to secure surplus money where it can be found, and the provinces should put forward proposals in that connection, since the federal government does not do so.
However, I trust that next week the conference will give all Canadians a glimmer of hope that will enable them to look forward to the days when they will have an equal chance to live, wherever they might choose to settle.
I English]



REPORT CONCERNING MOVEMENT TO WEST COAST PORTS

Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I had very constructive meetings in Vancouver on Tuesday with all elements of the industry concerned with grain movements. Present at the meeting were officials of the Canadian Wheat Board, members of the grain transportation committee and the producers advisory committee to the Canadian Wheat Board.
With regard to the existing backlog in the grain movement to and from the west coast

February 6, 1969
Movement of Grain
ports, I wish to report that the Canadian National and Canadian Pacific railways have given me their firm assurances that the existing backlog, occasioned in particular by the recent severe weather, will be corrected promptly. The elevator companies have assured me that the proper grains, and grades of grain, will be loaded at country points, as has been the case in recent days, in accordance with Canadian Wheat Board instructions, and that box cars will be unloaded without delay at terminal positions.
In private meetings, I was pledged the capacity and the continued co-operation of labour in meeting the challenge of the coming weeks. Given these firm assurances, and with more normal temperatures expected, I am confident that the situation at Vancouver will be corrected promptly. It would be folly of course for me to give an exact date as to when normalcy will return.
The discussions I had in Vancouver were both frank and enlightening. While I do not wish to be specific at this stage, it was conceded during these meetings that mistakes had occurred in recent weeks-mistakes that were extremely difficult to correct rapidly because of the unusually severe weather in January. In order to obtain the full picture of what actually happened, I suggest that hon. members consider hearing representatives of the railways, the elevator companies and the Canadian Wheat Board before the agriculture committee later in March. I consider that, in the interest of the grain producers, the efforts of those responsible in the grain industry should at this stage be directed as a matter of the highest priority to moving grain.
With regard to the demands for a transport controller made by some opposition members, and by premiers of the western provinces as well as by some government supporters, it is the confirmed opinion of everyone concerned-the producer representatives, the Canadian Wheat Board, the elevator companies, the railways and the Board of Grain Commissioners-that the present two co-ordinating committees in Winnipeg and Vancouver are better able to cope with the present situation than would be a transport controller. I am in full agreement with this position.
The situation in Vancouver highlights the importance of the excellent work of the grain transportation committee in the past two and a half years. The committee has fully accepted that in the long run the use of unit trains, larger country elevators and computerized

control are essential. The desirable objective is to establish a more efficient grain handling system in the interest of reducing costs to farmers and maximizing export efficiency. The basic research has now been completed and a new shipping order system has been developed. Basically, this system will involve 50 shipping blocks instead of 2,000 individual shipping stations. The first two shipping blocks will go into operation on an experimental basis in February in the Medicine Hat area, and in the Dauphin area in March. If the system works satisfactorily in these two areas, then it will be expanded for the whole of western Canada.
[DOT] (2:40 p.m.)
This work must be given the highest priority in order to ensure that we are equipped to take care of unusual demand situations. Many representatives at the first meeting of the Canada Grains Council expressed support for the need to modernize our grain handling system.
Finally, Mr. Speaker, I shall be in close touch with the situation in order to ensure that progress is in conformity with the assurances I received in Vancouver.


Mr. J. H. Horner (Crowfoot):: Mr. Speaker, we on this side of the house commend the minister for going out to Vancouver, ascertaining the direct cause of the problem and doing whatever he thought would eliminate or alleviate the difficulties the farmers now have to face. We had hoped he would have made this trip at least a month ago or, in fact, two months ago, when we had the first indication that Japan was not satisfied with the grading quality of United States wheat. The warning signs were then issued that trouble would arise in Vancouver because of the congestion that could well develop with regard to the necessity of having dry and high grade wheat there, and also damp grain which had to be dried, which would perhaps result in a lower grade quality wheat being stored.
The minister in his statement suggested that on his trip to Vancouver he ascertained there was an existing backlog of grain. This is an important admission on behalf of the government. Up until now the government has tried to shrug this problem off by saying it was a situation that arose only because of extraordinarily bad weather conditions. The minister also said that mistakes had occurred in recent weeks. We are interested in this admission by the government.
February 6, 1969

The minister also suggested that the railroad companies had assured him that the difficulty could be resolved, and because of these assurances he felt that the mistakes made in respect of shipping conditions could promptly be corrected. He did not tell us what the causes were and how, all of a sudden, the railroads could assure him that they would improve the situation.
The minister's statement suggests that the railroads have been negligent in the movement of grain up until this time, but they are going to pull up their socks after having talked to him. He did not say this, but he suggested it in his statement. We in this house know the problem that is involved. If there were not enough diesel locomotives with which to move the grain, why did not the government obtain some on a rental basis from the United States?
The minister also suggested that a new shipping order would go into effect, after due consultation with all the people in the grain trade, in an effort to reduce the cost to the farmers. The farmers were not consulted. All the representatives of the grain trade were consulted, except the producers. The producers themselves should have been consulted in this regard. It is suggested that the new shipping order will involve 50 shipping blocks, rather than 2,000 individual shipping stations. The minister's words suggest to me-and we will later examine them closely-the initial breakdown of the quota system, which ensures fair and equal opportunity for all farmers, if the system is properly administered, to deliver their grain.
The minister suggested, also, that the interested parties could be called before the agriculture committee. We commend this suggestion. I am sure the agriculture committee will want to know whether the railroads have been at fault, and why the trouble developed. It will want to know why, if the Wheat Board was at fault, the situation was allowed to develop. The committee will want to know what was the breakdown of communications which created this backlog of grain. We will want to know how the costs to the producer are to be reduced. If 50 shipping blocks are provided, this will in effect make the farmer deliver his grain to a shipping point that is perhaps much farther from the point to which he now has to deliver. This will increase the farmer's cost.
We on this side of the house are concerned about these questions. Surely the farmers should have been consulted before action was
Movement of Grain
taken. The farm unions, the Canadian Federation of Agriculture, and representatives of the producers should have been consulted about whether a transport controller was really necessary. The minister in his statement said that the situation in Vancouver highlighted the importance of the excellent work of the grains transportation committee, which has been in effect for the past two and a half years. Surely if the grains transportation committee is the solution, with one committee in Winnipeg and one in Vancouver, and the minister saw evidence of excellent work there, there should not have been this backlog. If the minister is right, why has there been this ball-up of grain movement? We on this side of the house are not convinced that a transport controller, with absolute authority for the movement of grain, could not play an effective role in clearing as quickly as possible the backlog of grain that exists and the problems we have at Vancouver.
We are very, very disappointed that the minister did not mention anything about the government picking up the demurrage charges for the grain now at Vancouver. The demurrage charges for the ships waiting there should be picked up by the federal government. The minister said this problem arose because of weather conditions. If it did arise because of weather conditions, surely it was an act of God and the government should help the farmers by at least paying the demurrage charges of the ships at Vancouver. The government should at least pay these charges for the first three months of this year. Surely this is not asking too much of the government. If the government wants hon. members on this side of the house to sincerely believe it is interested in helping the producers, it should do something to alleviate the problem in this regard rather than helping the middleman, because by its action the government is just increasing the problems of the producers.


Mr. A. P. Gleave (Saskaloon-Biggar):: Mr. Speaker, it is a good thing the minister finally went west, and saw for himself the situation that we face. I am sorry he has not seen fit to appoint a transport controller, or better still a co-ordinator who will take into consideration the whole movement of grain from the prairies to the west coast. The minister is, in effect, asking us to accept the proposition that the very committees which have failed to deal effectively with the situation in the immediate past are to be depended upon to do so in the

February 6, 1969
Movement of Grain
immediate future. We are supposed to depend on them to deliver the goods.
Essentially, we are still in the "wait and see" situation which we have experienced since last fall in regard to this problem. We will probably have to "wait and see" for some time yet before we know whether this committee is doing effectively the job it is supposed to do. Our figures show there is less Wheat in store on the west coast than there was on January 24. Some 9,300,000 bushels are in store now as compared with about 12 million bushels then. In effect we have failed to keep supplies moving in fast enough to keep pace with the outward movement, let alone build up a reserve of grain so as to take care of sales as they are offered.
[DOT] (2:50 p.m.)
Farmers have a right to expect better cooperation from the grain handling companies and from the railways than they have received. We are asked to run our farms efficiently; this is constantly being preached to us. But our being efficient is not much use if services essential to moving the grain break down. We do not ask these companies to serve the industry out of a spirit of charity, or just to be good to us. They make money out of it, just as the farmers hope to do. But in a period of extreme need they have failed to deliver the goods. We all know this is a time of fierce competition for grain sales on the world market, and that this situation is likely to continue.
I am all in favour of the research which is presently being done to discover new systems of moving grain. If the grain companies and the railway companies can work out new methods in co-operation with the Department of Trade and Commerce, more power to them. But I am not satisfied that, up to now, they have made an all-out effort to get the grain in position.
I am pleased to have the assurance of the minister that steps will now be taken to this end. I hope those responsible for moving the grain do not let him down because, if they do, they are letting the farmers down also. What is badly needed is some confidence on the part of the farmer that this job is being properly handled. I will tell the minister through you, Mr. Speaker, that the confidence of the farmers in the government, the grain handling companies and in the railways is at an all-time low. If the people who purchase

our grain overseas come to the conclusion that we cannot be relied on to deliver it, we are in bad shape.
I shall be pleased to see representatives of the Canadian Wheat Board and of the grain handling companies appear before the Standing Committee on Agriculture. In fact, I asked that the representatives of the Wheat Board should appear before now, but I was told-and I accepted the statement at the time-that they were too busy to do so. I hope they were too busy. Let us not forget that the first order for wheat for Japan was given away back in November.
In closing I urge that steps be taken to keep a day to day tab on shipping orders out of the elevators, and that a similar day to day check be kept of car loadings and their movement. Remember, it is necessary to unload between 550 and 600 cars a day at the terminals in Vancouver if we are to keep up to our commitments. I see the minister agrees with me.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I admit that the first time this serious question was raised in the house, I found it very difficult to determine who was right, since there were so many different opinions. Today, in the light of the minister's statement, I am sure that a problem existed. However, if one cares to set to work and to devote all one's energies to the task, it is possible to find a solution.
I congratulate the minister for his statement following his trip to western Canada to meet all the organizations interested in the movement of grain to various parts of Canada and also abroad.
Having listened to the encouraging remarks of the Minister of Industry, Trade and Commerce (Mr. Pepin), it will be interesting to follow the developments in this matter. I sun sure that all members will be much interested in following progress in the next few days, and that grain handling will be done normally, bringing relief not only to the government, but also to grain producers who had to face a very serious problem.
Therefore, I congratulate the minister and I can assure him that the members of the Ral-liement Creditiste will always be ready to help find a solution to problems which come under his department.
February 6, 1969



CANADIAN CURRENCY


Mr. Ralph Slewarl (Cochrane) moved: for leave to introduce Bill No. C-168, respecting Canadian currency (Effigy of former Prime Ministers).


Some hon. Members:: Explain.


Ralph Wesley Stewart: The purpose of this bill, Mr. Speaker, is to honour former Prime Ministers of Canada by placing their effigies on the obverse side of our currency. This will also give a character to our currency which is more Canadian.
In introducing this bill I think it is well to mention that there is a precedent for this; the effigy of our first Prime Minister appeared on the obverse side of one of our bank notes.


Some hon. Members:: Hear, hear.


Ralph Wesley Stewart: I ask that this measure be referred to the appropriate committee.


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


Robert Lorne Stanfield: I should like to ask the Prime Minister whether he would consider a suggestion I made a little earlier about the government deferring further action on the bill relating to estate tax and income tax until the provinces have been conferred with and consulted. In view of the importance of the matter, would he give it immediate attention?
I should like to ask the right hon. gentleman also whether he would consider consulting with the premiers about the modification of the position the government has taken with regard to the so-called 2 per cent social development tax and the refusal of the government to share this tax revenue with the provinces.


Right Hon.   P.-E. Trudeau@Prime Minister: As to the first suggestion, my comment is, of course, that this proposal was made in the 29180-330
Inquiries of the Ministry budget by the Xvlinister of Finance last October and that he subsequently invited the provinces to discuss it with him. They have had several months in which to do so, and discussions have taken place. As the house knows, the Minister of Finance modified the proposals slightly in the light of those discussions. We felt this was sufficient consultation. Moreover, we repeat that we intend, when we overhaul in a basic way the tax system of this country, to proceed in the same way or alternatively by submitting a white paper. At that time the provinces will have even more time and more specific invitations to submit their views.
On the second point, about giving the provinces part of the 2 per cent tax, or the totality of the tax as some provinces suggest, my only comment is that if there were agreement by the Leader of the Opposition to the effect that he would not mind if we did not balance our budget, or if he recommended we come out with some other tax of our own for the purpose of balancing the budget, then we might be prepared to consider this. We raise money because we need it; we raise money because we believe that the budget should be balanced; and we raise money because we want to use it for federal purposes. We believe that the country has to have the assurance that the federal government is aiming toward a balanced budget, which it would not be doing if it gave the money produced by its taxes to the provinces.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. I ask this question because it too might give some reassurance to the provinces. Is there any possibility that the tax reform measures of the government, the balance of the package that has not yet been disclosed, will be presented in the form of a white paper rather than in the form of a draft bill, as the Minister of Finance indicated previously?


Mr. Trudeau:: Yes, Mr. Speaker, we have considered that possibility. Our first indication was that it would be a bill, because we felt that it would be more useful for all concerned to look at the exact measures in a bill, so that their precise effect could be studied. However, if there is sufficient argument made strongly for a white paper, the Minister of Finance has been telling me that he is prepared to consider that alternative if it appears more helpful to the house and the provinces.

February 6, 1969
Inquiries of the Ministry PARLIAMENTARY COMMITTEE TO EXAMINE PROPOSALS MADE AT CONFERENCE


Mr. G. W. Baldwin (Peace River):: A supplementary question, Mr. Speaker, so far as the government's position at the coming federal-provincial conference and what will happen later is concerned: In view of the fact that the government's position has now been made clear in a white paper, or in the document that has been tabled, and that the conference will probably focus attention upon all problems or differences that exist, and in view of the fact that according to the document that has been tabled there are changes purposed that will materially affect parliament's position and its future role, does the government still have insuperable objections to the establishment of a parliamentary committee following the federal-provincial conference to examine and review the proposals that have been made?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker I think the government would be prepared, if the leaders of the various parties agree, to set some time aside in the house, as we offered at the time of the last federal-provincial conference, to debate the results of the conference or the substance of the paper.
On the establishment of a continuing committee to take up the constitutional problem, I do not believe that this government's position has changed from that of Mr. Pearson's government. We still think that such a committee would cause a great deal of delay in the constitutional process. It is already a fairly lengthy and difficult process, with representatives of ten provinces carrying on discussions with representatives of the federal government at the subcommittee level, at the committee level and then at the ministerial level. If all of this would then have to be processed as well through a house committee, especially a committee of the house whose membership might include opposition members who do not agree on what kind of constitution we need, I think an endless amount of time would be taken. I am hoping we will be able to proceed in a more urgent fashion.
However, this does not preclude a clear statement by opposition parties on what they think we should do with the monarchy, or what they think we should do with the executive function, whether we should keep our parliamentary democracy or adopt a congressional system, and so on. All of these views would be extremely helpful, but we think

that they could be stated quite clearly in a day or two and not require months and months.


Hon. George Hees (Prince Edward-Hasl-ings):: A further supplementary question, Mr. Speaker. Would not the setting up of such a parliamentary committee and having such discussion be quite consistent with the Prime Minister's views which he recently expressed about the desirability of consultation and dialogue, both in this house and throughout the country, on matters of this kind?


Pierre Elliott Trudeau: Mr. Speaker, consultation and dialogue on the constitution have been open, I repeat, since last February when the federal-provincial conference on the constitution began. There has been constant consultation and dialogue between the provinces and the federal government through the continuing committee of officials. In our caucus we have constantly encouraged discussion of the constitution, and we have encouraged it in the country every time we have talked about languages and everything else. We hope that the opposition will make up its own mind on what kind of constitution it wants for Canada and will say so clearly.


George Harris Hees: A further supplementary question, Mr. Speaker. Would not a logical addition to the consultation and dialogue that has been going on be consultation and dialogue within this house among members of parliament in general? Would that not be greatly beneficial to the government?


Pierre Elliott Trudeau: Mr. Speaker, the positions of the federal government, as stated in this paper, have been the object of long discussion within government ranks and within cabinet. All of the aspects of the suggested subjects on the agenda have been the object of dialogue, and we hope that the country will continue this dialogue.


Mr. Diefenbaker:: The country will die!


Pierre Elliott Trudeau: We do not want the government to be prevented from proceeding because the opposition does not know what kind of constitution it wants.


Some hon. Members:: Oh, oh.


George Harris Hees: I think the Prime Minister can do better than that.


Mr. Speaker:: Order, please.
February 6, 1969


EXTERNAL AFFAIRS
David Lewis: Mr. Speaker, I should like to dialogue for a moment with the Secretary of State for External Affairs. Can he inform the house whether the Canadian government is being kept informed of the exchanges among the big four powers concerning the Middle East situation and the search for a settlement in that area?


Hon. Mitchell Sharp (Secretary of Slate for External Affairs):: Yes, Mr. Speaker, I think we are being kept fairly well informed.


David Lewis: A supplementary question. I am glad to hear that. In view of the direct involvement of each of the big four powers in the Middle East situation in ways that I do not need to detail-indeed, it would be out of order to do so-are these four powers keeping in touch with the Secretary General of the United Nations, and are they consulting with the United Nations mediator, Mr. Jarring, or proceeding entirely on their own? If the minister does not happen to have this information now, can he ascertain the position and let us know?


Mitchell William Sharp: I think I can answer fairly directly, Mr. Speaker. The house may recall that when I made a statement on the executions in Iraq I supported at that time the efforts of the four powers to bring about or to assist in a settlement in the Middle East. I also said that I thought the efforts of Ambassador Jarring, who acts on behalf of the Secretary General, should be supported. In the information that has been given to us about the efforts of the big four in this field, it is clear the big four all support and intend to continue to support the efforts of Ambassador Jarring.


Gerald William Baldwin: A supplementary question, Mr. Speaker. Is the minister's idea of a dialogue the same as the Prime Minister's-a long monologue interspersed with short bursts of applause from his docile backbenchers?


John George Diefenbaker: A supplementary question, Mr. Speaker. May I ask the minister whether the question I directed to him some eight days ago in respect of the communication with the
Inquiries of the Ministry government of Iraq by the Canadian ambassador in regard to those ill-timed and heinous executions has received any reaction from the government of Iraq?


Mitchell William Sharp: Mr. Speaker, the message from the Canadian government to the Iraq government was delivered and received, but we have had no other reaction.	:


John George Diefenbaker: On what date was it delivered?


Mitchell William Sharp: I should like to take that question as notice, Mr. Speaker. It was delivered about the time I said it was.


John George Diefenbaker: You had better have more dialogue with your ambassadors.	*

EXPO '67	,
REQUEST FOR SUBSIDIES FOR "MAN AND !


Mr. Bernard Dumont (Frontenac):: Mr. Speaker, I should like to put a question to the Minister of Finance.
He sent us this morning a news release which reads in part as follows:
Mainly thanks to Expo, we have reduced by half our total deficit which now stands at $543 million,	.
In view of the help given by Expo, would the minister be willing to loosen the strings of the purse of the Department of Finance tb save "Man and his World"?


Mr. Speaker:: Once again, I feel the hon. member is repeating a question which has been put several times. On the other hand, in view of the importance of the question, the Minister of Finance may want to give a reply. '


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, if my hon. friend would examine the statement I made last evening, a statement I sent to him and other hon. members, he would also see that our deficit in current account was also decreased during 1968 by another 50 per cent, down to about a quarter of a billion dollars. I think we should all be very proud of that.
With regard to the second part of the question, the government is not, to my knowledge, presently considering further assistance with respect to payments toward Expo, on which the people of Canada spent about $150 million.

February 6, 1969
Inquiries of the Ministry [Translation]


Mr. Georges Valade (Sainle-Marie):: Mr. Speaker, I should like to put a supplementary question to the Minister of Industry, Trade and Commerce.
Since his return, has he had time to find a formula to keep "Man and His World" operating, or is he content to wait for the city of Montreal or the province of Quebec to take the initiative in this regard?


Jean-Luc Pepin: No, Mr. Speaker, I have not had time to do so, but I am under the impression that the chairman of the executive committee of the city of Montreal got in touch with the Prime Minister. I have not yet had time to contact the Prime Minister in this regard.


Georges-J. Valade: Mr. Speaker, I should like to put a supplementary question to the Prime Minister.
Can he give us the results of his meeting with the chairman of the executive council of the city of Montreal?


Mr. Speaker:: I am sorry, but exactly the same question was put yesterday.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister.
Can he tell us if there will be a tripartite commission to deal with the management of "Man and His World"?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, again, my position is unchanged. I shall just repeat what I have already said several times.
I doubt whether the city and the people of Montreal, the people of Quebec and Canada in general still have much money for Expo. We are willing to discuss the proposal, if the province of Quebec and the city of Montreal so decide. I am afraid that the financial difficulties of the province of Quebec and of the city of Montreal, as well as our own, would leave very little room for hope to the members of the Ralliement Creditiste. They should know that there are, for our people, other priorities than that of Expo.


Bernard Dumont: Mr. Speaker, I would like to ask a supplementary question.
Could not the Prime Minister assure the house that a loan without interest, like that which was recently granted to Brazil, might be managed to save "Man and His World"?
(Mr. Benson.]
[English\



POST OFFICE DEPARTMENT


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I wish to direct a question to the Postmaster General about the continuing dispute between his department and the letter carriers over straight-through delivery. Can the minister inform the house whether the letter carriers have advised him of their intention to commence symbolic picketing of post offices in Canada and whether he is again considering altering the date for the introduction of the five-day delivery?


Hon. Eric W. Kierans (Postmaster General):: Mr. Speaker, as soon as the question period is over I am meeting with the national executive of the council of letter carriers. We will explore all relevant questions. I have heard nothing about any picketing, symbolic or otherwise.


Heath Nelson Macquarrie: A supplementary question, Mr. Speaker. Can the minister advise the house of the estimated annual dollar savings which will accrue from the obviously contentious straight-through delivery?


Mr. Speaker:: Order, please. The hon. member is asking for statistical information or for the type of information which I suggest to him cannot be sought at this time.


Heath Nelson Macquarrie: On a point of order, Mr. Speaker, a very important part of the public service of Canada has threatened industrial action over this matter. I am wondering whether it is not important for us to know the money value of what is involved.



EXPEDITIOUS DELIVERY OF PENSION CHEQUES

Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, I should like to ask the minister whether he can give the house the assurance that the pension or any welfare cheques will be received on Friday whenever there is a long week-end.
I am asking this question, Mr. Speaker, because this year there are six months during which the delivery of cheques will be delayed for four days or more.


Mr. Speaker:: I have serious doubts whether
this is a supplementary question. Would the hon. member for Joliette have a question that would be a legitimate supplementary one?
February 6, 1969	COMMONS DEBATES	5217
Inquiries of the Ministry
POSITION RESPECTING ROD SERVICE CONTRACT	EXTERNAL AFFAIRS


Mr. Roch La Salle (Jolielie):: Mr. Speaker, I should like to ask a supplementary question.
I should like the Postmaster General to tell the house whether he intends to reassure the employees of Rod Service Limited and whether the contracts between Rod Service Limited and the department will be honoured until March 1970.


Eric William Kierans: Mr. Speaker, the question is under consideration now.



IMMIGRATION


Mr. Stanley Haidasz (Parkdale):: Mr. Speaker, I wonder whether the Minister of Manpower and Immigration would inform the house about the decision of the Immigration Appeal Board which last Monday reheard the case of the Polish refugee seamen. Does he intend to review and improve the regulations affecting refugees before ordering them to submit to a special inquiry?


Mr. McCleave:: Mr. Speaker, on a point of order, I suggest that since this matter does not involve the responsibilities of the minister the question is out of order. In any event, the answer to it has been made public information through other media.


Mr. Speaker:: Order, please. The hon. member was one of the hon. members, I believe, who asked questions about the very same matter. He was unhappy when I suggested the question might be delayed to the following day.


Hon.   All@: Mr. Speaker, if I might answer the question, I think the house will be interested in knowing that the Immigration Appeal Board dismissed the appeal of the nine Polish seamen, and four others. But in the exercise of its authority it ordered the department to allow the seamen to remain in Canada for a two-year period, after which time it will be determined whether they ought to be landed. In the case of two other Polish refugee seamen the board has reserved its decision.



O.A.S.-POSSIBILITY OF CANADIAN MEMBERSHIP

George Harris Hees: I can hardly believe my luck in being recognized, Mr. Speaker. May I direct my
question to the Secretary of State for External Affairs. In his meeting yesterday with Mr. Plaza, the Secretary General of the Organization of American States, did he advise the Secretary General that Canada is considering entry into that organization or in any way
moving closer toward that position?	'


Mitchell William Sharp: Mr. Speaker, in my conversation with the Secretary General I said what all hon. members of the house know, that we are considering the question and have not yet determined our position.


Mr. Gordon L. Fairweaiher (Fundy-Royal):: A supplementary question Mr. Speaker. Will the minister make available the document given to him by Mr. Plaza, which is described as outlining a legal view of how Canada's relations with Cuba would be affected if Canada joined the O.A.S.?


Mitchell William Sharp: Mr. Speaker, the hon. gentleman sent me notice of this question. Perhaps I ought to correct one impression left by the news report. The Secretary General did not give me this memorandum personally; he gave it to the department. I should be very happy to discuss with him whether he would like to have it tabled. Other than that, we are quite willing to do so.



RURAL DEVELOPMENT


Mr. W. B. Nesbill (Oxford):: Mr. Speaker, I have a question for the Minister of Forestry and Rural Development. A few days ago the hon. member for Huron (Mr. McKinley) and one or two other hon. members asked the minister questions about ARDA grants to be made available in the province of Ontario for purposes of drainage. At that time the minister took the question as notice. Is he now in a position to answer that question?


Hon. Jean Marchand (Minister of Forestry and Rural Development):: Mr. Speaker, I do not recall saying that I would take this matter into consideration. On the contrary, I

February 6, 1969
Inquiries of the Ministry think I answered that decisions concerning drainage programs were the responsibility of the province and not of the federal government.
A limited amount of money is earmarked for drainage in our budget. All the commitments of the province will be respected but within our budgetary limitations.


Wallace Bickford (Wally) Nesbitt: A supplementary question, Mr. Speaker. Am I to take it from the minister's answer that the federal government does not contribute anything to the province of Ontario at the present time for this purpose?


Jean Marchand: Of course we are, Mr. Speaker.



HOUSING


Mr. Henri Laiulippe (Compton):: Mr. Speaker, in the absence of the minister concerned, I shall put my question to the Prime Minister.
Would he tell the house what steps the government intends to take, in co-operation with the provinces, to implement the recommendations contained in the Hellyer report?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, the minister concerned was not scheduled to be in the house today. I think that he should be here tomorrow.



AGRICULTURE

[Stage Direction]
P.E.I.-PHASING OUT OF EXPERIMENTAL '	FUR FARM
Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I would like to direct this question to the Minister of Agriculture. Does the government have any plans to continue with the work which was carried on at the experimental fur farm in Prince Edward Island, which will soon be phased out?


Hon. H. A. Olson (Minister of Agriculture):: I will take this question as notice, Mr. Speaker, and give my hon. friend a more detailed answer, although I am sure he is aware that a section of the new facilities on the farm in the Greenbelt will be devoted to research on fur-bearing animals.



THE BUDGET


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct my question to the Minister of Finance. As the hon. member for Saint John-Lancaster would probably say, it is nice to have the minister here on one of his days off.
My question is based on a statement the minister made to the Montreal Bond Traders Association last evening in which he stated that once in a while bond dealers like to have statements as to the government's financial position. Will the minister treat parliament the same way, and will he now assure us there will be a budget presentation this spring?


Edgar John Benson: Mr. Speaker, I have neither said there will or will not be a budget this spring. However, I indicated to the house I am quite willing at any time to review the financial position of the government. This is what I told the bond dealers last evening.



CONSUMER AFFAIRS


Robert Lorne Stanfield: Mr. Speaker, I would like to direct a question to the Minister of Consumer and Corporate Affairs, who looks too unmolested to remain that way. When may we hope to learn the names of the members of the proposed prices and incomes commission, and the precise terms of reference of that commission?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: No decision has been made in that regard, Mr. Speaker. For purposes of the terms of reference I am still consulting with various groups in Canada. On Tuesday next I am having a rather lengthy meeting with some of the officers of the Canadian Labour Congress and meetings with other groups will follow. No decision has yet been made on the membership of the board.


Robert Lorne Stanfield: A supplementary question. Will we have to wait as long for the names of the commissioners as we had to wait for the white paper?


Stanley Ronald Basford: I hope not. The Leader of the Opposition had some reservations about the policy when it was initially announced. If he would like to make any suggestions to me as
February 6, 1969

to who should be on the board, I would be open to such suggestions.


Mr. A. D. Hales (Wellington):: A supplementary to the Minister of Consumer and Corporate Affairs. Is it the intention of the Minister to establish or set up a research laboratory in connection with his new department?


Stanley Ronald Basford: Not precisely, Mr. Speaker. The standards division of the Department of Industry, Trade and Commerce was transferred to me in July. A survey of governmental laboratories available to the department has been made. We feel it would be unnecessary to set up our own specific laboratories. We are concerned, as are all departments of government, with keeping our expenditures as low as possible.


Some hon. Members:: Oh, oh.


Gerald William Baldwin: Have you looked at the estimates?


George Harris Hees: That is the humorous side of the news for today.



OFFICIAL LANGUAGES


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Prime Minister. With regard to the Prime Minister's important statement Tuesday, relating the languages bill to English language rights in Quebec, will he at the first opportunity explain what those rights are and where they are set out?


Right Hon.   P.-E. Trudeau@Prime Minister: I am not quite sure I understand the question, Mr. Speaker. The language rights in Quebec are defined by section 133 of the constitution, and by the laws that the province desires to enact under that constitutional provision. It is, of course a question of law.


Mr. Speaker:: I was going to suggest to the hon. member that the question as he asked it seems to be very wide in scope. He is asking for a constitutional interpretation. I have the impression this is a debate which will take place at the constitutional conference and I do not think this should be entered into at this time.


Robert Muir: thank the Prime Minister for his reply, and I have a supplementary question, Mr. Speaker. Is the government studying the St. Laurent amendment of 1949, embodied in section 91(1)
Inquiries of the Ministry of the B.N.A. Act, which prohibits parliament from legislating language rights?


Pierre Elliott Trudeau: Yes, Mr. Speaker. In answer to another hon. member of the Conservative Party the other day I referred to section 91(1). There are many aspects of language bills, Mr. Speaker. They also come under property and civil rights. The right to contract in one language or another can, for example, be determined by the province.



TRANSPORT


Louis-Roland Comeau: Mr. Speaker, I have a question for the Minister of Public Works. In view of the good news regarding the Digby-Saint John Ferry, will he make an announcement to the house soon in connection with the construction of terminals?
Hon. Arthur Laing (Minister of Public
Works): Mr. Speaker, it would be our hope that we shall have the terminals and approaches ready when the ship is ready. I made that statement in Saint John the other day.


Mr. J. P. Nowlan (Annapolis Valley):: supplementary question, Mr. Speaker. Has there been a firm agreement signed between the government and the company on the arrangements for the terminal facilities? If so, will the minister table that agreement?


Mr. Laing (Vancouver South):: I do not
think that agreement is a responsibility of my department.


Mr. Thomas M. Bell (Saint John-Lancaster):: A supplementary, Mr. Speaker. As a result of the minister's visit to Saint John, is he planning for a greater percentage of his departmental expenditures in the maritime provinces, in view of the fact that central Canada got everything this year?



IMMIGRATION


Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. In view of the fact that an Immigration Appeal Board has been set up in Montreal, does the minister intend to set up an Immigration Appeal Board in Toronto in order to save appellants time and expense?

February 6, 1969
Inquiries of the Ministry


Hon. Allan J. MacEachen (Minister of Manpower and Immigration):: The board is setting up a pilot project, Mr. Speaker, based in Montreal. A separate board has not been set up there. The question of a similar project in Toronto will be given consideration in the future.



INCREASED SHIPMENTS THROUGH WEST COAST PORTS-QUOTAS

[Stage Direction]
Right Hon. J. G. Diefenbaker (Prince
Albert): Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. Following his optimistic pep-up statement of a little while ago, so the western farmers will have some idea as to what they may expect can he tell the house what is the projected increase in the number of bushels exported through the Pacific coast ports that now can be expected, in view of the changes which have been made? Second, what hope is there of an increase in the quota for the various parts of western Canada? They are operating under very low quotas with the result that the farmers' credit facilities have almost been exhausted.
Jean-Luc Pepin: If I could answer the first question, Mr. Speaker, I would be God. I cannot give an answer because, as the right hon. gentlemen knows, there are constant negotiations between the Wheat Board and foreign importers. I cannot say what the exports will be from west coast ports. With respect to the quota, the chief commissioner of the Wheat Board has said that he hopes to make it a six-bushel quota in due course.


John George Diefenbaker: Mr. Speaker, I have never ascribed the powers or authority of the Deity to the hon. gentleman, and I want that to be perfectly clear. But with the return to reasonable normalcy in climatic conditions surely there must be some expectation of what the increase in exports will be during the next month or so over what they have been during the last two months? I know the minister has figures on that.


Jean-Luc Pepin: Mr. Speaker, I have the figures comparing last year with this year. They show for all wheat grades up to January 21 this year 152 million bushels compared with 125 million bushels last year, and with respect to all grains 178 million bushels this year

up to January 21 as opposed to 158 million bushels last year.


John George Diefenbaker: Are those figures for exports by way of the Pacific coast?


Pierre Elliott Trudeau: It does not matter as long we sell it.


John George Diefenbaker: Surely the minister
knows the figures for the west coast?


Jean-Luc Pepin: I would like to be generous-


Mr. Speaker:: Order, please.


Jean-Luc Pepin: Mr. Speaker-


Mr. Speaker:: Order. Would the minister resume his seat. The hon. member for Halifax-East Hants.


Jean-Luc Pepin: Mr. Speaker, may I make a clear supplementary statement in answer to the right hon. member for Prince Albert, because I know he is impatient to know the figures. The figures for exports last year were about 355 million bushels. The chief commissioner of the Wheat Board has said in recent days that he hopes to do as well this year and possibly go up to 350 million bushels, but I have not got exact figures for the west coast. I will get them for tomorrow.



CANADIAN BROADCASTING CORPORATION


Robert Jardine McCleave: Mr. Speaker, I wish to direct a question to the Parliamentary Secretary to the Secretary of State, of which I gave the hon. gentleman notice. It has urgency because of the meeting next Monday of the broadcasting committee in Montreal with employees of the Canadian Broadcasting Corporation. Would the Parliamentary Secretary use his good offices to help the members of that committee by speeding up the return to Order No. 66 made by this house on January 29 and set forth at page 636 of Votes and Proceedings'?


Mr. Robert Sfanbury (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I would be glad to do that. It is being translated so that the hon. member will get it in both official languages at once. I hope it will be ready tomorrow.
February 6, 1969



POST OFFICE DEPARTMENT


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, may I direct a question to the Postmaster General. Could he tell the House whether he has instructed postal staff across Canada not to waste time trying to find new addresses for people who have moved and, if so, would he say what advance notice the public had of this new directive?


Eric William Kierans: The answer is no, Mr. Speaker.



HOUSING


Henry P. Latulippe: Mr. Speaker, I should like to direct a question to the Minister of Finance.
Could he tell the house whether the government intends to decrease taxes on building materials and the interest rates on mortgages for residential housing in order to comply with the recommendations contained in the Hellyer report?


Edgar John Benson: Mr. Speaker, unless I misunderstood the question, I believe I answered it a day or two ago, but if I have misunderstood it I will get
supplementary information for the hon. member tomorrow.



BUSINESS OF THE HOUSE

Mr. Macdonald (Rosedale):: Mr. Speaker, if
I may I would like to make the weekly statement on business for the next week. Tomorrow, Friday, we will commence with the report stage of the bill to establish the Freshwater Fish Marketing Corporation, item No. 30 on the Order Paper, to be followed by continuation of second reading on item No. 23, the bill to amend the Canadian Overseas Telecommunication Corporation Act. We will follow that with item No. 27, the Precious Metals Marking Act, which is at the report stage. If we complete those stages tomorrow we will then turn to Bill C-154, item No. 18, with respect to pesticides.
On Monday it would be our intention to call for third reading of the Precious Metals
Business of the House
Marking Act, assuming that the report stage has been adopted on Friday and then, on the same basis, the third reading of the bill dealing with the Freshwater Fish Marketing Corporation. We would then call second reading of the bill to amend the Export and Import Permits Act, which is item No. 49, and thereafter third reading of items Nos. 33 and 41 respectively concerning the Aeronautics Act and the Navigable Waters Protection Act.
On Tuesday, as I have already indicated, we would call again the motion for second reading of the omnibus Criminal Cede bill on the understanding that if all those who wish to speak do so before the close of the sitting that day the debate would be adjourned so that the Minister of Justice, who will be absent next week at the federal-provincial conference could come into the house the following week and, in closing the debate, reply to remarks that have been made.
On Wednesday and Thursday of next week it would be our proposal to call Bills C-154 and C-155, and depending upon the progress of those bills it would be the intention then to call Bill C-151, the Fisheries Improvement Loans Act, which I understand passed the committee today.


Gerald William Baldwin: Mr. Speaker, may I ask the hon. gentleman whether it is quite clear that the omnibus amendments to the Criminal Code will only be called for Tuesday, and that the other items mentioned by the hon. gentleman will be proceeded with on Wednesday and Thursday irrespective of whether the motion for second reading of the Criminal Code bill has been completed on Tuesday?


Donald Stovel Macdonald: Yes, Mr. Speaker. With further consultation it might be possible to call that bill again later in the week, but it is hoped to go ahead with the farm bills on Wednesday.


Mr. Schreyer:: On a point of order, Mr. Speaker, since the President of the Privy Council has given the order of business for the next several days I think it is appropriate to ask the minister what he has in mind to deal with the report of the committee on transportation. That committee presented its second report to the house on December 3 last. More than two months have passed and there has been no motion for concurrence made. Could the minister indicate what will be done in this regard?


Donald Stovel Macdonald: Mr. Speaker, the hon. member may not be aware of the
February 6, 1969
5222	COMMONS
Income Tax Act and Estate Tax Act fact that that report has been made the subject matter of a reference to the Standing Committee on Privileges and Elections. It seems appropriate that that committee should arrive at its findings on that particular report before any further action is taken on it.


Edward Richard Schreyer: Still on the point of order, Mr. Speaker, I would like the minister to indicate how much longer the Standing Committee on Privileges and Elections will be studying that report?


Mr. Speaker:: Order, please. The hon. member cannot ask this question. He is now dealing with the deliberations of a committee and this cannot be debated.



GOVERNMENT ORDERS


[Stage Direction]
The house resumed, from Wednesday, February 5, consideration of the motion of Mr. Benson for the second reading and reference to a Committee of the Whole of Bill C-165, to amend the Income Tax Act and the Estate Tax Act, and the amendment thereto of Mr. Saltsman (p. 5191).
Mr. Barney Danson (York-North):: Mr. Speaker, I choose to rise in support of this new estate tax legislation because along with my colleagues I have studied its features and consider it not only very good legislation but legislation which reflects the Liberal position in relation to taxation. In doing so it highlights the principal differences between the various political philosophies represented in this house.


An hon. Member:: A big "L"?


Barnett Jerome Danson: A big "L" which has a small "1" connotation. It is legislation that is a distinct departure and, I believe, an improvement over that which previously existed. The recognition of the equal yet very special status of the widow is important. It recognizes the changing role of women in our society and their fundamental rights. At the same time it recognizes that they are still women, and for that we are truly grateful.
Now for the first time widows will not be faced with agonizing decisions for which they are frequently unprepared or unequipped at a time when they are making, I believe, the most difficult adjustment of their lives.

The small farm or small business will almost always be exempt. Those not so small will pay some tax as before. In some cases they will pay a little less and in others a little more depending on the circumstances, but in no case will their situation be so drastically different that it will change the ultimate disposition of the estate.
The demise of the family farm is a matter of serious concern to society, to government and, of course, to the farmers themselves. I submit that this problem exists with or without estate taxes. The prime concern of the farmer, indeed of all businessmen-and the farmer today must operate as a businessman-is that of economics, productivity and profitability. Another major factor in family farming is the willingness or lack of willingness of sons to remain on the farm. More and more farm children are choosing educational pursuits and skills which attract them to other endeavours and regions, particularly urban centres.
This legislation is being used as a smokescreen by some to place the blame for a much larger problem on the shoulders of the government. I hope it might have some beneficial results. Just as the farmer has had to change from the horse to the tractor, just as he has had to become more scientific in his approach to basic farming, the farmer now will have to be more inclined to seek needed professional advice in preparing his estate. He should consult a lawyer, accountant, trust company or even a well qualified life insurance underwriter to determine the structure of his assets in his lifetime and in preparation for his death.
The mortality rate among farmers is the same as for all Canadians, 100 per cent. I think the farmer or small businessman who seeks such advice will be surprised to learn how little, if at all, the new amendments affect him. If they do he has the pay-out period of five years now so that he can plan his pay-back of estate taxes if they are burdensome. Under a special appeal to the minister I am sure that in special circumstances he could have an even longer period.
In so far as penalizing success is concerned I suggest that this reflects a type of thinking that went out the window generations ago. Most of us in our society recognize that those who for a number of reasons are blessed with material success above the norm have an obligation to those less fortunate. Most men of wealth accept also the responsibilities of wealth; if they do not, they should.
29180-331J
Income Tax Act and Estate Tax Act
If these amendments meant that all wealth-was to be completely equalized and if they did not allow for reasonable retention of the main fruits of one's efforts, initiative and entrepreneurship, they would indeed warrant'-some of the hysterical criticism that the social and economic Neanderthals are hurling, but I suggest there is still a great deal left. I am not at all convinced that substantial inherited wealth is at all desirable for the proper development of one's children. We want to give these children a good start in life, a good education and an opportunity to prosper, but I do not think we necessarily want to give them a future on a silver platter. A sense of values comes into play here. Children today are questioning these values. I suggest to the gentlemen opposite and to my left that their value judgments, if indeed they are judgments at all rather than reflex actions, are far out of tune with our times and with the very children for whom they allege they speak.
This past weekend I had a constituent call me who was very concerned about this bill because he thought his estate was being absolutely devastated. In speaking to the man a little further and finally realizing who he was I found out that his estate consisted of many millions of dollars. The problem was whether he was going to leave $4 million or $5 million, $3 million or $5 million-it really does not matter very much. That man was very concerned about giving his children a good start. I suggest that children with $2 million or $3 million are not getting a bad start. On the other hand, there is the converse; I am not really sure this is a good start for kids.
There is an exception which should interest us as legislators. There is a very interesting tradition of inherited wealth being beneficial. This is in a case where families-the Ken-nedys perhaps are the best example-have gone into public service and have used that wealth constructively, even ill-gotten wealth, I think, in some cases. I should not mention names of families because some people might think I am singling out the Kennedys or the Rockefellers. But the result of the efforts of these families has been really quite valuable. It is families of this type we should choose to emulate among those who are fortunate enough to inherit such wealth.
There is another important economic factor involved. I refer to the continuation of the family business with family management. In my experience, for every example of successful second or third generation family management of a business there are at least ten
February 6, 1969
5224	COMMONS
Income Tax Act and Estate Tax Act examples of failure. Professional management is becoming more essential and this nostalgia for the good old days perpetrates a myth from which, if continued, the industries of this nation could suffer severely.
I do not believe the new estate taxes in themselves will result in additional sales of family businesses. I hope that such businesses will continue to be sold when the next generation does not have the drive, the desire or the skill to ensure their dynamic continuance. There are lots of Canadian dollars looking for investment as indicated in the York University study, but even foreign dollars combined with dynamic management are far preferable to home-grown and inherited mediocrity.
The pay-out period gives opportunity to dispose of the inheritance on a fair basis and make the proper deal that should be made. It will not involve a forced sale because there are many people looking for businesses today.
Then we have this talk about killing initiative. The people who are supposedly affected by the highest rates are generally beyond the stage where money is the sole object. The money, the profitable balance sheet, is the scoreboard of success. These men want the challenge, the accomplishment, even the power, power to be used responsibly, I believe, and for constructive purposes. The men with ideas, the leaders, the entrepreneurs, the men who provide the dynamics of our society and economy have many motivations. Money is only one. After a certain level of accomplishment its value is used only as a measuring stick of success or for achieving greater success. Someone has said that most men are self-made but that only the successful admit it. I am not sure that is always true.
* (3:50 p.m.)
My friends in the N.D.P., I regret, fail to recognize the value of this device and the need for a realistic measurement of accomplishment. They somehow consider profit immoral while the greater immorality is the lack of profit, for it is profit that makes investment possible. It is profit that makes higher wages possible. It is profit that makes research possible, and it is profit that makes taxes possible. It is the misuse of profit or its achievement by improper means which is truly immoral. This immorality is almost as great as the toleration and encouragement of this immorality by others, including government.
This is a most interesting debate because the problems we are talking about are problems of success and of affluence. We have


people now with sufficient assets to be concerned about estates, although we find a lot of their concerns are unfounded. How much more fortunate we are to face these problems than problems of the lack of prosperity. Certainly there are areas and pockets which have been shamefully neglected and with which we should be dealing much more vigourously, but in the main we are all living better than ever before.
Our problems are problems of priority in necessities which we considered luxuries a few years ago. Most people today do not face the difficult decision of whether to buy a car but really how expensive a car and, in a growing number of cases, how many cars. Many people are worried about whether to buy a coloured television set or a second black and white set for the recreation room or the bedroom, or a new outboard motor or a skidoo. This does not apply to all our population but to a very large and growing segment of it.
We have so much going for us in this country that we should really be counting our blessings. Certainly we have problems that we must face and tackle vigourously. Some of these will be solved and others will not, and when we solve some then there will be new ones we never expected. The danger is in losing perspective. Some cry gloom and doom whenever we make a progressive step, as we are now in updating and humanizing our estate laws, changes I support with considerable enthusiasm, and it worries me terribly that there is an element of a lunatic fringe which brands it socialist or neo-communistic. Some of my friends opposite are encouraging this hysteria. I am afraid they are backing themselves into a corner from which they may never emerge, but perhaps that is a good thing.
We must have a responsible alternative to the government, but by encouraging this hysteria and this lunatic fringe hon. members do not prove themselves to be a responsible alternative. Instead, they run the risk of losing their credibility. I think this is a pity because one never knows but that in 15 or 20 years the people of Canada might want a change of government. Those who seek to fill the position at that time may well have lost this responsibility. I do not suggest they have done so; I just suggest it is possible.
Hon. Robert L. Stanfield (Leader of the
Opposition): Mr. Speaker, it has been made pretty clear by the Minister of Finance (Mr. Benson) that we are not dealing here with a
February 6, 1969

revenue measure. This measure is not put forward for the purpose of raising money but as a measure of social and tax reform. The minister told us yesterday that only 5 per cent of the people of Canada would ever pay estate taxes. I do not know whether he intended to suggest that what happens to the other 95 per cent is of little concern-I do not suppose he really meant that-but that was one possible inference to be taken from his attitude.
When the minister put forward his bill in its initial form, which would have meant taxing very small estates, he must have known that it would have affected hundreds of thousands of estates. The minister shakes his head, but considering an estate of $20,000 to $40,000 and the constant deterioration of the value of money, it would have begun to affect a very substantial proportion of the Canadian people.


Edgar John Benson: Three thousand estates.


Robert Lorne Stanfield: My friend made his speech and, incidentally, failed to give me some information which I sought.


Edgar John Benson: On a question of privilege, Mr. Speaker, my hon. friend asked yesterday for information which I have asked the department to provide. It has not come to hand but it is on the way along with answers to questions posed by the hon. member for Edmonton West (Mr. Lambert).


Robert Lorne Stanfield: It is surprising to me that the minister would have presented this measure to the house without having this information at his fingertips.


Edgar John Benson: I have it in the department.


Robert Lorne Stanfield: affect the moderately small businessman whose role in the economy the government is always so loud in praising. Lord knows, he is having a hard enough time anyway holding out and making his way against the corporate giants who are constantly surrounding and pressing him.
So the question is not the abolition of succession duties. It is not whether we should have progressive rates of taxation. The question is whether the progressive rates proposed in this measure are wise. The provisions of this bill represent a sharp increase in the maximum rates which hits the middle range income people most of all. I suggest the bill is likely to have a substantial effect on the incentive and drive of this kind of man. I believe the hon. member who preceded me would be inclined to agree that this is so. The hon. member was a little confused and perhaps did not realize the effect of this bill on the small man. He was perhaps confused by the telephone call he received about the man who is likely to die with an estate of $4 million or $5 million. He was quite right not to be concerned about him particularly but quite wrong not to be concerned about the man who has built up a small enterprise which will be hard hit in this way.
The Minister of Finance said that the estate of the family farmer who has one son and dies leaving a farm worth $200,000 would be subject to a tax of about $43,000. He said the son should be prepared to take this on as a mortgage. But if that farmer was moving ahead and increasing his capital, as he should have been to improve the operations of the farm, the chances are that the farm is already subject to a substantial mortgage. The minister can make abstractions and quote examples which suit his convenience, but they may be very far from appropriate to the conditions that exist. This bill will mean that if a man spends some years on a farm he will have to make sure that he does not enter into new undertakings which will involve him in substantial debt in relation to his enterprise, because in addition to anything undertaken in this way his son will have to take on a further heavy mortgage in order to meet the increased estate taxes that the minister is trying to impose in this bill.
I would like to know, and we should know for the purpose of this debate, how much money we are talking about. How much does it cost the Department of Finance to grant these exemptions as between husband and wife? The minister came in the house yesterday and built a straw man of $200 million.
February 6, 1969	COMMONS
We are not talking about $200 million. We are not talking about $100 million. What are we talking about-$10 million, $15 million, $20 million? How can we discuss this measure intelligently when the minister cannot tell us what is involved?


Edgar John Benson: 1 will tell you tomorrow.


Robert Lorne Stanfield: Mr. Speaker, the minister says he will tell me tomorrow.


Edgar John Benson: Or later this evening, if you stay in the house.


Robert Lorne Stanfield: I am just as capable of staying in the house as my hon. friend. When the Minister of Finance is trying to persuade the house that we should adopt certain tax increases for certain categories of people, 1 think he should be able to tell us, and it was his duty to tell us long ago, how much money he is talking about. We need to know the amount he is talking about so we can judge whether the risks we are running with regard to the incentives of people, for example, are in any way commensurate with the amount of money involved. Is the Minister of Finance going to endanger the initiative of people in this income or property range?
This bill will possibly have a very profound effect on agriculture and also the more prosperous parts of the country which are moving ahead rapidly. The businessmen in these areas will be adversely affected by the provisions of the bill. Is the minister going to do this for $10 million, $20 million, or something of this sort? Why cannot he tell us? It is all very well if one adopts the position of a socialist economy and takes the attitude that these incentives are not important. That is at least consistent. But if we believe that this kind of drive and energy is important to the maintenance of private enterprise, we have to exercise some care in the degree to which we impose these taxes.
I repeat that we should certainly subject these people to succession duties, we should certainly subject them to progressive rates of taxation, but let us do it in a sensible way. I say again that the Minister of Finance is not hitting the wealthy man, he is not hitting the multimillionaire. He tried to hit the fellow right at the bottom but was scared off and is now hitting the fellow in the middle. He is not doing anything very substantial about the wealthy man. I do not know why we should be asked to grant an unlimited exemption in respect of transfers between husband and wife. Suppose a man has $50 million; why
DEBATES	5227
Income Tax Act and Estate Tax Act should we be asked to permit him to transfer the whole amount free of tax to his spouse?
I think there is a lot of nonsense in this bill. Incidentally, the bill obviously makes it more difficult for anybody to take reasonable care of an aged parent either during the lifetime of the child or after his or her death. There can be no question about this. The bill makes it much more difficult to meet many of the obligations involved in ordinary family life. That is why I say it is half-baked. Certainly, no reasonable person would criticize the provision for easy transfer to a wife. There is no question about that. The question is whether the other things which have been done have not made it unnecessarily difficult to help other dependants, members of the family, possibly including an aged mother, whether they are not imposing an undue burden not on the wealthy but on the people in the middle.
[DOT] (4:10 p.m.)
Now, sir, I would think there are better ways of raising the revenue that is involved. Perhaps that is a foolish thing to say because the minister does not seem to know how much revenue is in fact involved. But I suspect there are better ways of raising this money, possibly by means of some kind of tax on non-essential items of consumption. I agree the bill is not as bad as it was initially and I congratulate the minister on at least backing away from some of the absurdities involved in the original proposal. When it was first put forward in the house he refused to acknowledge the injustice and the confusion he was creating. Somebody, thank God-I do not care who it was-persuaded him that the action he was contemplating was too foolish for even this government to get away with.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I suggested earlier in the day that having regard to the bad feeling which has arisen between the federal government and the provinces as a result of measures such as this, the bill should be deferred at least until there has been further consultation. A reasonable course for the minister to follow would be to incorporate this proposal in his white paper. I suppose the hon. gentleman will tell me he was so anxious to help the wives and the widows that he could not delay things. Well, I have no objection to his going ahead to deal with that aspect, but I believe far more consideration ought to be given to the other questions involved such as
February 6, 19G9
5228	COMMONS
Income Tax Act and Estate Tax Act the possibility of providing for other members of a family. In addition, much more consideration should be given to means by which the money which the minister is yielding by making these concessions with respect to transfers between husbands and wives can be replaced.
Without taking any more time, Mr. Speaker, I say that the procedure followed by the minister with respect to consultation with the provinces and with the people of Canada was wrong and inexcusable. It involved a breach of an undertaking given specifically to the provinces and generally to the Canadian people that tax reforms would be incorporated in a white paper or in a draft bill. I am glad to note from what was said earlier today that the government appears to be having second thoughts about its position in this regard and will perhaps come forward with a white paper as it was originally supposed to do.
The house is now being asked to deal with a piecemeal, haphazard measure. We shall certainly support the minister in granting reasonable relief to a reasonable extent in connection with transfers between husbands and wives, but we do not wish to be a party to actions which will be detrimental to relations with the provinces, which will perhaps cause damage to an important sector of the economy and place an unjust bill on hundreds or thousands of individual Canadians who find themselves having to accept responsibility as virtually the sole support of a mother or a father.
I think this is a bad bill on a number of counts. I hope the minister can be persuaded, if not by me then by some of his more sensible backbenchers or colleagues, to put the whole thing into cold storage until it has been thought about a little more.


Mr. Steven Otto (York East):: Mr. Speaker,
I have listened with great attention to the right hon. gentleman-


Robert Lorne Stanfield: Not yet.


Steven Otto: -and to the hon. member for Edmonton West (Mr. Lambert). I do not intend to review the specific problems they mentioned, but I thought I should answer the question raised by the Leader of the Opposition (Mr. Stanfield) when he asked why a wife should be exempt from tax as this proposal suggests.
I believe the minister has presumed, as we have the right to presume today, that a wife has a very important role to play in the
IMr. Stanfield.]

acquisition of an estate. It is not the husband alone who is responsible for its accumulation. Very often today the wife works to help improve her family's position. That is one reason for bringing forward this reform.
For the last three or four months we have been hearing hon. members ask: where are the reform measures which this swinging Prime Minister (Mr. Trudeau) was going to introduce? Where are these reforms?


An hon. Member:: A good question.


Steven Otto: Well, reform means change. But it seems to me that the opposition-and I am not speaking now only about hon. members opposite but also of opposition on this side of the house-tends to say: we want the reforms but don't change this, or don't change that. How can there be reform without change? This is the issue which is involved in the bill before us.
I agree with the Leader of the Opposition that this measure should possibly have been introduced along with other reform measures. I believe Carter was right when he said that if it was intended to introduce a large number of changes, especially in the taxation field, they should all be introduced together, not piece by piece. You see, Mr. Speaker, the people who will be hurt by this bill are not likely to forget it when we introduce another measure later which will be of benefit to them, for example, the single taxation of corporations. On the other hand, members on the other side who are pleased to see the introduction of this bill will condemn us anyway if we remove the burden of double taxation from corporations. All these changes should have been introduced together. Possibly the Leader of the Opposition was right on this point.
However, there is another point to be considered. It is essential that as much time as possible be given to those who are responsible for the planning of estates. The disposal of estates has to be thought out carefully and in advance. Wills have to be made. Notice is now given that when this bill becomes law all those responsible for estates must prepare themselves.
Let me deal with some of the objections raised specifically by the hon. member for Edmonton West. He criticized the bill because it would mean, he said, the dispersion of capital. This argument was based on the presumption that all inherited wealth is immediately invested in corporate or other fields of investment. This is nonsense. Inherited
February 6, 1969

wealth is not, in the main, the source of investment capital. I should like to know where the hon. member got the facts upon which he based his presumption. I do not think that presumption is valid. Nor, as the hon. member for York North (Mr. Danson) pointed out a little while ago, is the presumption valid that there is something sacred or sanctified about the continuation of family corporations. I think he was accurate when he said that approximately 10 per cent of such corporations are successful and the majority not. It is not likely that we will get succession of ability merely because a son's father had brain and drive. This is not so.
[DOT] (4:20 p.m.)
Consider also that when most corporations reach the stage where succession duties become a problem a move is made toward public subscription, at the same time maintaining the power structure within the family unit or among friends. If there is any one thing in Canada that is the cause of inefficiency so far as industrial growth is concerned, it is that we tend too much to keep control of corporations in the hands of family units.
Mr. Porter, in his volume "The Vertical Mosaic", was quite right when he said that it is one of the detriments of Canadian corporate society that about 85 per cent of our wealth is controlled by 190 families. You cannot expect the constant and certain succession of ability merely because the father of the family left sons behind him to run the business. History and experience teach that the opposite is true. Facts from across the border indicate that it is much more advantageous to introduce new blood into a corporation than to keep it in the family. However, I accept the fact that the hon. gentleman was obviously quite successful in the business in which he engaged before becoming Leader of the Opposition and premier of Nova Scotia.
Let me say a word about farms. The hon. member for Edmonton West (Mr. Lambert) said that in cases where farmers have two or three sons working on the farm to make the enterprise successful who do not have any income of their own, it would be unfair when the father died to expect them to pay succession duties or estate tax. Let me put the proposition another way. What would the hon. gentleman say if I had stated that it would be quite proper, using the same analogy, to allow an executive in a plant to draw an income of, say, $4,000 a year and to receive $200,000 or $300,000 worth of corporation shares tax free when he retired? He
Income Tax Act and Estate Tax Act would scream blue murder. But the fact is that even though farmers' sons do not draw any income or pay income tax, they are still taxed at the death of their father.
As I have suggested to the minister, I would be in favour of letting beneficiaries amortize their inheritance, if they so chose, over a period of ten years by paying income tax annually and then having a lump sum tax free. But they cannot have it both ways. You cannot put one group of people into one category and, as the minister said, put another group in another category.
Further, the hon. gentleman said that there was something very evil about corporation farms rather than the preservation of family farms. It seems to me there is a place fox-family farms if people want to continue farming. But many western farmers are not really family farmers as much as men running a business. They have to watch the stock market and feed prices in the same way that other businesses have to watch for certain indicators. Provision should be made in other legislation to give them the same opportunity to receive capital and an adequate supply of labour. But the small family farmer is not going to be hit by this bill. He will not have an estate to worry about. It is the large farmer who runs a big farm as a business who will have to worry, the same as other large businesses; they are both in the same position. I can see no rationalization whatever in putting farmers in a position different from other citizens.
The corporate farm, which was condemned, is not in issue here. However, I submit that in some cases it can be justified. After all, if we are going to consider farming as an industry we have to make it as efficient as possible. If corporation fanning is the most efficient way for the industry to operate, then what is wrong with it? If the purpose were to have farms for the exclusive use of large corporations, that would be a different matter. But that is not the purpose. The purpose of farming is to produce the most on the least amount of land in the most efficient way.
Let me now get down to the main issue, which is whether we acknowledge the fact that there is such a thing as inherited privilege and whether we are going to perpetuate it in the face of world opinion and the movement forward. Everyone wants to leave a mark on this earth. It seems that Canadians and Americans especially want to leave something for future generations. But the fact is that future generations do not want it. They
February 6, 1969
5230	COMMONS DEBATES
Income Tax Act and Estate Tax Act want to make a start on an equal basis. They want education, and this we are providing. They want the same chances as other individuals. Certainly I think that the idea of leaving behind some privilege is passe; it is square. It is only our generation, our square generation, that is so concerned about it.
Let me put it another way. If we accept the idea of inherited privilege what, then, is the purpose of the legislation to assist education? If I read it correctly, it seems to me that we have said it is no longer important whether one parent has worked hard, whether he has saved money, whether he has the means to grant the privilege to his children of going to university, and another parent has not. What we have said is that we are going to put both in the same boat. If one student is a good student but does not have wealth behind him, he is put in the position where he can borrow money and also receive an education.
If hon. gentlemen opposite are insistent upon preserving inherited privilege, or if they question, as the Leader of the Opposition did, the rate of estate tax, which is really the same thing, then why should we not say that a man whose great grandfather made a great contribution politically should be entitled to certain privileges? How can you argue inherited privilege in the one case but not in the other?


Edward Richard Schreyer: He should be appointed to the Senate.


Mr.   Oiio@: 
Edgar John Benson: May I rise on a point of privilege, sir? Earlier this afternoon the Leader of the Opposition was pressing me for a figure. I told him I would provide it as soon as it came down to me from my office. I wish to say that I gave him that figure before he left the house a minute or two ago. It was $45 million.


John (Jack) Henry Horner: Mr. Speaker, I rise at this time firmly convinced that a
February 6, 1969

major battle confronts the agricultural industry with respect to the estate tax proposal the minister brought down last October 22. In kicking off this debate the minister said, "Oh, there has been a lot of misrepresentation." He complained of how everything he said had been distorted. His attitude was that everyone in the country, every tax consultant, farmer and lawyer was wrong and he was right. He reminds me of the lady watching her son, who had just enlisted in the army, marching and saying, "Johnny is in step but everybody else is out of step."


An hon. Member:: You should say "Benny".


John (Jack) Henry Horner: Yes. It should be "Benny is in step and everybody else is out of step."
When I went to the minister's office before the Christmas recess to speak to him about the estate tax he said, "Don't fear, rest easy. I am not as bad as everyone thinks I am. I am not harming the farmers as much as the newspapers say or as much as people think." Well, I am afraid I did not rest easy and the minister did not put my fears at rest with his proposal. I will give my reasons for my attitude in my speech.
I am pleased to understand the N.D.P., position on this legislation. When it was first introduced on October 22 I suspected it was socialist legislation. Now that the N.D.P. has fully adopted its proposals I am convinced it is socialist legislation. This is very interesting because the minister said the government was introducing a new philosophy in legislation. This measure was to remedy some existing injustices and inequalities. He said: "That is all we are doing, just transferring money." It turns out he is transferring $45 million to government coffers. If the present legislation merely seeks to transfer money from one part of the community to another, then clearly it is socialist legislation.
Many Canadians were aware of the Prime Minister's thinking along socialist lines. Many were blinded by his supposed charisma but it did not fool the farmers of western Canada. They have mistrusted socialist ideas and that is why they did not send too many of his party to Ottawa. Certainly their mistrust of the Prime Minister was not misplaced, because his government in fact has introduced socialist legislation. Let us see what the Winnipeg Free Press had to say about this matter:
The new rates have been described by Saskatchewan's Attorney General Daryl Heald, as confiscation, rather than a tax.
DEBATES	5231
Income Tax Act and Estate Tax Act
He went on to say that this measure will make it increasingly difficult for a farm to be passed on to a son or daughter. Mr. Runci-man, who was appointed president of the new Grains Council, also said that the new tax would make it difficult to pass a farm on to a son or daughter. I could read many quotations supporting this view. The president of the Farmers' Union of Alberta described the tax as vicious in its effect on farmers. Yet to all this the minister says: "They are all wrong; I am the one who is right."
It is interesting to note that the N.D.P. position is that there is no reason why a man should not pay a tax of $43,000 when he inherits a $200,000 estate. Personally I have long been sceptical of socialist principles, and the present legislation is an example of socialist principles being carried into legislation.


Stanley Howard Knowles: Would the hon. member permit a question? Have we said we are supporting this legislation?


John (Jack) Henry Horner: Have I misinterpreted? I gathered from remarks made by hon. members belonging to his party that his party generally supports this legislation.


Stanley Howard Knowles: Will
the hon. member permit a further question? Is he not aware that we have moved an amendment to the second reading of the bill?


John (Jack) Henry Horner: I am aware of the amendment. If the hon. member's party does not support this legislation and if I have incorrectly interpreted the attitude of the hon. member's party, I hope that members of that party will correct my impression in speeches yet to be made in this debate.
9 (4:40 p.m.)
It has long been my belief that in a free country such as Canada a man should be able to benefit from the fruits of his labour, the education he can acquire and the risks he is prepared to take against the elements of nature, competition or whatever it may be. It is also my belief, as well as the belief of the Conservative party, that in some respects a man should benefit from a thrifty attitude. There is much talk about efficiency. Generally speaking people should benefit from thrift, particularly with regard to the family farm. A farmer should benefit from all the members of the family co-operating. However, this estate tax makes it difficult to achieve any benefit.
February 6, 1969
5232	COMMONS
Income Tax Act and Estate Tax Act
It is interesting to note that the hon. member for Coast Chilcotin (Mr. St. Pierre) had much to say about the tax and how it would apply to farms. I refer to an article in the Calgary Albertan concerning an interview with the hon. member for Coast Chilcotin in which he said this new tax really hits the ranchers. I do quite a bit of farming. I can assure you, Mr. Speaker, it hits the farmers too. He said that the average ranch shows an average return on capital invested of 0.85 per cent, and yet the minister wants to take away a lot of that capital.
Farmers throughout western Canada, in fact all across Canada, have worked hard to build up economic units to pass on to the next generation. In his speech the other day the minister said there would be little effect on the farmers. I recommend that the minister read the article which appeared in the Calgary Albertan. I am sure he will find it interesting. The article states:
I'm worried that the estate tax is going to accelerate the sale of these ranches to foreigners. People just won't have the money to pay the estate taxes. But nobody here will concede this.
The farmer in the just society is the forgotten man, and this has been apparent ever since the difficult fall harvest.
In his opening remarks the Minister of Finance, as reported on page 5181 of Hansard, had this to say:
During his lifetime the farmer or the small businessman benefits from government programs and from the general well-being of the country-
Is the minister suggesting that, because the farmer benefits from government programs, in the end the government should get all those subsidies back by taking half the farm when the farmer is through with it? Is that the type of Indian-giver he is? I am certain that when previous governments established rates or guarantees for the sale of products of the farmers the government did not expect the money back. The minister went on to say:
-as much or more so than the salary or wage earner benefits... An estate tax may place a special burden on estates in which the major assets are not liquid. I admit that. But how great is the burden?
The whole point of my speech is how great is the burden. Every farm leader in Canada has said the burden is great, the tax is vicious, it is confiscation, not a tax, it is the ruination of the family farm. Every farm


leader across Canada states the burden will be too great, but not the Minister of Finance.
Why will the burden be particularly great at this time? Looking at the agricultural industry we realize that slowly and surely the average age of today's farmer is becoming higher. The approximate age for farmers in Ontario is 60 years; Alberta, approximately 55; Saskatchewan, approximately 58. These farmers are at an age when they are concerned about having their sons or daughters inherit their farms.
Another reason it is too great a burden at this time is the accelerated inflation over the last ten years which has caused the price of farm land and machinery to increase vastly. The government and the Farm Credit Corporation are aware of this. The government set up an inquiry to see whether the prices of farm machinery could be lowered or, if not, kept at the same level. Every year since 1963 there has been a price increase of 4.5 per cent. The government has promoted a sharply inflationary condition. In his speech to the 122nd annual meeting of Canadian life insurance companies, Mr. Graham Towers said he was fearful governments could no longer control their spending. This is -apparent in the 10 per cent increase tabled in the government's estimates, which represents a $1.2 billion increase in spending. We are talking about a shift of $45 million.
As the Leader of the Opposition (Mr. Stanfield) stated, it is not the wealthy people who will carry the burden. It is in fact a shift from the very wealthy to the middle class people and in particular that group of farmers who- have toiled many long hours to build up efficient units. These are the people who will be hurt. The minister admits it is a burden. He calls it a special burden. The minister is not a farmer but he takes it upon himself to say the burden is not too great. He has disregarded farm leaders and practically every farmer in the country. When he stated in his speech that it is not too great a burden, he did not quote any agricultural professors.
The Economic Council of Canada, when tabling its report last fall, stated that the agricultural industry needed more capital. I say to the Minister of Finance, what will this tax do regarding capital in the agricultural industry? It will take capital out of the industry. The report stated that one of the things drastically needed in the agricultural industry was greater capital because Canada
February 6, 1969

is almost 20 per cent behind the United States. The minister has given no recognition to this fact in his budget or in this bill.
[DOT] (4:50 p.m.)
Under the previous provisions of the Estate
Tax Act allowance was made for a $10,000 once in a lifetime gift of farm property from one parent to a son. The Canadian Federation of Agriculture sent a telegram to the minister asking that the level of this exemption be raised to $25,000. The minister admits that this tax is a special burden but he does not think it is too great a burden. Surely it would not mean too great a loss of revenue if he increased this figure to at least $30,000. However, the minister blindly closes his eyes and turns his back on the farming community. I suppose he adopts the idea that half the farmers must go and then the government will deal with the remaining half.
In his speech on February 5 the minister said that this legislation would actually cause a reduction in estate tax on farms worth up to $160,000. The minister circulated his own tables to show the amount of tax involved. Those tables show the third way in which estates are generally willed, especially farm estates. An estate is left in trust with the income to the widow during her lifetime and the assets divided equally among the children on her death.
The tax on a $80,000 estate if a family had one child used to be $2,600. Now it will be $8,700, a marked increase. On a $150,000 estate the tax will now be $26,700.


Mr. Roberis:: Will the hon. member accept a question?


John (Jack) Henry Horner: How much time have I?


An hon. Member:: Forty minutes.


John (Jack) Henry Horner: Very well.


John (Moody) Roberts: Would the hon. member like to give the tax figure on that same size of estate if the estate if left half to one child and half to the widow?


John (Jack) Henry Horner: I will deal with that later.


John (Moody) Roberts: It is zero.


John (Jack) Henry Horner: Please let me deal with that in my own time. Let us look at an estate of $150,000. Under this bill the tax will be $26,700. Under the old provisions it was $6,800.
Income Tax Act and Estate Tax Act There is a marked increase. Surely the minister cannot pull the wool over the eyes of members of the House of Commons as he has attempted to pull the wool over the eyes of all the farm leaders and farm spokesmen. Surely he cannot pull the wool over the eyes of the hon. member for Coast-Chilcotin and over the eyes of other hon. members from rural areas.
Let us now take a look at Part IV covering estates left outright, with one half to the widow and one half divided equally amongst the children. Therein lies the difference. The government is actually taxing only half the estate at this time and naturally the rate is lower.


Edgar John Benson: On a point of order, Mr. Speaker, I am sure my hon. friend would not want to be wrong. The tax figures quoted in all these examples are the complete tax after both persons have died and the estate is moved on to the children.


John (Jack) Henry Horner: The minister is making a very interesting statement and it will bear close examination.


Barnett Jerome Danson: Will yours?


John (Jack) Henry Horner: I hear the hon. member for York North (Mr. Danson) making some comment. In his speech he suggested that all farmers should see a lawyer, a tax consultant, an insurance adjuster or someone like that. Certainly, because he is in the legal profession. So is the Minister of Finance.


Barnett Jerome Danson: On a point of order, Mr. Speaker, I really must have this straightened out. I am not a lawyer and I would like the record to be clear.


Edgar John Benson: Neither am I.


John (Jack) Henry Horner: The hon. member is not a lawyer but he is certaintly soliciting business for the lawyers. If the estate tax is not high enough on farmers at the time of their death he wants to herd them together and clip them when they are still alive. Farmers cannot afford any more taxes.
The minister suggests that the provision in Part IV is the total tax on the total estate. Then why is he so concerned about not increasing the exemption to farmers? Why is he so concerned about the special burden? Why does he admit it places a special burden on liquid assets? It is interesting to note the
February 6, 1969

Proceedings on Adjournment Motion minister's interest in the agricultural industry, but his disregard for it is also very evident.
In his speech the minister said that 95 per cent of the people escape paying estate tax altogether, that in fact all the estate tax collected is paid by 5 per cent of the people, and that half of the amount collected in estate taxes is collected from estates of $500,000 or more. This is the way it has been up until this time.


Edgar John Benson: No, the way it will be.


John (Jack) Henry Horner: That is the way it will be. Well, that is a very debatable figure. If the minister had a record of being in any way correct in his forecasting one could perhaps put more faith in him, but as his record has not been too good in that regard one can hardly blame the farmers for paying very little attention to his forecast.
Dealing with estates worth $500,000 I point out that there are many farms and ranches in western Canada worth that amount, in fact, nearly 50 per cent of the farms and ranches in western Canada. In his opening statement the minister said that the maximum estate tax rate would be reduced from 54 per cent to 50 per cent, but he is lowering the amount of the estate to which the 50 per cent rate will apply. The maximum rate used to apply to an estate worth $1,500,000 or more. Now it will apply to estates of $300,000. I call it five o'clock, Mr. Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Bechard):: Order. It is my duty, pursuant to Standing Order 40, to inform the house that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Vancou-ver-Kingsway (Mrs. Maclnnis)-Consumer Affairs

establishment of joint committee on price stability; the hon. member for Victoria-Haliburton (Mr. Scott)-Transport-leasing of water lots on canal systems; the hon. member for St. John's West (Mr. Carter)-Housing- removal of tax on building materials.
It being five o'clock the house will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills, public bills.



MOTIONS FOR PAPERS


Mr. Barry Mather (New Westminster) moved:: That an order of the house do issue for a copy of all letters, reports, studies or other data in respect to an exchange by the Royal Canadian Mounted Police, the Royal Canadian Air Force, the Department of National Health and Welfare, the Geological Survey of Canada and the National Research Council of Canada regarding the sighting in 1967 by Mr. Steve Michalak of an unidentified flying object.
[DOT] (5:00 p.m.)
He said: Mr. Speaker, I do not want to take up the time of the house at any great length on the matter referred to in notice of motion No. 19 which asks for an order for a copy of all letters, reports and so on, the details of which you have just read. I do, however, have a few points I should like to put forward. First, there is the failure of the government to table the papers referred to and the significance of that failure as it bears upon the rights of members of parliament in representing the people of Canada. Second, I wish to comment on the present situation in our official dealings in respect of reported sightings of u.f.o.'s or flying saucers.
At the outset may I say that in respect of u.f.o.'s I am an agnostic. I neither believe nor disbelieve; I just do not know. I have no special interest in the matter. Indeed, the first time I heard the term u.f.o. I thought it had to do with the United Farmers of Ontario. So I am by no means a flying saucer devotee.
My reason for bringing up the matter in the first place and later and in asking for the tabling of papers was simply to comply with a request from constituents who, as are many other Canadians, are much interested in what reportedly happened to Mr. Stephen Michalak in eastern Manitoba last May when he was prospecting near Falcon Lake. According to Mr. Michalak, who later published a pamphlet on his experience, about noon that day he saw two oval-shaped objects glowing an intense scarlet approach overhead. While one stopped in mid-air the other landed on a flat rock nearby. After a few moments its companion resumed flight and swiftly disappeared. Overcoming his shock Mr. Michalak approached the landed object. He described the appearance of it in detail. He later touched it and the touch burned his rubber glove.
February 6, 1969

Mr. Michalak states that the object tilted up and released a sharp beam of heat that scorched his chest. It continued upward and disappeared. Immediately after this Michalak states that he experienced severe headaches and nausea and with difficulty returned to his home in Winnipeg. He later lost weight and developed a rash and other symptoms which were never clearly diagnosed.
It was this reported happening and the interest by my constituents which prompted me to write the National Research Council section which receives or records such sightings. I asked for a report on it. I was told that R.C.M.P., R.C.A.F., Health and Welfare and Geological Survey of Canada reports have been received by the branch, and while these would be made available to me to read if I would go to that office the branch would not agree to table the material.
It seemed to me then and now that this material should be made available to all members of parliament in the usual way so that it could be studied by any interested member. With this in mind, in October, 1968, I asked for the production of papers. When this was refused and the data was not tabled in the house I took the step of transferring the matter for debate.
I believe that in the field of unidentified flying objects the Canadian government does not show enough serious concern. The position of the government agency is exemplified by a statement in a letter to me from the head of the upper atmosphere research section of the radio and electrical division, National Research Council of Canada on September 27, 1968, which reads as follows:
In March of this year the N.R.C. accepted the responsibility for filing and cataloguing all u.f.o. reports sent to the federal government. We keep these on the non-meteoritic sighting file which is maintained as an auxiliary file to the fireball report file. This office acts as a co-ordinating headquarters, etc... It should be understood that we do not actively solicit non-meteoritic sightings, nor do we in general carry out field work of such sightings unless they show a fairly definite promise of giving useful scientific information-
In other words, there is no real or active interest by this division in the very large and conceivably important area of u.f.o. information. This government agency is out of tune with the desire for more knowledge in this new field by a great many serious-minded North Americans. It is estimated that no less than five million Americans now claim they have seen u.f.o.'s, and the United States government recently received a detailed report by a special body which spent some years and
Motions for Papers
half a million dollars to investigate alleged sightings. The fact that the report was of the opinion, in brief, that there was nothing to the stories and reports of u.f.o. incidents immediately aroused criticism by a number of scientifically oriented groups who are or appear to be very well informed to the contrary.
At any rate, I believe that in Canada we should have a more tangible policy regarding u.f.o. investigations. I think the government should table all information available pro and con about these phenomena. I think we should also consider that our own little earth is now sending out flying objects, and if life exists on other planets the flying objects which the U.S.A. and the U.S.S.R. are sending into space may very well appear to that form of life to be unidentified flying objects.
In conclusion, Mr. Speaker, I find the following brief comments by some well informed people of interest: "The existence of these machines is evident and I have accepted them absolutely"-Air Chief Marshal Lord Dowding; "I believe extra-terrestrial intelligences are watching the earth and have been visiting us for millenia in their flying saucers"-Dr. Hermann Oberth, rocket scientist; "I believe in u.f.o.'s"-Knut Hammarskjold, Director General of Internal Air Transport Association; "the hypothesis that these u.f.o.'s are extra-terrestrial surveillance... I regard as most likely"-Dr. James McDonald, physicist; "at first, without any question at all, I thought it was stuff and nonsense, but not any more"-Dr. J. Allen Hynek, astrophysicist.
I have two points. I think the papers should be tabled so that we can all find out what they say, and I believe Canada through its agency in this field should take a more serious interest in establishing the facts.
[DOT] (5:10 p.m.)

Mr. Yves Fores! (Parliamentary Secretary to the President of the Privy Council): Mr. Speaker, the hon. member for Surrey (Mr. Mather) has filed a notice of motion transferred for debate in which he asks that an order of the house do issue for all letters, reports, documents, etc. from the R.C.M.P., the R.C.A.F., the Department of National Health and Welfare, the Geological Survey of Canada and the National Research Council concerning a flying saucer or at any rate an unindentified flying object sighted by Steve

February 6. 1969
Motions for Papers
Michalak who, if I understand well, is a constituent of the hon. member, and we understand his interest for that individual.
The hon. member raised two points, the second of which precisely takes into account the fact that he is not an expert in the matter of flying saucers and I think that I could say so myself.


An hon. Member:: You have never been in one?


Mr. Forest:: I have never travelled in a flying saucer.
But the hon. member mentioned that he was specially concerned about his constituent, and his intervention was aimed at drawing the government's attention to those who claim having seen flying saucers. He mentioned a report recently published in the United States, which does not give much credit to the statements of alleged witnesses. I do not think the government will establish a royal commission on that matter, but I am sure the Department of National Defence and the Research Council of Canada carry out routine investigations about those who claim having seen, in the skies over Canada, unidentified flying objects.
But I am coming back to his first question, in which he asked that the documents be tabled to enable hon. members to read them and get a clearer picture of the situation.
The hon. member will understand that the government does not have much to conceal on a subject like this. As to the request of the hon. member for the complete file, the latter includes some documents which are marked "confidential", such as advice, opinions or reports which have not usually been made public in the past for obvious reasons. If the government were to divulge publicly these opinions or confidential documents every time it is requested to do so, I would think that the departmental officials concerned would not be very inclined to offer candid opinions or to submit complete reports.
On the other hand, I want to inform the hon. member that I have the complete file containing some reports, including articles which have been published in newspapers by various reporters. It is a complete file from which a few pages have simply been removed. They are interdepartmental reports or others originating from officials who may have expressed opinions which in no way affect the nature of the file and the publication of which would not be in the public interest. Any other procedure would, I think, 
create a dangerous precedent that would not contribute to the good administration of the country's business and such has been the policy of the present and preceding governments.
If the hon. member is willing to approve this suggestion, we would be ready to table a complete file immediately and hon. members could thus be informed of this interesting question raised by the hon. member for Surrey.


Barry Mather: If I am in order, I should like to thank the hon. member for the offer he has made and accept it.


Yves Forest: Mr. Speaker, 1 am ready to table the report asked for by the hon. member for Surrey, according to the proposal that he has just approved, with the reservation that some confidential documents have been removed from the file.


The Acting Speaker (Mr. Bechard):: Under the circumstances, does the hon. member for Surrey wish to withdraw his motion.''


Barry Mather: I do, Mr. Speaker, and I again thank the government for tabling the documents.


The Acting Speaker (Mr. Bechard):: By
unanimous consent the motion is withdrawn. Order discharged and motion withdrawn.



SUPREME COURT OF CANADA


[Stage Direction]
Cm the order:
Mr. Fortin-That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a return showing, since the Supreme Court of Canada was instituted (a) the number of judgments rendered by judges whose mother tongue was French and, of those, the number of judgments rendered (i) in French (ii) in English jb) of the judgments rendered in English by judges whose mother tongue is French, the number of judgments respecting Quebec (c) the number of judgments rendered in French by judges whose mother tongue is English.
[Stage Direction]
Mr. Jean-Charles Cantin (Parliamentary
Secretary to the Minister of Justice): Mr. Speaker, I have one remark. It is not, for myself or the government, a matter of taking the hon. member by surprise. I know he is not here. I want to state this: There is absolutely nothing else to add, with regard to this
February 6, 1969
[Stage Direction]
motion, to the statement made by the Minister of Justice (Mr. Turner) himself on January 15 last.
The Acting Speaker (Mr. Bechard):: Order.
The motion stands.


Gerald William Baldwin: The motion has not been put.


Yves Forest: Mr. Speaker, I know that the hon. member for Grenville-Carleton (Mr. Blair), who introduced this private bill, as well as the others, items 2 and 4, under the heading Private Bills, is still sick. Therefore, I move that these items be allowed to stand.


The Acting Speaker (Mr. Bechard):: Is it
agreed?


Some hon. Members:: Agreed.



PRIVATE BILL


[Stage Direction]
The house resumed, from Tuesday, December 17, consideration of the motion of Mr. Allmand for the second reading and reference to the Standing Committee on Finance, Trade and Economic Affairs of Bill S-9, respecting British Northwestern Insurance Company.
John Leroy Skoberg: Mr. Speaker, I am sure everyone was taken by surprise at the rapidity with which the government decided to table the papers requested by the motion of my colleague. I am trying to locate the bill now before us.
In looking at the title of this bill one could presume there is very little objection in so far as the actual overt intention is concerned, but once again I suggest that this is the case in relation to many bills that come before us. I am wondering what the purpose is behind this proposed change of name. As I understand the bill it is an act respecting British Northwestern Insurance Company. I begin to wonder why the hon. member opposite introduced it in the house at this time and what might be behind the apparent intent.
[DOT] (5:20 p.m.)
I wonder whether changing the name to Eagle Star Insurance Company of Canada- unfortunately I cannot yet pronounce the French name-is required for a specific purpose. It seems to me that if the British Northwestern Insurance Company has been able to carry on a good business with the people of
Private Bill
Canada, there is no great advantage in changing the name to Eagle Star Insurance Company. I wonder whether this company has a specific reason for changing its name, and if it has-


Mr. Allmand:: Mr. Speaker, I wonder
whether I could ask the hon. member a question?


John Leroy Skoberg: Yes.


William Warren Allmand: The hon. member has wondered out loud about certain things. He has wondered whether the company is going to do this or that. I ask the hon. member if he was present during the three other debates on this bill or whether he has read the explanation, which he will find in Hansard, when the bill was introduced.


John Leroy Skoberg: I think I was present during one of the debates on the bill, and I can assure the hon. member that I am quite capable of reading and of realizing exactly what is involved in the interpretation of the bill. I also assure the hon. member that we can understand it. However, there is still doubt in my mind as to the exact intent of the bill. I am sure the intent has not been spelled out in its entirety.
I am amazed that the hon. member would introduce a bill merely to change the name of the company when the purpose and intent of the bill are in some doubt, to say the least. Various reasons have been suggested for the change of name. The committee which studied Bill S-9 asked a number of questions in this respect. We realize that the bill has been dealt with by the other place. The representatives of the company were present at that time, and it would have been better if a more detailed explanation had been given with regard to exactly what is involved in the bill.
I realize that the Superintendent of Insurance dealt at some length with the bill, an act respecting British Northwestern Insurance Company changing the name to Eagle Star Insurance Company of Canada. But it seems to me there are other matters involved than just the change of name. Any time a company comes before the people of Canada through this house to change its name only, I wonder whether there should not be further investigation.
This is a federally incorporated company transacting fire and casualty insurance business in Canada. British Northwestern Insurance Company has transacted this type of business in Canada and there is no reason

February 6, 1969
Private Bill
why it should come before the house to change its name. Obviously it does not need to do this in order to stay in business. The present name of the company must mean something by way of honour and integrity to the public of Canada, and I am sure the people of this country have a justifiable pride in the company.
When one reads the transcript of the evidence given before the committee one realizes that there is reason to ask questions about the company. It is registered under the Canadian and British Insurance Companies Act. It has operated under its own name and also formerly through two subsidiary companies. It intends to concentrate its efforts in the company mentioned in the bill and wishes to change its name in order to be identified more closely with the group. In my opinion, when you attempt to identify yourself with a particular group it is a straight indication that you are trying to take advantage of that group. There is no reason to change the name of the company because, after all, in most cases the people remain the same. If the people remain the same, the intent and purpose of the company or any other group in society must be the same so far as the public is concerned.


William Warren Allmand: Mr. Speaker, could I ask a further question of the hon. member?


John Leroy Skoberg: Certainly.


William Warren Allmand: The hon. member suggests that there is not much purpose in changing a name if most of the people remain the same. Would he kindly explain why his party changed its name from C.C.F. to New Democratic party five or six years ago, when they are still the same people?


Mr. Peters:: That should be good for half an hour.


John Leroy Skoberg: Mr. Speaker, I would be only too happy to oblige the hon. member by explaining why the New Democratic party, with its broad base in Canada, adopted that name. I know that other parties have changed their names for specific purposes. If Your Honour would allow me to do so, I could spend perhaps 15 minutes answering the hon. member.


The Acting Speaker (Mr. Bechard):: Order. This is not the place to answer such a question.


John Leroy Skoberg: Then I ask the Chair why the question was allowed in the first place. It
seems strange-


The Acting Speaker (Mr. Bechard):: Order.
The question was out of order.


John Leroy Skoberg: I am pleased to hear that, Mr. Speaker. I must refer briefly to what the hon. member said about changing names, because I believe this is the basis of the bill before us. Although the name is to be changed, the people in the company remain the same. British Northwestern Insurance Company wishes to change its name without giving any good reason. There seems to be something wrong somewhere in the back rooms of the insurance companies.
One has only to read the evidence given before the committee to realize that a considerable number of questions were asked about the company. One question was whether there now was such an entity as the Eagle Star Insurance Company. The Superintendent of Insurance answered that there was such a British company, the parent of the company we are considering. I am very surprised that the hon. member opposite has not answered this question and settled the doubt in my mind as to the name.


William Warren Allmand: I did, three times.


John Leroy Skoberg: 

tendency for the company to transact business which was formerly written by the parent company. The question remains: where does ownership lie. I am sure than an examination of many of the applications which have come before us would show that in many cases ownership rests in the United States, where corporate enterprises have been set up, possibly to avoid some of the inequities of our present taxation system. The bill we were discussing earlier may do something in this direction, though I doubt it. It is my contention that Canadians should concern themselves more directly with the affairs of insurance companies of this type. In this case, it may be that the directors of the company are Canadians, but it is almost impossible to find out where control will ultimately lie, and where the money which is to be syphoned off will be used.
There is another question which arises in my mind in connection with the transfer of policies between companies with different names. How will our senior citizens, who have great faith in the British Northwestern Insurance Company, feel about the change of name to Eagle Star? I believe such a change would have an important psychological effect on a good many people, and this is something to which we should give consideration.
Another question arises in connection with the increase in capitalization for which the company is asking. The explanatory note tells us:
The purposes of this bill are to change the name of the company to Eagle Star Insurance Company of Canada ... and increase the capital stock of the company from $2,000,000, divided into 50,000 shares of $40 each, to $5,000,000, divided into 125,000 shares of $40 each,
I am sure that when the bill was discussed earlier many hon. members were wondering about the reason behind this wish to increase the capital stock of the company. One fact did come out. We were told that the bill was really for the purpose of incorporating a new insurance company which would conduct all classes of insurance except life insurance. Well, it has been proven that with the number of insurance companies in existence already the general public is getting well fleeced. One can be well assured that the public will certainly pay the large dividends these people expect after changing their name to something else.
There is one other point I should like to raise. As the hon. member for Notre-Dame-de-Grace (Mr. Allmand) has mentioned, it has
Private Bill
been discussed on one or two occasions earlier. It has to do with the nature of the explanatory notes. I do not think they give the house enough information to enable members to know exactly what these companies are asking for, and in my opinion we should be given more informative explanatory notes when we are dealing with subjects of this kind. Indeed, Mr. Speaker, I respectfully suggest you might recommend something along these lines.


William Warren Allmand: May I put a question to the hon. member? Since he would like fuller information, would he not be willing to allow this bill to go to the committee so that he could examine the officials of the company, put direct questions to them and obtain all the information he wishes?


John Leroy Skoberg: I would answer the hon. member's question by indicating how impossible it is for us to attend every committee meeting which is held.


Some hon. Members:: Oh.


John Leroy Skoberg: He suggests I should crossexamine the representatives of the insurance company who might be present at committee meetings. I would simply say that if one is to try to do a job in this house one cannot attend every committee meeting which may be held.


An hon. Member:: Sickening.


John Leroy Skoberg: I hear some hon. members opposite doing a bit of braying. I remind them that they themselves very often do not have time to devote themselves to the work of all these committees. The question brought up by the hon. member-


The Acting Speaker (Mr. Bechard):: Order. I regret that the time allotted to the hon. member has expired.


William Arnold Peters: Who is taking time? It is the sponsor of the bill, surely?


Mr. J. Edward Broadbent (Qshawa-Whit-by):: I must say that in spite of the high level of the discussion and the complex nature of the subject under consideration I do not feel that this matter has received the wide range of study that it should. Before we take a serious decision on the question of principle I feel we should spend much more time in the

February 6, 1969
Private Bill
house discussing it. I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this bill be not now read a second time but that it be read a second time this day six months hence.


William Arnold Peters: Mr. Speaker, I have anxiously awaited the opportunity to speak again on this bill. The fact that an amendment has now been proposed gives me an opportunity to do so. I intend, with your permission, to say a few words on the bill.


An hon. Member:: 
William Arnold Peters: I have had the opportunity of being present when this company has come before us on previous occasions. I agree with the hon. member from Oshawa that we do not have sufficient information about this matter to make a decision. I do not know what this company told the sponsor of the bill, but whatever it was he did not communicate to the house the real reason behind this bill.
This company has been incorporated under the laws of Canada for a long time. Amending bills have appeared on several occasions. The first bill is to be found in chapter 70 of the Statutes for 1910. There was an amending bill in 1952 and again in 1958.


William Warren Allmand: Mr. Speaker, I rise on a point of order. I believe there is a specific amendment before the house, which is that the bill be read six months hence. I submit that any speech must be directed to the amendment and not to second reading of the bill. The hon. member is now making the sort of speech that he has made on three or four other occasions on second readings. I would ask for a ruling on this particular matter.


The Acting Speaker (Mr. Bechard):: I would ask the hon. member for Timiskaming (Mr. Peters) to restrict his remarks to the amendment. I understand he is giving his reasons for postponing second reading of this bill.


William Arnold Peters: Mr. Speaker, far be it for me to lecture the hon. member for Notre-Dame-de-Grace (Mr. Allmand), but if he is familiar with the motion he will know it is a negative motion and a killing motion as well. We are not amending the bill in a restricted sense but in a substantive way. In effect, in arguing for a six months hoist I am also saying why I am
tMr. Broadbent.]
not in favour of the measure. The hon. member may not agree that this motion should be moved, but I am of the opinion that just because the bill has been before us on a number of occasions dealing with two major specifics, it does not necessarily follow that we have the full story on which to base our decision.
I have much more information about this company than that which appears in this small summary. In the report of the Superintendent of Insurance for Canada there is information concerning this company that goes back some period of time. There are many reasons why not only this company but a number of other companies as well should be questioned closely. We should consider this matter carefully before changing the structure of this insurance company in particular, and allowing a proliferation of insurance companies in general. These companies are asking not only to change their name but also to change their capitalization.
This company is asking to increase its capital stock from $2 million to $5 million. The hon. member for Notre-Dame-de-Grace may not be aware, as I am sure other members are, that if this bill and the 20 or 30 other bills which will be presented by other Liberal members are passed we will be taking money out of the Canadian economy. From that part of the economy which is the direct concern of the Canadian government, we will be extracting several hundred million dollars which could otherwise be used to develop the nation.


William Warren Allmand: That is not true.


William Arnold Peters: The hon. member says that is not true. Certainly I am not prepared to take his word for it because it would be very difficult to ascertain how much of this money would be directed to the places to which we would like to see it go. I am sure that in a sober moment even the hon. member for Notre-Dame-de-Grace would agree with that.
The report on housing has just been presented to us. Instead of taking $3 million out of general circulation and handing it to this insurance company, I think we would do much better to put this sum into housing. We must not forget that this $3 million is only a small part of the accumulated capital amount.
As the company now stands, it has an authorized capital of $2 million. It is now asking for an authorized capital of $5 million. Last year it had assets amounting to $7,347,735. Its total liabilities amounted to $6,133,000.
February 6, 1969

Last year its total disbursements were $2,500,000. In its surplus account at the end of the year it showed a capital gain of almost $1 million. Therefore, I suggest it would be very hard for the hon. member to claim that this amount would make no difference to the development of the nation.
The representatives of thousands of insurance companies are trotting up and down our streets selling insurance to the same people for identical risks. The hon. member who sponsors the bill says that this does not affect the economy, but it is interesting to note that a colleague of his in a somewhat remote sense, namely, the premier of Saskatchewan, decided not long ago during an election campaign to turn over the government operated insurance plan to free enterprise. Did he do this? No, he did not. He may have decided to raise premiums but he certainly did not drop government controlled insurance because he fully realized that if he did so he would take out of circulation money that would be useful in other fields.
This company probably handles about $200 million every year. If it increased its capitalization two and a half times, this would mean that its potential for doing business would increase two and a half times. The hon. member for Notre-Dame-de-Grace may have some particular reason for sponsoring this bill or he may not. If he has not, then as a member of this house I say he is a sucker. If he has, then I would like him to explain his involvement. The hon. member may be pushing this bill because in some way it affects his riding; at any rate, he ought to examine what companies like this do in the field of insurance. I know him to be progressive minded.
[DOT] (5:50 p.m.)


An hon. Member:: He is a rebel.


William Arnold Peters: Some may say he is a rebel.


Mr. Guay (St. Boniface):: On a point of order, Mr. Speaker. I submit the hon. member is not speaking to the amendment before the house. He is speaking on the motion itself.


Mr. Speaker:: It is my understanding that this type of amendment does not preclude the hon. member from speaking to the substance of the bill now before the house. I gather this is the hon. member's second contribution to this bill. At any rate, he has made a minimum of two contributions. He will be limited, firstly, to consideration of matters which are of the essence of the bill before us. Secondly, he should not repeat statements he made in
Private Bill
the first instance. I am not suggesting he has done this but those are the two sole limitations he would face at this time. I would not think the amendment before the house now would limit him too seriously in his present contribution to the debate.


William Arnold Peters: Mr. Speaker, I have not looked at what I said on previous occasions when this bill was discussed. If I repeat anything it is accidental. I was saying that the hon. member is progressive minded, although I hesitate to use that term when describing government supporters. Certainly, he has an inquisitive mind as I have noticed in standing committees. No doubt he would be interested in examining financial statements relating to British Northwestern Insurance Company. It might also be wise for hon. members of this house generally to be aware of amounts of money being collected by such companies and being disbursed. The hon. member sponsoring the bill ought to have all pertinent information in his possession. He should know, for instance, whether the premiums collected by the company bear any reasonable relation to claims paid out. I notice, for instance, that for an insured amount of approximately $1,600,000 the company collected premiums of approximately $544,000. I hope my interpretation of the figures is correct. That amount relates only to fire insurance, Mr. Speaker.
I doubt whether the combines investigation branch could determine whether arrangements between insurance companies constitute combines or restraint of trade. I think it is well known that the companies say to each other, "You scratch my back and I will scratch yours; we will see that certain rates are set and that one company does not carry more than a certain share of any risk." It is well known that companies re-insure their risks with other companies, which in turn reinsure still further with other companies. In that way, insurance risks are spread over the entire insurance industry operating in any particular field.
I may favour an amendment, to be moved later, Mr. Speaker, which would have the effect of sending this bill to a standing committee in order that special inquiries could be made about the company. We have placed tremendous reliance in the past on the Superintendent of Insurance. I have listened to him on several occasions in committee and been impressed with the way he answered questions. Sometimes it seemed as if he directed the deliberations of committee members. Indirectly, he has great influence in
5242	COMMONS DEBATES	February 6, 19B9
Income Tax Act and Estate Tax Act this house on matters of insurance. I think it would be wise if in some way guidelines could be laid down as to how we ought to deal with companies like the one referred to in this bill. These companies come before the house and ask for an innocent change of name. Yet when one looks into the matter one discovers that the control of the company has changed, the structure of the company has changed, and that really the company is not what it purports to be. Mr. Speaker, these companies are as phony as $3 bills. There is nothing honest about them. They move in a jungle of finance that is above the heads of most hon. members. I admit frankly that I do not understand the workings of that jungle. It might be useful if the activities of this company were studied thoroughly in committee. As I said, when looking into the activities of the company one may well find that an innocent change of name is not all that is involved but that ownership and control of the company has also changed.


Mr. Speaker:: Order. I regret to interrupt the hon. member for Timiskaming (Mr. Peters) but the hour appointed for consideration of private members' business has now expired. The house will resume its business at eight o'clock p.m.

At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


[Stage Direction]
The house resumed consideration of the motion of Mr. Benson for the second reading and reference to a Committee of the Whole of Bill C-165, to amend the Income Tax Act and the Estate Tax Act and the proposed amendment thereto of Mr. Saltsman (p.5191).
John (Jack) Henry Horner: Mr. Speaker, at five o'clock I was dealing with the effects the estate tax will have on what is generally considered to be the family farm or what has now become established in many places in western Canada as a farm of an economical and efficient size.
The minister suggested this tax would be a special burden on the farmer. He justified

this by saying farmers have received subsidies from the federal government during the years they operated the farm and it was only fair that this advantage should be equalized with the burden carried by the wage earner by imposing this special tax upon farmers. This change will involve $45 million. The minister stated he was not trying to raise more money by this change, which someone called a philosophical change, but claimed it would apply more fairly to all segments of the industry. If this is true, Mr. Speaker, it is a shame this government feels the farmer must have this special burden placed on him, particularly in the light of the report last fall of the Economic Council of Canada. Their report painted a vivid picture of Canadian agriculture in dire need of more capital. This tax is a direct tax on capital, there is no question about that.
The minister has said the estate tax in the past has brought in $200 million. The proposed changes are an attempt to shift $45 million of that figure to people in different occupations. I would like to ask the minister if these proposed changes will result in a drop in income from $200 million to $190 million?
Is the raising of the exemption from $20,000 to $50,000 going to have any real effect on the income the government receives? Surely, his computers have worked out some estimates as to what change in dollar income this will bring about.
The Canadian Federation of Agriculture has suggested the exemption on a once in a lifetime gift of a farm from father to son be increased from $10,000 to $25,000. I have suggested this figure be raised from $10,000 to $30,000. This would not involve many dollars and would lessen the burden the minister has placed on farmers.
The report, "Transfer Taxes: Their Effect on Productivity and Control of our Economy" published for the Ontario Economic Council has some interesting facts with regard to transfer taxes on capital. I quote from page 9 of the report:
As the economies of large-scale farm operations become more prevalent, and the world demand for food accelerates, are the working capital requirements of our agricultural industry to be compounded by the imposition of substantial transfer taxes on our farms?
This is exactly what the minister is doing. The report also points out that Canada leads 13 countries in the free world in transfer tax on capital. One commodity Canada is short of
February 6, 19S9

is capital. The Minister of Finance (Mr. Benson) should realize that this country is basically an importer of capital and therefore we should not have the highest possible taxes on that capital. There is a table on page 11 of the report which vividly illustrates the percentage of revenue which the government receives from transfer taxes. The report also vividly points out there is a direct relationship to economic growth and tax on capital. One example in the report is West Germany. Over the past 20 years this country has had the quickest acceleration of economic growth and the lowest tax on capital, a direct relationship between tax on capital and economic growth of the country.
We in this country complain of foreign ownership and what steps the government could adopt to allow more Canadians to take part in the growth and ownership of this wonderful country of ours.
[DOT] (8:10 p.m.)
As the hon. member for Edmonton West (Mr. Lambert) pointed out this increase in estate tax will encourage Americans to buy land and businesses in Canada. I will read again from the article quoting the hon. member for Coast Chilcotin (Mr. St. Pierre):
I'm worried that the estate tax is going to accelerate the sale of these ranches to foreigners. People just won't have the money to pay the estate taxes.
In a young and vibrant country like this, with all our natural resources and potential, we are taxing capital; yet capital is one of the commodities which we import and for which we pay high prices, first in interest rate and secondly in the loss of Canadian ownership. Canadians all across the country want to own more of the land and participate in the growth of the country.
In today's economy, the farmer works longer hours and receives less pay per hour of labour than workers in any other industry. In days gone by it was often said that a farmer lived poor and died rich. With this increase in estate tax he will continue to live poor, and he will die poor.
It has been said that this bill represents a new philosophy. From whence did the philosophy come? A number of months ago Bruce Hutchison wrote an article in which he said he has known the Prime Minister (Mr. Trudeau) for a long time. He wrote that as a young man the Prime Minister was very embarrassed by his riches, by the wealth left to him. Let us give Bruce Hutchison the benefit of the doubt. The Prime Minister is
DEBATES	5243
Income Tax Act and Estate Tax Act now 50 years old, and he has no children. He has not worked to build up an estate like a farmer with the sweat of his brow, with the use of his muscles, and with backbreaking work over long hours. Why should he be concerned about leaving an estate for anybody? Just think about this.
I know a lot of people are annoyed at the Minister of Finance. But he is a dutiful servant of his Prime Minister.


An hon. Member:: Slave.


John (Jack) Henry Horner: Someone says slave. I do not really think he is a slave because I talked to him about this particular tax and I know he was fully confident in his own mind about it.


Edgar John Benson: I still am.


John (Jack) Henry Horner: He is obeying the wishes of his master.


Edgar John Benson: Oh, nonsense.


John (Jack) Henry Horner: It was his master's mind that devised this cruel, special burden for the farmers across Canada.
Let us examine the farmers' position. Many businesses in our economy can pass on rising costs of labour in the price of their products. A shipbuilder can increase the price of his product. A car manufacturer can increase the price of his product in spite of the automotive pact arrangement made by the government. Nearly every manufacturer in Canada can increase the price of his product to cope with increased labour costs. But a farmer cannot.
A farmer has his wife, sons and daughters pitching in to help make his farm productive. Many hours are spent building up the farmstead, beautifying it, making it more efficient, modernizing it through greater use of electricity and gas. This adds to the efficiency of the unit, but in many cases the wife and the sons do not take any salary for the work they do. Maybe they should. I would not say that they should not, but in many cases a farmer cannot afford to pay them
Let us consider the case of a farmer growing wheat in western Canada. To date, he has not sold any wheat and he has to meet the expenses of a full year's operation. His son is quite prepared to work for the family unit in the hope that someday he will take it over. Under these circumstances perhaps the farmer's son should put a lien on the farm for back wages. When his father dies he could say, "I have worked here for 20 years, so I will make a claim, against my father's estate
February 6, 1969
5244	COMMONS DEBATES
Income Tax Act and Estate Tax Act for $20,000 for back wages." That would be only $1,000 a year. Let us suppose that he claims $2,000 or $3,000 a year, and that the farmer's widow also claims in this way. Many farmers' wives drive trucks hauling wheat to the elevators, and throwing off feed to the cattle in winter time without receiving any pay in the financial sense.
Let us take the case of a farmer with three sons, who spends $20,000 educating two of them, and the third son wants to farm. The father may say, "Well now, I realize you want a farm. You will have this place when I go, and we will buy another quarter section or half section of land with the money I would have spent on your education." Many farmers' sons quit school at Grade 9 and get their basic education on the farm by actually participating in the management and the work of the farm. Should they tack a bill on to the estate for the education they receive?
In many cases the education they receive that way is far better to them than going to university to study agriculture as I did, or going to an agricultural college as I did. They probably learn just as much by taking part in the day to day close supervision of the farm work. The other two sons who got an education carry that education with them. It cannot be taken away from them when their father dies. But the lad for whom the father purchased an additional quarter or half section of land will be hurt by this cruel and, to quote the President of the Farmers' Union in the province of Alberta, vicious tax that the Minister of Finance is imposing.
There is no question in my mind that the agricultural industry today is at a crossroads. The question is whether it is going to continue in existence or whether it will bumble and collapse. I could quote many articles to show the exact position of agriculture in many parts of Canada. For example, some time ago I read that in the province of Quebec ARDA is buying up land and putting farmers on social welfare. Surely, something better than that can be done in this country of ours. Surely, we are not going to force farmers to go on social welfare because of this cruel and vicious tax. Surely, the minister will reconsider and accept the suggestion by the Canadian Federation of Agriculture that the once in a lifetime gift exemption be increased to $25,000 from $10,000. Before this debate concludes, I would like the minister to indicate how much money that would cost.

At the rate members of the government have been spending money I can well understand the minister's great desire to acquire some money. What farmer could afford a $38 waste basket? What farmer could afford to spend $9,000 renovating an office?


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


Some hon. Members:: Carry on.


Mr. Depuiy Speaker:: If there is unanimous agreement-


John (Jack) Henry Horner: Just for one quick sentence.


Edgar John Benson: Mr. Speaker, in view of the kind words that the hon. member is delivering, we would be pleased to have him continue and finish.
[DOT] (8:20 p.m.)


Mr. Depuiy Speaker:: Is there unanimous consent of the house to allow the hon. member to continue?


Some hon. Members:: Agreed.


John (Jack) Henry Horner: I see the house is in a very generous mood tonight. I would be the first to admit that I have taken up my fair share of the time of the house in contributing what little wisdom I have-


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: -to the general well-being of the government. But I will assure you, Mr. Speaker, and through you the minister, that I will be brief. We on this side can well understand the government's position that they cannot afford to lose that $200 million because the minister issued the great cry across the land that they want to hold the line on expenditures. We heard that during the last election campaign. The amount of money that would be realized through the estate tax is very very small compared to the total expenditures of the government. It is less than one third of one per cent. As a matter of fact it is less; it is nearly one sixth of one per cent of the total expenditures of the government. Even after the forceful statement that they were going to hold the line on expenditures, those expenditures were increased by $1,200 million. A well known fact was stated in the Globe and Mail a few
February 6, 1969

days ago. I will quote the article of January 31:
There Is no way by which the Government can guarantee that taxes plus borrowing can produce any certain amount of revenue.
Then, the article goes on to suggest the government really does not do much business:
Although the Government of Canada operates a few enterprises which can be classed as income producing, ranging from Air Canada to Polymer Corp. and the Post Office, its net income from such sources is very small at best. For practical purposes, any money it has to pass out comes either from taxes or from borrowing.
In addition, we had the grave warning of the former governor of the Bank of Canada to the effect that he was afraid the government, in spite of itself, could not hold the line. The farmers can hardly be expected to be convinced that the government really needs this $200 million from the estate tax when they see a gigantic increase in the estimates of $1,200 million at a time when the government says it is holding the line. Can you imagine what the situation would be if it were a period in which they were not concerned about holding the line on government spending. As I was suggesting previously, the government could pay $38 for a waste basket or spend $3,900 in renovating an office. No farmer could afford that nor could he even envisage what a $38 waste basket would look like. Before I complete my term as a member of parliament I intend to visit those offices to see what a $38 waste basket looks like.
This is the type of extravagant expenditure this government makes while at the same time placing a special burden on estates which consist mostly of non-liquid assets. The minister says this burden is not an undue one. Well, as I said in my opening remarks and it is well to repeat it, the minister is like the mother whose son had just joined the army. As he marched by her in a parade, she said, "My Johnny is the only one in step". All the farm leaders say this is a burden. The minister does not know the extent of the burden he has placed on the farmers. I urge him to reconsider. The very least he could do would be to take into consideration one of the recommendations of the Canadian Federation of Agriculture that the $10,000 once a lifetime gift from a farmer to his son be increased at least to $25,000. They are asking for a small thing in respect of an industry which is crying out for more capital and in which capital is very necessary, particularly in light of what this government has done to all farm capital.
DEBATES	5245
Income Tax Act and Estate Tax Act
This government has increased the interest rate from 5 per cent to nearly 8 per cent and we are told that before long it will be over 8 per cent. I ask the minister to please reconsider that small item of the once in a lifetime gift and show the farmers that he wants to allow them to pass on what they have accumulated through many long hours of hard work late at night. The farmers have worked by the sweat on their brows. I know that last January in Alberta when it was 48 below zero at night and 20 below zero all day very few people were prepared to throw around bales of hay in that kind of weather. Surely, the minister should consider the plight of the farmer. I plead with the minister and if he wants me to get down on bended knees I will do so. I will do anything I can in order to urge the minister to reconsider his position. Surely, it is not too much to ask. I would like him to feed into his computer the question of how much money the proposal would require. It would be an infinitesimal amount compared to the increases in government expenditures in one year. I ask the minister to think about it. We will not hold it against him if he makes one more small change in his budget resolutions.


Edward Richard Schreyer: Mr. Speaker, I agree with the hon. member who has just spoken that there has been a tendency in the last couple of years at least for the government to be excessive in its administrative procedures and the way in which it goes about decorating its ministerial offices. However, I do not wish to take any time of the house in saying anything more about this since the hon. member for Crowfoot (Mr. Horner) has already made considerable reference to it. I was not aware of the $38 waste baskets, but I do know that in the past couple of years the government has been leasing office space, paying pretty fancy prices for it and allowing it to go unused. Tens of thousands of square feet have been allowed to go unused for months on end. I shall say no more about that, other than to say that the government should take more care in respect of some of the jet set attitudes which prevail in some of the ministerial offices.
[DOT] (8:30 p.m.)
I appreciate very much the fact that the minister is patient enough to sit here and listen to some of the comments I shall make with regard to the proposed estate tax legislation. I say this sincerely, because for our part we have some specific criticisms to make and
February 6, 1969
5246	COMMONS
Income Tax Act and Estate Tax Act it may well be that the criticisms I will be making will be based on a misinterpretation. If the minister is able to refute these specific criticisms, then we may find ourselves able to support the bill. I hope the minister will be in a position to turn aside what I consider to be some glaring inconsistencies in his proposed estate tax legislation.
I have been intrigued with the Minister of Finance (Mr. Benson) for some time, and I have taken the trouble to look up a number of his old speeches. One speech in particular which I found very interesting was delivered on January 16 to the London West Liberal Association. Surely, the minister recalls this speech very well. After reading this speech, one comes quickly to the conclusion that the minister feels he has been unjustly attacked in respect of estate tax legislation. He went back into history and referred to some rather surprising historical names to support his conclusion. The minister made reference to Julius Augustus, Plato and one or two others. What did the minister say in his speech to the London West Liberal Association? He said it was a solemn obligation on the part of the state to take pains to avoid scheduling taxation which results in extreme wealth on the one hand and poverty on the other. That is a very commendable attitude on the part of the Minister of Finance in our time. One can have no quarrels with that, but I should hope the minister would be a little more successful in translating his high ideals into a form of reality in respect of tax measures.
The minister has failed in certain respects in this bill before us to introduce or maintain equality in the proposed rates of taxation. The minister must be well aware that if there was some consolidated opposition to the proposed changes in estate tax rates it was first of all because he lately proposed to reduce drastically certain exemptions. These reductions would have had the effect of making estates of a rather modest size subject to taxation. He has since conceded that it is necessary, perhaps as a result of representations or pressures, to exempt estates under $50,000 from taxation. Unfortunately, the minister has not followed that idea of making estates under $50,000 exempt in the true sense of the word. While estates of $50,000 or less will not be subject to tax after this latest modification, the minister has distorted if not destroyed any inherent exemption in respect of estates over $50,000 and up to $80,000.
When looking at the tables supplied by the minister, one sees a grave distortion because
[Mr. Schreyer.l

of the lack of progressiveness in respect of taxes levied on estates of $55,000, $60,000, $65,000, $70,000 and $85,000. I intend to put on the record in a few minutes some figures to show just what the marginal rate and the effective rate of taxation will be on these smaller estates; those over $50,000 but under $100,000.
I do not want to be too critical of the minister in a general way because I do not feel he deserves some of the exaggerated criticisms levelled at him in recent weeks. Perhaps some of the criticism has occurred in this house, but certainly the most abusive and exaggerated criticism has been levelled outside this house. I do not think it is fair to refer to the minister by the nickname "Red Benson". I do not think that is very fair to the Minister of Finance, particularly in view of his rather idealistic notions in respect of taxation. In any event, he is certainly not putting those idealistic notions into effect. He is not proposing anything in this legislation that borders on confiscation.
Perhaps it would be of interest to note a particular passage which the minister quoted from the report of the Ontario committee on taxation which was tabled several months ago. Let me cite the minister's quotation:
Though differences in wealth will always be with us, extremes of affluence and poverty must be prevented in the interests of a stable society. While other arguments may have been added in the theoretical support of equalitarianism, there is a continuing validity to Plato's warning that the state should avoid riches and poverty-"for the one produces luxury and idleness and revolution, the other revolution and meanness and villainy besides".
I support and agree completely with this idea. That is to say, an extreme of riches produces luxury and idleness and revolution while the other produces revolution, meanness and villainy. The report then states:
A reasonable tax and wealth is one way of ensuring a proper balance between these two objectives; capital accumulation and control of extremes of wealth.
Having that in mind, and a proper review of taxation in the modern state, one would have hoped the minister might have been a little more careful in setting up estate tax rates. Let me point specifically to a very bad feature or effect of the new estate tax changes. Let us take for example an estate that is left outright to a widow and which, on her death, is divided equally amongst her adult children. In the case of a $60,000 estate, under the new proposal the estate will pay more in estate taxes. In the case of an $80,000
February 6, 1969	COMMONS
estate left outright to the widow and, on her death, left to one child, under the new proposals the estate will pay more than under the existing estate tax rates. This is based on the $60,000 and $80,000 rates. Let us turn to the effect of the new proposals on an estate left outright to a widow which is left on her death to one child. I have in mind an estate of more than $1 million. In this case, instead of the estate paying more, as in the case of a smaller estate, it will pay less. As a matter of fact, it will pay $85,000 less in taxation. Perhaps I am misinterpretating the minister's tables, but it would appear that on a $1 million estate left to a widow and, on her death, to one child, under the existing taxation system the tax would be in the order of $511,000. Under the new rate it wauld be $434,000. I take that to mean there would be $85,000 less in taxes.
[DOT] (8:40 p.m.)
In other words, the tax saving alone on the very large estates will in this instance be more than the entire size of the estate that will be taxed more heavily under the new proposals. So I agree with those members of the Conservative party who have made a point of saying that there is really nothing beneficial under the proposals of the minister in so far as modest sized estates are concerned. Quite frankly, I think that is where our concern should be, for the reason some members of the government party mentioned this afternoon. I still hear ringing in my ears the words spoken this afternoon by the hon. member for York North (Mr. Danson) and the hon. member for York East (Mr. Otto). They both spoke to the same effect, namely, that the leaving of large amounts of capital wealth by one generation to the next is not particularly beneficial to the family line itself, to the inheritor, nor to the country.
I agree with those who state that there is something beneficial, perhaps something nice, if I may use that word, about the idea of one generation giving a helping hand to the generation that comes after it. This we have done in the form of increased educational opportunity, better health service, health care, and so on. I agree also that the idea the state should approve of one generation helping the next generation by monetary assistance, if you like, is laudable and supportable. As far as I know, no one in our group is opposed in principle to the idea that our tax laws should be benign and approve of the leaving of small estates by one generation to the next. But when we are dealing with estates of the order 29180-332 a
DEBATES	5247
Income Tax Act and Estate Tax Act of $500,000, $1 million, $1,500,000 or $2 million, there is nothing beneficial in looking at the problem in the broadest possible way and allowing transfers of huge amounts of wealth from one generation to the next. This in fact helps to accentuate the extremes of wealth and poverty and perpetuates economic injustice.
We in this country have heard a great deal in the last five years about this government's intention to fight a war, a crusade, against poverty. The government cannot seem to find the money with which to wage an effective war against poverty. Let us consider the number of family units in this country that in 1964 were considered to be living below the poverty line and compare this with the number of family units today considered to be living below the poverty line. In 1964, what could be purchased for $3,000 would require today about $3,500. The number of household units, or families, in this country still living below the poverty line is about the same; in other words, there has been no progress whatsoever in our much publicized war against poverty in Canada.
The concern in this respect does not seem to be mounting. Tax legislation is put before us, and suddenly there is great preoccupation and concern about what will happen to those children who will inherit large amounts of money; there is concern that they may have to pay a little more in the way of estate tax. I suggest that between reality and the ideals hon. members have expressed there is a wide gap. That wide gap is not closing when one considers the tax legislation proposed by the minister, because one sees that the very large estates come off best and the smaller estates pay more than is the case under the existing estate tax system.


Edgar John Benson: Mr. Speaker, would the hon. member accept a question?


Edward Richard Schreyer: Yes.


Edgar John Benson: I do not wish to interrupt, but I wonder whether the hon. member realizes this: If one looks at the tax rate on $1 million estates about which the hon. member was talking, and assumes that people with $1 million have the best possible tax advice, the minimum amount that can be paid is $305,300, and the amount proposed is $338,400; and from this one could save much by gifting.
February 6, 1969
5248	COMMONS
Income Tax Act and Estate Tax Act


Edward Richard Schreyer: I have already said that in the case of estates which a number of children would be inheriting there is really nothing disproportionate in the minister's schedule. But when one looks at the minister's figures one sees that with respect to an estate under $100,000, certainly under $90,000, which is being left outright to a widow, and on her death to one or two children, more will be paid in the way of tax once the new law comes into effect than is the case at the present time. Once you get over the $100,000 mark with respect to estates being left in a similar way to a widow and one or two children, less tax will be paid. This is the simple fact of the matter, and I cannot understand why the minister would be satisfied to leave it this way.
Surely, there must be some way in which to avoid this glaring lack of proportionality or progressiveness. To realize the inequity that will exist, one has only to compare the tax effect on estates under $100,000 with those over $100,000. The situation gets worse as the value of the estate increases. At the $1 million mark there is, as I have said, a substantial reduction in tax. Would it not have been better to increase the exemption to a basic $50,000 and then to leave the marginal rate of tax on estates over $1 million at 54 per cent as it was, rather than reduce the marginal rate at the top so that the same marginal rate is being applied to inheritors of estates of $300,000 as it is to $1 million estates? They are paying the same marginal rate as those who will inherit estates of $1 million or $2 million. I do not think this is a very equitable way to proceed with what is alleged to be estate tax reform.
I would like to put on the record some figures with regard to the effective rate of taxation on estates of various sizes. Let us compare the old estate tax rates with the new ones. The effective rate on a $55,000 estate, for example, will be 50 per cent under the new proposals. On a $60,000 estate, the effective rate will be 50 per cent. On an $80,000 estate, the effective rate will be 36 per cent. The effective rate decreases gradually. I think it is possible to generalize as follows: With respect to estates valued at less than $90,000 the effective rate according to the new proposals will be 10 to 15 per cent higher than under the existing estate tax system. The effective rate on estates of $500,000, $1 million and $2 million will be less in comparison to the existing rates than is the case with smaller estates.

[DOT] (8:50 p.m.)
It is difficult to verbally convey statistical data. I ask the minister to read this document which has been prepared by specialists in analysis. Tax reform in Canada still has a long way to go. It is my opinion that within three or four years the government will implement substantial tax reforms in this country, one of which should include tax on capital. The proposed new rates will reduce initiative and have negative effects on our economy. What is even more destructive of personal initiative is a system which taxes income very highly and does not tax capital gain or inherited wealth. One does not have to ponder too much to reach the conclusion that taxation on wealth or capital is destroying initiative at a time when high rates of taxation on earned income are being levied.
When the hon. member for Waterloo (Mr. Saltsman) moved his amendment yesterday it was for the following reasons: The proposed legislations was not designed to produce more revenue than the existing legislation but rather increased the rate of taxation so that it weighed more heavily at the top end of the scale. I have already dealt with the fact the proposed legislation is not progressive enough, Mr. Speaker. Small estates are subject to a higher rate of tax than estates in the bracket of $1 million or more. The proposed legislation is completely inadequate in terms of introducing real equity into the tax structure.
As the minister knows the introductory paragraph of the Carter Commission report stated the tax system in Canada is basically inequitable. This is the sum and substance of the commission's findings. There can be no more damning indictment of a tax system than that it is inequitable. The government has had the time to study the recommendations of the report. What have they brought forward? The Government has introduced Bill C-165, which purports to be more equitable with respect to tax treatment of estates, the transfer of wealth from one generation to another, and for the life of me I cannot see how it can possibly be termed more equitable.
I have already pointed out it is the small, modest estates of between $50,000 and $90,000 that will bear the heaviest burden. In case hon. members have not been impressed by this argument, I refer to the fact that even after the latest modification conceded by the minister in the case of a $60,000 estate left to a widow and one child, the amount of tax paid will increase from $2,600 in actual tax
IMr. Benson.]
February 6, 1969

levied to $4,800, almost double. In the case of a widow with two children, the amount will also be increased.
How can the minister possibly say this is a logical, coherent, progressive tax proposal? No one would object to one generation giving a helping hand to the next by building up a modest estate. It is precisely in this case where more tax will be collected. But then, lo and behold, estates of large size, the people who have enjoyed an abundance of opportunity and a concentration of economic power in their hands, when transferred to a widow with one or two children, the tax will be less.
If I am wrong in my interpretation, I would be happy to hear how the minister explains this apparent aberration which appears in this tax bill.


Robert Lorne Stanfield: A good name for that bill, apparent aberration.


Edward Richard Schreyer: A commendable feature of the bill proposed by the minister is that estates passed to the spouse will not at that point be subject to estate tax. This is fine. We could have had a bill which we would have supported in every sense of the word if only the minister had got rid of those aberrations which have the effect of hitting the smallest estate harder while the very large ones in some instances reduced taxation. The minister has an opportunity to speak on the amendment, and I wish he would exercise that opportunity.
[DOT] (9:00 p.m.)


Mr. Alastair Gillespie (Etobicoke):: Mr. Speaker, I should like to refer briefly to some of the remarks made by the previous speaker, the hon. member for Selkirk (Mr. Schreyer), and his predecessor. The hon. member for Selkirk was speaking in favour of the amendment. It seemed to me that his was a refreshing performance after that of the hon. member for Crowfoot (Mr. Horner). At least, it started out that way. It was sensitive at first but then it seemed to me that the hon. member became confused and distorted the record as presented in the schedules from which he read. He also referred to aberrations. I suggest that the aberrations are in his own eye. If he looks at-


Edward Richard Schreyer: Mr. Speaker, I rise on a point of privilege. I did not make any charges or statements that were in any way a deliberate distortion of the minister's own tax schedules. The minister has supplied every member here with a tax schedule showing
Income Tax Act and Estate Tax Act what will be the effect of these proposals on estates of different sizes, of, in cases where estates are left outright to a widow, or a widow with 1, 2, 3 or 4 children, estates left outright to children, and so on. The hon. member suggested that I had distorted-


Mr. Speaker:: Order. This is a point for debate, not a question of privilege.


Alastair William Gillespie: Let me just refer the hon. member for Selkirk to schedule 1A, the last column, item No. 3. Under the present law a $1 million estate left to a widow with one child qualifies for an estate tax of $305,000. Under the proposed law the tax payable is $434,000. That is what I think the Minister of Finance (Mr. Benson) was trying to point out to the hon. member opposite who referred to aberrations, and I am suggesting that those aberrations are in his own eye.
I should like to refer to some of the remarks of the hon. member for Crowfoot. I think we were all impressed by the sincerity as well as the volume of his remarks, and indeed by his imagination. If the fields of the farmers on whose behalf he claimed to speak were half as fertile as his mind, our agricultural production would increase tenfold. The hon. member referred with modesty to the little wisdom that he had shown, and also mentioned that he was impressed by wastepa-per baskets. As we listened to his remarks we were reminded of exactly the same thing.
In rising to speak on this issue I am conscious that I may cover some of the ground that other members on this side of the house have covered. However, I want to emphasize to all members the social importance and the justice of this proposal that is before us this evening. This measure is going to benefit, in terms of family security, thousands of families across Canada.
This is the first time that we have had an imaginative approach to estate tax. I refer in particular to the tax free transfers during life and at death between spouses, and in particular to the very much larger exemptions for younger children in the form of bequests. I should like to give a couple of instances. By eliminating pensions, a real inequity has been removed from many estates. Under the existing law a survivorship pension in the hands of a widow forms part of the taxable assets of her estate, or more particularly her husband's estate. For example, a widow at age 64 receiving a pension of $250 a month would have that pension valued for estate tax purposes at $32,000, which is a big bite out of the
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5250	COMMONS
Income Tax Act and Estate Tax Act basic exemptions for which a widow would be eligible. A younger woman aged 40 receiving $250 a month would have her pension valued for estate tax purposes at $50,000. Both of these situations will now be eliminated by the bill before us.
I should like to draw the attention of hon. members to the case of the young family of a widow of, for instance, 35 consisting of four children under ten. Under the old act that family would have had up to $100,000 in exemptions,-$60,000 for the widow and $10,000 for each minor. Under the new bill there will be no tax payable on the death of her husband and the transfer of the assets to the wife.
Let me take the case where this same widow might be killed shortly after the death of her husband. Under the old act her estate, which one can presume would have been made out in favour of her children, would have had a basic exemption of $100,000; that is to say, $40,000 general exemption and $15,000 for each child, for a total of $100,000. Under the proposed bill these exemptions rise to $160,000 before any tax is payable; $35,000 for each child and a $20,000 minimum exemption. The amount of $160,000 for a young family which the father has provided through life insurance and other means is not a large estate if the wife has to face the future alone. In short, these changes will help those who are the most vulnerable. I refer to the aged widows and the young families, those who can the least provide for themselves, those who in fact need help.
[DOT] (9:10 p.m.)
There have been several forms of criticism and I should like to single out two in particular for comment. In leading off the debate for the opposition the hon. member for Edmonton West (Mr. Lambert) said we were taxing success. In his remarks, as reported on page 5183 of Hansard, he said that this estate tax would continue "for generation after generation", as if he had suddenly discovered something new. Those were strange words to come from one who was a member of a previous government that last revised the estate tax legislation. He made several further statements, the import of which were that the estate tax was a new tax that Canadians face. At page 5184 of Hansard he said in so many words what he took the attitude of the government to be. I quote:
'We will tax you because the more you save the more you have, and so the more we will take away from you.'


That is his idea of the government's attitude. Remarks of this sort seem designed to appeal more to the emotions of men rather than to inform them.
The hon. member for Crowfoot (Mr. Horner) considered this a tax on capital. I say to him, has he better suggestions for raising the revenues needed in the country today?


An hon. Member:: But are they needed?


Alastair William Gillespie: If he can in some way save or collect $200 million by implementing other measures, let him say so. Let him make suggestions. Of course, Mr. Speaker, the estate tax is a tax on success. How could it be otherwise, and why should it not be? Why should not the strong be taxed rather than the weak? Why should not those who have been fortunate help to pay for those who have not been so fortunate. What is wrong with that? Why should the well off not pay at a time when it is easiest for them to pay, that
is,	after their families have been provided for and on the death of one of the partners?
The second main criticism I have heard stems from the belief that somehow or other farmers have special claims for better treatment than businessmen ought to receive. I am not persuaded by the arguments of hon. members opposite. It seems to me the small businessman has an equal claim to consideration. The problems of farmers and businessmen are those of liquidity. Those who criticize succession duties imposed upon family businesses passing from one generation to another seem not to have heard of estate planning and seem to have ignored the fact that the minister has provided, as a matter of right, for instalments payments of tax debts over a period of five years.
The drawing of a will is a most solemn and personal matter, probably one of the most solemn and personal things a man has to do during his lifetime if one excludes the marriage contract. For many it is a final accounting. It is their way of saying, "I have totalled it up and this is the way I am going to leave
it.	" So, it is not surprising that there should be thousands of Canadians who are concerned about the effects of these changes. Many of them think they have made a final accounting. They wrote it on a piece of paper and tucked it away in the bottom drawer. But they will have to pull out that piece of paper and obtain advice. For many, this will not be easy; for some it may not be possible.


William Arnold Peters: Especially if they have left nothing.
February 6, 1969	COMMONS


Alastair William Gillespie: The minister has recognized some of the difficulties likely to occur. He has provided for executors of estates and for estates generally to choose as a matter of right the most favourable exemption schedules up until July 31 of this year. I shall ask the minister to give further consideration to this area of the matter, since it needs clarifying. There may well be estates that, because of prevailing circumstances, cannot take advantage of existing provisions. I am, of course, referring to the type of situation we have here in Ontario. In Ontario we shall have to wait for the provincial government to amend its succession duty act to make it compatible with the federal Estates Tax Act, so that possible benefits accruing under the Estate Tax Act can flow to the people of Ontario.


Robert Lorne Stanfield: Will the hon. member permit a question.


Alastair William Gillespie: I wonder if the hon. member would ask his question when I have finished my remarks.
The drawing of wills is a complicated matter, and it is not always easy for one to obtain the advice one needs. I suggest we need to give further consideration to this point as July 31 may come around too soon for some.
The second point we ought to consider is that some people who have drawn wills may now be mentally incapacitated or infirm in some way and not able to change their wills. They may not be able to derive benefits from the new act. It seems to me that we ought to consider this point also.


Robert Lorne Stanfield: They are lucky. They will never know about the act.


Alastair William Gillespie: I have referred to estate planning. I should like to draw your attention, Mr. Speaker, to a number of provisions in the bill and to comment on their implications as I see them. The minister has said on a number of occasions that gifts up to $2,000 a year by each parent to each child are to be tax free. That is to say, if you have a normal family of a mother, father and children, $4,000 each year may be transferred to each child each year until the death of the first partner. After that, $2,000 a year may continue to be passed on tax free. I wish to make two points clear. First of all, over a ten year period this provides an opportunity for parents to pass to each child $40,000.
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William Arnold Peters: I don't know anybody with that much to pass.


Alastair William Gillespie: Secondly, the transfer does not have to be in cash. If a parent makes gifts exceeding $2,000 a year to a child that parent is liable to pay gift tax on the cumulative total of such taxable gifts which are over and above the basic minimum I have just referred to. Through estate planning, it is possible to split estates and to minimize the effects of gift tax liability. For example, if one looks at the schedule one will see that accumulated gifts of $200,000 would be taxable at $71,500 and at the marginal rate thereafter of 75 per cent. If the gifts were split, and made by husband and wife, that is if they each gave $100,000, the tax is $21,250 for each parent, for a total of $42,500, which is $30,000 less than the figure I mentioned previously. The marginal rate also is only 36 per cent, half the marginal rate on the unsplit $200,000 accumulated gift.
[DOT] (9:20 p.m.)
May I refer quickly to other opportunities allowing for the transfer of assets to those of younger generations. I have already referred to the exemptions for younger children and to the fact that for each child under 11 years old the exemption is now $35,000. I referred in my example to a family of four children under the age of 10. The total exemption for that family would be $160,000. Similarly, the exemption in respect of disabled children has been considerably increased. An adult child aged 41, for instance, who is dependent because of infirmity would qualify for an exemption of $40,000, and provision is made for exemptions to dependant adult children up to $80,000. Surely, this is a compassionate move. For adult children not so dependent, the exemption is $10,000. I have referred also to the provision for the payment of estate tax over a period of five years in six equal instalments. This will enable estate planners to use much more latitude when considering ways and means of financing the tax, because it will take the heat off the forced sale.
One further point on estate planning: It may be argued that only those who are wealthy can afford the kind of tax advice which will enable them to undertake estate planning. I would say that anyone who has an estate of $50,000, or is likely to have such an estate, is quite able to afford the kind of tax advice needed to minimize the effect of estate taxation. The fact is that anyone who has an estate worth more than $50,000 should seek
February 6, 1969
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Income Tax Act and Estate Tax Act the advice of a tax consultant or an estate planner or a lawyer. He cannot afford not to do so.
In conclusion, I should like to refer to the terms of the amendment. We are asked to give consideration to a complete revision of the federal tax legislation with a view to making revisions in such legislation which would be progressive and equitable. It seems to me, Mr. Speaker, that in the three months since these proposals were put forward in the budget resolutions there has been ample opportunity for intensive review. The very fact that changes have been made in those resolutions reflects the kind of intensive examination which hon. members may have requested. The amendment refers to a progressive tax and to equity. I suggest that both principles are well embodied in this bill. It seems to me the hon. member who moved the amendment wrote it out before he had read the bill.
The whole area of estate taxes is one of the most complicated in tax law. It touches on the most personal plans of thousands of people. Some larger estates will be worse off under this measure. Some of the 5 per cent of the people who pay will have to pay more. But for 95 per cent of the people of Canada and for a very large proportion of the remaining 5 per cent, the proposals contained in the new bill represent a major improvement.


Mr. Stan Schumacher (Palliser):: I was
somewhat surprised, Mr. Speaker, to hear the previous speaker, the hon. member for Etobicoke (Mr. Gillespie) suggest, in connection with the government's taxation policy, that the government was acting on the principle of the strong helping the weak. That came as a great surprise to me in the light of the record of the party which he supports. I am thinking particularly, now, of the social development tax of 2 per cent with its $120 limit and the fact that in the legislation now before us the minimum rate of estate tax has been increased by 50 per cent, from 10 per cent to 15 per cent, and the maximum rate reduced from 54 per cent to 50 per cent. How can anyone say this is a policy of the strong helping the weak? I fail to see it.


Some hon. Members:: Hear, hear.


Stanley Stanford Schumacher: In rising to join in this debate, I do so as a member from a province which is presented with a particular problem in this field. My province has a peculiar relationship with this estate tax issue inasmuch as it has declined to profit by this field of


taxation and today rebates to its citizens the provincial share of federal taxes raised in such a way.
As the minister himself has pointed out, 75 per cent of the tax revenue raised by federal estate tax goes back to the provinces. In the province of Alberta, the amount raised by federal tax collectors in this connection is rebated to the individuals concerned. This sounds like a neat, straightforward operation at the end of which the taxpayer is fully recompensed, having suffered no financial loss. Unfortunately, this is not quite the case.
Although the federal tax collectors know that the money will eventually be paid right back to the beneficiaries of the estate, the federal tax collectors still insist on collecting the money, taking it into the federal coffers, and paying a lump sum back to the provinces which must then be rebated by the province to the individuals concerned. Apart from the cost and effort involved in this process, there are two serious drawbacks attached to it. First, those responsible for the collection of federal estate tax insist on prompt and full payment of the tax even though they realize it will eventually be rebated. Second, and this is much more serious, the sum rebated can be viewed as income by the federal government and taxed as such, as pointed out by the hon. member for Edmonton West (Mr. Lambert) in his speech yesterday.
I cannot believe that the minister would have gone to all this trouble, and courted the public abuse he has received in respect of this measure, simply for the sake of the revenue which the estate tax will produce. On his own admission this revenue, according to the estimates he has, will amount only to some $30 million.
Perhaps the answer lies in the income tax revenues which he expects will flow from taxable provincial rebates, particularly in view of the fact that several other provinces have indicated they will follow Alberta's lead in rebating this tax. Whatever his reasons for perpetrating this tax horror on Canadians, the minister has so far shown no public awareness of what the impact will be. He has scrambled a few figures around and made a few more confusing statements, but the main body of his tax measure remains untouched. As it now stands, this tax proposal is a lethal weapon pointed directly at the family farm and the small businesses across Canada. If it becomes law, it will wipe out a large segment of our national, social and economic life within one generation. The minister has made
February 6, 1969	COMMONS
light of this claim and says everyone will be much better off than before. He seems to think that by raising the tax floor from $20,000 to $50,000 people will believe small businesses and family farms will be made safe. If he really believes that, which I doubt, then he is sadly out of touch with the facts of Canada's economic life.
[DOT] (9:30 p.m.)
After all, the revisions announced by the minister on January 30 do not change the exemptions one iota. All he has done has been to say that no estate under $50,000 will be taxed. The $75,000 estate will still be gouged as heavily under the revised proposal as under the original. Thanks to the reckless spending habits of his colleagues of this and previous Liberal governments, inflation and rising costs have made $20,000 look like $50,000 and $50,000 look like $100,000.
Let us take the example of farm units in the province of Alberta. The latest reliable figures are those available in the 1966 agricultural census, and we should remember what has happened to prices and costs since then. I read in the newspaper last night that real estate prices in Ottawa have risen 13 per cent in the past year. If that is true of real estate in this city, just think what has happened to the capital value of farm units since 1966. In that year there were 69,411 farms in Alberta. Of these, only 519 were run by managers. The others were all owner or tenant, or owner-tenant operated. In other words, they were farms that could be designated as family or privately operated farms, not run by syndicates or large corporations.
As of 1966 there were some 30,000 farms in Alberta capitalized at more than $50,000, and another 20,000 or so just under that figure. The latter have probably graduated to the $50,000 figure by now after three years of spiralling costs and inflation. Perhaps these figures, Mr. Speaker, will give the minister some idea of the dimensions of the problem his new estate tax has created for Canadians.
The Saskatchewan Association of Rural Municipalities sent the minister a letter some time ago about his new tax. They drew attention to the menace it posed to farming in particular. The letter reads in part:
Because of high land values and large land holdings which successful farming operations require, farm estates attract large estate taxes but have no liquid assets readily available to pay them. We cannot see how our national wellbeing would be served by the breaking up of production units to pay estate taxes.
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Nor do I, Mr. Speaker. The proposed tax system, the letter states:
-will expose the farm estate to taxes which could compel the farm to be broken up and sold.
It is true that the minister has now made an allowance for payment of estate taxes on an instalment basis. This is hardly a measure of relief. It is very like the hangman telling the condemned man that instead of breaking his neck quickly with one short, sharp drop he will be merciful and let him strangle to death slowly.
No, Mr. Speaker, however one looks at this tax it is an iniquitous and unnecessary measure. Personally, I believe in abolishing all taxation of estates. I am unalterably opposed to any action that tends to discourage individual initiative and business enterprise, and even more to any measure that destroys accumulations of private capital. If we pursue such a blind policy as the discouragement of individual business enterprise and the destruction of private capital, the nation is doomed to slow economic death. History is full of examples of what happens to a state that follows this course.
Canada remains ravenously hungry for capital. It is among our largest imports. One of our most pressing needs for the realization of our potential as a people and as a nation, is capital. The last thing we should be doing is taxing our own sources of capital out of existence. One of the most interesting documents on this subject is the report of the Economic Council of Ontario. Last fall the Council finished an exhaustive study of the question for that government. The report notes:
While allegedly aimed at the "redistribution of wealth", these taxes (death duties and estate taxes) are to a very significant degree extracted from individuals who by today's standards cannot be considered wealthy.
And then later on:
One may question whether a $70,000 farm represents an "undue concentration of wealth" when carried to this degree ... (and whether to tax it) ... is economically sound policy.
In its introduction to the chapter on transfer taxes, the description used by the council to cover all estate and similar taxes, the report states:
Though the percentage of revenue from transfer taxes received by the Canadian governments is exceeded among the nations of the western world only by the governments of the United States and United Kingdom, the relative maturity of the economies of these two prominent countries, when
February 6, 1969

Income Tax Act and Estate Tax Act
compared to that of Canada, raises a question as to the merit of thus dissipating and discouraging private accumulations of investment capital.
The answer may well be that most Canadians are unaware that transfer taxes are, in fact taxes levied on investment capital.. . and that Canada ranks above all other nations in the share of taxes raised from all forms of capital investment.
There is irony indeed that Canada, which needs capital almost more than any other western nation, is the most assiduous in destroying the incentive for accumulating such capital and, when such accumulation is made, taxing it out of existence. I am absolutely opposed to this legislation, Mr. Speaker, in theory as well as fact. I believe that instead of considering ways of increasing the tax burden on private capital we should be considering measures to free it entirely from its government-imposed shackles.


John (Moody) Roberts: Mr. Speaker, there is no doubt in my mind that the government's proposals for estate taxes have caused a great deal of concern, particularly among rural people. In common, I suppose, with many hon. members I received many letters, indeed hundreds of letters, concerning this subject. Along with the hon. member for York North (Mr. Danson), I have conducted conversations, discussions and meetings with various farm organizations. I found that as we explained to the farm organizations the facts of the matter, a great deal of their concern evaporated. There is a great deal of misunderstanding and misrepresentation,-no doubt accidentally,-in the press in relation to the estate tax, and I think this is very unfortunate. I think this is very unfortunate because the Minister of Finance (Mr. Benson), who should be receiving credit for a progressive piece of legislation, is receiving a few brickbats.
The fact of the matter is that in introducing the five year period to pay, a great progressive step has been taken. The fact of the matter is that in enabling wives to inherit tax free, and receive gifts tax free, a great progressive step has been taken. We have heard a great deal of talk to the effect that the family farm is going to be hit and will probably disappear. The facts are that most family estates are going to be much better off under the new legislation than they were under the old provisions.
I was frankly amazed at the argument presented by the Leader of the Opposition (Mr. Stanfield) in relation to this measure. It is a complex problem. He had a very simple

solution-throw the thing out. Why? Well, there has been a lot of confusion, a lot of misunderstanding. What does that prove? That proves it was really a half-baked idea. Really, I do not think that proves it was a half-baked idea.
[DOT] (9:40 p.m.)
If the government were unprepared to listen to reason he would be the first to complain that they were rigid, that they were stonewalling or that they were arrogant. When the Minister of Finance is prepared to accept reasonable suggestions from people on whatever side of the house he says, "Ah, that proves it was a half-baked idea". He says, "Let us talk straight; let us not have any confusion". Well, let us not have any confusion. Let us talk straight about where he stands on this issue. He says "Throw it out". What does he want to throw out? Does he want to throw out the five year payment principle? Does he want to throw out the fact that wives will receive tax-free inheritances? Does he want to throw out the fact that wives will be able to receive gifts tax free? Does he want to throw out the fact that the gift tax exemption has been effectively nearly doubled? I ask what is it that the hon. Leader of the Opposition (Mr. Stanfield) wants to throw out.
When we get to the hon. member for Crowfoot (Mr. Horner) then the confusion becomes compounded. What does he say? He said that the Minister of Finance says the burden is not too great. Then, this member says "But let us talk to the farm leaders". Let us do more than talk to the farm leaders; let us have a look at the facts. The fact is that the new proposals do not, on an over-all view, reduce exemptions on estates. What they do is provide advantages to estates involving families with children in comparison to those involving families without children. That is because there is a new exemption. Perhaps the Leader of the Opposition wants that thrown out too. There is a new exemption of $10,000 for each child no matter what his age is. It is true that the basic exemption has been lowered from $40,000 to $20,000, but the total exemptions will slide upwards depending on the number of children in the family.
We should really keep in mind that these exemptions in many cases apply twice. That is to say, the exemptions will apply at first on the half of the estate going to the children and they will apply again on the half of the estate which is provided to the wife when it
February 8, 1969	COMMONS
passes to the children upon her death. So, in circumstances I have described the exemptions applied to the estate will be at least equal-and where there are children in most cases they will be more-than at the present time, provided the husband divides his estate between his wife and child.
Now, there is a new gift tax exemption. Perhaps that is something the Leader of the Opposition wants to throw out. It is double the previous exemption. It is not an exemption that applies only to children. It can be given to any person. So, in many cases expensive gifts can be made tax free over a period of time. For example, a man can give $2,000 a year to his son tax free. He can also give $2,000 to his daughter-in-law tax free. He can give $4,000 to his wife tax free and she can pass on $2,000 each to the son and to the daughter-in-law tax free. In one year, therefore, $8,000 can be transferred tax free within a family situation.
It may be true that some family farms or businesses will have difficulty paying their estate tax. But they would have even more difficulty paying if the estate tax changes were not put into effect, both because of the extended time given for payment and because an estate, properly arranged, will now generally pay less tax when there are children in the family.
Estates will quite properly be arranged so as to minimize their tax. If the estates are changed, and if we are dealing with a family estate, the tax levied under the new proposals will almost always be less than at the present time. But if people refuse to take advantage of the opportunity offered them, they may pay more tax. It is misleading to suggest that people will not take advantage of the new provisions. It is even more misleading to imply that if they do not choose to take advantage of these provisions they will be forced to pay higher taxes. The fairest thing is to compare the minimum tax they would have to pay under both the old and new legislation if they take the most advantageous way of arranging their estate. On such a comparison, a family estate will now pay less tax.
Let me illustrate my statement with some figures. The hon. member for Crowfoot had some trouble with his figures and the hon. member for Palliser (Mr. Schumacher) does not really understand the situation very well either. Let us look at the least advantageous situation, that in which there is one child. On an $80,000 estate, if the tax is arranged as favourably as possible there will be a tax 29180-3331
DEBATES	5255
Income Tax Act and Estate Tax Act of $1,500 which is $1,100 less than it would be under the most favourable conditions at the present time. If the tax were paid on an instalment basis the instalment payment would be $300 a year for 5 years; and on an estate of $80,000, at 6 per cent, the income on the assets would be $4,800 a year. Let us go to an estate in the amount of $100,000. The tax would be $3,000. That is down $3,200 if the estate is arranged as favourably as possible. The amount paid on an instalment basis would be $600 a year. And at 6 per cent the amount paid on $100,000 would be $6,000 a year.
Then, we might take an estate of $120,000. The tax would be $9,600. This is down $600 in respect of an estate arranged on the most favourable basis at the present time. The tax on the instalment basis would be $1,920 a year for 5 years and with interest at 6 per cent the amount of return on $120,000 would be $7,200. On an estate of $150,000 the tax would be $15,300. That is down $1,500 over the present situation. The tax on an instalment basis would be $3,060 and the annual income on the asset would be $9,000. On an estate of $200,000 the tax on an estate arranged in the most favourable way would be $26,400. That is down $2,200 over what would be paid under the most favourable circumstances at the present time. The tax instalment would be $5,280 and the revenue at 6 per cent interest would be $12,000 a year.
If we start to deal with estates valued at half a million dollars or more there will be more tax paid than at the present time. It may be that the hon. member for Crowfoot is worried about those estates. I would rather worry about the estate valued at under half a million dollars. So long as we are talking of families with at least one child, and an estate valued at less than half a million dollars, under the new arrangement the tax will be less than under the previous arrangement. Those are the facts, and I wish the hon. member for Crowfoot and the hon. member for Palliser would have a look at them.
Someone might ask whether there should be estate or succession duty taxes at the provincial level. It does not make much sense to have them at the provincial level because one province would then have an effective tax advantage over another unrelated to potential economic advantage. Someone might also ask whether we should have a tax at the federal level. One could say that the amount collected, which is approximately $100 million a year, less than one per cent of the federal budget, is not really worth while.
525B
February 6, 1969

Income Tax Act and Estate Tax Act
One could also argue on the social side, as I as a Liberal would argue; that is, I do not like a system where a large accumulation of wealth can be passed on from father to son when the person benefiting has not exerted any effort in accumulating the wealth. I would not want to see a situation where enormous sums of money and the power and influence which is attached to them, could be passed on from generation to generation without some regulation.
[DOT] (9:50 p.m.)
I do think there is a special problem, and a special case, in relation to farming and family enterprises. Succession or estate tax duties may fail unfairly on family and farm enterprises because of unliquid assets. There are two approaches one can take to this problem. You can say let us evaluate or assess the farm land for estate tax purposes at farming value, not at real commercial value and, if later that land is converted to other uses, let us go back and charge retroactive taxes on the property on the basis of real commercial value. I can see certain disadvantages to this. It might lead to an uneconomic use of the land, if the land is high priced because it could be better used in another capacity, and thus reduce efficient use of our economic assets.
Also, if you follow such a procedure there might be an encouragement to a large number of gentlemen farmers to push into farming simply to reduce their other profits by operating farms at a loss. They would be encouraged to do so because of taxation. The proper way to look at this tax reform is in the committee of finance later on this spring or summer.
Really the solution to the problem in relation to family farms is to bring in, not a $50,000 exemption which the minister has suggested, but a $100,000 exemption. This should deal with the problem of family farms. A $100,000 exemption would take account of the increase in respect of the value of farm property in the past ten years. It is a fair figure.
This second, and perhaps more fruitful, approach should be looked at by the Finance committee later in the spring when we are considering reform of the whole taxation system. The important thing to recognize at this stage, as long as we are talking about family estates under this new legislation, is that these estates are going to be better off than

they have been in the past. Whatever injustices or inadequacies there have been in respect of estate taxes, they have been diminished by the progressive steps taken by the present Minister of Finance (Mr. Benson). We may not have come all the way down the road, but we have come down two thirds of the way, as a result of the nature of this progressive legislation.


Alfred Pullen Gleave: Mr. Speaker, may I call it ten o'clock.


Stanley Howard Knowles: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under standing order 40 deemed to have been moved.

Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, a few days ago I asked the Minister of Consumer and Corporate Affairs (Mr. Basford) the following question:
Can the minister tell us when the standing joint Senate-Commons committee on price stability, income and employment, will be established?
The minister's answer on that occasion was very vague. I hope tonight he will answer my question in some way other than by saying that before this joint committee can be established the prices and incomes commission must be established. I hope he will not tell me this, because I already know it.
My question is directed to him for the purpose of speeding up the process of establishing both the commission and the committee. I know they are both essential to the process of dealing with prices and income. The minister's white paper on prices and stability, which will be discussed by the committee on Tuesday, was published about December 20 last. I also know that this idea was not new then. Strangely enough, it was exactly two years to the day when the joint Senate-Commons committee on consumer credit and prices published an interim report. One of the recommendations at that time was that a joint committee be established to review consumer affairs and the state of the Canadian economy. This has already been talked about for two years and considerable thought has been given to it.
February 6, 1969
It is my considered opinion that the state of the Canadian economy is worse now than it was two years ago. I have been quite impatient because there are a great many people in this country looking forward with great anticipation to a study being made with respect to inflation, prices and incomes. These factors are very badly in need of attention.
The cost of living increased over 4 per cent last year. Pensions and allowances have increased by 2 per cent, but this increase does not come close to offsetting the four per cent increase in the cost of living. While wages have been increasing their ratio to the increase in the cost of living has been lessening. When talking about different factors in our economy one must consider that the one thing completely out of line is the increase of profits to large companies. I do not have to go back in history to illustrate this. Let must just refer to an item which appeared today in the Globe and Mail. It states in part:
Higher profits are being reported by a wide range of companies in initial 1968 annual reports.
It continues as follows:
Only four of the first 35 companies to report show lower profits for 1968.
The article refers to a number of companies. I shall only refer to one or two. The Algoma Steel Corporation of Sault Ste. Marie had a profit of $1.70 a share compared with $1.22 cents in 1967.


An hon. Member:: That's all right.


Winona Grace MacInnis: Sure, it is all right for Algoma Steel, but this is the sort of thing we have to deal with when we are trying to keep prices and incomes in line. The Ford Motor Company of Canada Limited, Oakville, showed profits increasing by 58.8 per cent to $30.26 a share last year from $19.04 the previous year.
I could go on through these corporations one by one, but I do not intend to do so. I do want to emphasize that when you look at these factors you find that prices have gone up on the one hand and that the incomes of people have not been keeping pace on the other. They are not now in a position to pay for the things they need. The cost of living has gone up higher and faster than incomes, wages and pensions, yet profits have gone way out of line. These are the things that need to be studied.
The function of the joint committee when it is set up will be to deal with and consider the reports of the commission on prices. Let me
Proceedings on Adjournment Motion read you the minister's own words about the function of the standing parliamentary committee on price stability, incomes and employment, as found in the White Paper:
What is envisaged is a joint committee of the Senate and the House of Commons. It would receive the reports of the commission for review and discussion and would make recommendations.
What will be the reports of that commission? The minister went on to say:
While it will be empowered to make recommendations as to government policy, its main function will be to rally a sense of public responsibility leading to voluntary restraint.
The minister emphasizes very definitely that he does not intend to have anything but voluntary restraints. Let me point out to the minister that what we have right now is forced restraints on certain sectors of our population.
[DOT] (10:00 p.m.)
We have forced restraint of pensioners, whether they are old age pensioners, retired public servants, people on veterans pensions and allowances, or the blind. We have forced restraint of the most blatant kind, because these people have no means of raising their income. Parliament has turned -a deaf ear and a blind eye on them.


Mr. Depuiy Speaker:: Order, please. The hon. member's time has expired.


Winona Grace MacInnis: right, Mr. Speaker. I just want to say that the profit-makers are running wild and I want to see this situation brought under control.


Stanley Ronald Basford: Mr. Speaker, I am grateful to the hon. member for Vancouver-
Kingsway (Mrs. Maclnnis) for raising this issue tonight and for paraphrasing from the white paper, which says that inflation hits hardest at and has gradual effects on those on fixed incomes, those on limited incomes, those unemployed, and the elderly. It is illustrated again and again in the white paper that these people are hurt most by inflation, and this is why we must evolve new policies to curb inflation.
I am also grateful to the hon. member for raising this issue tonight and urging me, I take it, in the strongest possible terms, to follow up and pursue the policies set out in the white paper. I am a little surprised at this, because the group to which the hon. member belongs has been very critical of

February 6, 1969

Proceedings on Adjournment Motion those policies. The former member for Burna-by-Coquitlam, who is now involved in a byelection, made a big speech the other night in Nanaimo in which he said that this policy is no good. Therefore, I am delighted to have support from the New Democratic party for the policies set out in the white paper. I am also delighted to have the hon. member for Vancouver-Kingsway urging me to get on with the policies I have set out in the white paper. I said in the white paper and in the house that I intended to use the policies in the white paper as a basis for-


Winona Grace MacInnis: On
a point of order, Mr. Speaker-


Mr. Deputy Speaker:: Order, please. The hon. member knows that on the adjournment debate we do not follow the procedure of raising points of order.


Winona Grace MacInnis: I
just want to say that I am not supporting the policy. I am supporting the idea of having the committee study this question.


Stanley Ronald Basford: I have said in the white paper and in the house that I would use the policies set out in the white paper as a basis for consultation with interested economic groups before doing the things set out in the white paper. That process of consultation is now under way. I said in the house today, for example, that I had met on Tuesday for a long session with the principal officers of the Canadian Labour Congress. I think that the hon. member for Winnipeg North Centre (Mr. Knowles) in particular would want me to consult with the Canadian Labour Congress before I set up a prices and incomes commission and a parliamentary committee to deal with its report.
This process takes time. I am meeting with the Canadian Manufacturers' Association and the Canadian Chamber of Commerce. I have already had one meeting with two officers of the Canadian Chamber of Commerce. I am grateful to them for the advice they have already given me. I am looking forward to further consultations with that body. This is why the committee to which the hon. member for Vancouver-Kingsway referred has not yet been set up. It will not be set up until these consultations are over and we pass an order in council establishing the prices and incomes commission, which I hope to do as soon as I can. But I will do it only after I have had the consultations that I have promised the people in the private sector I would have with them.
(Mr. Basford.]



TRANSPORT-LEASING OF WATER LOTS ON CANAL SYSTEMS

Mr. W. C. Scoit (Victoria-Haliburton):: Mr. Speaker, on January 29 I asked the Minister of Transport (Mr. Hellyer) whether it was still the department's intention to pursue its program with respect to water-lot leasing on the Trent and Rideau Canal Systems. For the past two years the tourist industry on the Trent and Rideau Canal systems has been threatened with additional taxation by way of water-lot leases. Such legislation, if passed, would affect only the commercial operators on these two canal systems. It would not apply to their competitors on other bodies of water such as the Great Lakes, Muskoka, Couchiching, or Simcoe.
In other words, commercial operators on these two systems are being placed at a distinct disadvantage in relation to commercial operators elsewhere. I venture to suggest there will be numerous cases where property ownership will be in serious dispute; cases where it has never been clearly established whether the shoreline involved does in fact belong to the Crown. Much of this shoreline has never been removed from the deeds of the original and present owners. These people are already paying an annual property tax and, because of the present inflated value of waterfront property, their municipal tax assessments are high. Now the department wants to institute a form of double taxation by forcing them to lease property on which they are already paying a high premium.
There are many questions about such legislation which could well lead to complications. First of all, will the property owner pay for a lease on all improved property? Second, if the property is of such size as to allow for the erection of several docks, will the property-owner pay for a lease on the entire waterfront, or for a lease on each dock, and will he have a choice as to whether to lease the entire property or split it into several separate leases around independent docks?
A further difficulty arises. Due to differences between the nature of one waterfront and another, one operator may have to build a dock out 125 feet or more on a shallow beach-type land contour in order to service a boat docking. On the other hand, another operator, perhaps enjoying access to government improved land which, because it is dredged regularly, is close to deep water, may be able to service the same boat with a 20 foot dock. Nevertheless, the operator with the long dock and the shallow beach will
February 6, 1969

have to pay more for his lease because of the length of his dock, something over which he has no control. This constitutes an inequity in taxation.
Has the government considered how little profit may be derived from the water lot leasing when the costs have been deducted for implementation and enforcement of the program, a program which is being carried out against a very small segment of Canada's third largest industry. I would point out, however, that it is the largest industry in the Kawartha Lakes district which I have the honour to represent.
Since figures for 1968 are not yet available, and since, because of Expo, the 1967 figures would tend to give a distorted view, I am going to quote from 1966 statistics which indicate that 40 million tourists visited Canada in that year, 18 million of whom came to Ontario and over two million to the Kawartha Lakes region. More than one billion tourist dollars were brought in, $398 millions to Ontario. And the 1968 figures should be considerably higher.
However, as a profit-making business the tourist industry is only marginal. High operational costs, competition between lodge operators and the competition provided by an ever-increasing number of private and provincial trailer parks, some of which are now offering plush facilities, have combined to narrow the small margin of profit enjoyed by lodge owners. Now, these same people are threatened with yet another monetary demand. Where, and when, is it going to end?
If the department feels that legislation to lease water lots must go through, surely a simpler and more economical method could be found. In closing, I should like to suggest that the Department of Transport make a further review of the entire program before going ahead with this method of water lot leasing.


Stanley Haidasz: Mr. Speaker, I am pleased at
this time to assure the hon. member that because of the number of representations received on the subject of water lot leasing on the Trent and Rideau Canals the Minister of Transport (Mr. Hellyer) intends to personally review the situation and the program.
Proceedings on Adjournment Motion [DOT] (10:10 p.m.)



HOUSING-REMOVAL OF TAX ON BUILDING MATERIALS

Mr. Walter C. Carter (St. John's West):: Mr. Speaker, yesterday I asked the Minister of Finance (Mr. Benson) a question dealing with the recommendation made by the task force on housing that the 11 per cent sales tax presently being assessed by the federal government on building materials be eliminated. My question was prompted by a statement attributed to the minister responsible for housing in Vancouver, at which time he was alleged to have stated that the Minister of Finance might juggle a few items in the budget so as to eliminate the federal sales tax on building materials.
In reply to my question, the minister stated that no consideration was being given to the recommendation of the task force with regard to the elimination of this tax. His reply indicates to me that there is nothing but confusion in this government. In my opinion, they have injected confusion into national policy. Some time ago we had the Postmaster General (Mr. Keirans) pontificating about NATO. He said that NATO had to go. Not content with reorganizing the Post Office Department, he is now endeavouring to reorganize the world.


Stanley Howard Knowles: Might be a good idea.


Walter C. Carter: Not by the Postmaster General, if his reorganization of the post office is any indication.
We have a task force headed by one minister which says: "Take off the 11 per cent tax on housing". The Minister of Finance says: "It will stay on". So, obviously there is no unity whatever in this cabinet. Everyone knows that the 11 per cent sales tax must come off.


Mr. McGraih:: Everyone but the Minister of Finance.


Walter C. Carter: Exactly. In my opinion it is the greatest single contributing factor to inflating the final cost of housing. This 11 per cent tax often means the difference between owning a home and not owning a home.
Since the Minister of Finance is not here I will direct my question to his parliamentary secretary. Was the so-called task force on housing just another step in the personal publicity campaign of the Minister of Transport
February 6, 1969
5260	COMMONS
Proceedings on Adjournment Motion (Mr. Hellyer)? I ask again: Are the recommendations of the minister and his task force to be pushed aside? Why have a task force headed by a minister if we ignore its recommendations? This government is attempting to take credit for doing something about housing when actually the housing crisis has been brought about by the inflation that has been created by this government.
Canadians are being subjected to what is probably the heaviest burden of taxation in the western world as this government, by its artificially induced inflationary policies, siphons away the prosperity that they have earned. The 10 per cent increase in income tax two years ago, followed by the 3 per cent increase one year ago, the 2 per cent increase for social security, not to mention the vicious increase in estate taxes and this ruinous tax on building materials and homes, in my opinion have contributed to destroying the prosperity of our nation. I say to government members that they should get together and remove this tax on homes, thus giving the average Canadian a chance. The attitude of the Minister of Finance represents outright rejection of the recommendations of the task force on housing headed by the Minister of Transport.
What we have here, Mr. Speaker, is one minister publicly repudiating the advice of another. Of course, I would say that this advice was improperly offered. The Minister of Transport had no business heading a task force. Yet, knowing his great love of, and reliance on, public relations one can see how he was dragged into this situation. But now the position is this: his suggestion has been publicly repudiated and rejected by the Minister of Finance.


Thomas Miller Bell: Shame.


Walter C. Carter: He has become unwanted, along with his advice. He is in the position of a minister whose advise has been turned down and whose policy is rejected by cabinet. In my opinion and, I am sure, in the opinion of many Canadians, he has only one thing left to do, and that is resign.


Some hon. Members:: Hear, hear.


Walter C. Carter: The Minister of Transport headed a task force on housing at great expense to the Canadian taxpayer. It is his opinion that in order to provide decent housing accommodation for the average Canadian citizen we must eliminate the 11 per cent sales


tax on building materials. If the Minister of Finance and his other cabinet colleagues refuse to go along with that recommendation, the only honourable thing for the Minister of Transport to do is to resign from cabinet.


Some hon. Members:: Hear, hear.


Walter C. Carter: I suggest, too, that unless the government follows through on the recommendations of the minister and the task force he headed, he has no other choice.
A recent release by real estate dealers in Ottawa shows that homes in this area have increased about 34 per cent in price since 1965. Liberal governments have been in power since before 1965. In the city I have the honour to represent, St. John's, we have several public housing projects, but some of them are not working out very well. The latest public housing project in St. John's cost the three levels of government, the municipal council, the provincial government and the federal government, over $20,000 per unit to build. I say that if the only way to bring down the price of homes and provide decent accommodation for our average and low income workers is by having the government enter the housing field, then by all means let the government build houses that the average Canadian can live in without social stigma. The houses ought to be built at prices the average Canadian can afford.
Surely, a time when government expenditures are rising higher and higher-they are up nearly 10 per cent in the latest estimates- is no time for anyone to continue gouging our young people in search of a home. May I conclude with a few more words, Mr. Speaker?


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


Mr. H. E. Gray (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the hon. member has provided some heat, but I shall attempt to throw at least a little light on the matter. Everyone can, I think, be sympathetic to the idea of lowering taxes where possible. The Minister of Finance (Mr. Benson) has himself indicated that he would like to be able to propose tax reductions. However, he has pointed to the hard fact, Mr. Speaker, that must be faced and that is if important tax reductions were made at the present time the public would either have to pay the same
February 6, 1969	COMMONS
amount of tax in some other way or go without some service or benefit which it has come to expect from the government.
Estimates based on the value of production of building materials and related statistics led to the conclusion that the sales tax on all building materials now yields over $300 million. The revenue from other materials used in the construction of housing-in other words, single family dwellings, apartment buildings and other units-is even more difficult to estimate but is believed to be between $130 million and $140 million. Thus, if the sales tax on all building materials were to be repealed at this time, I am informed that it would have to be replaced by increasing the rate of sales tax by more than 1.5 percentage points, or increasing the revenue from the present personal income tax by about 7 per cent. In other words, some equivalent measure would have to be introduced.


James Aloysius McGrath: What about winter works?
[DOT] (10:20 p.m.)


Herbert Eser (Herb) Gray: The exemption only of building materials used in housing would involve lower amounts, but the tax increase in other areas to offset this loss would still be important and difficult.


James Aloysius McGrath: I said, what about winter works programs?


Herbert Eser (Herb) Gray: Also proposals to eliminate the sales tax on building materials would affect the 3 per cent old age security tax that is part
DEBATES	5261
Proceedings on Adjournment Motion of the sales tax. An exemption for building materials would reduce the old age security tax revenues which go to pay the old age security pensions.
It would, of course, be very difficult to administer an exemption restricted to building materials used only for housing construction. The tax is paid by the manufacturer of materials who does not know whether the bricks, lumber or glass he produces will be used to build a house or a factory. Any exemption, therefore, would probably have to be administered by refunds or by certificates from builders. It might well be better to consider payments to house or apartment builders or home owners of amounts calculated by some formula which would be approximately equal to the sales tax included in the cost of a housing unit.
In general, Mr. Speaker, the recommendations of the task force with respect to the item raised by the hon. member are certainly deserving of serious consideration. In doing so, we cannot overlook factors such as those I have mentioned. We must certainly take them into account in carrying out our duty to the people of this country.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the house is now deemed to have been adopted. Accordingly, this house stands adjourned until tomorrow at 11 a.m.
Motion agreed to and the house adjourned at 10.25 p.m.

Friday, February 7, 1969