1969-06-06

ROUTINE PROCEEDINGS


[Stage Direction]
Tenth and eleventh reports of Standing Committee on Health, Welfare and Social Affairs-Mr. Isabelle (Hull).
[Editor's Note: The text of the foregoing reports appears in today's Votes and Proceedings.]


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, this is a day for the Minister of Indian Affairs and Northern Development. I wonder who is the acting minister in the absence of the minister. I see the Prime Minister indicates that it is the Minister without Portfolio.
I would like to ask the acting minister why the minister did not meet with the National Indian Committee on Indian Rights and Treaties which is now in Ottawa. I ask this question particularly in light of the firm undertaking the minister gave in the house, in response to a question from myself, on May 13, that he would meet with the committee either in late May or early June.
Why has the minister not met with the committee which is now in the city?


Hon. Robert K. Andras (Minister without Portfolio):: I will have to draw this to the attention of the minister, who will give his reply on Tuesday.


Robert Lorne Stanfield: I have a supplementary
question. Will the Acting Minister also bring to the attention of the minister my request for an undertaking from him that he will meet with the committee before he makes his
major statement concerning the Indian Act, in order to ensure that that statement in fact reflects the views and the priorities of the Indian people?


Robert Knight Andras: The representation is noted, Mr. Speaker.



FINANCE


Mr. David Lewis (York South):: Mr. Speaker, I should like to address a question to the Minister of Finance. In view of the announcement by the Toronto-Dominion Bank of its intention to increase the prime rate of interest again, despite a 25 per cent increase in its profit and in view of the minister's concern about inflation in this country, will the minister inform the house whether he intends to take steps, or to ask the governor of the Bank of Canada to take steps, to prevent this further increase in the prime interest rate?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I will discuss the matter with the governor.


David Lewis: I have a supplementary question, Mr. Speaker. May I ask the minister whether he would consider, indeed, whether he intends, to call a meeting of the heads of the chartered banks in Canada and persuade them to call a halt to this constant increase in the interest rates, which affects the cost of living in this country.


Edgar John Benson: Mr. Speaker, I expect to be meeting the heads of the chartered banks later this month at which time this matter as well as others will probably be discussed. The high interest rate is of course one of the indications of the tightening of the monetary policy by the banks, which is in effect useful toward controlling inflation.


David Lewis: I have a further supplementary question, Mr. Speaker. I understood the Minister of Finance to say that it is his intention to allow this continued increase of the interest rates as a measure to control in-
9820

June 6, 1969
Inquiries of the Ministry flation. Is that what he intends to discuss with the heads of the banks?


Edgar John Benson: After I have had my discussions with the heads of the banks I will be pleased to tell my hon. friend what I discussed.


Mr.  R. Gordon L. Fairwealher@Fundy-Roy-al: I have a supplementary question for the Minister of Finance, Mr. Speaker. When the minister sees the heads of the chartered banks in the near future, will he impress upon them the need to copy the government's flexible system of dealing with inflation? Will he also remind him that tight money works a hardship in the least developed parts of Canada?


Mr. Speaker:: Order, please. The hon. member's question is in the nature of a submission.



CONSUMER AFFAIRS


Mr. James A. McGrath (Si. John's East):: Mr. Speaker, I have a related question for the Minister of Finance. In view of the announcement made today by the Dominion Bureau of Statistics indicating that for 18 months in a row the consumer price index has increased, will the minister say whether the government will consider the possibility of a prices and income policy through the economy?


Edgar John Benson: should like to point out that the increase in the cost of living this month was encouraging in that it was only .2 per cent as compared with 1.1 per cent in the previous month. This is not good enough in the long run, and of course I should like to see decreases in the cost of living but, unfortunately, they have not been achieved to this point.


James Aloysius McGrath: Is it the position of the government that the taxation policy together with the educational work of the Prices and Incomes Commission will reduce inflation to the level considered safe by the Economic Council of Canada, a level which has been exceeded in each of the past three years.


Mr. Speaker:: Order, please. I wonder
whether the hon. member is not asking the

minister to give a general statement of policy, and whether the question as phrased is in order.


Mr. R. N. Thompson (Red Deer):: I have a supplementary question, Mr. Speaker. In view of the fact that the consumer price index increased by 2.1 per cent in the first five months of this year, is the minister considering the fact that on this basis we will be having an increase in the index of more than 4 per cent as a result of his policy?


Edgar John Benson: I hope this will not be the case. The policy which the government is carrying out through control of its own expenditures, the surplus, the reduction in tariffs, the deferral of depreciation and the monetary policy will all have an effect upon the control of inflation. I trust the Canadian people and all people will start to realize that we cannot take increased incomes out of the economy without greater productivity, or else prices will rise.


Mrs. Grace Maclnnis (Vancouver-Kin gsway):: I have a question for the Minister of Finance. Pending a downward trend in the cost of living, is it his intention to review measures whereby incomes can be increased through income tax deductions or, in concert with the Minister of National Health and Welfare, through pension increases?


Edgar John Benson: Mr. Speaker, this is a very broad question. Of course we continuously review possibilities and actions which the government might take.


Mr. Speaker:: Order, please. It seems to me that the question asked by the hon. member for Vancouver-Kingsway is the same type of question as the one asked by the hon. member for St. John's East, and it seems to me that they border on debate. May I remind hon. members that this is the debate we will initiate on Monday.


James Aloysius McGrath: I have a further supplementary question, Mr. Speaker. In view of the continuing rise in the cost of living index and the failure of the government to cope with it effectively, will the minister not consider resigning?


Edgar John Benson: No, Mr. Speaker.


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



9S21



NATIONAL DEFENCE


Hon. J. A. MacLean (Malpeque):: I have a question for the Minister of National Defence, Mr. Speaker. Before I ask it, perhaps I might have the indulgence of the house while I point out that this is the 25th anniversary of the beginning of the physical liberation of western Europe. I think it is fitting we should recall the great sacrifices which have been made so that we can continue to enjoy the democratic system of government to which we all subscribe.


Some hon. Members:: Hear, hear.


John Angus MacLean: Arising from the statements made by the Prime Minister yesterday, in which the right hon. gentleman rejected the position of the United States Secretary of Defence and the British Minister of Defence on the grounds that Canada's reduction of its NATO force applies to its nuclear commitment, may I ask whether this implies that no reduction is planned in our so-called conventional contribution to NATO?


Hon. Leo Cadieux (Minister of National Defence):: First, I should like to join with the hon. member in paying homage to fallen Canadians on D-Day. I might also say that the Department of National Defence is represented by the Chief of Staff at the ceremony which is taking place in France.
As far as the question is concerned, I have indicated that in my view we are not reducing the conventional capability but we are restructuring the force. We think that in going along with the policy directives which were given by the ministers to the military committee we are complying with the general wish expressed by NATO to have more flexible forces. I do not think the question itself leads to any other interpretation.


John Angus MacLean: Is the house correct in assuming it is the position of the Government of Canada that a reduction in NATO's conventional forces would lower the nuclear threshold but that Canada's reduction applies only to our nuclear role?


Léo Alphonse Joseph Cadieux: No, Mr. Speaker, I think the hon. member is anticipating, again. I do not think we have indicated what the air role will be. The possible reduction in nuclear capacity with the brigade is minimal. I would say. The loss of the Honest John is about the only thing concerned.
Inquiries of the Ministry



NATO-RESIGNATION OF CANADIAN SENATOR FROM COMMITTEE

Mr. Thomas M. Bell (Saint John-Lancasier):: A supplementary question to the Prime Minister on this NATO business. Has the Prime Minister yet been able to find a replacement for Senator Lang who resigned from the NATO committee saying that the government's NATO position was petulant, amateurish, dangerous-


Mr. Speaker:: Order.



STAFF OVERTIME AND COMPENSATORY LEAVE PROVISIONS

Mr. Harold E. Winch (Vancouver East):: Since I believe that by courtesy, and perhaps by rule, we should not direct questions to the Speaker of the house, may I direct a question to the President of the Treasury Board who is also, I understand, a member of the Internal Economy Commission? For up to three years, now, members of the staff of the Parliament of Canada have not been paid in respect of overtime, or been given time off in place of overtime, nor, because of the nature of their work, have they been given holiday time. May I ask whether any decision has been reached with regard to payment in respect of overtime and loss of holidays?


Mr. Speaker:: Order. I suggest to the hon. member it might not be proper to depart from the well established custom. The hon. member knows that this kind of question can be directed to the Speaker in writing in the usual way, and I assure him that I will be pleased to look at the matter on his behalf.



CANADIAN CONFEDERATION


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to put my question to the Prime Minister.
Since the Quebec premier has announced that a referendum would be held next October, would the Prime Minister consider the advisability for the federal government of holding at his own expense a referendum in

June 6, 1969
Inquiries of the Ministry Quebec in order to learn the views of people on that thorny question which is separatism, since I consider that it is a national matter?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I realize that the proposal would raise some difficulties, but I am ready to discuss it with the hon. member, if his arguments are liable to convince me.



VETERANS AFFAIRS


Mr. Colin D. Gibson (Hamilton-Wentworlh):: Mr. Speaker, I have a question for the Prime Minister. This being the 25th anniversary of D-Day, June 6, 1944, one of the greatest days in Canadian history, would the Prime Minister consider holding each year on Parliament Hill an appropriate ceremony commemorating this great event?


Pierre Elliott Trudeau: Mr. Speaker, I would be prepared to discuss this interesting suggestion with the Minister of Veterans Affairs.


Mr. Donald Maclnnis (Cape Breton-East Richmond):: A supplementary question. I
would ask the Prime Minister why he did not recognize the remarks that were made by the defence critic on this side to his own Minister of National Defence a few meetings ago.



WOODS REPORT-REQUEST FOR PRESENTATION

Mr. John Burton (Regina East):: Mr. Speaker, I have a question for the Prime Minister. Would he consider making the commemoration of D-Day more meaningful by tabling the white paper on the Woods report concerning veterans affairs before the summer recess?



WATER RESOURCES


Mr. G. H. Aiken (Parry Sound- Muskoka):: Mr. Speaker, I have a question for the Minister without Portfolio responsible for water resources. Resulting from the appointment in Ontario of a new Minister of Energy and Resources Management, and his energetic approach to the problem, and in view of his IMr. Caouette.]
statement that he will press the federal government to take action on pollution control in interprovincial waters, is the minister reconsidering the government's position and will he shortly be making a statement on this particular problem?


Hon. Otto E. Lang (Minister without Portfolio):: Mr. Speaker, the government's position in regard to pollution matters will be further revealed when the water bill is given first reading. I welcome very much, of course, the positive statements about co-operation which were made by the new minister who was recently appointed in Ontario, because that certainly is the line of attack which seems to us to be essential in respect to this important problem in Canada.


Gordon Harvey Aiken: Mr. Speaker, I have a supplementary question which I will direct to the Prime Minister. Is the government considering following the lead of Ontario and placing responsibility for both water and air pollution under one department?


Pierre Elliott Trudeau: No, Mr. Speaker.


Gordon Harvey Aiken: A further supplementary question which is based on the large number of speeches and the very commendable and extensive interest being taken in regard to water pollution by the Minister of Fisheries and Forestry. Will the Prime Minister soon consider making a statement in the house as to who will be the minister or ministers responsible for water pollution?



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmoulh-Halifax East):: Mr. Speaker, might I direct a question to the Minister of National Defence. Can the minister inform the house whether or not the government has given any consideration to cutting back the d.d.h-280 program and, if not, will it be carried out in full.


Léo Alphonse Joseph Cadieux: Mr. Speaker, we have not given consideration to cutting off this program. As a matter of fact, I should say that I think 75 per cent of the money provided for the program has already been spent.
June 6, 1969



RESEARCH


Mr. J. Edward Broadbenl (Oshawa-Whii-by):: Mr. Speaker, I have a question for the President of the Treasury Board. Since a number of government officials in recent days have been making statements, many of which conflict with one another, about science policy I wonder if the minister will promise to make a statement on motions before the end of the session on the general science policy of the government?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, when a suitable occasion presents itself I will be glad to do so.
I may say now that I am encouraged, as I am sure the hon. gentleman is, in the interest being shown in science policy and the general debate going on.


John Edward Broadbent: A supplementary question, Mr. Speaker. Will the minister also inform the house whether the task force looking into the government's research development program has completed its work?


Charles Mills (Bud) Drury: Mr. Speaker, I think the hon. member's question is related to a question on the order paper. A task force within the Department of Industry, Trade and Commerce is looking into the research programs of that department. I understand the work of the task force is not yet completed.


Gordon Harvey Aiken: Mr. Speaker, may I direct a supplementary question to the President of the Treasury Board. In answering a question just now he said he would make a statement when a suitable opportunity presents itself. Is any change in science policy being considered? Will there be an announcement with respect to responsibility for science policy?


Charles Mills (Bud) Drury: Mr. Speaker, we are reviewing our structures now in order that we may determine an adequate science policy. If changes are to be made they will be announced in due course.



PUBLIC SERVICE


Mr. Robert Muir (Cape Breton-East Richmond):: Mr. Speaker, may I direct a question
Inquiries of the Ministry to the Prime Minister, and ask if the recent selection of E. B. Jolliffe as chief adjudicator of the Public Service Staff Relations Board was based, as has been suggested in the June 4 issue of the Union of Defence Employees Information Bulletin, on the C.C.F. and N.D.P. background Mr. Jolliffe shares with the Prime Minister?


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order please. The hon. member for Winnipeg North Centre.



PARLIAMENT OF CANADA


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I have a question for the Prime Minister. I shall try to word it in such a way that it will not sound charged, because the question relates to an important matter of public policy. Since it seems to be possible for one and the same person to be a director of 25 companies and also chairman of the Banking and Commerce Committee of the other place, is the government considering the introduction of legislation which would require members of the other place, as well as this place and certain other senior public officials, to disclose to the public their financial interests and outside income sources?


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: Mr. Speaker, I appreciate the importance of the question and I appreciate the way it was worded. To make sure that there will be no conflicts of interest in the exercise of the functions of members of the House of Commons or of the other place, I said a few months ago, either when answering a question in the house or at a press conference, that the government has the whole question of conflicts of interest under study. During the course of the summer I think we will be able to arrive at some view as to what reforms might be made in the Senate and House of Commons Act and in other statutes to ensure that this problem is dealt with in a satisfactory manner. In the meantime if members of the other parties in the house have constructive suggestions to make, I will be interested to hear them.

June 6, 1969
Inquiries of the Ministry FINANCE



POSITION OP GOVERNMENT ON INVESTMENT COMPANIES MEASURE

Stanley Howard Knowles: I have a supplementary question, Mr. Speaker. I thank the Prime Minister for his answer, and may I direct my supplementary to the Minister of Finance. In the meantime is the Minister of Finance prepared to make it clear that the government will stand firm by the terms of its investment companies bill, which is now before the other place?


Edgar John Benson: Mr. Speaker, the Investment Companies bill was introduced into the other place intentionally so that members of the other place could conduct hearings in their committee. As a result of these certain changes to the legislation are proposed. These changes are being looked at very carefully and will not weaken the legislation one bit. It will remove some inconvenience and inconsistency in the legislation. Some of the proposed changes are very useful. Of course the government will have a look at the legislation as it is passed by the other place. If it is not in agreement with it, then of course we would refuse to accept the amendments. I should say I was consulted by the Superintendent of Insurance on some of the amendments. He seemed to think they were helpful.



THE BUDGET

[Stage Direction]
TORONTO-INQUIRY AS TO POSSIBLE LEAK Mr. Thomas M. Bell (Saini John-Lancasler):
I have a question for the Minister of Finance on a somewhat similar subject. In view of the fact Toronto business firms received detailed comments on the budget early Wednesday morning from Clarkson Gordon & Company, I ask the minister if this is an example of a budget leak or a better mail service?
Edgar John Benson: Mr. Speaker, with respect to distribution of the budget, we do not rely on the mail service.


Thomas Miller Bell: I don't blame you.


An hon. Member:: Neither do a lot of
Canadians.


Edgar John Benson: The offices of the Bank of Canada across Canada have sealed bundles delivered to them containing copies of the budget, which are available on budget night. 
Some accounting and legal firms pick them up that night and carry out an analysis. I can assure my hon. friend to the best of my knowledge there was no budget leak.



POST OFFICE DEPARTMENT


Mr. Heath Macquarrie (Hillsborough):: should like to direct a question to the Solicitor General. Can the minister advise if a posse has been sent out after the four bandits who yesterday relieved the slow moving Post Office of $100,000 worth of bonds? Can he advise if they have been apprehended and the securities returned?


Hon. G. J. Mcllrailh (Solicitor General):: No,
Mr. Speaker.


James Aloysius McGrath: supplementary question, Mr. Speaker. Will the Solicitor General consider gathering a posse together and deputizing the hon. member for Hillsborough?


George James McIlraith: Yes, Mr. Speaker.



INCOME TAX


Mr. A. D. Hales (Wellington):: I should like to direct a question to the Minister of National Revenue. Can the minister advise the house if the income tax refunds, which are very important to many Canadians, are being returned on schedule or is there some delay or backlog?


Hon. Jean-Pierre Cote (Minister of National Revenue):: There is no delay as far as we are concerned. I think it has been faster than in any previous year. If there is any special case the hon. member has in mind, I ask him to advise me, as it may be a case where there was a mistake on the return which could cause a delay.



REQUEST FOR TIME EXTENSION TO WESTERN FARMERS

Mr. John L. Skoberg (Moose Jaw):: My
question is for the Minister of National Revenue. In view of the serious cash situation facing the western agricultural economy, will the minister provide extra time for the payment of income tax demands for the agricultural producer and small businesses in rural areas?
June 6. 1969


Hon. Jean-Pierre Cole (Minister of National Revenue):: Our department is always ready to look at individual cases. If the man would see the district director, I am sure arrangements could be made.


John Leroy Skoberg: A supplementary question, Mr. Speaker. Because of this lack of any real cash on farms and no apparent immediate prospect of remedy, will the minister accept grain in lieu of cash for payment of such income tax?


Joseph Julien Jean-Pierre Côté: Yes, Mr. Speaker, if the member is ready to shovel it.



WATER RESOURCES


Winona Grace MacInnis: In the absence of the Minister of Fisheries, I wish to ask the acting minister to draw to the minister's attention that on May 20, as reported in Hansard at page 8828, the minister stated he planned to make a full statement within ten days on the entire matter of pollution in Placentia Bay. I wish to find out when that statement will be available.


Mr. E. F. Whelan (Parliamentary Secretary to Minister of Fisheries):: I ask the hon. member to be patient. Before the minister makes a statement, he is going to visit the area.



KENNEDY ROUND-ACCELERATED TARIFF CONCESSIONS BY OTHER COUNTRIES- POTATO IMPORTS

John Angus MacLean: I wish to direct a question to the Minister of Finance, and ask him if there are any discussions going on between his department, or the government, and any of our main trading partners with a view to obtaining accelerated tariff concessions, corresponding with those announced in the budget, bearing in mind the dire need of Canadian agricultural producers of several types, especially potato producers, for gaining a more favourable entry into the United States market?


Edgar John Benson: As
I indicated in the budget speech, Mr. Speaker, the purpose of the reduction in tariffs was basically to reduce costs in Canada, so they were done without consultation with our trading partners. Of course we would be very
Inquiries of the Ministry pleased to see our trading partners move forward and speed up the Kennedy Round provisions, because I think this is for the good of the world generally, as well as all of Canada.


John Angus MacLean: In any case, would the minister take action to try to obtain more favourable entry into the United States market for Canadian potatoes, since we are a net importer of potatoes?


Edgar John Benson: Mr. Speaker, we continually press for more favourable entry for some of our products into the United States and other markets, sometimes with success and sometimes without success. This is continuously in our minds and whenever there are discussions with counterparts in the United States and other countries, my officials press for freer entry of goods throughout the world. Indeed a lot of our-


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Does the Minister of Finance agree that this unilateral reduction made by Canada offers Canada an opportunity to do some bargaining to seek reductions in tariffs? Does this not offer us a particular opportunity-


Mr. Speaker:: I interrupted the minister a moment ago because I thought we were entering into a debate. I suggest to the hon. Leader of the Opposition this is what we would be doing further, if I were to allow the minister to respond to the supplementary.



STRAWBERRIES-MAINTENANCE OF IMPORT DUTIES

Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, this question is directed to the Minister of Finance, and concerns the question of the maintenance of the strawberry tariff through 1969, first proposed to the Minister of National Revenue and later to the Minister of Agriculture. I wonder if the Minister of Finance has any information on this today?


Edgar John Benson: Mr. Speaker, the hon. member brought the matter to my attention privately a day or so ago. I made inquiries and I expect a report today. I will chase it up, as I do not know what it contains.

June 6, 1969
Inquiries of the Ministry [Translation]



THE CANADIAN ECONOMY


David Réal Caouette: Mr. Speaker, I would like to put a question to the Minister of Finance.
Since he delivered his budget speech, has the minister received protests from Alberta and British Columbia about the restrictions imposed upon them to make them poorer and, perhaps, to leave the other provinces of Canada in their present state of poverty?


Mr. Speaker:: Order, please.


Edgar John Benson: No, Mr. Speaker.



WATER RESOURCES


Gordon Harvey Aiken: My question is directed to the Prime Minister, and it may sound similar to a question I asked previously. My question concerns the question of federal responsibility for pollution matters. It arises from the fact the responsibility seems to be fragmenting now, rather than becoming effective. I ask the Prime Minister to lend his mind to this subject and make a statement shortly. The Water Conservation Act is not the answer to the over-all problem.


Mr. Speaker:: I have to agree with the hon. member. His question sounds very much like the one he asked earlier today.


Gordon Harvey Aiken: I did not get an answer to the previous question. I think the Prime Minister is ready to answer this one.



PLACENTIA BAY, NFLD.-COMPENSATION TO FISHERMEN FOR LOSS THROUGH POLLUTION

James Aloysius McGrath: Mr. Speaker, in the absence of the Minister of Fisheries and Forestry, and the Acting Minister of Fisheries and Forestry, and the Minister of Transport, who has a great deal of interest in this matter, I would like to direct my question to the energetic and ambitious Parliamentary Secretary to the Minister of Fisheries and Forestry. Is he prepared to tell the house what the Minister of Transport meant when he said at St. John's the other day that 
the government would be coming up with a revised plan of compensation for the fishermen of Placentia Bay-


Mr. Speaker:: Order. The hon. member's question is not in order. He cannot ask the Parliamentary Secretary to give an interpretation of the statement made by the minister.


James Aloysius McGrath: Then, Mr. Speaker, would you permit me to rephrase my question and ask the parliamentary assistant what is the revised plan of assistance that the government has devised for the fishermen of Placentia Bay?


Eugene Whelan: Mr. Speaker, I do not know what the hon. member has in mind at all times, but I can tell him that we have set up an appeal board with three trustworthy and honest fishermen on it, together with two trustworthy and honest civil servants, to listen to the appeals of fishermen in cases where they do not feel they are being properly compensated. I think this is the answer.



FISHERIES


Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, I would like to ask a question of the Prime Minister.
Mr. Speaker, I apologize for this preamble, but it is necessary.

In view of the fact boards of trade, members of this house and the other place, Liberal organizations and many individuals have requested the closing of St. Mary's Bay in Nova Scotia, will the Prime Minister check with his regional desk to see that something is done to protect the rights of the fishermen in this bay?


Louis-Roland Comeau: Mr. Speaker, I wish to direct a question to the Parliamentary Secretary to the Minister of Fisheries and Forestry who seems to have all the answers. Can he say whether any action is being planned to close off St. Mary's Bay, Nova Scotia, to protect the fishermen in those waters?


Eugene Whelan: Mr. Speaker, it is under concentrated consideration.
June 6, 1969



WHEAT-REQUEST FOR STATEMENT ON MARKETING-SALE TO RUSSIA

John Stratford Burton: Mr. Speaker, in the absence of the Minister of Industry, Trade and Commerce I wish to direct a question to the Minister without Portfolio (Mr. Lang). Can he indicate whether the government will shortly be making a statement on the general grain marketing situation, and can he indicate whether there is any prospect of restoring the minimum price levels, in the spirit of the International Grains Arrangement?


Otto Emil Lang: Mr. Speaker, the Minister of Industry, Trade and Commerce has reported regularly to the house on developments in both regards, and I am sure he is prepared to continue to answer specific questions on the subject.


John Stratford Burton: Can the minister say whether any progress has been made in concluding a sale of wheat to Russia this year?


Otto Emil Lang: Mr. Speaker, at this time there is nothing to report in that regard.



INQUIRY OF THE MINISTRY

John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that the annual meeting of political scientists and economists being held at York University, Toronto, is about to conclude within the next two days, would the Prime Minister rush through a paper for presentation, entitled "Why I Abandoned Truth, Beauty and Goodness, and Joined the Liberal Party"?


Mr. Speaker:: Order, please. The question period has expired.
[DOT] (11:50 a.m.)



GOVERNMENT ORDERS


[Stage Direction]
The house resumed, from Thursday, June 5, consideration of Bill C-184, to establish a Canadian corporation for telecommunication by satellite, as reported (with amendments) from the Standing Committee on Broadcasting, Films and Assistance to the Arts, and the motion of Mr. Saltsman (p. 9806).
29180-622J
Telesat Canada Act
John Stratford Burton: Mr. Speaker, just prior to the adjournment last night I had made a few remarks with respect to the very interesting comments of the hon. member for Hillsborough (Mr. Macquarrie) on this bill, particularly his very sympathetic attitude toward the outlook and ideas of the New Democratic party. I pointed out to him that I was rather saddened that he was not prepared to go along with the amendment moved by my colleague, the hon. member for Waterloo (Mr. Saltsman), which would have the effect of changing the proposed telecommunications satellite corporation into a crown corporation. I pointed out to the hon. member that the Conservative party has a tradition to live up to in dealing with public policy affecting communications and the development of communications facilities because, as I noted, it was the Conservative party in 1935 which, as a result of pressure from a great many quarters in Canada, introduced legislation providing for the establishment of the Canadian Broadcasting Corporation. That corporation was established as a public agency to provide a public service to all the people of Canada. It seems to me it would be fitting if this tradition and precedent were followed by that party in the present case and we had its support in dealing with the proposal before us.
For a moment, Mr. Speaker, I was almost tempted by one argument presented by the hon. member for Hillsborough. He was very much concerned about the prospect of having the new corporation, if it were a crown corporation, come under the jurisdiction of the Minister of Communications (Mr. Kierans) in view of his record over the last few months with respect to another government operation involving communications, namely, the Post Office Department. For a second I was almost tempted by his argument in that respect. However, I must point out to the hon. member that when one considers the matter in more objective terms one has to take account of the fact that in considering the total picture in a situation such as this we have to deal with two related aspects. One has to consider the principle involved in establishing public policy, and one has also to consider the problems of operations and management. Good decisions with respect to both are essential if we are to have an operation which meets the objectives of public policy.
The fact is that if one has not established the basic principles on a sound basis then, of course, the best operations and management in the world will not be successful. But if one

June 6, 1969
Telesat Canada Act
does establish an operation on sound principles then the problems ol operations and management can be dealt with in due course, and there are a variety of ways for dealing with them.
In considering this matter we have to take account of the fact that we are dealing with new technological developments, and we have to consider public policy in that respect. Throughout Canadian history there have been a number of occasions when new technological developments have had a profound influence on the economic, social and political development of the country. One of the earliest examples of this type after 1867 was the development of railways across Canada. The Canadian Pacific Railway Company, a private operation, played a key role. Most hon. members are familiar, of course with the sordid picture that developed as a result of government decisions of that day to entrust this development to private concerns, to allow those concerns to rob the treasury and to take advantage of all sorts of public concessions, and with the weakness of the government of that time. All this resulted in penalties and liabilities for which we are still paying in Canada. This is an example of the type of thing that must be avoided in taking advantage of new technological developments and in developing public policy with respect to them.
There are other examples of new technological development where a sounder approach was taken. Here I refer to one to which I have already made brief reference, the establishment of the Canadian Broadcasting Corporation which in my view was established on the basis of very sound principles. Of course all members of the house and the public generally have individual points of criticism with respect to the operations of the C.B.C. Some of our views differ in that respect but I think we can generally agree, and I think it is generally felt throughout the country, that the C.B.C. is ours. It belongs to the people of Canada. Whatever else may be said for it, it does operate in the public interest. This is the principle upon which it provides service to the people of Canada. I wish it had been possible for the government to take the same approach in dealing with this bill. By doing so it would have maintained a good precedent that would stand us in good stead in the years ahead.
When we consider this matter it seems to me we have to take account of the implications and the consequences of development

now taking place. The fact is that communications are one of the newest and more important aspects of Canadian society. They are an important aspect of new developments in our society today. Communications play a key social and political role within the country as a whole. Thus it is very important that we carfully consider public policy in this regard.
It is for that reason I feel the public interest can be best safeguarded if this new company is established as a crown operation or crown corporation. It can in this way conduct its affairs in the best interests of the nation. It seems to me there is a conflict of interest between the government, private carriers and private investors. The fact is that government goals and objectives differ from those of private investors.
Government goals and objectives are basically social and political. They are related to the provision of communications to rural areas and to the northern territories where there is a very real problem. The fact is, as has been stated by some people, that it is only through this new technological development that adequate communications will ever be provided to all regions of Canada with its widespread territories and thinly settled areas. It will also provide more adequate distribution of French and English language programs.
On the other hand, the objectives and the goals of private investors and private carriers are not so much concerned with public service. They do provide a public service in the course of carrying out their work, but the fact is that their basic and primary motivation is the making of profits. That aspect, of course, is in conflict with public goals and objectives, and one has to consider the serving of social and political objectives in contrast with economic and financial objectives, which may be the primary concern of private investors.
It seems to me that the arguments for the satellite system, as they have been stated by many people, are not basically economic. They involve economic considerations, but primarily the goals and objectives should be social and political. It seems to me it is also a matter of concern that the government has refused to divulge information on cost-benefit studies and analyses which have been carried out.
As has been pointed out already, there have been three motions presented in the house in respect of this venture which were
June 6, 1969

rejected. It seems very important to me that we have this information relating to the cost-benefit analysis of the satellite system. It is important that members have this information because there have been contradictory estimates as to the cost of this satellite system.
I recognize that a new amendment was introduced which limits private investor participation to a maximum of 2J per cent. My only comment in that regard is "big deal". The previous limit was 5 per cent. This limited private participants to 40. The new limit of 21 per cent will restrict this number to 80. It seems to me that this does not really make any essential change in the legislation. It still means that the economic elite of Canadian society will be the ones who will participate in the satellite system.
There are further implications regarding this development involving the Sidbec trust venture and the participation of Bell Canada as the main carrier. We also must consider Bell's subsidiary, Northern Electric. Northern Electric is one of the two main contractors developing this satellite system. We are witnessing a power play by these carriers. There are other people who are participating in the system, but there is a substantial conflict of interest in respect of this legislation and the policies which have to be developed after it has been put into operation.
It seems to me that the government with its one-third ownership will not have control over the operation and development of the system, thus increasing the monopoly power of the communications industry by allowing it to participate in the scheme. In dealing with the question of public ownership and making this corporation a crown operation, I think I should refer to statements which were made by the Minister of Communications when he was the Minister of Revenue in the Quebec government. I am referring to the Sidbec operation established in Quebec. He gave some reasons in support of the idea that it should be a public operation. He stated on one occasion:
The whole emphasis behind Sidbec was to create something that did not exist in Quebec, an integrated steel mill to give a boost and to have a multiplier effect on the economy.
I recognize that this is an economic argument with social implications. I suggest there is an even better reason for the operation we are now considering being a public corporation. We are dealing basically with social and political objectives. It seems to me that hon.
Telesat Canada Act
members must consider very carefully the decision they make on this amendment.
As I pointed out, there are a number of precedents in Canadian history which show that a variety of courses of action have been taken in dealing with new technological development. The people of Canada do not want to see the same thing happen. They do not want a repetition of what we have witnessed in the past. The proposal put forward by the government tends to move in this direction. Surely it is a step in the same direction. We do not want the policy which existed in the past. We want a new policy which is geared to the needs of today and tomorrow. In my view the objectives of our society for today and tomorrow can only be properly fulfilled by the establishment of this satellite as a crown corporation operating in the public interest and for the benefit of the people of Canada.


Mr. Bernard Dumont (Fronienac):: Mr. Speaker, having seriously looked into this Act to establish a Canadian corporation for telecommunication by satellite, we do hope, in this corner of the house, that the minister will not confuse the issues as he is doing at the Post Office and in the Communications Department.
As far as the socialists' amendment is concerned, we realize once again that they want everything to be state-run. However, since the state cannot work wonders, I would rather ask them to live this wonderful feat performed by the minister of Transport (Mr. Jamieson) who is trying to show us Heaven from another angle, because, since the post office affair, I think the minister is convinced that Hell is red.
At the outset, I would like to say that we have in Canada today, and especially in Quebec, thousands of centres that do not yet receive communications through the ordinary channels of the C.B.C. or other networks, because a television cable was refused, for example, to the citizens of Saint-Ferdinand-d'Halifax, who does not receive the programs of the C.B.C. This village is located 30 miles from Quebec City. This is clear proof that when we have public corporations, the bureaucracy they impose cannot dispense good services, since the request a citizen of Saint-Ferdinand-d'Halifax sent a year ago has not yet been answered. And so these good people do not receive the Canadian message they have a right to, because the C.B.C. has become too bureaucratic.
Telesat Canada Act

establishment of a communication satellite which, we hope, will certainly enhance the culture of all Canadians.
Referring to that meeting in Washington, I read another news release that said:
A conflict between efficiency and democracy in the operation of an international communications network by satellite might delay considerably an agreement at the conference which has now been going on for a month in Washington and is due to end on March 21.
I feel that if the minister had asked delegates from all the parties to go to Washington, an agreement would probably already have been drawn up for Canada; and today we would not have to discuss this amendment which can only delay the progress of this telecommunications satellite.
The article added, and I quote:
Canada and what seems to be the majorityfrom the point of view of ideas,
-of the 66 delegations favoured a "tripartite" structure of administration and operation.
So, personally, even if there was no such thing as electoral funds, I would not speak of a tripartite undertaking. I would merely say: Let the private companies do their duty. They sometimes work miracles and they would be in a position to give us excellent service. But as we too have that worry, we also have reason to ask ourselves many questions. That is why we ask the minister, when he has other meetings, when discussions are held to decide this or that company will broadcast across Canada, tomorrow, through the telecommunications satellite, to kindly invite us that we might know what strings are being pulled behind the scenes. Then we can doubtless convince our good friends of the New Democratic party to want a private company, for they too will have ceased to worry about contributions swelling up election funds.
Again I wish to point out to the minister that I am not accusing him at all. I know him to be sincere enough to want some day to put an end to those election funds, which would keep us once and for all from having any doubts, and that is why, as regards the amendment before us today, I would like especially to ask him to consider seriously the question once more in order that the most learned people or company will be chosen to ensure the operation of this corporation.
Besides we can say that the satellite era has barely begun in Canada, that it is already- and it is perhaps not the amendment before us today-probably the greatest bone of contention between Ottawa and Quebec.
Telesat Canada Act
If we ourselves had moved an amendment, it would have been to ask that Quebec have, at least in the education field, the authority in those things.
But since we do not want to delay the debate and we are in favour of setting up the corporation, we earnestly ask the minister today to consider the possibility of having rather a company which will allow us, as in France, among other countries, to share broadcasts via the satellite Symphonic. Then the expenditure would surely be greatly reduced, because since the satellite will be orbiting over the equator, the band beamed towards Quebec will automatically entail no expense, and we would not have to incur an expense of the order of $60 million, let alone all the expenses that private enterprise, might be spared, in order that we go ahead in this field.
Moreover, the concern of the New Democratic party is probably due to the debt of Canada. I read recently that up to January 15 last, the national debt, including the debts guaranteed by the government, totalled $23,574 million, of which $6,361 million are in savings bonds.
[DOT] (12:10 p.m.)
If there is such a debt in Canada, is it not to put the cart before the horse to want to spend a further amount of $60 million for a satellite which could undoubtedly be operated by private interests, as long as things would not be rushed unduly, since France is already in a position to broadcast freely through the Symphonic satellite?
Now, I wonder why there is such a rush, and I also ask the representatives of the New Democratic party why they did consider Canada's debt instead, introduce an amendment to that effect and wait until private enterprise would enable us to meet our requirements within a few years.
I would also point out in my following comments that at present, because Quebec is concerned about the turn of events and is aware that the federal government wants to overtake them in that field it probably also wants to create a state-owned company.
That is why I urge the minister to be very cautious. The battle will certainly be tougher against a Quebec company than against well-disposed individuals like us.
We offer our co-operation to the minister. We contend that by putting first things first, by collecting all the data available throughout the world in order to work out a permanent plan, and by considering also the economic situation prevailing in Canada, we would be

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heading in the right direction, because right now we may look a little like millionnaires, but we are really poor.
We want to spend $60 million. Others want to move an amendment which would enable us to simply have only a public company, when we are in debt to the amount I just quoted. Considering those facts, would it not be preferable, until such time as we have some effective legislation forbidding contributions to electoral funds, to let private enterprise develop the system of telecommunication by satellite?
At any rate, as I have already stated, an international agreement is needed. As everyone knows, we cannot go on indefinitely accepting satellites. At the present time, a country as important as France is willing to co-operate with us. And for the Englishspeaking element in our country, we have the United States also willing to co-operate. Let us be realistic. The minister may rest assured that we shall do our share to promote the success of this undertaking which, in my view, is a worthwhile one. It must be remembered, however, as, in the future, education may be effected by satellite, that the province of Quebec will never accept a satellite communicating nothing but translations to the province.
The province is willing to accept a Frenchspeaking satellite, it is also ready to accept an English-speaking one. On the receiving sets to be built, listeners will be able to choose either a French or an English station, and we shall be happy that it will always be private companies that are involved.
I would not want even the Quebec government to deal with it, in our environment.
Finally, in closing, our main concern is the fact that the Socialists who have asked that a government agency solve their problem-as I referred to that earlier-may not have considered that the C.B.C. has not always provided us with the services we need.
Lately, I have also analysed a problem which, in my opinion, is rather serious in England. At the present time some Quebecers build prefab houses, export them to England and succeed in competing with the prices offered by the Socialists in Canada who have put the field of construction under government control.
Faced with such obvious facts, why should we ask for a government corporation when private enterprise, in the field of construction in Canada at the present time, in spite of all the difficulties and all the requests made here and there to improve the housing situation, 
still manages to build and to send overseas prefab houses at a better price than under state control building scheme in England.
This is one of the reasons why we cannot be in favour of this amendment and in the contrary, as I said earlier, we will agree to co-operate, so that we might be able to set up as soon as possible that telecommunication service which, no doubt, will be satisfactory, especially if we follow all the advise of the people of goodwill which is available to us nowadays.
Finally, Mr, Speaker, I should like everyone in Canada, apart from the election fund, to receive his due share of a telecommunication corporation so that tomorrow the homeland will be saved before the party, so that the living will receive the same services as the scientists, and so that finally the Canadian people will progress among two cultures, making it possible for telecommunication satellites to broadcast in England and in French, so that our children will not have to live through the squabbles experienced by Canadians of goodwill.


Mark Willson Rose: Mr. Speaker, I am disappointed that the previous speaker from the Ralliement Creditiste has failed to support the amendment of the hon. member for Waterloo (Mr. Saltsman). I think that the reason 'he and the members of his party have been elected to this house is the failure, certainly in the area from which he comes, of the kind of private enterprise he so glowingly lauds to meet the problems of the people he represents.
I should like to support the amendment. I think we should be very pleased that we are embarking on this very interesting and glamourous space age project. I have some criticisms to make. While I am going through them some hon. members may wonder why I am supporting the amendment at all, but I think it is important that we bring up a number of matters here. I believe that we are starting on a project of extreme significance to our future and I think that the purpose of our being here is to examine all the angles and try to ascertain the best kind of structure for Canadians in the future.
I hope that in the case of Telesat the Canadian people will not be asked first to pay $30 million and then to provide up to $40 million for social and political objectives which we have failed to meet by other means. We are always doing the same thing for social and political reasons. Instances such as the
June 6, 1963

C.B.C., the Canada Council and the new performing arts centre which opened this week are well known. Its initial cost was to be $9 million but its final cost rose to $2.36 for every man, woman and child in Canada. This is done for social and political reasons. We are continuing along the path of constructing lavish and expensive projects, all in the name of Canadian unity and cultural identity. This government, like its predecessors, continuously promotes grandiose schemes while ignoring, or standing aside and wringing its hands, trends and activities far more dangerous and crucial with regard to the erosion of Canadian national purpose and pride.
We propose to spend millions on this project, but what are we doing about foreign takeovers of Canadian industry? It is notable that one of the companies that is building the satellite is R.C.A. of Montreal, a wholly owned United States subsidiary or branch plant. Incidentally, this company will hold all the patents for its share of the components. Furthermore, what is the government doing about our social objectives in the case of magazines and publications, textiles, the radio and television industry, and our higher educational institutions where there are professors who are not Canadian citizens? All of these will have a much more profound effect on communications and cultural development in Canada than this project. Each of these aspects of our economy is being engulfed by foreign takeovers. I say that the government is doing nothing about it, but here we are again going off on another luxurious tangent, largely in the name of social, cultural and political objectives. I do not know whose political objectives they are. Perhaps they are the Liberals' objectives but they are certainly not mine.
It might be worth noting that the minister has emphasized the social objectives and soft-pedalled the economic ones. The house might have cause to wonder why. I should like to support what I said by quoting from the Minutes of Proceedings and Evidence of the Standing Committee on Transport and Communications of December 9, 1968, page 163:


Mr. Nowlan:: But in the development of it we give expertise to our Canadian research scientists and the end product will be something-not like the C.B.C.-hut for our national existence more than the functional end of the satellite, because as you remarked earlier, there could be a joint satellite between the Americans and the Canadians that would cover almost all North America.


Mr. Kierans:: Our purpose in going into this
satellite is social objectives; they may be political too, but let us say, social objectives as the way of
Telesat Canada Act
unifying the country, that that one satellite as far as we are concerned just blankets the whole of Canada. It could blanket Alaska too and there may be some arrangements that would be worked out to look after the American needs in Alaska. That is a social objective leading to a greater unification of the country. That satellite would be devoted to Canadian aims and objectives and will be programmed, I would imagine, in a way that is acceptable by the Canadian people and their cultural requirements or needs.
[DOT] (12:20 p.m.)
From then on, I suppose you could build a case that it would be better to rent the space on the American satellite, on straight economic grounds. However, I do not think you could even build it on economic grounds, if you take a long run approach to this rather than a short run. In a short run there will be investment costs, which may include some losses in the operations in the early years, as any corporation going into any kind of field expects that its development and marketing costs, in getting control of a market, will lead to losses. It then incorporates this in the amount of capital it has to set aside in order to make the thing viable.
As far as we are concerned, the economic gains in the long run will more than outweigh the costs, because by our scientists developing programs here in Ottawa in co-operation with industry our manufacturers can easily develop markets with different aspects of such a satellite; in other words, their export potential.
We might ask how this will happen if the patents are owned by people outside this country. There are some interesting assumptions in the ideas expressed in the quotation I have just read, and if there were time I would discuss them in detail. But I am speaking now of the economic justification of Tele-sat, the assumption that some possible spinoff effects during the development of satellite expertise is reason compelling enough for embarking on this project. It occurs to me that the spin-off argument could be employed to justify almost any venture in the scientific field-nuclear rockets, supersonic bombers, germ warfare, or even more useful fields of research such as water purification, urban transportation or efforts to improve the delivery of mail. Much more could be said critical of our scientific policy, particularly in the light of the number of projects which have been scrapped since this government took office. I have in mind, for instance, the cancellation of the oceanographic study program and the Queen Elizabeth Observatory near Oliver, British Columbia.
It might certainly be more efficient to invest our money directly in research into problems for which solutions are needed. Perhaps this would not be so glamorous or so political, but it might be much more useful in

June 6, 1969
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the long run. As I say, this spin-off argument would justify almost anything done in the modern scientific field.
Another argument used in justification of the Telesat project is that it would provide telephone and television service to citizens of the Canadian north. I look to Fisher and Crowe for their views on the subject, and quote from the Toronto Telegram of May 8, 1969:
Telesat will have some utility in improving the quality of telephone messages in the north over the present system, largely radio-telephone, but in essence it is a duplication of a service that presently exists.
Telesat does provide the C.B.C. with the capacity to beam in TV from the regular network to isolated northern communities.
The last point has its ironies to anyone who has followed the reluctance of C.B.C. to spend capital funds on reaching those parts of Canada which have been without television.
There are still dozens of towns and villages with populations from 500 to several thousands in the lower parts of Canada which are without C.B.C. television.
Further, there are only 30,000-odd people in the whole of the upper north from the western Yukon boundary all the way through to Baffin Island.
To serve these with TV from a satellite it will be necessary to build a ground station at each one (from $100,000 to $120,000 cost for installation).
Once you strip away all the Kierans' hyperbole, Telesat, in the short run, will make its major practical contribution by enabling the C.B.C. to put TV into a handful of Arctic communities. Laudable, but hardly enough to incite all those futuristic speeches and the planned expenditure (yes, he has it down now) of $60 million.
I realize it is unfair to seize upon one aspect of this Telesat project and relate it to the total cost of the project but my arithmetic leads me to believe that on the basis of the present population of the north-and as for the future there are no really helpful projections1 available to us-the cost of the television and telephone service to be provided by the satellite works out at approximately $2,000 a head.
Two weeks ago Mr. A. G. Lester, a vicepresident of Bell Canada, expressed doubt both as to the projected cost of Telesat and as to its need in the north. I quote from a report which appeared in the Globe and Mail of May 14, 1969:
Mr. Lester surprised committee members by saying he could not comment on the accuracy of the government's $60 million to $75 million cost estimate for the project. Neither he nor anyone at Bell, he said, knows the specifications involved in the estimate.
Pressed by the members, Mr. Lester said Bell's desire to integrate satellites into its communications 
network, rather than hard figures, is the basic reason for its participation. "If the public is to be well-served, you cannot have a whole series of competing communications services."
Noting the constant inflation of cost and deflation of service predicted in recent testimony, Mr. Mac-quarrie asked if the satellite would fulfil its promise in Northern Canada. "I sometimes feel I'm getting a snow job in that area," he quipped.
While most people in the northeast Arctic who want telephone service now have it, Mr. Lester said, the satellite will be necessary to serve any substantial new settlements.
"There will be a demand for communications of higher quantity and more quantity than can be provided by radio. Here we feel justified in adding rather complicated $1.7 million ground stations for the satellite-but they will only come in major centres."
It is possible that the unused capacity of our present microwave communication systems provided the motivation behind Mr. Lester's remarks, because at present there is a substantial capacity still available in our two microwave systems. Contradicting the minister, the Bell executive views Telesat as being a competing system rather than a complementary one, adding greatly, at least in the short term, to costs borne by domestic telephone users.
I think it is important, Mr. Speaker, that we examine at least briefly the broadcasting angle of this satellite proposition as it relates to Canadian social and cultural objectives. We know that the 55 per cent Canadian content rule laid down by the C.R.T.C. has recently been attacked by the private broadcasters of the C.A.B. as being archaic and unrealistic. We are aware, too, that the C.B.C. and private radio networks depend upon and even sometimes prefer broadcasting material manufactured outside Canada and expressing the cultural priorities of another country. Since this is the case, and since it is also true that at least some of Telesat's six channels will be rented, presumably to private firms, it is not irrelevant to ask how Telesat can fully reflect Canadian social and cultural objectives when it is so dependent on imported programs.
A second concern of mine has to do with the cost to the C.B.C. of using Telesat compared with the cost of using the microwave system. At least in the initial stages will not the C.B.C., an agency whose annual budget now exceeds $166 million, be forced into ever greater expenditure perhaps even against its will, thus becoming an even easier victim of public criticism than in the past?
June 6, 1969

[DOT] (12:30 p.m.)
In saying what I have said up to now I suppose I run a substantial risk of being labelled a crier of gloom and doom. Or perhaps I will be classed among those who laughed at Columbus. It is obvious to members of the opposition that our priorities are not always congruent with the priorities of the government. It is my duty, as I see it, to examine very carefully any proposal to spend $60 million to $75 million when there are many other needs for money almost daily in Canada that require to be met.
Other spokesmen for my party have outlined their specific views on the corporate structure of Telesat. We believe that if this corporation is to play a significant role in Canadian unity and identity-and I have already expressed major doubts about it being able to accomplish this-two-thirds of the control of the corporation should not, in my opinion, be placed in private hands.
In order to prevent a few individuals grabbing control of the stock, the minister has attempted to spread the ownership by reducing the shares of any one individual or group from 5 per cent to 2J per cent. As the hon. member for Regina East (Mr. Burton) said, this is hardly an example of people's capitalism, because this provision would still allow 80 individuals to control the public portion of the stock. I think the minister will have to spread it a little thicker, or perhaps I should say thinner, than that to convince anybody that the stock will be available to the average investor. In fact, an aide of the minister said recently, according to the Montreal Gazette for April 22, that they would not be able to guarantee that every retired school teacher who wanted shares would be able to get them, but they were going to take steps to make sure the distribution was as general as possible. I do not believe that the distribution is going to be very general, and I do not think anybody else does either.
Another limitation placed on the issuing of shares is the 20 per cent foreign ownership rule in regard to public shares. I do not think any shares should be owned outside Canada. But more important to our cultural development is the thought expressed again by a Bell executive speaking before the broadcasting committee on May 14, as reported in the Globe and Mail of that date. I quote:
If companies X, Y and Z, which may represent interests in Germany, France or the United States, are permitted to rent channels on the satellite, he said, part of the benefits of the system will be given to foreign interests.
Telesat Canada Act
I suggest that if we are seriously interested in developing a Canadian identity, a Canadian uniqueness, we must look at the provision for renting channels very carefully. I am not certain that Canadian interests will be protected if the people who are going to be in corporate control of a project that is being sponsored by the government have interests and priorities other than those that meet Canadian social, political and cultural objectives.
Our party feels that for social and political reasons this company should be a public or crown corporation. Because of what I said earlier in my remarks, I think hon. members will appreciate that I had a difficult time convincing myself that we should proceed at all at this time. However, since we are proceeding I think that if Telesat is not made either a crown corporation, or at the very least a company the majority ownership of which is vested in Canadian hands, the result will be a sell-out as far as the Canadian people are concerned.
It is anticipated that with the present structure the government will hold a minority of seats on the board of management. Therefore I cannot see how we can be certain of attaining the very laudable social objectives of this sophisticated, space-age experiment if the corporation is in other than public hands, if instead it is allowed to be controlled by a majority of people who do not share our Canadian cultural aspirations or the social objectives of an independent Canadian culture.


John Leroy Skoberg: Mr. Speaker, it is a pleasure for me to take part in this debate. It is also a pleasure to support the amendment put forward by my colleague the hon. member for Waterloo (Mr. Saltsman). I believe one should look at the bill before us and determine what we are eliminating from the particular clause. I should like to read the clause that is being amended. As amended it would read:
Such persons not exceeding seven as may be designated by the Governor in Council are hereby incorporated as a crown company to be known as "Telesat Canada" in English-
I will not defame the French language, with all deference to my friends to my left, by trying to pronounce the French version.
I believe it should be understood very clearly that my colleague the hon. member for Selkirk (Mr. Schreyer), who in my opinion is an expert in this field, has made various representations to the committee and to the

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house in order to bring to their attention why he considers this corporation should be a crown corporation instead of privately owned. I should like to make reference to the record for a moment. The first item before us when we returned from the recess was this piece of legislation. The hon. member for Selkirk has stated the objections to the bill held by those in this party. He previously moved an amendment which is to be found at page 7505 of Hansard for April 14. In his speech the hon. member said:
-if the industry involved is the central nervous system of our society, how can he justify putting this corporation under a form of ownership that is hybrid, that is . . . private, or what strange combination of both it may be? Even the minister is not able to tell us exactly in what ratio the public or the common carriers will be represented in the ownership of this corporation, or to what extent shares will be taken up by subscription.
Then the hon. member went on to say that this central nervous system should be controlled by the public, that any other course was completely unacceptable. I agree wholeheartedly with the hon. member for Selkirk. The hon. member said that he found this provision rather strange, and for that reason he moved a similar amendment to that now before us. The amendment was defeated at that time. The Creditistes voted with the New Democrats and the Liberals and Conservatives voted against the amendment. I have said many times in the house that there is absolutely no difference between the Conservative and Liberal parties in this area, and I believe that statement is justified by the defeat of that very sensible amendment by the combined vote of the Conservatives and Liberals.
One might ask why we are rather reluctant to accept some of the amendments and bills put before us in this house. However, when one observes the financial and economic structures of those who are applying for permission to operate a communications satellite, one has good cause for concern. Members of this party have no hesitation at all in passing the insurance company bills that come before the house if those companies indicate that within a short period of time they will become Canadian owned. If they do not do so, we do not pass the bills without debate. We find ourselves in exactly the same position in regard to this bill.
I suggest that within the Department of Communications there are experts quite capable of handling communications in this country. In my opinion they are the ones we should put our entire weight behind instead 
of bringing in outside experts to control something that should be the responsibility of the federal government. I have had the opportunity of associating with some of the senior civil servants in the area of communications, and I can assure the house that Canada should be very proud of having such people available to operate this type of communications system.
[DOT] (12:40 p.m.)
It amazes me to hear the Postmaster General and Minister of Communications (Mr. Kierans) say in the house that we should not establish a crown corporation to control this new communications media. I still hope that the minister and the government will agree to accept the amendment before us and set up a crown corporation. That must be done before we employ experts from the private sector. If the minister agrees to set up a crown corporation I think the people of Canada will be much better served. The set-up proposed in the bill before us is not as desirable in my opinion as a crown corporation would be.
I must tell the minister why I am reluctant to have outside companies participating in this field. Perhaps I might begin by reading part of an article that appeared in the Globe and Mail for Tuesday, March 25, 1969. The heading of the article is, "Telesat Canada Ownership Is Likely To Be Split". The article says in part:
Shares in Canada's communications satellite system, Telesat Canada, will be owned by the federal government. Canada's common carrier telecommunications companies and the public in proportions yet to be decided, according to preliminary information on legislation tabled in the Commons.
The common carriers, Trans-Canada Telephone System and the communications arms of Canadian National Railways and Canadian Pacific, had originally proposed they build and operate the satellite and ground network themselves and later urged the government to share ownership with them in a crown corporation set-up.
The article continues a little farther on:
The number of shares that would be available to each of the common carriers specified in the bill likely would be limited.
The latter contention bothers me. Remembering the provisions of the bill, I undertook a little exploratory work. I wanted to see if there were grounds for my fears. The article continues:
-Power Corp. of Canada Ltd., Montreal, and Niagara Television Ltd. of Hamilton, which made an early proposal to build and operate a satellite facility, would be limited to holding 5 per cent of the public shares.
June 6. 1969

Wondering whether there was ground tor concern, I looked at financial statements of Power Corporation of Canada Limited and discovered that it is a holding and investment company of the closed-end type. Investments are made primarily in Canadian equity securities, with holdings being concentrated in relatively few companies which have the potential to increase significantly in value. The copy of the financial statement in my hand contains the following statement:
Equity investments in smaller companies, or companies in the earlier stages of development, having the potential to achieve above average earnings growth, are made through subsidiary, Power Corp. Developments Ltd.
I ask the minister, does he realize the value of the system he is turning over to private corporations? These corporations want to grow. Should the people of Canada not have a share in operating the facility to be set up? Should they not share in the growth that private corporations envisage? The financial statement of Power Corporation continues with these words:
Investments in companies outside of Canada are made through subsidiary, Power Corp. International Ltd., and will be confined to countries with a sound economic and political climate.
Farther on the financial review says:
Power Corp., in conjunction with Niagara Television Ltd., has placed before the Board of Broadcast Governors a proposal for establishment of a new television network. This would be known as National Television Network, and would operate stations across Canada to be joined by means of two satellites to be operated by a second company, Canadian Satellite Corp.
The document in my hand suggests that both the private companies just referred to will offer shares to the public. The cost of establishing the network is estimated to be $75 million.
May I now turn to the financial statement of Southam Press Limited. Southam Press controls quite a number of companies. One wonders why the minister does not insist that a crown corporation alone shall control the network to be set up. Of course, we all know about Southam Press. The question to be asked is, who is behind Southam Press? It seems that Niagara Television Limited of Hamilton is a subsidiary of Southam Press Limited. The statement in my hand lists a number of companies controlled by Southam Press, and perhaps I might take a little time to list them.
At the top of the list is Greater Winnipeg Cablevision Limited which provides cable television in Winnipeg. Southam Press
Telesat Canada Act
acquired a 50 per cent interest in that company late in 1967. Next is Trans-Canada Expositions Ltd which is 50 per cent owned by Southam. The company was formed, in conjunction with MacLean-Hunter Limited, to produce certain trade shows. Then Calgary Broadcasting Company Limited is listed. It operates radio station CFAC in Calgary. Next Edmonton Broadcasting Company Limited is listed. It operates radio station CJCA in Edmonton. Southam Press holds a part interest, the' rest being held by Selkirk Holdings Limited. I have already mentioned Niagara Television Limited which operates television station CHCH-TV in Hamilton. Southam Press holds a direct 25 per cent interest there and also has a 19 per cent interest in Wentworth Radio Broadcasting Limited which operates radio station CKOC in Hamilton. The latter company also owns a 25 per cent interest in Niagara Television Limited, a subsidiary of Southam Press.
May I now turn to the statement of Selkirk Holdings Limited. It says:
An agreement in principle has been reached with Selkirk Holdings Ltd., in which the company holds a minority interest, to consolidate, where possible, their broadcasting interests. A first application has gone before the Canadian Radio-Television Commission in connection with the shareholdings of Wentworth Radio and Niagara Television in Hamilton. If approved, this application will be a step toward the separation of ownership between Southam and Selkirk in these two properties.
I have brought these matters to the minister's attention in an effort to induce him to accept our amendment. The Canadian people ought to be the owners of this communications network. There is still time for the minister to reconsider his position. The bill is designed to create a system to be utilized in conjunction with national broadcasting networks. The new system, we hope, will unite the people of Canada from coast to coast. They will be proud to own such facilities. On the other hand, if 80 individuals are to control this facility our people will not be proud. I therefore suggest to the minister that there is still time for him to reconsider his position. Perhaps he could think about it in the lunch hour. We think he ought to agree to the amendment proposed by the hon. member for Waterloo.
I now wish to comment about some other facets of the bill. Editorial writers and other contributors to newspapers have expressed concern about the arrogance displayed by the officials of Trans-Canada Telephone System. I think other hon. members have alluded to that arrogance during this debate. We are

June S, 1969
Telesat Canada Act
considering the welfare of the people of Canada, and I submit that a company making the representations this company has made ought to be dealt with in an appropriate way. I do not know the term one applies to companies, but if it were a union it ought to be decertified.
[DOT] (12:50 p.m.)
The proposal of Trans-Canada Telephone suggests that the public be excluded from participating in the operation of Canada's first communications satellite. Immediately a company that is supposedly a good corporate citizen suggests that, surely the government should see, if it is so good that in the view of Trans-Canada the public should be excluded, that the public should own it lock, stock and barrel. I believe there is still time for that if the minister has the stamina to withstand the substantial pressures which I understand are being brought to bear upon 'him outside the house. A public body is now in the process of deciding whether the application of Bell Canada for an increase in rates is justified. This will be determined by the members of that board, and the result will indicate whether we have proved the point we are trying to make.
I wish to quote from an editorial in the Toronto Telegram of May 7, 1969. The chairman of Trans-Canada told the Commons Broadcasting Committee:
-the cost to the telephone companies of $5 million a year to use the satellite facilities will actually be "a subsidy" paid by Bell Canada and its associated companies.
Almost in the same breath he asks:
-that the telephone firms and other "initial participants" be given exclusive rights to the satellite's use "in exchange" for the charges to be imposed by Telesat Canada. This is the private-public company that will administer the satellite operations.
As you go through this article you realize the implications inherent in the terms they are speaking about. It is completely unacceptable to have a Canadian corporation state to a responsible federal government that Telesat should not be publicly owned. I sincerely suggest that the minister should take a very close look at the over-all situation. For the fifth time I urge the minister to accept the amendment of the hon. member for Waterloo (Mr. Saltsman).
In the time I have left, I wish to refer briefly to the original sponsor of this amendment, the hon. member for Selkirk. In his 
opening words on April 14, as recorded at page 7502 of Hansard, the hon. member said:
Mr. Speaker, ever since word went out that the government of Canada was thinking of establishing a space communications satellite, I have supported that notion enthusiastically.
Every member of this party supports that notion enthusiastically. We will continue to support it as long as Clause 3 is altered in accordance with our amendment to make it entirely a crown corporation. The hon. member for Selkirk went on to say:
-we should want to assist the Canadian scientific community to develop the expertise connected with space, with communication by satellite, and that we should be taking an important step toward giving our scientific community something concrete to work on, something that will give that community an important place in the world.
I draw to the minister's attention that the people we have in this field are experts. It is not necessary to go outside to obtain expertise. Before he introduced his amendment at that time the hon. member stated:
I cannot disagree for one second with the minister in his statement that this is indeed our central nervous system and that his department is responsible for administering to the needs of this system. Therefore, it is completely unacceptable that this central nervous system should somehow not be controlled by us.
At that time the hon. member moved the following amendment:
That Bill C-184 be not now read a second time, but that it be resolved that in the opinion of this house consideration should be given to establishing the proposed Telesat Canada as a crown corporation, with provision for participation therein by the governments of the provinces as well as by the government of Canada.
I believe that sets out in a very few words the position of our party. I believe it shows that we believe in setting up a corporation under public control to ensure that the returns from the system do not go to the private carriers but directly to the general public of this country. I am sure all hon. members appreciate the fact that Canada is a nation we can be proud of as long as we retain ownership of it. We should not allow private corporations connected with companies in the United States and elsewhere to gain control of the over-all operation of this corporation.
I believe it has been set out clearly that there is room for conflict with regard to control and regulation. If the corporation is set up as a crown entity, this will ensure there will be no problems on questions such as foreign ownership and participation. In addition, the regulation of this corporation and
June 6, 1969

the Canadian Transport Commission's efforts to regulate Bell Canada will not need to be brought before this house later.


The Acting Speaker (Mr. Bechard):: Is the
house ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


The Acting Speaker (Mr. Bechard):: those in favour will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Bechard):: those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Bechard):: In my
opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Bechard):: Call in
the members. Order, please. As was stated before, the vote is deferred until after the study of the other amendment in the name of the hon. member for Waterloo (Mr. Saltsman).


Some hon. Members:: No, no.


Mr. Saltsman:: On a point of order, Mr. Speaker. I thought there was agreement the two motions would be combined into one motion.


Stanley Howard Knowles: His
Honour is deferring it until after the amendment of the hon. member for Palliser (Mr. Schumacher).


The Acting Speaker (Mr. Bechard):: If the
house gives unanimous consent to take the vote right now, that can be done, although I have the authority to defer the vote until after the discussion of the other amendment. Is it agreed we take the vote now?


Some hon. Members:: Later.


The Acting Speaker (Mr. Bechard):: The
statement made last night was as follows: The Acting Speaker suggested that if the foregoing motion were negatived, the other proposed motion would become a nullity. He suggested that if a recorded division were demanded on the foregoing motion, it could
Telesat Canada Act
be deferred until the next proposed motion is considered at which time a decision could be made with respect to the disposition of the other motion standing in the name of the hon. member for Waterloo.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Bechard):: It being one o'clock this sitting stands suspended until 2 p.m.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2 p.m.
Mr. Stan Schumacher (Palliser) moved:: That Bill C-184, an Act to establish a Canadian corporation for telecommunication by satellite, be amended by deleting in subclause 2 of clause 12, all the words following "under subsection (3)" appearing on lines 19 to 22 on page 9.
He said: Mr. Speaker, the effect of this amendment is to free the Governor in Council in order that he may be able to appoint anybody as his representative on the board of directors of Telesat Canada. This amendment was proposed at the committee stage of the bill and received the same rather stiffnecked treatment from the minister as all other amendments proposed by private members. This attitude on the part of the minister even extended to textual improvement on a matter not relating to substance with regard to an amendment proposed by the hon. member for Halifax-East Hants (Mr. McCleave), and this experience leads me to believe that my amendment will not have much chance of passing.
This amendment provides us with an opportunity to raise a certain point of view with respect to the future development of government, quasi-government and mixed corporations. There is an apparent trend toward having the public service built into anything with which the government is concerned. There was evidence of this in Bill S-29, which received approval yesterday, when the Minister of Indian Affairs and Northern Development (Mr. Chretien) said that not more than three members of the committee to be established under that bill would be members of the public service. At least there was no strict requirement in that legislation that there be any members of the public service on the

June 6, 1969
Telesat Canada Act
board, and I congratulate the Minister of Communications for resisting such a requirement in the present legislation with respect to Telesat Canada to the extent that it provides that at least two members of the board of directors shall be public servants.
As I say, Mr. Speaker, I do not have much hope that this amendment will pass and therefore I am not particularly worried that I seem to have missed the most important subclause. Upon further examination it would appear that my amendment should also apply to subclause 3 which deals with the permanent board of directors. This amendment to subclause 2 concerns only the provisional board of directors.
[DOT] (2:10 p.m.)
We have heard members of the New Democratic party extol the benefits of the crown corporation type of enterprise in Canada. The government party has not been particularly energetic in resisting that line of argument. In particular, we have heard certain references to the good example offered by the operations of the C.B.C. I believe the hon. member for Regina East (Mr. Burton) expressed that point of view. I think it was he who suggested that the Conservative party should be congratulated for bringing that organization into being. While the aims might have been good in 1935 in the establishment of the C.B.C., certainly no pride should be extracted from the present operations of that government organization. I think it is the best proof that we should not continue this type of enterprise in Canada.
Government sponsored enterprises never really build anything in an efficient manner. Certainly there is no proof in support of the suggestion that government sponsored organizations are efficient. Some hon. members may refer to Air Canada as an example of the efficiency of a government organization. How do they know that it is a good example? There are no yardsticks to be used to measure it. How do we know it is an efficient organization when it does not pay income tax?


An hon. Member:: How about the C.P.R.?


Stanley Stanford Schumacher: How do we know these things when there is no way of measuring them? There have been no efficiency studies carried out.


Max Saltsman: Would the hon. member permit a question?


Stanley Stanford Schumacher: Certainly.


Max Saltsman: The hon. member raised an interesting point in respect of comparisons. In view of the fact there are international carriers around the world with which a comparison of this kind can be made, and in view of the fact that the studies which have been made comparing Air Canada with the operations of other international carriers have redounded to the credit of Air Canada, the hon. member should reconsider his position. Suggestions have been made that Air Canada is probably more efficient than some private enterprise carriers throughout the world. Is the hon. member familiar with those studies?


Stanley Stanford Schumacher: I am not familiar with those studies, but I do not think there is evidence which proves, at least to the people of Canada, that the large part of our air transport being conducted by Air Canada is efficient because it is a government sponsored organization. The Canadian Pacific Airlines operation does not maintain several floors of office space in Montreal, or at the location of its head office, as does Air Canada. One suspects there is featherbedding to a great extent by Air Canada. This is not the case in respect of other organizations which have to account directly to their shareholders. I do not see that there has been any reasonable measure developed as to the efficiency of these organizations. In any event, this is not the point I intended to cover in my amendment.
The intent of my amendment is that we should not encourage the appointment of individuals to the boards of directors of companies in which the government of Canada is involved from the ranks of the public service, at least not on a compulsory basis. Certainly the Governor in Council is charged with appointing the best possible individuals to these boards of directors. It may be that the members of these boards, or some of them, should be members of the public service in order that we can obtain the best possible people, but my amendment does not restrict the Governor in Council from appointing public servants. I object to any statutory requirement that there be a certain number of public servants on these boards.
During a committee meeting I used the words of President Eisenhower when he left office nine years ago. He warned against the military-industrial complex in the United States. The way things are progressing in Canada we are in danger of suffering from
June 6, 1969	COMMONS
what could be called a mandarin-industrial complex. These people on these boards come into close contact with the industrial leaders of this country. If there is a danger in respect of the military complex in the United States, I suggest the same thing could develop and is developing in this country.
Hon. members of the New Democratic party may suggest that President Eisenhower was referring to officers of the armed forces in the United States who are associated with big business in respect of procurement. The point I make is that there is too close an association between these large companies and government, and this is not necessarily in the interests of our private citizens. For that reason I should like to take this opportunity to warn the government about that sort of development. Certainly the government is not endangering anything it wishes to accomplish ultimately by accepting this amendment. The amendment does not restrict the government in the appointment of members from the public service to these boards of directors, if it feels it should do so.


The Acting Speaker (Mr. Richard):: Is it the
pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.
The	Acting	Speaker	(Mr.	Richard):	All
those in favour will please signify by saying yea.


Some hon. Members:: Yea.
The	Acting	Speaker	(Mr.	Richard):	All
those opposed please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Richard):: I
declare the motion lost.


John Angus MacLean: On division, Mr. Speaker.
Motion (Mr. Schumacher) negatived.
The	Acting	Speaker	(Mr.	Richard):	As
indicated earlier this day, a vote will now be called on the prior amendment submitted by Mr. Saltsman, seconded by Mr. Knowles (Winnipeg North Centre), that Bill C-184, to establish a Canadian corporation for telecommunication by satellite, be amended, in clause 3, by deleting the words "together with such persons as a shareholders of the company from time to time"; also by deleting the words "with share capital"; and by inserting
DEBATES	9841
Regional Development Incentives Act the word "Crown" before the word "Company". Is it the pleasure of the house to adopt the said motion? All those in favour please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Richard):: those opposed please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Richard):: In my
opinion the nays have it.


Some hon. Members:: On division.
Motion (Mr. Saltsman) negatived.


The Acting Speaker (Mr. Richard):: There was a ruling earlier in respect of motion No.
3 by the Acting Deputy Speaker, so a vote cannot be taken at this time on the third amendment.


Eric William Kierans: that Bill C-184, to establish a Canadian corporation for telecommunication by satellite, as reported (with amendments) from the Standing Committee on Broadcasting, Films and Assistance to the Arts, be concurred in.
Motion (for concurrence) agreed to.


The Acting Speaker (Mr. Richard):: When shall the said bill be read the third time?


An hon. Member:: Next sitting of the house.


Some hon. Members:: Now.


Stanley Stanford Schumacher: I rise on a point of order, Mr. Speaker. I cannot give consent to this bill being read the third time at this sitting.


The Acting Speaker (Mr. Richard):: It will be read the third time at the next sitting of the house.



REGIONAL DEVELOPMENT INCENTIVES ACT


Hon. Jean Marchand (Minister of Regional Economic Development) moved: that Bill C-202, to provide incentives for the development of productive employment opportunities in regions of Canada determined to require special measures to facilitate economic expansion and social adjustment, be read a second
June 6, 1969
9842	COMMONS DEBATES
Regional Development Incentives Act time and referred to the standing committee on regional development.


The Acting Speaker (Mr. Richard):: Is it the
pleasure of the house to adopt the said motion?
[DOT] (2:20 p.m.)


John Angus MacLean: On a point of order, Mr. Speaker, I believe you said the motion was moved by the Minister of Regional Economic Expansion (Mr. Marchand), who is not present at the moment.


An hon. Member:: He is coming.


John Angus MacLean: Perhaps we could delay proceeding for a moment, Mr. Speaker.


Jean Marchand: Mr. Speaker, I believe that this is very important legislation. It is one of the major steps toward the government's objective of overcoming the disparities in economic and social development between regions of Canada. The essence of the legislation is that it provides a very powerful incentive to companies to increase employment in the slow growth regions of Canada. I hope, indeed, to be able to make it so effective that it will, in the course of the next few years, do a great deal to eliminate the term "slow growth" from substantial parts of Canada.
The new incentives that the bill proposes to provide are for firms undertaking new activities. That means either starting new plants or changing existing plants to make additional products that the plant cannot at present produce. The maximum scale of the incentives will be 25 per cent of the capital costs plus $5,000 for each job created in the new plant or in the expansion to produce new products. In order to compare that with the existing ADA program, I should say that nowadays the average capital costs of industries per job created are about $25,000. In other words, the employment related part of the incentive can in the average case be about 20 per cent of the capital costs, which would make the total incentive 45 per cent of capital costs. This compares with 20 per cent as the standard rate under the present ADA program. Whereas the ceiling under that program is $5 million, the bill provides for a maximum of $12 million.
A clearer way of expressing the purpose of the program, however, is to measure the whole incentive in terms of the jobs created. In an industry using an average amount of

capital, we will be prepared to provide an incentive of up to $12,000 for each new job created. If the industry is one that uses a lot of capital, we will go as high as $30,000 per job. I should make it plain that while the incentive will now be related to the employment created as well as to the amount of the investment, the proposed program is, just as much as ADA has been, a program of capital incentives. It does not provide for any continuing subsidy. It is a once and for all incentive to companies to start new production where the employment is most needed.
The advantage of this kind of incentive is that it means the company can make a careful calculation as to where its prospects will be best. It can balance any higher operating costs, such as for transport, or any other disadvantages of locating in the slow growth region, against the reduction in capital costs that the federal incentive provides. In that way we give industry the chance to use this program to establish viable enterprises which will be of long term benefit.
With the size of incentive proposed in this legislation, I believe that a considerable number of companies will find it economic to locate in the slow growth regions. As that begins to happen, of course the operating disadvantages of a location in, say, the mari-times will begin to decline. That is because for many industries the main disadvantage is that there are not many other industries. In other words, the difficult thing is to get the growth process started. Once it is started at the best industrial locations in the region, it gets a momentum of its own and the need for incentives gradually diminishes. That is what we are going to try to achieve.
Accordingly, the proposed improvement of incentives applies to new plants and expansions that broaden a plant's production. Those are the purposes of what the legislation calls secondary incentives. The improvement will not apply to expansions that involve only the production of more of the same thing. For that purpose, the maximum incentive will continue to be 20 per cent of capital costs, the same basic rate as the ADA program.
The comparison is a bit more complicated than that, for a number of reasons. We will be dropping the deductibility provision that formerly made the effective rate for expansions less than 20 per cent. On the other hand, companies will not be entitled, in addition to the grant, to special capital cost allowances for tax purposes. The value of that tax provision has varied greatly, of course,
June 6, 1969	COMMONS
according to the profit position of the company. In general, it was an important additional attraction to expansions by some established companies but it was of much less value to new ventures. In other words, it tended to help most those who least needed help, and we propose to drop it in favour of stronger incentives that will be more efficient for their purpose.
For the same reason, we propose to exclude from the new program some of the kinds of initial processing operations that are very directly related to the source of raw materials and for which a locational incentive can therefore be wasteful. This does not mean that the government is ruling out assistance to primary industries and the initial processing associated with them. Under the general powers of the legislation establishing my department, we can give incentives for any kind of commercial operation when it is required for a successful development plan for a special area.

However, Mr. Speaker, the new incentives legislation is conceived in such a way as to affect the regional localization of secondary industries which do not directly depend on special resources.
Large industries in the primary sector may sometimes need assistance in slow-growth regions, but it is more logical to treat them as particular cases than to bring them automatically under the act.
With regard to another very important aspect, we are contemplating the extension of the new program in relation to ADA. The highest subsidy can reach 20 per cent of the capital costs and can be used not only for the development of existing industries but also for their modernization. Even if modernization does not normally create new jobs it may be necessary to maintain the employment level. Under the proposed legislation, modernization schemes will be eligible for assistance as are development projects solely designed to increase existing production.
The bill introduced today is substantially different from the present ADA policy on several important aspects. The incentives provided will in no way be granted automatically.
The legislation establishes a formula which determines the maximum amount which may be granted for a given project. But this amount may not be granted if the business is unable to prove that it needs the whole
DEBATES	9843
Regional Development Incentives Act amount of the incentive either to set up a new branch, or to enlarge or modernize its existing facilities. All the factors enabling us to determine to what extent the new venture will benefit the area will also have to be taken into consideration.
Our judgment, of course, will not be based on any restrictive viewpoint. As a matter of fact, the over-all purpose of the legislation is precisely to develop more job opportunities and to encourage new forms of operations in underdeveloped areas. However, it provides for preventive measures to ensure that the taxpayers's money will not be wasted in order to promote a particular form of development.
Another point worth mentioning in the legislation concerns the areas eligible for grants. The "designated areas" of the ADA program have become "designated regions". In other words, the discrepancies of the Area Development Act will be done away with. Incentives under the new program will have more stringent effects since the designation of any relatively small areas would bring about serious anomalies with neighbouring areas.
Therefore, except for the particular case of Prince Edward Island, the legislation provides that a designated region must extend at least over 10,000 square miles. The reason behind this choice is that it represents an area 100 miles square, so that the centre is located about fifty miles from the boundary. The ease with which one travels today thus makes readily available to the residents of an area of that size the job opportunities within such an area.
The designation of those regions will not be made according to rigid statistical criteria. It will have to be proven that job opportunities are exceptionally inadequate. That can be assumed either by the rate of unemployment, or the low rate of growth, which is reflected by constant displacements. It will also be necessary to have good reasons to believe that the incentives which can be provided are designed to encourage the economic development of the area.
If these conditions are met, consultations will take place with the province in respect of the designation of regions. Obviously, if these consultations are to mean anything, we will have to give up the rigidity of statistics as the only criteria for designation. We hope to use good common sense as well as statistics.
I can say that informal preliminary consultations have already taken place with the provinces. Of course, no final decision will be
June 8, 1969
9844	COMMONS DEBATES
Regional Development Incentives Act taken as for the designation of regions before the legislation has been enacted. But we can already state that we are going to designate almost all the eastern part of Canada,, that is, a large part of Quebec and of the Atlantic provinces. It is also possible that we shall have to add important areas in the five other provinces.
The legislation provides for an orderly transition between the existing ADA program and the new program. There will be, in fact, a six-month period, from the 1st of July to the 31st of December this year, during which those programs will be applicable. It should be possible to commercialize, before March 31, 1971, the projects accepted under the existing program.
However, inevitable delays will not result in the cancellation of the subsidy.
Those remarks dealt with the most important aspects of the legislation. There are still, of course, many technical problems that we shall have to examine later. For the moment I would like to conclude by stating that the primary objective of the legislation is to offer a new opportunity for recovery to the areas of Canada that have suffered so long from slow growth. The proposed incentives will be powerful enough to ensure industrial expansion wherever it is possible. I think that in this way we shall be able to launch a real process of economic expansion and that our new program associated with the other programs of my department, will enable us in a not too distant future to provide new jobs to hundreds of thousands of Canadians in the areas which are now the least prosperous in our country.

Those are the main principles of this bill, and I hope I am not being presumptuous if I say that I shall be surprised if many hon. members disagree substantially with them.
At the same time, I fully recognize that there is one aspect of the bill that requires frank and careful discussion, namely, the very considerable discretionary power which it puts in the hands of the minister. I can say in all sincerity that, if there were a satisfactory alternative to this discretion, I would be delighted. It will make life very difficult for me and for the officials who by delegation will bear much of the burden. It is not the kind of power that either I or they relish. But the bill is written in the way it is because, after very careful consideration, I can see no other way to achieve the benefits for employment in this country that we are all seeking.

There are two reasons why a policy of this kind must be flexible. One is that the problems of the slow growth regions are very difficult. The other is that the needs of different industries are very varied. That the problems are very difficult is obvious. That is why the slow growth regions have been with us so long, why many earnest efforts, at all levels of public and private initiative, have not overcome them. It is clear that if we are going to have more success now, if we are going to bring about all the industrial growth that is viable, the incentives for locating in the slow growth regions must be strong. That is the reason for this legislation.
But while we will not get enough industries without strong incentives, it is equally clear that not every industry, not every new plant or expansion, needs the same level of incentives. After all, some industry has been established in the slow growth regions without any incentives at all, or with only the incentives that have been available in recent years under ADA.
In this bill we are proposing a level of incentives that we believe will be high enough for any industry that is going to be successful in the long run. But obviously that is a higher level of incentive than some industries need. If we paid the maximum level to them all, we would in some cases be wasting the taxpayers' money. We would be providing some companies with more incentive than they really need, and the difference would be a windfall profit at public expense.
Let me illustrate the problem by describing one idea which we considered and rather regretfully rejected. Obviously the difficulty about locating in, say, the maritimes is, for many types of industry, that the local market is small and other markets are a good distance away. Suppose, for example, that the industry is one in which the economic plant size is so large that the market has to extend over most of eastern North America. An industry of this kind needs, other things being equal, a bigger incentive than an industry that can produce economically for a market of a few million people.
We considered whether we could limit the discretion in the bill by laying down some sliding scale of incentives based on this kind of consideration. You will not be surprised, Mr. Speaker, to hear that we found it impossible. The kind of formula that might suit some industries would produce hopeless anomalies for others. It would have meant refusing adequate assistance to some projects
June 6, 1969	COMMONS
that plainly would benefit employment in a slow growth region, while probably giving other projects more assistance than they needed.
[DOT] (2:40 p.m.)
I am confident that any hon. member would have been driven to conclude, as I was, that the only thing to do is to ask parliament to establish in this legislation rules about the maximum level of incentives and then decide on an individual, case by case, basis whether the incentive should be offered on the maximum scale or at some lower level. That makes a very difficult program to administer.
I wish it were not necessary. But if we really want to attack regional disparities, if we want to give the slow-growth regions a real chance to share in the country's industrial growth, the policy just has to have the degree of flexibility proposed in this bill. If it does not, it cannot possibly do the job without wasting the taxpayers money in a way that we cannot ask the people of the rest of Canada to accept.
The question in my mind then became this, Mr. Speaker: how do we guard against any abuses which might creep in to the administration of a flexible program? There are two kinds of safeguard. One is internal organization, and the other is public scrutiny. Good internal organization ensures that all cases are handled systematically and that difficult cases are reviewed by enough officers to ensure that individual biases are very unlikely to prejudice the final decision.
At the same time it is important that this process should not make decisions unnecessarily slow. There will be some applications which clearly will not be eligible at all under the terms of the legislation. There will be many more cases about which it can be readily decided that they should receive the maximum primary incentive-20 per cent of capital costs-but cannot be considered for a secondary incentive. Both these types of case will be quickly dealt with, normally by two officers only.
The difficult cases, where we may or may not provide the maximum incentive, will be reviewed by at least three officers according to careful procedures for evaluating the financial prospects of the enterprise and the benefit-cost considerations involved for public policy. The most difficult cases of all will be further reviewed by at least two of the most senior members of the department before coming to me if policy issues are involved.
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Regional Development Incentives Act I should make it clear that I will in no circumstances be involved before the final stage of consideration of any case. It will be essential to be most scrupulous, and I shall be most scrupulous, to make it clear that no applicant will be able to short-cut the process by talking to me, or having some friend talk to me. That would not help at all. On the contrary, it will be made clear that any kind of intervention while a case is under consideration is likely to handicap the applicant. The minister's role will be to make the final decisions on the biggest or most difficult cases, to make sure that the objectives of the policy are being pursued. But the officials have to do the detailed work in all cases, and it is not the minister's job to get involved before the officials have studied the details. If I or any future minister began to interfere in the normal consideration of cases, suspicions of political favouritism would at once be aroused. Word would get around. In no time at all the press and the opposition would be alerted, as they should be, and the minister would have a bad time. Those are the facts of life, fortunately, in our system.
Moreover, these internal safeguards are only part of the picture. This program will be operated with the fullest possible flow of public information. In this respect, because the program is more discretionary than the ADA program, I intend to make important changes in procedure. We will continue, of course, to respect completely the confidentiality of applications until the company is ready actually to go ahead with the project. But as soon as it has decided to do so, we shall include it in a monthly list of projects for which incentives are being given. This will be a public list, tabled in the house if hon. members wish,, and it will state the scale of incentive provided to each project. If political favouritism is suspected, the issue can be raised in this house. The points of contention, however, will no doubt relate mostly to applications which are rejected or which receive a grant below the maximum and less than the company thinks it should have. The first appeal in such cases will no doubt be from my officials to me. If the company remains dissatisfied, and wishes to pursue the matter publicly, I would be entirely willing to state the reasons for the decision and hon. members would be able to question it.
Naturally, I have considered carefully whether there should be provision for an appeal to any kind of independent arbitrator. As I had the privilege of establishing the Immigration Appeal Board, in an area which
June 6, IS69
9846	COMMONS DEBATES
Regional Development Incentives Act had always previously been one of great ministerial discretion, I do not think I shall be accused of prejudice against an independent appeal process. But this is very different kind of legislation from the Immigration Act. The issues are not ones of law and individual rights but of economic judgment in relation to public policy. In such matters the proper point of final argument lies not in any quasijudicial body but in this house, to which I am responsible for the administration of the legislation. I would be happy, Mr. Speaker, that the case of any applicant who feels aggrieved should be publicly discussed by the appropriate parliamentary committee. These, I suggest, are the proper and adequate safeguards against any abuse of the flexibility which is essential to the purposes of this legislation.


Robert Lorne Stanfield: Mr. Speaker, this is an important piece of legislation and one for which we have been waiting for some time. It is important that it be brought into effect with whatever changes the house may see fit to make.
It has taken about a year to get as far as this, a long time it seems to me. The bill before us represents the measure which the minister is placing before parliament with regard to industrial incentives in areas of slow growth. Subject to refinement as the measure proceeds through the house, it is my view that we should get on with the job. Our main effort should be to improve the legislation and to prod the minister and his staff into a faster rate of activity than has been manifested to date. I believe a measure such as this to be in the national interest. Indeed, I hardly think it needs justification at this point; it is a measure to encourage industrial development in parts of Canada where there are substantial problems of unemployment and under-employment, together with the potential for development.
As the minister has quite properly pointed out, the bill does not make provision for continuing subsidies. It provides, rather, for an initial encouragement designed to offset the higher initial or starting up costs of an industry locating in a part of the country in which there are higher initial costs as a result of the lack of a highly developed labour force, or other factors.
This bill does not provide for continuing subsidies such as those involved for example in the tariff policy which make a continuing subsidy available to industries which receive 
protection. It simply provides that an industry which is prepared to locate in an area of slow growth should be able to do so on somewhat the same basis as an industry commencing activities in an area of more rapid growth. It recognizes, quite properly in my view, that an industry going into an undeveloped area industrially faces higher starting up costs. I think this is fully consistent with the national interest and properly administered ought to lead to a better utilization of our human and natural resources in this country, and therefore to the proper balancing of national and regional interests. Consequently, I think the measure is well justified in the national interest.
[DOT] (2:50 p.m.)
I am pleased, too, that the bill does recognize, first of all, the importance of grants toward the capital cost of industries in areas of slow growth. Secondly, I am pleased that the bill finally recognizes the importance of giving some help during the early break-in operations of a mill or plant which are usually related to the cost of training new personnel and working them into an effective unit. Thirdly, I am pleased that the bill recognizes the importance of the minister and his department consulting fully with the provinces before designating areas. I hope it will be the policy of the minister to consult fully and carefully, and on a continuing basis, with the provincial governments so as to ensure to the fullest extent possible that the development programs of the federal government and the provincial government concerned are fully co-ordinated. I think this is of the utmost importance.
I may say that some of us have been pressing these concepts upon the government of Canada for some four or five years. Actually, the concept of this kind of grant relating to assistance on the capital side, assistance on the secondary side to help meet the cost of properly getting going-which is recognized in the bill-and the concept of growth centres were recommended to the governments of the four Atlantic provinces some 4, 5 or 6 years ago by a distinguished economist in the United Kingdom who was retained for the purpose of making such a study. I refer of course to Professor Wilson, the Adam Smith professor of applied political economy at Glasgow University. These recommendations received a cool reception at the time in Ottawa. The general reaction was that Professor Wilson may understand the economy of Great Britain, but perhaps he has not fully taken into
June 6, 1969	COMMONS
consideration all the different circumstances that exist in Canada.
It is interesting to note that some five years later the government of Canada is prepared to adopt in principle virtually everything that Professor Wilson recommended at that time. I am pleased to see, although it does take time, that governments here can learn. In other words, the views once scorned, and gradually adopted in part, in the first instance related not to the concept of growth but to the concept of unemployment. I think it was unfortunate that the growth centre concept was ignored. The concept of developing centres of self-generating growth, urged by Professor Wilson and others a number of years ago but rejected by the government of Canada, has now been accepted by the minister. This is encouraging.
The same thing applies to the secondary kind of aid that the minister is proposing to give in certain cases. There is a recognition that since a new product is being developed there will be an additional period of difficulty for the factory or plant concerned. The secondary kind of aid is related, in some respects at least, to the amount of employment that is involved. This concept was advanced by Professor Wilson and is one of which anyone involved in promoting industry in a province of slow growth is only too well aware.
It would be difficult to exaggerate the handicap faced by an industry entering an industrially underdeveloped part of Canada in order to establish an industry of any sophistication and which requires training of personnel. It was possible to overcome this to some extent under the old vocational training agreements made between a province and the federal government to train unemployed on the job. This method was available for some time, and it was possible to overcome this kind of difficulty.
However, in the newer vocational training agreements adopted a couple of years ago, this facility was eliminated. It became impossible any longer to provide this kind of training on the job for a period of six months or so. It became virtually impossible under conditions existing in past years for an industry to establish itself in an underdeveloped area, where there was no pool of trained labour to speak of, and satisfactorily commence operations at a plant without suffering almost catastrophic losses during the initial period until the work force was trained, became integrated and was effective
DEBATES	9847
Regional Development Incentives Act as a unit. In other words, this process received a substantial setback under the new vocational training agreements adopted a couple of years ago. It is of the utmost importance that the minister is now taking measures to provide for this kind of much needed assistance, I would say essential assistance, and I hope that the measures taken by the minister will prove, as I believe they will, to be really helpful in this respect.
Without dwelling too long on the past I must say that, as a result of the failure of the government of Canada over the past four or five years to take advantage of all the good advice given to it, a good deal of time was lost in areas like the Atlantic provinces. Certainly, some effort was wasted and there has been a loss of time in developing centres of strong growth. I am pleased to see that the minister has revised the thinking in this regard, though I am a little discouraged by what seems to me to be the rather leisurely way in which the whole matter has been proceeding to date. I do not want to be unfair to the minister because he may have more difficulties to overcome than are apparent to me on the outside, but it seems to me that one year is quite a long time to take to get to the stage where we are just beginning to put the measure through the house. I find it difficult to understand why it would take one year to get this far. That fact that it has taken a year inevitably makes me question with how much vigour the program is going to be implemented.
There are other areas of concern with regard to this legislation, and the minister mentioned one of concern to him as he closed his remarks, namely the degree of discretion that is vested in the minister under this legislation. The minister emphasized the burden placed upon him. He recognized that inevitably some suspicion might arise in the course of the exercise of this discretion. He pointed to ways and procedures that he proposed to follow in order to reduce any such suspicion, and said he would do as much as he could to convince everyone concerned that he and his staff were being absolutely fair and even-handed.
[DOT] (3:00 p.m.)
I wish the minister well in this regard. I hope he is able to convince everybody concerned that there is no favouritism. I know he will try to administer the bill in that way. I suggest that it might be helpful to him, and to the program generally, if he were to consider the establishment of an advisory board
June 6, 1969
9848	COMMONS DEBATES
Regional Development Incentives Act enjoying some degree of independence. Such a board might examine how the act is being administered and make helpful recommendations from time to time. If men and women from labour and management with experience in the development of industry were to sit on the board, the board would be useful to the minister. Many minds in this country would be set at rest to some extent as to the way ministerial discretion is exercised. The board might continue to be helpful in making suggestions as to how administration under the act could be improved.
There is another aspect of administration on which the minister did not dwell. It is vitally important for people who are trying to promote industrial growth in a particular area, and for the industrialists concerned, to know as precisely as possible just what aid is available. It is important for the highest degree of certainty to be provided in this regard. If those concerned with the matter do not have that degree of certainty it will be difficult for those on the promotional side of the program to work effectively. It is unlikely that industrialists will wait too long in obtaining answers as to how much help is available. Industry will be confronted with a decision. An industrialist may want to build a plant and he may have a variety of locations from which to choose. Locations in designated areas will be considered, but he will not wait too long for answers. Industry may not be prepared even to consider establishing itself in designated areas unless someone who is interested in the area can say from the outset pretty specifically what help is available. It may be that no industrialist will be prepared to go through the long process of finding out what aid is available. He may not wish to wait months and months before finally getting an answer from the minister, only to find that the answer from the company's viewpoint is unsatisfactory. Unless the minister and his staff can introduce into this program far more certainty than they seem to have in mind, it may be difficult to entice industrialists to go through the long and uncertain process of finding out what aid will be available to them.
I know the minister feels there is need for flexibility. If industry is to develop in certain areas it will need to be certain about help available to it. Yet, there is a danger here. It stems of necessity from the manner in which the program is to be set up. The program involves a very high degree of centralization. Nearly all decisions must in some way go

through the minister. The minister is responsible for virtually every decision that is to be made. It is true that much of the spade work can be done by those working with him, but there will be a highly centralized exercise of discretion and there is a real danger that a bottleneck will develop because the legislation now being considered is not the only legislation the minister must administer. He must administer general legislation relating to regional economic development. That, too, involves the exercise of many other kinds of discretion. He will have many other things to consider.
The aid that is available must be reduced to writing, so that people can understand it. It will not be reduced to writing, perhaps, if the minister exercises his discretion too much. The greater the extent to which the minister exercises his discretion, the greater will be the danger that bottlenecks develop. I hope this does not happen. Conceivably the minister could become the greatest bottleneck in the country and I would not want that to happen.
Again I urge the importance, sir, of having the discretion under the bill translated as rapidly as possible into rules which will enable people to know where they fit. The rules will have the added effect of reducing the exercise of discretion on the part of the minister. Everybody concerned will thus be greatly facilitated in deciding how to proceed.
It is difficult to overemphasize this point, sir. So far as possible, the rules I have mentioned should be simple and clearcut. The minister worries, quite properly, about big money being wasted. He feels that in exercising his discretionary powers he ought to head off businessmen trying to get money they do not really need. I admire the minister in this respect, and the public will appreciate his motives. But let me suggest, sir, that as a result of the minister's desire to make sure no person receives money he is not entitled to, so many complexities may be introduced into the program that many people will not bother with it. Let me suggest this, too. The public has a great interest in this program and its best interest is served by making the program work. From the point of view of the Canadian taxpayer, the value of the program will be measured by the results it produces. We must be sure it produces results.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I have made this suggestion in the hope the minister will not set up so
June 6. 1969	COMMONS
many lines that have to be gone through, and so many complexities in making applications, that the success of the program will be jeopardized. The greatest waste of all would be to fail in the course of the next four or five years to develop self-generating growth in those areas of Canada the minister hopes to help. That will be the greatest failure. I do not urge the minister to throw away public moneys carelessly, but he should try to establish simple rules so that people may see where they fit. Only in this way can the program succeed.
If someone happens to get his hands on a few thousand dollars or even on a million dollars he may not really need, I do not think we should worry too much. After all, the government can recover that money eventually through taxation. Provision could be made for such capital to be carried on the books of a company in a way that will stop that company claiming any depreciation on that capital. I am not suggesting that the government should give away public money needlessly; I am only suggesting that eventually the money will be recovered. I also suggest as strongly as I can that there is a need for decisions to be reached as quickly as possible so that everyone may know as quickly as possible where he fits. Bottlenecks must not be allowed to develop, or the program will fail. I say that as earnestly as I can.
[DOT] (3:10 p.m.)
There are many definitions and declarations in the bill. I do not know what they mean. They should be defined as rapidly as possible at the committee stage and if that is not possible, by the minister. What exactly is meant by a plant being in commercial production? The operators of a plant become entitled to certain aid only when the plant goes into commercial production. The industry will want a clear definition of commercial production before it goes into a scheme of this sort. A plant operator will want to know exactly and precisely the conditions upon which the payment will be fully available. What is meant by a new product? What is meant by a significant contribution? There are many items of this sort which should be clarified as much as possible. I assume the committee will give these matters very close attention. Admittedly, they do not concern the principle of the measure and, therefore, I will not dwell on them at this time.
While I have been suggesting today there are dangers in the minister having too much discretion, danger in the lack of clarity in the 29180-623
DEBATES	9849
Regional Development Incentives Act standards to be established, there are some respects in which the bill may be too limited in its scope. I think the minister should consider embracing within the terms of this kind of measure certain types of service industries. He should consider, for example, the tourist industry. I presume the minister can help a particular tourist establishment under his general legislation. I assume this is the case, but in most of these areas in which the minister will be interested, the tourist industry is likely to have a very substantial potential for growth. It is likely to be very important to the development of the region. The minister will probably agree this is so, but he will probably say he can take care of it under the other legislation. Is the minister prepared to consider on an ad hoc basis an application from every builder of a motel, for example, in a designated area such as the Atlantic provinces? On the other hand, is the minister going to set forth some clearly defined rules so that those involved in that industry know what help, if any, is going to be available to them?
I hope the minister will very seriously consider including service industries, such as the tourist industry, that are clearly related to growth in this concept of development. Having done this, I hope he will proceed to provide clear rules as rapidly as possible so that we will not have a bottleneck develop because every application has to be processed from scratch.
I think the minister indicated this assistance would probably not be available to certain types of primary industries or industries involved in the initial processing such as processing of raw materials in an area. I do not know precisely what that means. For example, is fish a raw material in an area? Does this mean a plant involved in processing fish for the market would not be entitled to this kind of assistance? I do not know. This type of situation should be clarified because it could be, and frequently is, one of the best potential sources of growth in a particular region. The same can be said of forest products as well. Someone may say there is not much employment provided by a pulp mill. There is a great investment of capital, perhaps $40 million or $60 million, and only 300 to 400 men are employed. However, there are also many men employed in the woods and in industries required to service such a mill and its employees. There are many sections of the country where the minister will be concerned with this kind of work. Work in the woods will perhaps be the most suitable kind of
9850	COMMONS
Regional Development Incentives Act industrial development available or likely to be available. It may very well be through helping this kind of industry to establish that the minister will make his greatest contribution in some regions of the country.
We should not assume that an industry may not need this kind of help. A pulp company may not consider going into a part of the country in which there is no tradition of work in the woods and where there are no people used to working skilfully in the woods. It may be of the most vital importance to that area that this kind of work become available and the people learn the skills. A company probably would not go into such an area without some kind of assistance to get through the initial period in which the people acquire the necessary skills in the woods in order to produce the wood for the factory at a competitive price. I urge the minister not to be too rigid in any concept as to the kind of industry for which help will be available. I hope he will consider the service industries and not rule out too quickly industries involved in what he may now consider to be the early stages of processing primary products.
I wish to draw two other aspects of this problem to the minister's attention. The first is the matter of the economic infrastructure of the region. This bill, of course, is concerned with direct help to an industry. One of the purposes of the Atlantic Development Board in the Atlantic provinces was to help improve the economic infrastructure. This involves roads and basic services to industry which may not be available because the area is not highly developed from an industrial point of view. This kind of back-up assistance is essential to rapid growth in any area that is not highly industrialized. I am sure the minister fully realizes this, but I want to make certain he does not believe for a minute that he can satisfactorily generate and sustain successful industrial growth simply by helping a particular plant. It must be a much larger and more highly integrated concept than that.
I am sure the minister understands this, but I want to emphasize with all the force I can that this measure by itself cannot succeed. I regard it as essential, but it must be backed up by a broader concept. In relation to the broader concept, the general tax picture in a region is important. This is obviously the case in connection with municipal taxes which may be applied directly to the industry, but it is also important in terms of the

DEBATES	June 6, 1969
general economic climate of the province. For example, it is important in connection with highway taxes and taxes generally. I wish to point out to the minister, as I am sure others have, that a number of the slower growth Provinces in the country found it necessary to increase their taxes very substantially this past year, perhaps the past number of years, in order to provide basic services which in turn are related to growth. The Economic Council of Canada quite properly pointed out that it is absolutely essential to the satisfactory growth of a province or region that there are adequate services in the area such as education, transportation, health and services that the Economic Council of Canada refer to as growth related services.
[DOT] (3:20 p.m.)
So, Mr. Speaker, again I suggest to the minister that he is not going to succeed in his program unless the government of Canada takes measures, in co-operation with the provinces, to ensure that there is an adequate level of growth related public services in the area which he is seeking to assist. These should be available without imposing too heavy a burden upon the people or industry of the area. I want to emphasize that as strongly as possible.
In closing, sir, I say that there are questions of detail that the committee will want to examine. I wish the minister well in the administration of this bill. To use a hackneyed phrase, he has taken on a very challenging task, far from easy and in fact very complex and difficult. It will require all the imagination and all the energy at his command. I wish him well, but I hope he will be able to inject a higher degree of certainty into the program than he now appears to have in mind. I think this is absolutely essential. I believe the minister should broaden the program to make it available at least to certain types of service industries which lend themselves to this kind of consideration. It is vitally important that he back up this program with a general program relating to the strengthening of the infrastructure in the province. And finally, Mr. Speaker, it is essential to the success of this program that the province or region concerned be adequately serviced with growth related government services at a cost that is reasonable to the people and to the industry the minister is trying to interest in moving into the area.


Max Saltsman: Mr. Speaker, there sits a very brave man, and I would like
June 6, 1969

to welcome Canada's new economic czar. I listened carefully to what the minister said when outlining his program. I now feel that the discretionary power he recognizes as so dangerous is absolutely essential to the performance of his task. There is no doubt that in accepting this task the minister is going to make his life extremely difficult, because talking about how much money has been spent in an area will not wash any more. The only thing that will be important will be results, and he will stand or fall on his ability to correct the great disparities that exist in Canada.
The minister has complete power to act, and I shall commence my remarks by saying that I wish him well with those powers. I hope he will get the co-operation of his colleagues because, if he does not, they will break his heart. The job of members of this party is quite clear. It is not to carp about the details of the legislation, or perhaps even to make suggestions to the minister. It is to see that he gets results; to stay with him until he gets results, and to hold him responsible for results in the depressed areas of the country. This, of course, is what we have always talked about. This is what responsible government is all about. This is what responsible ministries are all about-not excuses, not the language of the bill, not reasons that things cannot be done, but the opportunity to do them and an accounting to parliament concerning the doing of them.
I wish to point out some of the pitfalls that the minister will face. We recognize that aid on a large scale will be necessary, yet if we take a look at the estimates for this purpose we find there is no increase in the current fiscal year. Thus we may well ask the minister, "How are you going to do it? Who is going to give you the tools to do your job? Are you going to persuade your colleagues of the importance of the task ahead of you, or will they let you be the fall guy when the money is not forthcoming so you will have to make the excuses on their behalf?"
The other thing that is vital is insistence upon full employment. This is not the first time the minister has heard this argument from me. If the minister is going to get industry into the Maritimes, into Manitoba or Northern Ontario, it may mean that some industries will have to leave central Canada, and when that happens there will be an awful lot of screaming. The only way to ensure that that kind of anger does not occur, to ensure that the policy is not one of beggaring your neighbour, is to see that you have full 29180-623j
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Regional Development Incentives Act employment in central Canada. The prosperity of the developing areas depends to a large extent on what happens to the developed, highly industrialized area of Canada. You cannot separate one from the other. Unless the minister insists upon full employment policies, I am very much afraid that even with the best of intentions and most energetic will, the program cannot succeed. Therefore,
I think it is essential for the minister to insist upon this, as we have in the past and as we will continue to insist.
As the program proceeds, we will be looking at the question of grants to the private sector. We are not averse to seeing sizeable expenditures made in order to develop areas, but what we do question is what appears to be the rather one-sided approach that this aid be given only through private entrepreneurs. There is not a single word in the legislation about the establishment of crown corporations. There is not a word about the government going into business itself. After all, this is bribery on a massive scale. We are talking about the provision of $1 million for 33 jobs. Why don't we go into business ourselves if we are prepared to spend that kind of money? Surely, we are capable of doing that?
There is no sense in arguing about who will get the money because, according to this legislation everything is discretionary. The minister has responsibility for everything. I give notice that we will be examining the decisions he makes, and will extend our criticisms or congratulations as the cases warrant. If we look at what the government has done in the past in terms of aiding industry we find that the Vickers Corporation was one of the main recipients of government charity, with rather disastrous results in the long run. Devco was another beneficiary, again with disastrous results for the people of the area. Now, we have Erco, which has received government benefit, and we have an extreme pollution problem. I ask hon. members who are so sold on private enterprise, how much worse could any government enterprise have done?


Mr. Deachman:: What about the government of Saskatchewan?


Max Saltsman: The government of Saskatchewan will go down in history when the Liberal party's name is forgotten because it pioneered things your government hadn't the vision to see. You have been living off the capital of the government of Saskatchewan ever since. So, you hold your Smart-Alec
9852	COMMONS DEBATES	June 6, 1969
Regional Development Incentives Act remarks for a moment while we try to have some sort of reasonable, sensible discussion.
[DOT] (3:30 p.m.)
The Watkins report in respect of the level of foreign ownership which exists in Canada points out the dangers that attend foreign ownership of our economy, including the loss of Canadian sovereignty and, the fact that extraterritorial decisions are made by these foreign owned companies. If the pattern in the future is similar to that of the past, and if these United States or other foreign interests are to be protected by this kind of incentive, what assurance do we have that the interests of national corporations will not supersede the interests of these regions? I suggest to you that the only way we can guarantee to these underdeveloped regions of Canada that development will be continuous and in their interest is through the establishment of Crown corporations on a scale we have not contemplated in the past.
It is not my intention to talk about Crown corporations without making some suggestions. There are some Crown corporations which could very easily be located in these areas. Recently we had a debate in respect of drugs, and it was pointed out that the measures proposed by the hon. Minister of Consumer and Corporate Affairs (Mr. Basford) to bring down drug prices were not adequate. It was suggested that what was really needed in this country was a Crown corporation for the manufacture of drugs. This would be an ideal industry for location in areas such as the one we are discussing. If we are going to spend the kind of money talked about in this bill, how could we spend it better than by investing it in the future of all Canadians? In this way all Canadians could be shareholders in these companies rather than investing their money in companies, the future of which is not always ours to determine but is determined at a head office removed from this country.
It is not my intention to speak at length on this bill, and hon. members on the other side of the house may contain their applause until the card goes up. I feel I have said almost everything I want to say, or I have presented at least a rough outline of my feelings. There will be a great deal of time available to us during committee hearings and when the bill returns to the house to examine the measure in detail. My closing remarks again take the form of a caution regarding those constitutional problems now being created by the

powers possessed by the minister. How rigid is he going to be in terms of interpreting the Canadian constitution? We know he has made some statements in the past which indicate his belief in the need for an infrastructure to persuade industry to properly locate. This means the federal government will have to become involved with the provinces in the construction of roads, schools, hospitals and this sort of thing, in order to make areas attractive to industry. I hope the minister will not take a rigid position such as the position adopted by his confrere, the Prime Minister (Mr. Trudeau). If he does, I do not see how this program will meet with success.
The existence of an economic czar creates a lot of problems at the federal level. It will be of interest to see how these problems will be worked out. It will be of great interest to see the extent to which the Minister of Regional Economic Expansion (Mr. Marchand) is able to convince his colleagues that the narrow constitutionalism we so often observe on the part of other members of the house is not adequate to meet the challenge of our times.
Like the hon. gentleman who preceded me, I should like to close by saying that all members of this house wish the minister well in his undertakings. I assure him that we will carefully scrutinize and evaluate his efforts. He has now the power to do good. Let him use that power to do good.


Mr. Henry Latulippe (Compfon):: Mr. Speaker, I am pleased to participate in the debate and to discuss the bill which the minister has brought in. I would like to tell him immediately how much I admire him for having taken the initiative of introducing that helpful measure because Canada needed it.
We know that this bill will not be a cure-all, but we sincerely congratulate the minister for being concerned with industry. He is doing quite well, because, in my opinion, this is one of the most appropriate measure we have ever had in Canada.
At the present time, we have to develop our industrial technology. We have to modernize our industries by all possible means and this bill will make it possible to produce a lot for the people and to develop labour, particularly specialized labour in some techniques that we are now unable to use.
Those workers now have to emigrate to other countries. We are paying to promote
June 6, 1969	COMMONS
and train such labour, and a great proportion of those workers are now leaving the country because we lack the necessary industries and techniques to use them.
[DOT] (3:40 p.m.)
I want to say to the minister and to the house that the purpose of the industry is not only to create labour but to produce in order to meet the needs of the country and the community. That is the purpose of industry and automation will increase its output. We shall use technology as much as possible according to whatever financial resources the government will put at our disposal.
As it stands now, a large number of small or medium-sized industries do not manage to find the capital required to enlarge and renovate their plants so as to make them more profitable. Through modernization and technology, they will certainly yield more profits and will be in a position to expand and to produce more. The government will have to intervene in order to facilitate the sale of the increased production from modernized industry. At the present time many companies have lagged behind and therefore are more or less economic operations.
Modernization of industry will not help the sale of our products.
I was saying a while ago that the industry is not meant to provide jobs but to produce. Industry is so automated today that soon we shall be unable to find work for everybody. Then, industry will not pay sufficiently high wages to the citizens and there will not be enough money into circulation to allow them to live from industry.
We will need other bodies, other means to correct the situation, but that is not the minister's responsibility. At the present time, he offers concrete measures that will be useful to the population, that will help improve designated areas that are practically undeveloped but that can become industrialized and keep part of their labour force at home.
This legislation will allow some areas to develop. In this way, the economy of those regions will acquire some balance.
We loyally support this measure. In our view, it is a very good piece of legislation, an exceptional one even. We have been hoping for something like this for a long time. The minister is presenting it today.
We must congratulate him on his bill and on the measures he has suggested to increase our industrial heritage.
DEBATES	9853
Regional Development Incentives Act
This will bring only a partial solution to the problem, because the problem is an economic one and not a political nor an industrial one.
At the present time, industry is not meeting all the needs nor is it fulfilling all its duties. That is why we can say that we have surpluses of certain products.
If we want industry to run well, these surplus products must be sold, either as exports or through adequate purchasing power. Once again I know that these industrial improvements will not put at the disposal of the taxpayers the purchasing power required to make the industry run properly.
Once it is modernized, once it has adopted all the technology, once it starts producing at full capacity, industry will have to sell its products. The government will then be faced with another problem. Another department will probably manage to solve the problem, but the minister will still have something to say when he sees that a surplus of products exists and that it must be sold. He will then say: If you want me to make a go of it, you have to give adequate purchasing power to taxpayers, so that the merchandise will move. Thus, another problem will be sown, and we shall reap it later.
We will settle for the time being, for a few months and maybe for a few years, a "stationary" problem, but it will not, be solved at 100 per cent by those most efficient means. We need those means. We need to apply all the technology and to use all the science that we have at our disposal. We must provide our industries with all the means they need to keep on expanding and to yielding top profits to the people.
With regard to what they cannot give, once again, further internal means, additional measures will be needed in order to solve the various problems which will have to be settled in addition to that one. It is one of the main problems to be solved and, once again, the minister is to be commended for taking such action.
I think that the bill is well timed. A few minor amendments might have to be made, but the minister has taken into account the geography and the economy of the province of Quebec and of every Canadian province, in order that those improvements benefit the regions that need them.
The designated areas will be able to benefit from them and the minister should be commended for that. Then, Mr. Speaker, I think
June 6, 1969

Regional Development Incentives Act that this legislation is a good one and I am confident that if nothing else crops up, if there are no loopholes, the bill will be very helpful to the people. It will contribute to the economic development of our industry and our labour. At least, once in the course of our history, we shall have done something practical, something long awaited by the population. This legislation will be welcome throughout Canada and by provincial governments. The minister will have no trouble to make arrangements with provincial governments, as far as the designation of areas is concerned, so as to enable all areas and regions remote from large centres to benefit from the Canadian economy.
[DOT] (3:50 p.m.)


The Acting Speaker (Mr. Richard):: Is it the
pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Regional Development.
Mr. Frank Howard (Skeena):: Mr. Speaker, I wonder whether I could rise on a point of order to make a proposition to the house. Because of the progress made and the proximity in time to private members' hour, I wonder whether the house would consider proceeding to private members' hour at this time for the purpose of considering two items, namely, item No. 1, about which an order has already been made, relating to Bill S-33, and item No. 6, second reading of Bill No. S-30. Upon the conclusion of the consideration of those two items, the house would then adjourn.


The Acting Speaker (Mr. Richard):: Is it the
pleasure of the house that we call it four o'clock and proceed with private members' business?


Some hon. Members:: Agreed.



PRIVATE BILLS


Gordon Harvey Aiken: That Bill S-33, to incorporate Atlantic Mutual Life Assurance Company, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.
Motion (for concurrence) agreed to.


The Acting Speaker (Mr. Richard):: When shall the said bill be read a third time?


Some hon. Members:: Now.


Harold Edward Winch: Now, by consent.


Gordon Harvey Aiken: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.



THE PERTH MUTUAL FIRE INSURANCE COMPANY

Mr. D. Gordon Blair (Grenville-Carleton) moved: that Bill S-30, respecting the Perth Mutual Fire Insurance Company, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Richard):: Pursuant to an order made earlier this day, this house stands adjourned until two o'clock on Monday next. May I take this opportunity to wish hon. members better weather and an interesting and restful weekend.


[Stage Direction]
At four o'clock the house adjourned, without question put, pursuant to special order.
[Stage Direction]
Monday, June 9, 1989