1969-06-04

Mr. Speaker:: Order. May I be allowed to bring to the attention of this house the presence in the Speaker's gallery and in the Senate gallery of a very distinguished group of parliamentarians from the United States Congress.


Some hon. Members:: Hear, hear.


Mr. Speaker:: This delegation of fellow parliamentarians includes I believe 8 members of the Senate and 12 members of the House of Representatives. They are here to attend the 12th Annual Meeting of the Canada-United States Interparliamentary group.
The Senate group is under the leadership of Senator Frank Church (Dem.) Idaho and the House of Representatives group is under the leadership of Cornelius Gallagher (Dem.) New Jersey. These gentlemen come to Canada, to Ottawa and to our parliament not only as parliamentarians and as neighbours but as friends. On behalf of the House of Commons I am very pleased to extend to them the most cordial welcome.



MESSAGE FROM THE SENATE

Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing the House the Senate has passed Bill C-171, an Act respecting the National Library, without any amendment.
[DOT] (2:10 p.m.)



ROUTINE PROCEEDINGS


[Stage Direction]
Twenty-second report of the Standing Committee on Finance, Trade and Economic Affairs, in French and in English-Mr. Clermont (Gatineau).
[Editor's Note: Text of foregoing report *appears in today's Votes and Proceedings.]


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, the house will recall that on April 5, 1969, the Minister of Fisheries announced the government's intention to draw further straight base lines delimiting Canada's territorial sea and exclusive fishing zones along the east coast of Nova Scotia and the west coast of Vancouver Island and the Queen Charlotte Islands. I am pleased to announce that the Governor in Council has now issued a list of geographical co-ordinates of points from which these base lines are to be drawn.
This new series of co-ordinates will be effective upon their publication in the Canada Gazette on June 11, under the authority of the 1964 Territorial Sea and Fishing Zones Act. That legislation created, beyond Canada's previously existing three mile territorial sea, a further nine mile zone within which Canada has exclusive jurisdiction over fisheries. At the same time the 1964 legislation empowered the government to establish along the coasts of Canada a system of straight base lines which, in the areas where they were established, would replace the sinuosities of the coast as the starting point for measuring the breadth of Canada's territorial sea and fishing zones. Such base lines may be drawn from headland to headland, from island to island and across the mouth of bays. Sea areas landward of the straight base lines have the status of internal waters of Canada.
A first series of base lines was established by the government in November 1967 for the coast of Labrador and the southern and eastern coasts of Newfoundland. Pending the conclusion of negotiations with certain European countries, the fishermen of these countries have been allowed to continue, in Canada's outer nine mile zone, the fishing activities they had been carrying out in those areas where they had traditionally fished prior to the passage of the Territorial Sea and Fishing Zones Act and the establishment of base lines thereunder.
The countries involved in these negotiations were Great Britain, Norway, Denmark,
June 4, 1969

Canadian Territorial Sea Limits France, Portugal, Spain and Italy. All of these have traditional fishing practices on Canada's east coast. It is now proposed to proceed further with the negotiations with the European countries concerned.
With respect to the United States, which has conducted traditional fishing activities off both Canada's east and west coasts, we intend to proceed with negotiations for the continuance of the present arrangement whereby Canadian and United States nationals are permitted to fish in the fishing zones of the other country on a reciprocal basis. Apart from traditional fishing practices, the United States and France also have certain treaty rights off Canada's east coast, and these rights will of course be respected.
A number of important gaps remain along Canada's east and west coasts after the establishment of the new series of base lines for Nova Scotia, Vancouver Island and the Queen Charlottes. As the Minister of Fisheries indicated in his announcement of April 5, the government intends to deal with certain of these gaps, as appropriate, after securing an amendment to the Territorial Sea and Fishing Zones Act during the next session of the house. The desired amendment will provide greater flexibility for dealing with coastal areas and will permit the Governor in Council to draw fisheries closing lines enclosing certain areas as exclusive fishing zones without extending the limits of Canada's internal water or territorial sea. At present, of course, Canada's fishing zones consist of a nine mile belt contiguous to the territorial sea, and therefore cannot be extended without at the same time extending Canada's internal waters and territorial sea by means of straight base lines.
Mr. Speaker, I now wish to table the order in council establishing the new base lines for Nova Scotia, Vancouver Island and the Queen Charlotte Islands, as well as the Canadian Hydrographic Service charts illustrating these base lines and the outer limits of Canada's territorial sea and fishing zones in the areas concerned.


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, speaking on behalf of the official opposition, we welcome the announcement made today by the Secretary of State for External Affairs. As you, sir, and the house are well aware, we have been diligently seeking this information ever since the legislation was passed away back in 1964. I am sure the fishermen on the east coast today have a better understanding of the meaning of the word 
"eternity", because they have waited from 1964 until Wednesday, June 4, 1969, for the announcement just made, which outlines some of the areas to be protected by the base lines which were outlined in the legislation of 1964.
The legislation was of course quite definite in providing that these base lines would be announced, but they are still incomplete. The minister's statement indicates that base lines, as provided in the legislation, will be drawn from headland to headland, from island to island, across the mouth of bays, and so on. I point out to the minister that if they were drawn from headland to headland on the south coast of Newfoundland, for example, they would run right into the middle of the territory of the French government in the islands of St. Pierre and Miquelon.


Mr. McGrath:: The government doesn't care about that.


Lloyd Roseville Crouse: No, they apparently are not applying themselves to this problem, because we heard nothing in the minister's announcement about any agreement with the French government or just what action will be taken in drawing the base lines in that area. This is a very important matter, because the common market countries have indicated that it is their intention to set up a base on the islands of St. Pierre and Miquelon, and the expanded fishery which will flow from that base will have serious, injurious effects upon the available supplies of fish on the east coast.


James Aloysius McGrath: They don't care about that, either.


Lloyd Roseville Crouse: We hope the government will continue to pursue this matter and that we may expect a further announcement in the not too distant future with regard to the action that will be taken to further protect the area I have mentioned, namely area adjacent to the islands of St. Pierre and Miquelon, and define Canadian fishing rights in that area, with particular reference to our fishing rights on the Grand Banks.


Mr. Frank Howard (Skeena):: Mr. Speaker, five years is a rather long time to wait for such an insignificant and incomplete announcement because, as has always been said, the fish of the ocean are no respecters of arbitrary lines which range across the oceans without regard to the desires of the government which establishes them. As was expected, the announcement of the minister did not
June 4, 1969



deal with certain areas along our coasts, notably the west coast from which I come and the bodies of water known as Queen Charlotte Sound and Dixon Entrance; these are left open to the international exploitation of fisheries, although they are areas we would normally consider our own. We are left in the position, perhaps because we are now in the fifth year since the Territorial Sea and Fishing Zones Act was presented to parliament, where we face the prospect of other nations, notably Japan and the Soviet Union, claiming historic fishing rights in areas which are not defined as Canadian territorial waters.
[DOT] (2:20 p.m.)
In fact, the other day another Japanese fishing boat operator was arrested, charged and fined in our courts for a violation of the 12 mile limit that exists now and that follows the convolutions of the coast. So, coupled with this, we have to have a more intensive prosecution of our jurisdiction, regardless of what form it follows.
The minister made mention, as did the Minister of Fisheries (Mr. Davis) on another occasion, of the necessity of filling in these blank spots with something called the fisheries closing lines. The reason for that was that in one area, which I know in particular, the distance involved is approximately 100 miles, which is too long a distance in international law and under international acceptance along which to draw a straight line closing off such a large body of water as are the inland waters.
To get around this difficulty of the international acceptance of this idea we are to develop something called a fisheries closing line. It seems to me that if for argument's sake the government had determined and conceived that a fisheries closing line 100 miles in length will be acceptable in international law, then the government must also accept the premise that the fisheries closing line that follows the continental shelf will likewise be acceptable, and a fisheries closing line that would follow the continental shelf would be far more valuable to Canada and her fisheries than the straight base line method we have at the moment. In fact, the Committee on Fisheries which reported to this house last Friday, May 30, made just such a recommendation, that when these fisheries closing lines are drawn they be drawn in such a way as to follow the area of the continental shelf and thus give us the fullest possible amount of protection, primarily for our bottom fish which would respect that line because the continental shelf
Loan Companies Act
would be at the extremity of their swimming grounds.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I would like to make a few remarks on behalf of the Ralliement creditiste.
As member of the committee on fisheries and forestry, I must say that the minister's statement is very incomplete, but that it represents nevertheless a step toward good relations with the countries to which it refers. More than ever, I would invite the government to make use of efficient methods to keep foreign fishermen-I am now thinking of Japanese fishermen in particular-from fishing in our waters. I am also referring to Russian ships who fish off the Canadian coast.
I invite the government to do everything in its power to define once and for all our fishing zones and to make sure they are observed.



LOAN COMPANIES ACT


Hon. E. J. Benson (Minister of Finance) moved: the first reading of Bill S-38, (from the Senate) to amend the Loan Companies Act.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the bill be read the second time?


Some hon. Members:: In the next session.


Mr. Speaker:: At the next sitting of the
house?


Some hon. Members:: Agreed.



TRUST COMPANIES ACT


Edgar John Benson: the first reading of Bill S-37, (from the Senate) to amend the Trust Companies Act.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the bill be read a second time?


Some hon. Members:: In the next session.


Mr. Speaker:: At the next sitting of the house?


Some hon. Members:: Agreed.

June 4, 1969
Questions



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Anderson: 1.	What is the total federal revenue from wharfage fees in each province of Canada?
2.	What is the cost of collection of these wharfage fees in each province of Canada?


Hon. Donald C. Jamieson (Minister of Transport):: The Department of Transport advises as follows: 1. Total gross revenues, 1967/68, public wharves administered by the Department of Transport, by provinces: Newfoundland, $129,425; Prince Edward Island, $110,719; Nova Scotia, $311,045; New Brunswick, $120,739; Quebec, $530,009; Ontario, $571,944; Manitoba, $1,118; Saskatchewan, $1,340; Alberta, none; British Columbia, $123,373.
2.	Cost of collection (wharfingers' commissions) 1967/68, by provinces: Newfoundland, $44,914; Prince Edward Island, $17,144; Nova Scotia, $39,243; New Brunswick; $21,603; Quebec, $85,568; Ontario, $58,557; Manitoba, $683; Saskatchewan, none; Alberta, none; British Columbia, $37,974.
The National Harbours Board advises as follows: 1. Top Wharfage for the Calendar Year 1967: Newfoundland, $4,234; Nova Scotia, $546,884; New Brunswick, $570,423; Quebec, $5,562,388; Ontario, $10,045; Manitoba, $69,638; British Columbia, $731,950.
2.	The cost of collection for the top wharfage charges at national harbours mentioned in part one is unknown because operating expenses of the harbours do not provide sufficient detail to isolate this item from other operating expenses.
The St. Lawrence Seaway Authority advises as follows:
1. Ontario	$255,500
Quebec	30,600
2.	These charges are a very small percentage of Authority revenue and there is no identifiable cost involved in their collection.


EXECUTIVE CONSULTANTS LIMITED
Mr. Skoberg: 1.	Has the government engaged Executive Consultants Ltd. in any capacity since June 1968?

2.	If so (a) what are the projects completed in progress and not yet begun (b) what is the contract amount, honoraria, expense provision or any other financial arrangement in each case?


Mr. Yves Forest (Parliamentary Secretary to the President of the Privy Council):: 1. No.
2. Not applicable.


FARM TRAINING IN CANADA
Mr. Skoberg: 1.	What steps are taken by the Canadian International Development Agency to inform developing nations as to the availability of farm training in Canada, both university and practical?
2.	Does the External Aid Office have a specific agricultural section geared to its programming?
3.	What plans are being taken by the External Aid Office to continue the Farm Training Programme with students from developing countries?


Mitchell William Sharp: 1. The Canadian International Development Agency uses correspondence, circulars, and visits abroad by its officials to ensure that Canadian Missions overseas are continuously provided with up-to-date information about academic and practical training opportunities in Canada, in many different fields of training including agriculture. In turn, the Missions bring this information to the attention of the governments of the developing countries during discussions on their training priorities and the way Canadian training facilities may be used to meet these priorities.
2.	The Canadian International Development Agency (formerly the External Aid Office) has had an agricultural adviser on its staff since August 1968. In addition, there are officials in the Agency who specialize in the planning, development and execution of agricultural projects. Close liaison on these matters is maintained between the Agency and the Department of Agriculture.
3.	Subject to suitable facilities being available in Canada, training programs are arranged by the Canadian International Development Agency in response to requests received from the governments of developing countries. Farm training programs can be arranged whenever there is an appropriate demand from a country to which Canada offers technical assistance.
June 4, 1969


PROGRAM TO ENHANCE PRODUCTIVITY
Mr. Salisman: Has the Department of Industry, Trade and Commerce undertaken a cost-benefit study regarding the new programme to enhance productivity (PEP) to come into operation November 1, 1969 and, if so, will this cost-benefit study be tabled and, if not, did the Treasury Board request any cost-benefit study under P.P.B.S.?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: A preliminary cost-benefit study has been undertaken. It will not be tabled. The study was undertaken at the initiative of the Department in accordance with P.P.B. guidelines. The final study will be submitted to Treasury Board.
Airport
(i)	All Sites in Canada
(ii)	Toronto International
(iii)	Montreal International
(iv)	Cartierville
(v)	St. Hubert
(vi)	Ottawa International
Footnote 1-Reference Item (i). Breakdown between aviation fuel and aircraft engine oil sales for airports other than Toronto, Montreal, Ottawa International and Cartierville Airports are not available at this time.
Footnote 2-Reference Item (v). Airport fee charged for aviation fuel and aircraft engine oil applies only to D.O.T. operated airports. St. Hubert was under R.C.A.F. operation until January 1, 1969.


FERRY &quot;JOHN HAMILTON GRAY&quot;
Mr. Macquarrie: 1.	How many passengers does the ferry John Hamilton Gray normally accommodate?
2.	How many automobiles does this ferry accommodate?
3.	What is the number of (a) passengers and (b) automobiles now being regarded as a normal load for the ferry?
4.	If part (3) is less than parts (1) and (2), what are the reasons for this diminution?


Donald Campbell Jamieson: 1. 550.
2.	190.
3.	(a) 400; (b) 190.
Questions


FEDERAL INCOME FROM AIRPORTS
Mr. Baldwin: What amounts of money were paid to the Receiver General in respect of (a) the one and one half cents per gallon federal airport fee charge for aviation fuel, and (b) the five cents per gallon federal airport fee charge for aircraft engine crankcase lubricating oil from July 1, 1968 to December 31, 1968, both days inclusive, from: (i) airports in Canada (ii) Toronto International Airport (iii) Montreal International Airport (iv) Cartierville Airport (v) St. Hubert Airport, and (vi) Ottawa International Airport?


Donald Campbell Jamieson: Period from July, 1968 to December 31, 1968
(a)	Aviation Fuel at (b) Lubricating Oil at 1.5c. Per Gallon	5c. Per Gallon
Gasoline and Oil combined $2,865,639.25 $775,969.63	405.92
977,965.34	885.90
4,156.66	50.55
Under R.C.A.F. operation until January 1, 1969.
96,249.25	99.62
4.	The number of passengers for which the vessel must be certificated is governed by the number of cars which can be accommodated aboard and the number of passengers per car. Recent experience with the service has shown that owing to the large number of trucks and trailers carried a capacity of 400 passengers is adequate.
METROPOLITAN TORONTO POSTAL DISTRICTS Question No. 2,044 (revised)-Mr. Robinson:
Will the Minister of Communications consider the re-zoning and renaming of postal districts in Metropolitan Toronto with a view of conforming to the local municipal boundaries and, if so, when will this be carried out and, if not, for what reasons?


Hon. Eric W. Kierans (Postmaster General and Minister of Communications):: In so far
as the Post Office Department is concerned: On May 1st, 1969, the Post Office Department introduced a new zoning scheme for the Metropolitan Toronto area which does take into account, as far as possible, local municipal boundaries. This new system is part of a nationwide program designed to facilitate delivery of mail addressed to postal patrons in larger communities.

June 4, 1969
Questions


REPORT ON LABOUR UNIONS RETURNS
Mr. Gilbert: 1.	How many of the firms that failed to report under the Corporations and Labour Unions Returns Act in the years 1965, 1966 and 1967 are still outstanding?
2.	Has any legal action been taken against any of these firms?


Jean-Luc Pepin: The Dominion Bureau of Statistics reports that: 1. Complete information has been filed by 98 per cent of corporations for the years 1965, 1966 and 1967 and partial information has been received for these years from all other corporations that are required to submit reports. These partially complete returns are being examined to determine if the deficiencies warrant prosecution.
2. No legal action has been taken against these corporations.


NORTH SYDNEY, N.S., TERMINAL FACILITIES
Mr. Muir (Cape Brelon-: The Sydneys):
With reference to Vote 20, Department of Transport, Main Estimates, 1969-70 in the amount of $2,300,000 for construction of dock and terminal facilities at North Sydney, Nova Scotia and Argentia, Newfoundland (a) what actual construction of dock and terminal facilities will take place at North Sydney and Argentia and what amounts will be expended for each item (b) what construction and acquisition of buildings will take place at North Sydney and Argentia and what amounts will be expended for construction and acquisition at each locale (c) what land will be acquired at North Sydney and Argentia and how much will be expended at each locale (d) what works will be carried out at North Sydney and Argentia in detail and how much will be expended at each locale?


Donald Campbell Jamieson: (a) Nil.
(b)	North Sydney, completion of passenger terminal $800,000. Argentia, nil.
(c)	Nil.
(d)	North Sydney, nil. Argentia, paving and completion of road from Argentia to Trans-Canada Highway $1,500,000.


AGRICULTURAL TRAINEES
Mr. Mazankowski: 1.	Did the Department of Manpower and Immigration reduce the number of agricultural trainees which the National Agricultural Exchange Association could bring into Canada for employment on Canadian farms in 1969?
[Mr. Kierans.l
2.	If so (a) did the Department undertake to find Canadian High School or University students who would be qualified and prepared to work from May 1 until November 1, 1969 on the farms which, because of the government order, were denied assistance through the Exchange Association (b) how many such students have in fact been placed?
3.	Of those students placed, how many have advised their employers that they will have to (a) report after May 1 or (b) depart before November 1, and therefore be unable to work the period which trainees under the Exchange Association program would work?


Hon. Allan J. MacEachen (Minisier of Manpower and Immigration):: 1. No.
2.	Not applicable.
3.	Not applicable.


TREASURY BOARD PUBLIC RELATIONS STAFF
Mr. Robinson: 1.	Does the Treasury Board have a public relations staff and, if so, how many?
2.	What is the total cost of public relations for the Treasury Board for each of the years 1960-68 inclusive?


Hon. C. M. Drury (President of the Treasury Board):: 1. There is one officer in the Treasury Board Secretariat who performs part time public relations duties.
2. The total cost of public relations for Treasury Board:	(a)	1960-1968, nil; (b)
December 1968-March 31, 1969, estimated cost $9,300.


SECOND PARK FOR SASKATCHEWAN
Mr. Southam: In light of the Minister's recent statement on the expansion of the National Park Development program for Canada, when can we expect an announcement as to the location and commencement of Saskatchewan's second National Park?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: We are
continuing discussions with the Province of Saskatchewan. When these are successfully completed there will be no delay in making a joint announcement with the Province as to the location and commencement of Saskatchewan's second National Park.


LOAN TO INDIA
Mr. Dumont: 1.	Was a loan of $30,000,000 made to India and, if so, on what terms and at what rate?
2.	What will be the rate and terms of the loan to Jamaica?
June 4, 1969


Mitchell William Sharp: 1. No development loans have been signed with India in the amount of $30,000,000. However, two loans of $15,000,000 each for the provision of fertilizers and commodities were concluded in late December 1968. The loans are interest free over 50 years with 10 years' grace before principal repayments begin.
2. The $1,250,000 loan to Jamaica to assist in the development of water resources bears 3% interest over 30 years with 7 years' grace before principal repayments begin.


SUBSIDIES TO SPORTS AND RECREATION
Mr. Fortin: 1.	What is the nature of the question being discussed between Quebec's Minister of Tourism and the Minister of National Health and Welfare regarding subsidies granted to sports and recreation?
2.	Has the Minister of National Health and Welfare received letters which he has not acknowledged from the Minister of Tourism and if so, for what reasons has he not acknowledged them?
3.	What suggestions did Quebec make concerning participation in the amateur sports program?
4.	How much money was devoted to amateur sports in each of the last five years and of this, what was Quebec's share?


Hon. John C. Munro (Minister of National Health and Welfare):: 1. Since December 1968, the Minister of Tourism, Game and Fisheries of the Province of Quebec and the Minister of National Health and Welfare, as well as officials of their respective departments, have held discussions concerning the conclusion of a cost-sharing agreement with the province of Quebec under section 5 of the Fitness and Amateur Sport Act.
2.	No-As a result of these discussions correspondence was exchanged between the two parties and all letters were satisfactorily dealt with by both parties.
3.	The suggestions made by Quebec were that it wished to join in with the other provinces and the two Territories in participating in the cost-sharing program pursuant to section 5 of the Fitness and Amateur Sport Act, and an agreement with respect to the 1968-69 and 1969-70 fiscal years has just been concluded with the province of Quebec.
4.	The federal funds expended under the federal-provincial cost-sharing program pursuant to section 5 of the Fitness and Amateur Sport Act over the last five years are as follows: 1964-65, $450,000; 1965-66, $703,059; 1966-67, $669,288; 1967-68, $813,375; 1968-69, $934,782.
Questions
With respect to the 1968-69 fiscal year, the province of Quebec will be reimbursed 60% of the cost incurred by Quebec in relation to the fitness and amateur sport projects supported by Quebec in that fiscal year up to a maximum federal share of $201,156. For the 1969-70 fiscal year, Quebec is eligible for a reimbursement on the basis of 60% of costs up to a maximum federal share of $200,137. Prior to 1968-69 Quebec did not participate in the program.


UTILIZATION OF FACILITIES BY NON-MILITARY AIRCRAFT
Mr. Yewchuk: 1.	With a proposed cutback in the armed forces strength, has the government given any consideration to the possible utilization of existing air force facilities located near major metropolitan centres for non-military aircraft to help alleviate the ever increasing congestion of air traffic and the concomitant danger to life and property?
2.	Would the Minister consider allowing nonmilitary aircraft to use the landing facilities of the Canadian Forces Base, Cold Lake, Alberta?


Mr. D. W. Groos (Parliamentary Secretary to the Minister of National Defence):: 1. If, as
a result of the defence review, any of the existing military airfields located near major metropolitan centres, were no longer required for defence purposes, they would be offered to other government departments or agencies before being declared surplus to Crown Assets Disposal Corporation. Such airfields would have to be examined individually to determine if they could accommodate civil air traffic. The airports retained by national defence would in all probability need to accommodate more intensive military flying operations, and it is doubtful whether it would be possible to permit or increase the use of such military airfields by civil aircraft except on a controlled basis.
2. The intensity and the type of current military flying operations at CFB Cold Lake preclude its use by civil aircraft at this time.


AID TO MAN AND HIS WORLD
Mr. Yewchuk: Does the federal government intend to continue financial aid to Man and His World on an annual basis?


Jean-Luc Pepin: The Government of Canada has not provided direct financial aid to Man and His World on an annual basis.
In 1968, certain of the physical assets which became the property of the Government of

June 4, 1969
Questions
Canada following the disposal of the assets of the Canadian Corporation for the 1967 World Exhibition were loaned to the City of Montreal for use by the City in operating Terre des Hommes. Some of these facilities have again been loaned to the City for 1969.
In addition, the Government of Canada has made an arrangement with the Province of Quebec which will permit the deferment from 1969 to 1972 of payments due Canada in respect of the Province's share of the Expo deficit. The purpose of this deferment is to allow the Province to guarantee support to Montreal in the event of a deficit arising from the operations of Terre des Hommes in
1969.


TOURISTS TO ONTARIO AND QUEBEC
Mr. Beaudoin: 1.	How many American tourists visited the Provinces of Ontario and Quebec during the years 1964, 1965, 1966, 1967 and 1968?
2.	How much was spent approximately by such tourists in Ontario and Quebec respectively during the same years?


Jean-Luc Pepin: 1 and 2. See attached table.
Number and Expenditures of United States Visitors to Provinces of Ontario and Quebec during years 1964-1968 inclusive
Quebec	Ontario
Expend!-	Expendi-
Entries	tures	Entries	turesNumber $ million	Number	$ million1964	2,832,000	91	22,303,000	3331965	2,946,000	106	23,235,000	3761966	3,018,000	113	24,043,000	4091967	7,533,000	388	23,944,000	5291968	4,769,000	N.A.	20,692,000	N.A.
NOTE: Data are based on entries through ports in the province. Normally some 60 per cent of entries are same-day traffic. Data on
Civilian Pay incl. Allowances Pay and Allowances-Service
Personnel
Travel and Transportation Pensions and Gratuities Suppliers, including Construction and Operation
Total
expenditures are based on province of entry and may not be representative by destination.
N.A.-Not Available.


DEFENCE EXPENDITURES
Mr. Forreslall: During each of the past three years, how much was spent by the Department of National Defence, exclusive of the R.C.M. Police, in (a) Metropolitan Halifax-Dartmouth (b) CFB Greenwood (c) CFB Cornwallis (d) all others for the following (i) civilian salaries and wages (ii) civilian allowances (iii) pay Defence Forces (exclusive of R.C.M. Police) (iv) allowances Defence Forces (v) pension contributions (vi) travel and removal expenses (vii) freight, express and cartage (viii) postage (ix) telephones (x) telegraph (xi) other communication services (xii) publication of Departmental Reports and other special material (xiii) exhibits, advertising, broadcasting and displays (xiv) professional and other outside special services (xv) rental of buildings and land (xvi) rental of office space (xvii) repairs and upkeep of equipment (xviii) office stationery, supplies and equipment (xix) materials and supplies (xx) municipal and public utility services (xxi) construction or acquisition of buildings and works including land
(xxii)	construction or acquisition of equipment
(xxiii)	contributions to Rifle Associations (xxiv) contributions to Military Service Associations (xxv) fuel for heating, cooking and power generating (xxvi) clothing and personal equipment (xxvii) dental supplies (xxviii) fuels and lubricants for ships, aircraft, mobile support equipment (xxix) food supplies (xxx) medical supplies (xxxi) barrack, hospital and camp stores (xxxii) miscellaneous material and supplies (xxxiii) total expenditures in Nova Scotia (xxxiv) total expenditures for each of parts (a), (b). (c), (d)?


David Walter Groos: Data is not maintained in a manner which would permit details of defence expenditures for the areas listed, being readily identifiable, nor is the necessary expert staff available to undertake the large amount of work which would be required to gather the necessary information. However, based on the record of where federal cheques are sent, estimated total expenditures in the Province of Nova Scotia are as follows:
1965-66	1966-67	1967-68$	$	$26,960,571	27,605,215	29,063,82270,514,211	75,830,128	82,813,8443,577,063	2,669,249	2,343,4644,020,291	5,270,628	5,058,72637,464,982	36,321,625	25,733,475142,537,118	147,696,845	145,013,331

June 4, 1969

Final figures are not yet available for the most recent fiscal year, 1968-69.
These figures do not reflect work done in Nova Scotia if the cheques for such work are sent to the company head office in another part of Canada. Similarly, suppliers and contractors may procure material and equipment from outside the province and such payments are not recorded.


BELL CANADA-NORTHERN ELECTRIC COMBINES INQUIRY
Mr. Gilbert: 1.	When is it anticipated that the study undertaken by the Combines Investigation Branch on the relationship between Bell Canada and its subsidiary Northern Electric Company will be completed?
2.	Will the results of the above study be made known to Members of Parliament?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: 1. The general practice is that no information is given out as to whether a particular inquiry is being pursued with respect to a particular company or group of companies unless and until a report is published. In the present case, however, it was necessary, in view of legislation then before the House of Commons, to disclose the existence of this inquiry to the Standing Committee of the House of Commons on Transport and Communications in December 1967. At that time the Director of Investigation and Research made a tentative forecast that his part of the work was expected to take about two years from that time and he is at present working towards the completion of the inquiry in the first half of 1970.
2. When the Director has completed his inquiry he will, in accordance with the Act, decide whether to submit a statement of evidence to the Restrictive Trade Practices Commission or to the Attorney General of Canada or to discontinue the inquiry for lack of evidence. In any event, the public will be informed.


MR. ROBINSON HEAD
Mr. Orlikow: 1.	Is Mr. Robinson Head the new Assistant Deputy Minister (Operations) of the Department of Industry, Trade and Commerce?
2.	Is Mr. Head, in part, responsible for the management and co-ordination of the Chemicals Branch activities?
3.	Did Mr. Head, prior to his appointment, work in the Chemical Industry and, if so, what position did he hold?
Orders for Returns
4.	Before his appointment as Assistant Deputy Minister, did Mr. Head divest himself of all interests (stocks, bonds, etc.) related to the Chemical Industry?


Jean-Luc Pepin: 1. Yes.
2.	Yes.
3.	Yes. Vice President, Cyanamid of Canada Limited.
4.	No. Following his appointment, yes.


CANADIAN REPRESENTATION AT INSTALLATION OF PRINCE OF WALES
Mr. Diefenbaker: 1.	Is our country going to be officially represented at the installation of His Royal Highness Prince Charles the Heir Apparent to the Throne of Canada?
2.	Have there been any communications in connection with such representation with the British Government?
3.	If so, what has been the attitude thereto of the Government of Canada?


Mr. Jean-Pierre Goyer (Parliamentary Secretary to the Secretary of State for External Affairs):: 1. Yes. Our High Commissioner in London has received an invitation from the Earl Marshal on the command of the Queen to be present at the Investiture on July 1, and he will attend.
2.	No.
3.	Not applicable.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Downey: 1.	How many persons were employed in each of the following classes: professional, administrative, clerical and stenographic in the Department of Trade and Commerce as of December 31 in each of the years 1961-68 inclusive?
2.	How many persons were employed in each of the following classes: professional, administrative, clerical and stenographic with the Department of Industry as of December 31, in each of the years 1963-67 inclusive?
3.	How many persons were employed in the following classifications: professional, administrative, clerical and stenographic in the new combined Departments of Industry, Trade and Commerce as of December 31, 1968?
4.	What is the total number of staff engaged in all phases of personnel administration with the Department of Industry as at December 31 in each of the following years: 1963, 1964, 1965, 1966, 1967?

June 4, 1969
Orders for Returns
5.	What is the number of staff engaged in all phases of personnel administration work for the Department of Trade and Commerce as at December 31 for the following years: 1961, 1962, 1963, 1964, 1965, 1966, 1967?
6.	What number of staff were engaged in all phases of personnel administration work for the Department of Industry, Trade and Commerce as at December 31, 1968?
7.	How many persons were employed by the Treasury Board in each of the following classes: professional, administrative, clerical and stenographic as of December 31 for each year from 1957-68 inclusive?
8.	How many persons are presently employed in the Office of the Prime Minister in each of the following classes: professional, administrative, clerical and stenographic as of December 31 for each year 1957-68 inclusive?
9 How many persons are presently employed in the Office of the Privy Council in each of the following classes: professional, administrative, clerical and stenographic as of December 31 for each year 1957-68 inclusive?
10. How much has been paid in salaries, travelling expenses, set allowances, consultant fees or similar expenses and how much has been estimated will be spent on these items in each of the following years 1961-68 inclusive?
Return tabled.


NUTRITIVE QUALITIES OF FISH MEAL
Mr. Carter: 1.	Is the government currently investigating the nutritive qualities of fish meal and its possible use in food aid programs abroad?
2.	Have Canadian producers been made aware of international requirements in regard to nutritional content of fish meal or other processed fish products and are such requirements being met?
3.	What was the amount of fish processed, frozen, or in fish meal form, shipped under Canadian External Aid programs in the calendar year 1968?
4.	What is the anticipated amount of fish and fish products to be shipped (a) as fish meal (b) other fish products under External Aid programs in the calendar year 1969?
Return tabled.


BILINGUAL ADVISERS TO CROWN CORPORATIONS
Mr. Foriin: 1.	Which agency Crown Corporations currently have advisers on bilingualism on their staffs?
2.	Of the corporations named in the reply to part 1, above, which departments have advisers on bilingualism who (a) have French as their mother tongue (b) have English as their mother tongue (c) have another language as their mother tongue (d) are bilingual?
3.	What are the ages and educational levels of the advisers on bilingualism of each of these corporations?
4.	What is the administrative level of the position of adviser on bilingualism in each of these

corporations, and in each case, at what level have such appointments been made?
Return tabled.


NUMBER RECEIVING BILINGUAL BONUS
Mr. Korchinski: 1.	In each department, how many civil servants receive 7% above their salary because of their bilingual abilities?
2.	How many civil servants are there in each of the provinces?
3.	How many civil servants are in receipt of the bilingual incentive in each of the provinces?
Return tabled.


ADULT TRAINING-NUMBER IN QUEBEC RECEIVING SUBSIDIES
Mr. Godin: 1.	How many workers have received subsidies under the adult training programmes from offices in Quebec of the Department of Manpower and Immigration?
2.	What was the total number of workers for each of the occupations in which training was given?
Return tabled.


MOVING EXPENSES ALLOWED MEMBERS OF CANADIAN FORCES
Mr. Corbin: 1.	What moving expenses and per diem allocations are paid by Canadian Forces for or directly to members of the Forces and their families during a period of transfer from one base to another (a) in Canada (b) outside Canada?
2.	Does the total amount payable vary from one rank to another and, if so, what may be the maximum and minimum paid to (a) Private (b) Captain (c) Lieutenant (d) General?
3.	What is the maximum amount payable to any single member of the Armed Forces or to any married member with (a) one dependant (b) two dependants (c) three dependants (d) four dependants?
4.	Are meals and lodging paid and, if so (a) for how long (b) what is the maximum per diem allowance (c) who pays the transfer of furniture and personal belongings?
Return tabled.


UNEMPLOYMENT INSURANCE COMMISSION APPEALS
Mr. Dionne: 1. How many appeals have been made to the Board of referees of the Unemployment Insurance Commission as the result of claims lodged at the various offices of the Commission (a) in Canada (b) in Rivi&re-du-Loup and, of these, how many
June 4, 1969

decisions were upheld, or changed in 1965, 1966, 1967 and 1968 respectively?
2.	What was the total number of claimants for unemployment insurance benefits at the liivicre-du-Loup district office in each of those years?
3.	What was the total number of persons hired through the intermediary of the Canada Manpower Centres in the districts of Riviere-du-Loup and Montmagny in each of those years?
4.	What was the cost of maintaining the various immigration offices in Canada and abroad in each of those years?
5.	What results have been obtained, so far, from the survey of Canadian workers customarily employed in forestry operations on United States territory, particularly in the States of Maine and New Hampshire?
Return tabled.


CANADIAN CENSUS DISTRICTS
Mr. Simpson: 1. As determined by the 1961 decennial census, how many census districts, established pursuant to the Statistics Act, are there in Canada, wherein ten percent or more than ten percent of the inhabitants speak the English language as their mother tongue?
2 What are the names, numbers and location of each of these census districts?
3.	As determined by the 1961 decennial census, how many census districts, established pursuant to the Statistics Act are there in Canada, wherein ten percent or more than ten percent of the inhabitants speak the French language as their mother tongue?
4.	What are the names, numbers and location of each of these census districts?
5.	How many local government or school districts are there in Canada wherein ten percent of the inhabitants speak the English language as their mother tongue?
6.	What are the names, numbers and locations of each of these?
7.	How many local government or school districts are there in Canada wherein ten percent of the Inhabitants speak the French language as their mother tongue?
8.	What are the names, numbers and location of each of these?
9.	How many federal or provincial electoral districts or regions are there in Canada wherein ten percent of the inhabitants speak the English language as their mother tongue?
10.	What are the names, numbers and locations of each of these?
11.	How many federal or provincial electoral districts or regions are there in Canada wherein ten percent of the inhabitants speak the French language as their mother tongue?
12.	What are the names, numbers and locations of each of these?
Return tabled.
Motions for Papers



MOTIONS FOR PAPERS

Yves Forest: Mr. Speaker, notices of motions Nos. 159 and 164 for the production of papers are acceptable to the government.



EXTERNAL. AFFAIRS POLLUTION STANDARDS

[Stage Direction]
Motion No. 159-Mr. Harding:
That an Order of the House do issue for copies of all standards on pollution established by the Department of External Affairs.
Motion agreed to.

[Stage Direction]
Motion No. 164-Mr. Harding:
That an Order of the House do issue for copies of all standards on pollution established by the Department of Transport.
Motion agreed to.
Yves Forest: Mr. Speaker, notice of motion No. 147 is acceptable to the government, subject to the usual reservations concerning privileged papers and authorization of the government authorities concerned.


Mr. Speaker:: Subject to the reservations just expressed by the parliamentary secretary, is it the pleasure of the house that notice of motion No. 147 be deemed to have been adopted?


Some hon. Members:: Agreed.



CORRESPONDENCE BETWEEN NORTHWEST TERRITORIES AND AUDITOR GENERAL

[Stage Direction]
Motion No. 147-Mr. Howard (Skeena):
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House copies of all correspondence between the Auditor General's office and the Government of the Northwest Territories regarding the accounts for the fiscal year 1967-1968.
Motion agreed to.
Yves Forest: Mr. Speaker, would you kindly call notice of motion No. 125?
I ask, Mr. Speaker, that the remaining notices of motions be allowed to stand.



REPORT ON OIL POLICY

[Stage Direction]
Motion No. 125-Mr. Saltsman:
That an Order of the House do issue for a copy of the interim report of the Task Force on Oil
[Stage Direction]
June 4, 1969
Inquiries of the Ministry
Policy (Northern Development), as mentioned by the Acting Minister of Energy, Mines and Resources in Hansard on April 25, 1969, Page 7956.
Mr. R. J. Orange (Parliamentary Secretary to the Minister of Energy, Mines and Resources):: Mr. Speaker, this is the first of a series of interim reports which will be made to the government. When the final report has been made consideration will be given to making it public. I would therefore ask that the hon. member agree to withdraw his amendment.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, I think it is important that we should have this information at this time. Therefore I would ask that the motion be transferred for debate.


Mr. Speaker:: Transferred for debate pursuant to Standing Order 48.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: I should like to ask the Minister of Finance a question relating to the Kennedy round cuts which in general were supported almost unanimously in the house at the time. My question, Mr. Speaker, arises from the minister's announcement of a wide range of tariff cuts to take effect immediately, though they had been scheduled to take effect in 1972.
Can the minister say what studies were made by his department as to the probable effect on the industries concerned of this sudden change in timing, especially the smaller industries which will be involved?


Edgar John Benson: Mr. Speaker, a careful review of the effect on industry was made by officials of my department and it was deemed-or they felt-that the decision would not have a serious effect on Canadian industry but that it would oblige Canadian industry to become more efficient and to reduce costs, thereby helping to combat inflation, which is exactly what we wanted to do.


Robert Lorne Stanfield: Am I correct in assuming that no studies exist as to the effect which these proposed changes would have upon the industries concerned?


Edgar John Benson: Mr. Speaker, there are
undoubtedly notes within my department on the observations of my officers and their comments to me. I can assure the hon. member that long discussions were held between the departmental officials and myself regarding the effects the changes might have on certain industries.


Robert Lorne Stanfield: A supplementary question: In view of the changes being made without notice, and presumably without any consultation with the industries concerned, is the minister prepared to hear representations from companies that might be affected; and in the event of a company being able to make a case of hardship as a result of the changes coming into effect immediately rather than in three years time, is the minister prepared to consider any transitional arrangements by way of assistance?


Edgar John Benson: Mr. Speaker, first of all there was a great deal of consultation with industries after the Kennedy round proposals were brought forward. Certainly I am willing to listen at any time to the submissions of various industries. As is always the case in this government, we are very receptive to having people come to us to talk about their problems.
Secondly, there are provisions for transitional assistance where industries are being materially affected by the Kennedy round. I should point out to hon. members that in spite of the fact that these tariff proposals have been in effect for some time and that two of the four steps have been taken previously in reducing tariffs, the call for this type of assistance has been very small.


Robert Lorne Stanfield: One further supplementary question, Mr. Speaker. I am sure that the minister agrees that there might be a difference when a change comes into effect immediately instead of 1972. Would the minister give us his assurance that he is prepared to consider, not what was originally proposed but the hearing of representations in regard to the effect of these changes that are being introduced immediately?


Edgar John Benson: As I pointed out, Mr. Speaker, I have already considered the effect; and I am quite willing to hear representations.
June 4, 1969


Hon. George Hees (Prince Edward-Hast-ings):: A supplementary question, Mr. Speaker.


Some hon. Members:: Hear, hear.


George Harris Hees: I am glad to see my claques here today, Mr. Speaker. I have a supplementary question following that asked by the Leader of the Opposition. In view of the fact that the government spent a great deal of time and trouble consulting industry and working out a spread over five years for the implementation of these tariff cuts-


Mr. Speaker:: Order, please.


George Harris Hees: -what was the purpose-


Mr. Speaker:: Order. Would the hon. member kindly ask his question.


George Harris Hees: I have just reached it, Mr. Speaker-what was the purpose of all this if, all of a sudden, the minister now decides to make these cuts immedately?


Mr. Speaker:: Order, please. The question is argumentative. The hon. member is debating the matter and this is not in order. Is the hon. member for Nanaimo-Cowichan-The Islands rising on a supplementary?



THE CANADIAN ECONOMY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may J direct a further question to the Minister of Finance. In view of the fact that when the minister in his statement last night outlined the supplemental expenditures for the balance of this current year he made no mention of any expenditure to prairie farmers, to meet the reduced price of wheat and declining delivery quotas, may I ask the minister if we are to take it that this means the government has decided against any financial assistance to the western farmers in the form of an acreage payment or deficiency payment?


Edgar John Benson: Mr. Speaker, I do not think that the hon. member should make any such assumption. He is always making false assumptions.


Some hon. Members:: Oh, oh.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Inquiries of the Ministry Speaker. I think trying to be funny does not become the minister on a serious question like this. The minister can easily tell me whether or not my assumption is wrong. I am asking him: Am I to take his answer to mean that the government does intend to do something about supplying funds to assist the farmers of western Canada?


Mr. Speaker:: Order. I suggest to the hon. member that his supplementary is a repetition of his original question.


George Harris Hees: A supplementary based on the question	posed by the Leader of the
Opposition.
Mr.	Douglas	(Nanaimo-Cowichan-The
Islands): A point of order, Mr. Speaker.


Mr. Speaker:: Order. The hon. member is rising on a point of order.
Mr.	Douglas	(Nanaimo-Cowichan-The
Islands): With great respect, may I submit to Your Honour that I asked the minister a question, and the only reply I received was that I am always making wrong assumptions.


Some hon. Members:: Hear, hear.
Mr.	Douglas	(Nanaimo-Cowichan-The
Islands): Therefore, Mr. Speaker, it seems to me that under the rules of the house I am entitled, if I was wrong in my first assumption that the answer the minister gave was that there will be no payments to the farmers, to rephrase the question and to ask him directly whether this means that there will be payments to the farmers. That seems to me a perfectly proper question.


Edgar John Benson: I am quite willing to answer the question. The position of the western farmer is, of course, under consideration, and the government's decision in the matter will be announced in due course in this house.



IMPACT ON INFLATION OF CAPITAL COST DEFERRAL PROVISIONS IN BUDGET

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I wish to direct a question to the Minister of Finance. The question is serious and arises out of the budget. Is the government giving any consideration to the economic fact that the budgetary measures in regard to the deferral of capital cost allowances will slow development in Toronto, Calgary, Edmonton and Vancouver, and in particular increase unemployment in those areas, as well as rents that are already high?

June 4, 1969
Inquiries of the Ministry


Edgar John Benson: Mr. Speaker, the effect stated by my hon. friend was the exact purpose of this budgetary measure, namely to slow down construction-that is, commercial construction, not industrial construction such as homes, needed roads and so on-in areas where the economy is over-heated, in order to ease pressure there and benefit all Canadians.


Mr. Speaker:: Order. I see there are six, seven or eight members who are attempting to rise on supplementaries. I will allow the hon. member for Calgary North a supplementary, but I have to remind hon. members that we have not started the budget debate today. Six days will be allotted to the budget debate, and I think this is the kind of debate that we should have at that time.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. If hon. members will allow me, I will call on the hon. member for Calgary North for his supplementary question.


Eldon Mattison Woolliams: Thank you very much for your graciousness, Mr. Speaker. May I address this question to the Minister of Finance. It has to do with the deferral of capital cost allowances for commercial buildings, which is to apply to certain sections of the country. Has the minister in conjunction with his department studied this matter and reached conclusions about the likely impact of this policy on inflation in this country. If so, will he undertake to allow the house to examine the conclusions of the study if any have been reached.


Edgar John Benson: Mr. Speaker, such studies were undertaken, and I consulted my officials. We think this policy will have a sizeable effect on inflation in the country, along with other budgetary proposals I brought forward last night. If my hon. friend wants to talk to me I will be glad to talk to him. We think the policy will have an effect. We think the entire budget will tend to dampen down inflation in this country, this being of vital importance to all Canadians and especially to those living on fixed incomes.


Mr. Baldwin:: The minister will be sorry he spoke those words.


Mr. Speaker:: Order, please. My graciousness is exhausted.



FARM MACHINERY


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, the question I have to ask is one that deals with the serious situation on the prairies involving seizures of machinery, tractors and the like, and vendor companies refusing to accept grain in exchange. As there are little or no quotas sufficient to meet the needs of the farmer, and although the matter is one that comes under provincial jurisdiction, would the Prime Minister be prepared to use his high office to communicate with these implements companies and suggest that since the western farmer is not responsible for the position in which he now finds himself, his wheat being unsaleable, these companies ought to hold off seizures, which are very disruptive and are bankrupting numbers of farmers at this moment?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, this question should really be directed to the ministers concerned with this subject, the Minister of Agriculture and the Minister of Industry, Trade and Commerce. They have at various times stated that this matter has been given their continuing attention.


John George Diefenbaker: I am directing my question to the Prime Minister and asking him whether he will get in touch with these large implement companies and point out the terrible detriment being caused the western farmer by these seizures. These companies refuse to accept wheat. I realize this is not a responsibility of his, but I ask him whether he would do this for the purpose of aiding farmers who today are suffering in consequence of seizures.


Pierre Elliott Trudeau: Mr. Speaker, on this side we believe in the cabinet system of government, and I for one have great confidence in my ministers. Therefore I do not interfere in their operations.


Some hon. Members:: Oh, oh.


George Harris Hees: Whatever happened to Paul?
June 4, 1969



CANADIAN BROADCASTING CORPORATION


Mr. Bernard Dumont (Frontenac):: Mr. Speaker, I wish to put a question to the Secretary of State.
Would he tell the house why the C.B.C. wants to close its French-language radio station in Vancouver?


Mr. Speaker:: That question should be put on the order paper.


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



IMMIGRATION


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, my question is for the Prime Minister. Is the matter of the government's red carpet welcome to deserters from the armed forces of the United States one of the subjects on the agenda of the present meeting of the Canada-United States Interparliamentary Association?


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order please. As the hon. member knows, the delegation to which he refers is a parliamentary delegation and not a government delegation. Therefore his question ought to be directed to the Speaker in writing.



FISHERIES


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, my question is for the Minister of Fisheries and Forestry and is based on information that the sea lamprey in the Great Lakes which destroys lake trout can be virtually wiped out by utilizing chemical control methods, thus permitting commercial fishing to be restored. I ask the minister to advise the house why this program was cut back?


Mr. Speaker:: Order please. I doubt whether this question ought to be allowed during the question period. It seems to me that it could easily be put in writing or considered at the time of adjournment.
29180-616J
Inquiries of the Ministry AGRICULTURE



POSSIBILITY OF AID TO WESTERN FARMERS FOLLOWING MEETING BETWEEN PREMIER AND PRIME MINISTER

Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, my question is for the Prime Minister. Will he acquaint the house with representations the Premier of Saskatchewan made to him in the meetings of the last few days. Are the statements the premier made in Saskatchewan since those meetings, that the government will announce some program of aid to western farmers within the next 90 days, correct statements?


Pierre Elliott Trudeau: Mr. Speaker, my answer is much the same as the one I gave following my meeting with the premier of Alberta a few weeks ago. These meetings are of a private nature and there is an understanding between the premier and myself that the meetings are to remain private. We have no intention of revealing what has been discussed.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, may I direct a supplementary question to the Prime Minister. I direct it to him because he is responsible for establishing government priorities. Since the Minister of Finance last night announced a budgetary surplus of some $250 million, will the government divert some of this surplus into an emergency program to alleviate the economic crisis confronting western farmers and those in the western economy.


Mr. John Burton (Regina East):: Mr. Speaker, may I direct a supplementary question to the Minister of Agriculture. Since the Premier of Saskatchewan has stated publicly that he was told by the Prime Minister that a policy statement on agriculture will be made within 90 days, will the Minister of Agriculture now take the house into his confidence and indicate what is the scope of this policy statement and tell us precisely when that statement will be made public?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, as the Prime Minister has pointed out, when changes in government policy have been determined an appropriate announcement will be made in this house.


Gerald William Baldwin: A supplementary question, Mr. Speaker. Will the Prime Minister tell us if part of the government's anti-inflation policy consists of keeping

June 4, 1969
Inquiries of the Ministry
at the lowest possible level the earning power [Translation]
of those engaged in western agriculture?	BANKRUPTCY


Mr. Speaker:: Order please.



FISHERIES


Mr. David Anderson (Esquimall-Saanich):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. It arises out of a statement on motions made earlier today.


Some hon. Members:: Oh, oh.


An hon. Member:: Pretty boy!
Another hon. Member: Go ahead, handsome!


David Anderson: Mr. Speaker, in discussions on the proposed fisheries closure lines, I wish to know whether the government of Canada has intervened with the governments of Japan, the U.S.S.R., the U.S.A. or with the governments of other countries. If so, what are the views of these governments about this very novel proposal in international fishing zones?


Mitchell William Sharp: Mr. Speaker, may I reply to the gallant and honourable member.


Some hon. Members:: Oh, oh.


Mitchell William Sharp: We have not had formal discussions of this kind. As the hon. member knows, we do not yet have legislation upon which we could base these fisheries closing lines.


David Anderson: May I direct a supplementary question to the Minister of Fisheries, Mr. Speaker. Is it the minister's intention to instruct fisheries patrol vessels operating on the west coast to notify Soviet, Japanese or other fishing vessels this year of our intention to close Queen Charlotte Sound next year to international fisheries?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, it will be our intention to communicate with those countries on the basis of the maps which were tabled today by the Secretary of State for External Affairs. As that minister said, legislation is required upon which we can establish such fisheries closing lines.



INQUIRY WITH RESPECT TO AMENDING LEGISLATION

Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I should like to put a question to the Minister of Consumer and Corporate Affairs.
Considering all the legislative measures that have to be examined before the end of this session and considering also that the minister undertook in 1968, and early in 1969, to revise the Bankruptcy Act, could he tell us if this means that he has abandoned all plans to revise this act since it is not included in the legislative program announced by the government?


Stanley Ronald Basford: No, Mr. Speaker. The introduction of the new bankruptcy legislation was not contemplated for the present session. As I have said previously, I am expecting to receive this year a report from the special task force revising the Bankruptcy Act. I am informed that I will have this report this year. When I have the report it will be my intention to bring in a new Bankruptcy Act as soon as possible.


Gilbert F. Rondeau: Mr. Speaker, I have a supplementary question.
Since this task force has already been working on this project for a few years and since we have not yet had a report concerning the Bankruptcy Act, does the minister intend to make representations in order to get a report as soon as possible?



UNEMPLOYMENT INSURANCE


Mr. Donald Maclnnis (Cape Brelon-Easi Richmond):: Mr. Speaker, I have a question for the Minister of Labour. Has the Unemployment Insurance Commission made special arrangements with the Crown corporation, Devco, for unemployment insurance funds to supplement the corporation's early retirement leave plan to an extent in excess of 90 per cent for approximately one year?


Hon. Bryce S. Mackasey (Minister of Labour):: Mr. Speaker, perhaps it will require a statement on motions if I am to be explicit. However, I might inform the hon. member of
June 4, 1969

my understanding of the matter. Due to the lay-off of a certain group of employees over age 60 by Devco, that particular company has agreed to supplement any income these men earn from part-time work, and unemployment insurance benefits, to a level which they think is their moral obligation to this particular group of employees.


Mr. Maclnnic:: As a supplementary question, I put this more directly and ask the minister if this is a proper use of the U.I.C. fund-that it should pay over 90 per cent of the early retirement leave plan?


Bryce Stuart Mackasey: If the Unemplyoment Insurance Commission fund can be extended to help peoples in dire need, then I think it is laudable.


Malcolm MacInnis: As a further supplementary question, Mr. Speaker, I would ask the minister to study this particular plan with the Minister of Regional Economic Expansion and determine the fact that this is not a pension. Because of the strings attached these men are not enjoying the U.I.C. fund as it was meant to be enjoyed.



ADMINISTRATION OF JUSTICE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wish to direct a question to the Solicitor General. Can the minister say whether the early parole of Steven Truscott is being given consideration by the National Parole Board?


Hon. G. J. Mcllraith (Solicitor General):: Mr. Speaker, I am informed by the Chairman of the National Parole Board that they are awaiting final reports from a panel of psychiatrists, and upon receipt of these the case will be considered by the parole board.



INDUSTRY


Mr. A. D. Hales (Wellington):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Can he advise the house which figures will be used, the 1966 census figures or the local municipal population figures, in determining whether or not the two year deferment of capital cost will be allowed for commercial building projects?


Edgar John Benson: The 1966 census figures, Mr. Speaker.
Inquiries of the Ministry FISHERIES



SEALING-STEPS TO PREVENT DISSEMINATION OF FALSE ADVERTISING

James Aloysius McGrath: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. On Monday I directed a question to him, which is to be found at page 9331 of Hansard, and which he had said he would take as notice. Is the minister prepared to give me an answer now, and while he is on his feet will he also tell the house what action the government proposes to take on the report of the Standing Committee on Fisheries and Forestry regarding the seal industry?


John (Jack) Davis: We will give it very close consideration, Mr. Speaker.


James Aloysius McGrath: Mr. Speaker, may I rephrase my question. On Monday the minister undertook to take my question as notice. Is he now prepared to give the house an answer to that question regarding the establishment of an international organization to be based in Canada, whose aims and objectives are the abolition of the seal hunt in Canada?


Mr. Speaker:: The hon. member for Fraser Valley West.



OLD AGE SECURITY


Mr. Mark Rose (Fraser Valley Wesi):: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare. Is the government considering amending the old age security legislation to overcome the injustice whereby the old age security supplement is reduced for a complete year if the spouse of the recipient receives the old age pension for even a single calendar month in that year?


Mr. Speaker:: It seems to me that the question is argumentative. Because of this it cannot be received.


Mark Willson Rose: Mr. Speaker-


Mr. Speaker:: I gather the hon. member has a supplementary question.


Mark Willson Rose: Thank you, Mr. Speaker. Since I gave the minister oral notice of my question I believe he was prepared to answer it, and I wonder if he might be permitted to do so.

June 4, 1969
Inquiries of the Ministry Mr. Speaker: This would be somewhat difficult, because in my view the question was not phrased correctly. It was rather an argument; but in view of the hon. member's request perhaps the minister might wish to reply.
member countries of the International Monetary Fund?


Mr. Speaker:: I suggest that this question should be placed on the order paper.


John Carr Munro: Mr. Speaker, there are various anomalies in the guaranteed income supplement legislation that the government has under consideration from the point of view of effecting a cure, and this is one of the areas we now have under consideration.



CANADIAN BROADCASTING CORPORATION


Mr. J. M. Forrestall (Darimouih-Halifax East):: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare. Last week he indicated that he hoped to be in a position in a few days time to inform the house whether the government had decided one way or another on the request for $100,000 from the Nova Scotia United Black Front. Can he do so now?
VANCOUVER-CLOSING OF FRENCH STATION Mr. Rene Mafie (Champlain): Mr. Speaker, I have a question for the Secretary of State.
Could he tell us whether the C.B.C. has definitely decided to close down the French-language radio station in Vancouver?


Mr. Speaker:: I feel that question should be put on the order paper.



REQUEST FOR STATEMENT OF GOVERNMENT POLICY

Mr. Sieven E. Paproski (Edmonton Centre):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister. In view of the Prime Minister again slapping western Canada's economy in the face by allowing the Minister of Finance to impose restrictions on our construction industry, would he now produce a national oil policy?


Mr. Speaker:: Order, please. I would suggest to the hon. member that the same objection I raised with the hon. member for Fraser Valley West would apply in this case. The question is argumentative and as such should not be accepted.


John Carr Munro: Mr. Speaker, we are arranging to meet with spokesmen of the Black United Front to determine just what the dimensions of the assistance will be.


J. Michael Forrestall: As a supplementary question, will these meetings take place this month or will they be deferred until the fall?


John Carr Munro: Within the next few days, Mr. Speaker.



CONSUMER AFFAIRS


Robert Lorne Stanfield: Mr. Speaker, I wish to direct a question to that doughty warrior against inflation, the Minister of Consumer and Corporate Affairs. I express the hope that he has not tired himself out in finding a chairman for his Prices and Incomes Commission, and I ask him when he expects to be able to announce completion of the formation of that commission?


Stanley Ronald Basford: Mr. Speaker, judging from the questions asked today I assume the only people concerned with inflation are on this side of the house.



FINANCE


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I wish to direct a question to the Minister of Finance. Is he in a position to tell the house what has been the progress in ratifying the amendments to the Bretton Woods Agreement dealing with special drawing rights, by fMr. Rose.]


Some hon. Members:: Hear, hear.


Some hon. Members:: Oh, oh.


Stanley Ronald Basford: I hope to announce the balance of the composition of the Prices and Incomes Commission very shortly. In the meantime Dr. Young, the Chairman, is proceeding with the recruiting of staff and of research assistants for the commission, and the work of the commission is going forward.
June 4, 1969



NATIONAL DEFENCE


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, may I express the hope that after the lapse of a few moments your graciousness has been recharged, and may I direct a question to the Minister of National Defence. Are the reports in today's papers offiical, that Canada has agreed to take over some of the responsibility that previously rested with the United States with regard to the operations of NORAD in Canada and, if so, was this decision based in part on the cabinet review of defence policy?


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, the story that
appeared in the papers indicated a reduction in the number of regions under the NORAD agreement. This of course has increased the region supervised from North Bay by something like 370,000 square miles of Canadian territory, which are now going to be under the supervision of that particular region. So far as the government policy is concerned I believe this is in accordance with the wish expressed in the policy statement of April 3 for Canadians to participate more in the surveillance and control of their own territory.



NATO-FILLING OF GAP CAUSED BY CANADIAN TROOPS WITHDRAWAL

George Harris Hees: Mr. Speaker, I wish to direct a question to the Prime Minister. Does he intend to take the opportunity presented by the presence of the distinguished Senators and Representatives from the Congress of the United States-


An hon. Member:: They are gone.


George Harris Hees: -to explain to them whom Canada expects to fill the gap caused by the withdrawal of Canadian troops from NATO?


Mr. Speaker:: The hon. member should be making his representation to the Speaker, who would relay it to the parliamentary delegation on his behalf.



NATO-REQUEST FOR STATEMENT ON ROLE OF MARITIME COMMAND

['I suggest that the question is argumentative. The hon. member for Selkirk.']
J. Michael Forrestall: Mr. Speaker, I wish to direct a question to the Minister of National Defence. In light of the observations and comments he made on television last night, will he soon be in a position to make a definitive statement to the house on the role of maritime command?
Inquiries of the Ministry
Hon. Leo Cadieux (Minister of National
Defence): Mr. Speaker, I think I would have to link this particular question with the NATO question, because I did say in the house the other day that I had agreed to consult with SACLANT on the maritime role of our forces. On the other hand I said that I would try before the parliamentary recess to indicate to the house what would flow from the fact that the defence budget has been capped for three years. However I am not quite sure whether I can indicate at that time the implications of this for the naval element of the Armed Forces.


J. Michael Forrestall: Would the minister indicate whether he will be able to make any statement before the end of June in respect of the establishment in the Halifax-Dartmouth area vis-a-vis NATO?


Léo Alphonse Joseph Cadieux: Generally speaking, I think people who have a special interest in naval affairs should be encouraged by the policy statement by the Prime Minister, because evidently this is a role which has to be enlarged. So I suppose there is no such worry.



John George Diefenbaker: Mr. Speaker, would the Secretary of State for External Affairs advise what progress, if any, has been made in negotiations with the government of communist China on the matter of recognition? Also, will he tell the house whether within the last week or so the administration in the United States has made representations to Canada that in any recognition which may take place the sacrifice of the government and people of the Republic of China in Taiwan should not be countenanced?


Mitchell William Sharp: Mr. Speaker, I shall answer the second question first. I have had no representations and as far as I know the government of the United States has made no representations to the Canadian government along these lines. Indeed, I doubt they would consider a form of protest such as the right hon. gentleman thinks they ought to make. I do not think we are sacrificing any people. Our objective is one which should be the wish of all members of this house and all people-to recognize the 700 million people who are not represented here.

June 4, 1969
Inquiries of the Ministry
On the first question, I think I have reported to the house that we had substantive discussions and expect to have further discussions very soon.


John George Diefenbaker: If I may ask a supplementary question, I should like to know when the minister changed his mind in respect of the statement he made throughout and prior to the election campaign that if the government of the Republic of China in Taiwan would in any way suffer potential danger recognition would not be proceeded with and that communist China would be so advised?


Mr. Speaker:: Order, please. I do not think the question asked is in the proper form. The right hon. gentleman has asked the minister when he changed his mind about some matter. I do not think a question in this form should be acceptable.


John George Diefenbaker: May I alter the format of the question and ask the minister whether he has changed his mind since he made that statement?
[Later:^\


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Secretary of State for External Affairs. In view of the fact he has stated that Canada now has a one-China policy, does he now feel that the Red Chinese government is the government of Taiwan as well?


Mr. Speaker:: I suggest that the question is argumentative. The hon. member for Selkirk.



AGRICULTURE


Mr. Ed Schreyer (Selkirk):: Thank you, Mr. Speaker. I was about to conclude that Your Honour felt I was no longer a member of this house. I have not resigned yet. I should like to direct my question to the Minister of Agriculture. In effect it relates to the question put by the right hon. member for Prince Albert earlier this afternoon. Given the fact that the western Canadian dairy industry has lost one million pounds of its dairy quota and six million pounds have been relegated elsewhere in Canada, has the minister any course of action in mind to remedy the dairy policy which has such a great regional bias?


Horace Andrew (Bud) Olson: Mr. Speaker, the result to which the hon. member alludes has not been because of any policy on the part of the Canadian Dairy

Commission. The facts of the matter are that the policies of the Canadian Dairy Commission are applied uniformly across the country and that we would resist the setting up of regional policies, respecting the activities of the Canadian Dairy Commission, to restrict interprovincial trade.


Edward Richard Schreyer: Mr. Speaker, I am sure the Minister of Agriculture would agree I did not say the Dairy Commission policy was discriminatory in its intent but rather in its effect. I should like to ask the Minister of Agriculture whether the government is unwilling to take action with regard to the dairy policy and when he will undertake to do what he stated he would do as recorded in yesterday's Hansard at page 9388? He said he would be happy to list all the measures undertaken by the government to assist western agriculture.


Horace Andrew (Bud) Olson: I would be happy to give that list, which is rather long, if the rules would allow Your Honour to permit me to do so.


Mr. Speaker:: Order, please. I understand the hon. member wishes to ask a supplementary question but I should point out to him that there are only a few minutes left and the hon. members for St. John's West, and Hillsborough have been waiting anxiously.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I had intended asking a question supplementary to that asked by the hon. member for Selkirk. Perhaps I might ask it as a separate question. It relates to the serious problem in the dairy industry in the prairie provinces. Is the minister not aware that when the criteria for the dairy policy were set out they did discriminate against the prairie producers?


Mr. Speaker:: Order, please. I would
think that question also is argumentative.



HOUSING


Mr. Waller C. Carter (Si. John's West):: Mr. Speaker, my question is directed to the acting minister in charge of housing. Have the federal government or any of its agencies entered into an agreement with the province of Newfoundland to participate in a program of land assembly, public housing, water and sewer projects, which is estimated to cost in
June 4, 1969

excess of $150 million as announced yesterday in Newfoundland by Premier Smallwood.


Mr. Speaker:: The hon. member for Hillsborough. I believe the hon. member for St. John's West is rising on a point of order?


Walter C. Carter: Mr. Speaker, is there an acting minister of housing in the house this afternoon?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, the department will be responding tomorrow.



INQUIRY OF THE MINISTRY

Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I have a question for the Prime Minister which I ask with a very heavy heart. It is based on a speech of my hon. friend the Postmaster General in which he advised that some time ago he sent the Prime Minister a message similar to that of the former minister of transport but had sent his through the post office. I should like to ask the right hon. gentleman if he is up to date in reading his incoming mail and has received such a communication from the Minister of Communications?


Pierre Elliott Trudeau: Mr. Speaker, a letter came in but there was not sufficient postage on it.
tTranslation]



THE CANADIAN ECONOMY

[Stage Direction]
REPERCUSSIONS OF GOVERNMENT POLICY Hon. Theogene Ricard (Saint-Hyacinlhe):
Mr. Speaker, I should like to address a question to the Minister of Finance.
Would he tell the house how many unemployed will be the outcome of the program he set out last night?
Mr. Speaker:: Order, please. I suggest to the hon. member that the question is clearly argumentative.


Mr. Ricard:: Mr. Speaker, the minister said a while ago that he had come to such a decision after a careful study of all the aspects of the question and this is why I should like to know how many unemployed there will be on account of his new policy?


Mr. Speaker:: Despite the explanation, I think that the question is argumentative.
Income Tax Act



GOVERNMENT ORDERS


[Stage Direction]
The house resumed, from Tuesday, June 3, consideration of the motion of Mr. Benson that Bill C-191, to amend the Income Tax Act, be read the second time and referred to the Committee of the Whole.
Mr. John Gilbert (Broadview):: Mr. Speaker, I make no apology for rising at this time to speak against Bill C-191. In fact I think there should be 263 speeches in this house directed to the Minister of Finance (Mr. Benson with regard to the oppressive provisions in Bill C-191. This bill affects most Canadians but in particular it affects those persons within the low income group. Until last night I had difficulty in determining who has been our worst minister of finance. In fact, Miss LaMarsh, that gallant parliamentarian who has left this house, indicated in her book that it was the Secretary of State for External Affairs (Mr. Sharp), but after hearing the speech of the Minister of Finance last night I think he has overtaken the former minister of that department.
[DOT] (3:10 p.m.)


An hon. Member:: That is hard to do.


John Gilbert: I say that in most of these measures the Minister of Finance takes an arithmetic view toward Canadian problems and does not display any of the so-called compassion which at times he indicates.
I was rather delighted to read an article in last Saturday's Toronto Star about the Minister of Finance in which it was indicated that he was a poor boy who had made good, who had worked his way up from the ranks and is now holding one of the major portfolios in the cabinet. I cannot help but think that he has moved from the position of protecting the weak and the low income groups to the position of protecting the corporate elite.
You can probably remember, Mr. Speaker, the great speeches he made when he was a member of the opposition. In those speeches he was very persuasive, very incisive and very determined that it was necessary to bring forth certain legislation affecting some of the corporate giants in this country with respect to corporate tax holidays and incentives. But now that he sits on the other side

June 4, 1969
Income Tax Act
of the house, now that he has reached the top of the ladder, he realizes that he must protect the corporate elite.
Last night's performance was a perfect example of the colossal sham which the Minister of Finance perpetrates. In fact, neither in this bill nor in his speech last night has he done anything to help the people of western Canada to solve their agricultural programs. I see nothing in this bill to help pensioners to offset their decreased purchasing power resulting from the rising inflation from which they are suffering. I heard nothing last night, nor did I hear anything today with regard to poverty, with regard to tax reform, with regard to regional development or with regard to high interest rates and, more especially, with regard to the determined penetration of American ownership into the Canadian economy.
Bill C-191 deals in the main with two major areas. One is the social development tax of 2 per cent, and the other is the imposition of taxes on insurance companies. Those are the two main areas. Yesterday we had the pleasure of hearing the hon. member for Winnipeg North Centre (Mr. Knowles) make his usual, eloquent, persuasive speech concerning the group which the social development tax will affect most. He pointed out that it is the lower income groups that are most affected by the 2 per cent tax, and that it is an oppressive tax particularly on people who are on fixed incomes such as pensions. He pointed out the dramatic example of the government accepting a 4 per cent increase in inflation while at the same time taking a niggardly attitude by increasing the payments to old age pensioners by only 2 per cent. In other words, the government is saying to these people who contributed so much to the building of Canada that even though inflation is increasing at a rate of 4 per cent per year it will give them only 2 per cent and they must absorb the other 2 per cent themselves.
I felt last night that after the persuasive speech of the hon. member for Winnipeg North Centre the minister would take immediate steps to remedy the harsh treatment of these people and in his budget speech would rescind the 2 per cent social development tax. But no, he did not. He acted in his usual stubborn and callous manner in determining priorities for the Canadian economy. He seem to think that balancing the budget is more important than looking after particular

needs of the different groups within our society.
The government has placed special emphasis on some of these measures by saying that no benefits will be given, more especially to the lower income groups, without them paying and paying in full. They should take the same attitude toward their corporate friends that they take toward the lower income groups. Then there would probably be a proper adjustment. But no, they ignore the situation and these are the results we get.
I need not remind you, Mr. Speaker, that two years ago the government attempted to impose a 5 per cent increase in personal income tax on Canadians, and it was only when it was defeated in the house that the Minister of Finance of that time came back with a measure that imposed a 3 per cent increase in income tax on personal income and a 3 per cent increase in corporation tax. They had no idea of imposing the 3 per cent increase in corporation tax until the 5 per cent increase in personal income tax was defeated in the house.
Last year we had the great social development tax of which the minister seems to be so proud and which came into effect at the beginning of this year. We are dealing with that tax in this measure. Last night, as I say, he had the opportunity to show that he had learned something as he climbed the ladder of success from poor boy to one of the top rungs by rescinding the social development tax, but he did not do so.
The second area of this bill deals with insurance companies. One can say without hesitation that insurance companies in this country have had an unfair advantage over the years in regard to taxation. A slight improvement is being made in this legislation, and one hopes that this is only the beginning in making the insurance companies pay their fair share of corporate taxes.
One appreciates that the government has created regulations to determine what is business income. 1 might point out that this is at variance with the late Mr. Carter's proposals, in that they are much more administratively complex in determining what is income. Up to this time the investment income of the insurance companies has not been taxed, but now they will have a 15 per cent tax imposed on their investment income.
You have heard me speak many times, Mr. Speaker, about the actions of insurance companies, and you have heard me say that they
June 4, 19G9

have not accepted any social responsibility in the performance of their function within the Canadian economy. I have pointed out on different occasions that they are one of the institutions which should guarantee a steady flow of money in the mortgage field to take care of the housing needs of Canada. Last Wednesday when I spoke on the housing legislation I emphasized that last year the insurance companies invested less in mortgages than they had in previous years. In other words, they are determined to get out of the mortgage field and into the equity field thereby leaving a big gap with regard to filling the need for mortgage money in Canada.
I was really sad when I read the statistics issued by Central Mortgage and Housing Corporation which indicate that up to the month of April of this year there has again been a sharp decline in the amount of money invested by insurance companies in housing mortgages. May I read part of the statistical report. It says that the activity of other institutional lenders has declined over the past several months from 64,700 units in January to 26,300 units in April, the lowest level so far this year. In other words, the banks have been picking up the slack with regard to mortgage moneys. The statistics indicate that up to the end of April this year mortgage moneys advanced by insurance companies declined 61 per cent compared with the similar period last year. This demonstrates the lack of social responsibility on the part of the insurance companies. These are but two of the reasons why we in the New Democratic party will not support Bill C-191.
[DOT] (3:20 p.m.)


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


Some hon. Members:: No.


Mr. Speaker:: All those in favour will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Bechard in the chair.
The Deputy Chairman:: Order. House in committee of the whole on Bill C-191, to amend the Income Tax Act.
On clause 1-Insurance policy proceeds.


Edgar John Benson: Mr. Chairman, I simply want to indicate to the committee that there are a series of amendments to this bill. I have provided the table with copies of the proposed amendments as well as the house leaders and financial critics of the parties opposite. I have additional copies if anyone desires them. There will be an amendment to clause 1 that I should like to have moved. There will also be an amendment to clause 2. These amendments have been supplied to hon. members and there are additional copies if they would like them.


Stanley Howard Knowles: Did
the minister send these amendments by mail?


Edgar John Benson: No. As a matter of fact I gave them to your financial critic yesterday.


George James McIlraith: I move:
That Bill C-191, an act to amend the Income Tax Act, be amended by renumbering clause 1 on page 1 as subclause (1) of clause 1 and adding immediately after line 16 on page 1 the following subclause:
"(2) Paragraph (c) of subsection (5) of section 7 of the said Act is repealed and the following substituted therefor:
'(c) in satisfaction of the rights of the taxpayer under a life annuity contract, as defined by regulation, that was entered into before June 14, 1963 except to the extent that the amount so received exceeds the aggregate of
(i)	the value of his rights under the contract on the second anniversary date of the contract to occur after October 22, 1968, and
(ii)	the aggregate of premiums paid by the taxpayer under the contract after the said second anniversary date.' "


[Stage Direction]
Amendment agreed to.
Albert Béchard: Shall clause 1 as amended carry?


Some hon. Members:: Carried.
Clause as amended agreed to.
On clause 2-


George James McIlraith: I move:
That Bill C-191, an act to amend the Income Tax Act, be amended by renumbering clause 2 on page 1 as subelause (1) of clause 2 and by adding immediately after line 6 on page 2 the following subclauses:
"(2) Paragraph (m) of subsection (1) of section 11 of the said Act is repealed and the following substituted therefor:
'(m) where a taxpayer is an insurance corporation, such amounts in respect of payments made or credits allowed by the taxpayer to its policyholders as are permitted by section 74;'
(3) Subsection (3b) of section 11 of the said Act is repealed and the following substituted therefor:
'(3b) For greater certainty, it is hereby declared that where a taxpayer has used borrowed money
(a)	to repay money previously borrowed, or
(b) to pay an amount payable for property described in subparagraph (ii) of paragraph (c) of subsection (1) previously acquired, the borrowed money shall, for the purposes of section 85J and paragraph (c) or (d) of subsection (1), be deemed to have been used for the purpose for which the money previously borrowed was used or was deemed by this subsection to have been used, or to acquire the property in respect of which the said amount was so payable, as the case may be.' "


[Stage Direction]
Amendment agreed to.
Albert Béchard: Shall clause 2 as amended carry?


Some hon. Members:: Agreed. Clause as amended agreed to.
June 4, 1989

On clause 3-


Mr. Skoberg:: Mr. Chairman, on a point of order, is there any opportunity for other members of the committee to have copies of these amendments?


Edgar John Benson: I just offered to supply the amendments. I have sent some over and I have more here if anybody would like them.


John Leroy Skoberg: I object to this type of parliamentary procedure. We are voting on something we know absolutely nothing about.


Edgar John Benson: Mr. Chairman, as I indicated, yesterday or the day before, I provided copies of the proposed amendments to the financial critics of the opposition parties.


Harold Edward Winch: We also happen to be members of parliament.


Thomas Clement (Tommy) Douglas: We are in the committee of the whole house. Each member must bear his own responsibility. The minister should make sure that all members have copies and the question ought not to be put until they have copies and the minister has explained the amendment concerned. It is all right for the Solicitor General; he does not need to know what is going through the committee, and he seldom does. But the rest of us would like to know what is going on.


George James McIlraith: I move:
That Bill C-191 be further amended
(a)	by striking out lines 7 to 20 on page 2 and substituting the following:
"3. (1) Subparagraphs (i) and (ii) of paragraph
(b)	of subsection (1) of section 18 of the said Act are repealed and the following substituted therefor:
*(i) the amount so unpaid shall be deemed to have been paid by the taxpayer and received by that person on the first day of the said third taxation year and section 47, except subsection (3) thereof, is applicable to the extent that it would apply if that amount were being paid to that person by the taxpayer; and
(ii) that person shall be deemed to have made a loan to the taxpayer on the first day of the said third taxation year in an amount equal to the amount so unpaid minus the amount, if any, deducted or withheld therefrom by the taxpayer on account of that person's tax for the said third taxation year.'
(b)	by striking out line 27 on page 2 and substituting the following:
'salary, wages or other remuneration in respect of an office or employment is'; and
(c)	by striking out lines 8 to 20 on page 3 and substituting the following:
Income Tax Act
'47, except subsection (3) thereof, is applicable to the extent that it would apply if that amount were being paid to that person by the taxpayer; and (ii) that person shall be deemed to have made a loan to the taxpayer on the first day of the said second taxation year in an amount equal to the amount so unpaid minus the amount, if any, deducted or withheld therefrom by the taxpayer on account of that person's tax for the said second taxation year.' "


Edgar John Benson: If hon. members ask me to comment on a particular clause I shall be pleased to do so. This amendment is simply to clarify the clause. It is a technical amendment to make sure that people do not get taxed on too large an amount.


[Stage Direction]
Amendment agreed to.
Albert Béchard: Shall clause 3 as amended carry?


Some hon. Members:: Carried.
Clause as amended agreed to.
On clause 4-


Edgar John Benson: Mr. Chairman, I have an amendment to clause 4 that I should like to have moved.


Albert Béchard: Order. I am quite ready to read the amendment but it is about 11 or 12 pages in length.


Edgar John Benson: The amendment to clause 4 is very short.


George James McIlraith: I move:
That Bill C-191 be further amended
(a)	by striking out lines 24 to 27 on page 4 and substituting the following:
"by the taxpayer, before 1974 and during the taxation year of the taxpayer in which the vessel is disposed of or within 4 months from the end of that taxation year, under conditions satis-"; and
"such re-assessments of tax, interest or penalties."
(b)	by striking out line 35 on page 6 and substituting the following;


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clauses 5 to 7 inclusive agreed to.
On clause 8-Special table.
William Gordon Ritchie: Mr. Chairman, would the committee revert to clause 6?
On clause 6-


William Gordon Ritchie: Clause 6 refers to a rocking bed for poliomyelitis victims. May I point out to the minister that these beds might be used by persons other than poliomyelitis victims, and an injustice might be done to certain people who require these beds but who are

June 4, 1969
Income Tax Act
not afflicted by this condition. Is this provision only to describe the bed?
[DOT] (4:00 p.m.)


Edgar John Benson: Mr. Chairman, we have not heard of this bed being used for other purposes. The primary purpose is to describe the type of bed so that it is not confused with other kinds of beds. We shall be looking at this matter to see if we need changes in the wording. I think it is a matter of administration. The section really tries to describe certain beds which are to be used for certain purposes.


[Stage Direction]
Clause agreed to.
Clauses 8 to 14 inclusive agreed to.
On clause 15-Mutual insurance corporations.
Edgar John Benson: I have a rather long amendment to have moved here, Mr. Chairman. It seeks to determine the income of insurance companies to be taxed. There has been consultation on this matter and agreement has been reached.


Thomas Clement (Tommy) Douglas: Mr. Chairman, does the amendment represent any change in policy from that inherent in the original, unamended clause.


Edgar John Benson: No, Mr. Chairman. It does not.


George James McIlraith: I move:
That Bill C-191 be further amended
(a)	by striking out lines 13 and 14 on page 17 and substituting the following:
"the immediately following year under its participating''
(b)	by striking out line 44 on page 17 and substituting the following:
"holder or would be so required to be included therein but for the exception contained in that paragraph with respect to a registered retirement savings plan or a registered pension fund or plan, and"
(c)	by striking out line 30 on page 20 and substituting the following:
"dividends or stock dividends in respect of shares in the"
(d)	by striking out the word "and" in line 39 on page 20, and by striking out line 2 on page 21 and substituting the following:
"insurance policies in Canada,
(d)	a the aggregate of amounts that, by virtue of this subsection, have been added to the taxable income of the insurer otherwise computed under this Part in computing its taxable income for taxation years before the year,
(e)	if the insurer has made an election under subsection (9) in respect of the year, the lesser of
(i) the aggregate of dividends and stock dividends in respect of shares in the capital stock of

the insurer paid by it in the year out of property other than property used by the insurer in the year in, or held by it in the year the course of, carrying on an insurance business in Canada, or
(ii) the amount of tax for the year paid by the insurer to the government of a country other than Canada under the income tax laws of that country out of property other than property used by the insurer in the year in, or held by it in the year in the course of, carrying on an insurance business in Canada,
(f)	if the insurer has not made an election under subsection (9) in respect of the year, the lesser of
(i)	that proportion of the aggregate of dividends and stock dividends in respect of shares in the capital stock of the insurer paid by it in the year that
(A)	the insurer's gross investment revenue for the year (except such part thereof as is required by subsection (9) to be included in computing its income for the year)
is of
(B)	the insurer's gross investment revenue for the year, or
(ii)	the amount of tax for the year paid by the insurer to the government of a country other than Canada under the income tax laws of that country, and
(g)	the aggregate of all amounts determined under paragraphs (e) and (f) in respect of the insurer for taxation years before the year."
(e)	by striking out lines 35 to 39 on page 21 and substituting the following:
"for the year, the amounts required by paragraphs (b) and (c) of subsection (4) to be included in computing such income, and the amounts determined under subparagraphs (ii) and (iv) of paragraph (p) of subsection (12) for the period ending with the year shall be determined in accordance with prescribed rules."
(f)	by striking out lines 45 to 47 on page 22 and substituting the following:
"assets and liabilities (including reserves of any kind)
(i)	as of the end of any taxation year before its 1968 taxation year, were the amounts thereof determined for the purposes of the relevant authority, and
(ii)	as of the end of its 1968 taxation year, were,
(A)	in respect of depreciable property as defined in section 20, the capital cost thereof as of the first day of its 1969 taxation year,
(B)	in respect of policy reserves, the insurer's maximum tax actuarial reserves for its 1968 taxation year for life insurance policies issued by it in the course of carrying on its life insurance business in Canada, and
(C)	in respect of other assets and liabilities, the amounts thereof determined as of the end of that year for the purpose of computing its income for its 1969 taxation year;"
(g)	by striking out lines 1 and 2 on page 24 and substituting the following:
Life insurance policy
"(f) 'life insurance policy' includes an annuity contract and a contract all or any part of the insurer's reserves for which vary in amount depending upon the fair market value of a specified group of assets;"
June 4, 1969

(h)	by striking out line 35 on page 24 and substituting the following:
Property used in the year
"(3) of section 7;
(m) "property used in the year in, or held in the year in the course of" carrying on an insurance business in Canada does not, in relation to a nonresident insurer, include assets owned by the insurer in the year that
(i)	became "assets in Canada" within the meaning given that expression in section 120 of the Canadian and British Insurance Companies Act or in section 2 of the Foreign Insurance Companies Act, and
(ii) but for
(A)	section 127 and subsection (1) of section 133 of the Canadian and British Insurance Companies Act, or section 12 and subsection (1) of section 25 of the Foreign Insurance Companies Act, as the case may be, and
(B)	a decrease in the fair market value of the insurer's assets in Canada other than those referred to in subparagraph (i),
would not have become "assets in Canada" within that meaning, except to the extent that such assets would have been required by the Canadian and British Insurance Companies Act to be retained in Canada and under the insurer's control if
(C)	the insurer had been a resident of Canada registered as such under that Act, and
(D)	the reference to 'Canadian securities' in
subsection (1) of section 85 of that Act were read as a reference to "securities;"	: and
(i) by re-lettering paragraphs (m) to (p) on pages 24, 25 and 26 as paragraphs (n) to (q) respectively.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clauses 16 to 19 inclusive agreed to.
On clause 20-Amounts included in computing policyholder's income.
Edgar John Benson: Mr. Chairman, I have a
lengthy amendment to this clause to have moved. It seeks to clarify the provisions of the clause as they currently exist.


George James McIlraith: I move:
That Bill C-191 be further amended
(a)	by striking out line 26 on page 28 and substituting the following:
"policy (other than a policy that is a registered retirement savings plan or that is or is issued pursuant to a registered pension fund or plan) all or any part of the insurer's"
(b)	by striking out lines 28 and 29 on page 29 and substituting the following:
"holder;"
(c)	by striking out line 4 on page 30 and substituting the following;
"increase."
(d)	by striking out lines 1 to 4 on page 34 and re-lettering paragraphs (c) to (i) on pages 34 and 35 as paragraphs (b) to (h), respectively; and
Income Tax Act
(e)	by striking out line 5 on page 35 and substituting the following;
"interest in a life insurance policy means".


Harold Edward Winch: Mr. Chairman, it would help us greatly if the minister would explain the intention of this amendment.


Edgar John Benson: I have just done so, Mr. Chairman.


Philip Bernard Rynard: Mr. Chairman, could the
minister clarify the differences between nonparticipating and participating policies? What does the government consider taxable income in this regard? Will it tax funds left to accumulate under participating policies? Will those moneys be taxed when the policies expire, or how is this to be done? How will that tax be levied?


Edgar John Benson: Mr. Chairman, basically in enacting this legislation we have worded it so as to protect and exclude from investment income tax the income in the company's hands coming from non-participating policies, since these policies were written on the basis that there will be no participation by the individual. They are written with fixed interest rates in mind. Such policies, therefore, are to be excluded from investment tax, or from considerations with respect to investment income. With respect to participating policies, the participant usually pays a premium and participates in investment income. The Carter Commission proposed that such investment income when paid to the individual in the form of dividends ought to be accrued to his benefit and taxed then in his hands. We looked very carefully at these proposals and decided they would be unwieldy to operate because it would mean that individual records would have to be kept of all those who must pay tax. Those records would have to include amounts of cash paid or received, and so on. As an alternative we decided to levy a tax on the investment income of the corporation but to exclude certain portions of that investment income in the process. As I said, in order to protect with respect to non-participating policies written at fixed premiums and in order to protect registered policies, where policyholders need protection, our legislation has been carefully drafted. Investment income will be taxed after expenses relevant to that investment income have been deducted. Those expenses are ones the company incurs in earning the investment income and include items such as certain carrying costs, certain selling costs and part of the administrative

June 4, 1969
Income Tax Act
costs of the company. Then, when investment income is determined, it is taxed at the rate of 15 per cent which, incidentally, is about the lowest tax rate on our present tax scales.
The dividends distributed out of that investment income to policyholders are not taxable in their hands, no matter whether those dividends are distributed in cash or credited to them. They are not taxable in their hands. After dividends are deducted from investment income an amount remains from which the company deducts the balance of its operating expenses. It pays tax on this net income, as does any other corporation. This provision applies to mutual and stock companies.


Harold Edward Winch: Could I ask the minister to clarify something, Mr. Chairman? May I cite my own case as an example. I have a 20 pay life insurance policy which was paid up 10 or 15 years ago. I have never drawn out the dividends, nor the interest on the dividends. Will I have to pay tax on the accumulated money under this legislation? If so I will immediately draw out my money. Will this legislation be retroactive? Will I have to pay a tax on future interest earned? I wish the minister would clarify this. If he does not I shall get in touch with my insurance company tomorrow and take my money out.


Edgar John Benson: Mr. Chairman, my hon. friend gave a good example. I advise him not to do what he is thinking of doing. We have not made this type of legislation retroactive. As a matter of fact, the value of the policy will be computed on the second anniversary after the date of the budget. That is, it will be two years after October 22. Any moneys accumulated under the policy to that date will be non-taxable. Even in those cases where one buys life insurance and continues that life insurance in force, there will be no tax on that money in the hands of the individual, if he holds the policy until death.
[DOT] (4:10 p.m.)
This does not affect previous policies. It only affects policies which are cashed in following the second anniversary date after October 22. Say a man buys a policy at age 50, makes payments on it until he is 65, and then decides to cash it in. If he gets an amount of money back which is greater than the cost of the policy to him, it is income in his hands. It is really interest in his hands, and that is taxable. But no one need feel that they are going to lose by keeping the policies they have.


Harold Edward Winch: I am sure the minister is going to help a lot of people with the information he is giving now, but I would like one further explanation. Could the minister explain, if one takes the cash surrender value of a policy, whether that amount of money is taxable?


Edgar John Benson: Under present circumstances for policies held up to two years from the budget date-no. What happens in the future from that date on is that if you have insurance and you pay premiums on the insurance policy, and get dividends to offset them, you may end up with a cash surrender value ten years later that is $500 more than the policy value as determined at the two year calendar date, plus all net premiums, and if the cash surrender value is greater than those two the tax is on the difference which is realized by the individual at the particular time he cashes his policy.
To take a simpler example, if you were to start fresh now and went out and bought a policy at age 20 and held it until age 50, a policy for $10,000 face value, which is worth $7,000 at the time you cash it in, then if you had paid only $6,000 in premiums and took the cash surrender value of $7,000, the $1,000 difference would be taxable in your hands. Only the investment increment realized by the individual is taxable in his hands.


Léonel Beaudoin: Mr. Chairman, there is a point which is not clear to me. It is the amendment which reads as follows:
-by striking out line 26 on page 28 and substituting the following:
'policy (other than a policy that is a registered retirement savings plan or that is or is issued pursuant to a registered pension fund or plan) all or any part of the insurer's'
I think it is about a policy in which there is the additional clause 79B included in the former legislation. Is not the difference in the cost of the premium taxed according to section 79B of the former legislation, and is it necessary to tax the amount of the pension of the policyholder according to this amendment?


Edgar John Benson: The reason for this part of the amendment is that we are trying to segregate from the investment income of the companies, retirement policies of individuals which are retirement savings policies. Just as we do not tax retirement savings plans until the recipient gets the money in a pension benefit,
June 4, 1969

whether it be through mutuals, trust companies and so on, we want to treat the insurance companies in the same manner. We also want this tor the individuals who buy registered retirement savings plans through an insurance company. The premiums paid on such policies are deductible by an individual, and we want to treat them the same as we treat other retirement pension plans.


Léonel Beaudoin: The question I ask myself, Mr. Chairman, relates to the insurance premiums which the policyholder must pay before getting his pension because it is agreed that these premiums are not taxable. But when he gets his pension, if it exceeds the cost of the premium, how will it be taxed? Is this included in the tax?


Edgar John Benson: What happens here is the same as with any pension plan. The individual pays into it. If it is a registered retirement savings plan, which is what we are talking about in this amendment, it is just the same as a pension plan. The individual may deduct his contributions to the plan for tax purposes, but when he receives benefits on retirement the entire benefits are taxable in his hands. It works exactly the same as a pension plan.


Philip Bernard Rynard: I am wondering about the case of a whole life policy bought for one of the partners in a corporation or company. The premiums are paid by the corporation, and when the man retires at age 65 there is no further need for insurance on his life. What becomes of this policy? How is it distributed, and what about the dividends?


Edgar John Benson: First of all the dividends would not be taxed. They are not taxed on any policies. We are not taxing dividends; we are using the other method I described earlier. With respect to a policy of the kind that the hon. member is talking about, if it were taken out tomorrow, I have explained the method of evaluation. If the policy went on until the man was 65 and the policy was then surrendered for its cash surrender value, the amount of income realized by the corporation, or the people holding the policy-it might not be the corporation, it might be other shareholders-would be the difference between the premiums paid and the cash surrender value received at that time.


Philip Bernard Rynard: In other words, if the cash value was less than the amount paid in there would be no problem of taxation at all?
Income Tax Act


Edgar John Benson: No problem whatsoever.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On Clause 21-Receipts for exploration or drilling rights included in incomes.
John Stratford Burton: Does the minister consider that this now places oil and gas companies on the same basis as other operating businesses so far as the scope of this section of the act is concerned? Second, are there any further amendments planned, and is the minister in a position to indicate what they may be with respect to the taxation of oil and gas companies? Third, does he feel that this fulfils the intent and the spirit of the Carter Commission report with respect to oil and gas companies?


Edgar John Benson: Mr. Chairman, this is a very general question and one that I am not at liberty to answer at the present time, or at least until my white paper is prepared and I disclose to the house what our intentions are with respect to tax reform. It is a very interesting question but I do not think I should express opinions in this regard at the present time while we are contemplating our tax reform and white paper which, as I mentioned last night, I hope to get out this summer.


John Stratford Burton: I take it we can safely conclude from the minister's answer that the white paper has not been completed, but can he answer the question whether he considers these amendments carry out the spirit and intent of the Carter Commission recommendations?
[DOT] (4:20 p.m.)


Edgar John Benson: This amendment is intended to stop people from selling oil properties, becoming non-resident and not paying taxes on the proceeds they receive. This is not a general clause having to do with anything beyond that.


[Stage Direction]
Clause agreed to.
Clauses 22 to 24 inclusive agreed to.
On Clause 25-Acquisition of depreciable property.
Edgar John Benson: There is an amendment to this clause, Mr. Chairman. It is simply to add the words "re-assessments of tax, interest or penalties shall".

June 4, 1969
Income Tax Act


George James McIlraith: I move:
That Bill C-191 be further amended by striking out line 21 on page 44 and substituting the following :
"re-assessments of tax, interest or penalties shall"


Albert Béchard: Shall the amendment carry?


Some hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
John Stratford Burton: Does the minister consider that this amendment changes the long term revenue yield to the government with regard to the scope of this clause?


Edgar John Benson: Mr. Chairman, would the hon. member indicate to which clause he is referring?


John Stratford Burton: Clause 25, which I believe is the one we are on.


Edgar John Benson: This is really to clarify what happens after recent court decisions. It does not produce additional revenue but does make sure that we get the revenue to which we are entitled over a period. In effect it allows the capitalization of interest during construction rather than writing it off as an expense during that time. Then it is written off as the property is written off over a period of time. It does not involve additional revenue.
Clause as amended agreed to.
Clause 26 agreed to.
On Clause 27-Social development tax.


Albert Béchard: Shall clause 27 carry?


Stanley Howard Knowles: that this clause should be struck out of the bill.
A while ago one of my colleagues asked me-and that colleague may ask the question on the floor-what this money is used for. Well, the answer I gave my colleague is that it just goes into the general revenues of the government; it is not earmarked for any special consideration. The minister has tried to emphasize that the government puts this money into social development of various kinds, but if the provinces suggest this is money for a particular purpose and they should get it for that particular purpose the minister says no, that it is a tax that should go into the general revenue.
This is an addition to the income tax imposition by this government. In this way the federal government can get money which it does not have to pay out to the provinces and it is the kind of tax which bears most heavily on the poor. We think it is a most regressive tax. We believe the Committee of the Whole on this bill should oppose clause 27 and strike it out.


Mr. Mongrain:: Mr. Chairman, with regard to clause 27, I heard the hon. member for Winnipeg North Centre (Mr. Knowles), as well as other hon. members, speak of discrimination between the rich and the poor, of the unjustifiable difference in the way mil-lionnaires and poor people are treated. To my mind, this smacks of demagoguery, Mr. Chairman, because in the final analysis, the principle which inspired this legislation is simple and we have lived with it for many years. We are dealing here with insurance, no more no less, and almost all our social laws are based on that payment system.
For instance, whether an individual is rich or poor, he insures his house against fire; obviously, the insurance premium is the same.
If he insures his automobile against accidents or theft, the insurance premium is the same for the poor as for the rich.
The argument is also put forth that if old people do not have enough money to subsist, it is unjust to increase their tax burden. There is much sympathy for that argument because everyone knows the difficulties- especially in a period of economic austerity such as we are now going through-those who earn small salaries or who live on pensions can experience. But a truth remains that cannot be denied, and that is that the
Income Tax Act
government cannot pay indefinitely without getting the money somewhere.
What astonishes me, what I find illogical, in the reasoning of the members of the opposition who oppose this measure, is that day after day we hear them in this house clamour quite often for expenditures of hundreds of millions of dollars. If we were to add up the requests made in this house, they would cost the government more than a billion dollars; but seldom are solutions or new sources of revenue suggested. Indeed, when the government tries to levy a tax, there is an outcry.
I understand that theories are put forward, by the Social Credit for instance, or by the New Democratic party which would like to socialize all our business concerns and make us believe that some Santa Claus could pop up and give the country inexhaustible sources of revenue while making it possible to distribute free money to everyone. But such promises seem to me like wishful thinking because they have not been proven up to now, if we are to judge on the basis of the failure experienced by other countries which made similar attempts.
The truth is harsh but it is obvious. One gets nothing for nothing. If we want to make a present to someone, we have to pay for it. The same principle applies to the government as to the individual. Money has to come from somewhere. Some will say "Tax the rich". A few years ago, an American politician, Mr. Huey Long and the political party to which he belonged used the catchword: "Soak the rich". What is going to happen? At a given time we will end up with a greater number of poor because the rich people will not be left with enough money to invest, to create jobs for the poor. Such truth should be obvious to those at least who do not believe too much in Santa Claus, and who have gone beyond that stage.
It is true that in the context in which we live, there is a category of Canadians who would certainly require either some supplementary assistance or relief from taxes. If we want to keep on providing them with what they get already, it certainly cannot be done overnight, through some miracle. The government certainly does not give anything for nothing. They must find money somewhere.
[DOT] (4:30 p.m.)
In this legislation, the insurance policy principle is applied: people buy an insurance policy and the premium is the same for everybody, rich or poor, whatever the insurance may be, even for welfare benefits.

June 4, 1969
Income Tax Act
I do not think this will improve the situation. From the electoral point of view, such a practice may be successful and it may be profitable to spread about that the poor and the millionaires are treated alike. But one must also say that as far as income tax is concerned, millionaires are certainly more taxed, proportionately speaking, than in most countries of North America and of the whole world-I am referring here to Canadian millionaires-and that they are affected in other fields if they are not in that one.
Besides, the millionaire will probably be the last one to use the free health service and in most cases will want to pay for special services, for he can afford to go to hospitals where he will be provided with nursing care night and day and he will probably have nothing to do with that method which puts everybody on an equal footing.
Such an accusation is stamped with demagoguery in these times. I believe this is no time for people having a sense of responsibility to allow situations like that to continue in Canada. On the contrary, we should now remind ourselves of the words that echoed throughout the whole world, the words of the late John Kennedy: In the time we live in, ask not what your country can do for you, but rather ask what you can do for your country, in the difficult circumstances the world is going through now.
It is true that all Canadians have to tighten their belts but it is thanks to that that the Canadian economy is so healthy as compared with that of other countries. It is because the government has had the courage to enforce austerity measures readily accepted by the great majority of Canadians who understood that this austerity spell required all of them to do their part of the job, a sacrifice they have indeed accepted as the outcome of the last elections has shown. It was the same party which went to the people after it had warned Canadians it would increase taxes and curtail profits in some sectors. I believe it is healthier for the future of a nation to warn its people that they will have to accept occasional sacrifices to prevent the economy from crumbling. We should try to avoid this complacent philosophy and refrain from telling the poor: "You are exploited, you get the same deal the rich do." All in all, this brings me back to the slogan I was quoting earlier: "Soak the rich, don't help the poor." Finally, we shall come to the point where there will no longer be any rich people but just poor people. At the limit, the government will have to take care of everybody.

I know the measure is not popular but I think that under the circumstances it is justified. It should win the support of all hon. members instead of being the target of unconsidered attacks, as it was, from such a serious man as the hon. member for Winnipeg North Centre.


William Gordon Ritchie: Mr. Chairman, I rise to support the position of the hon. member for Winnipeg North Centre. In my opinion this 2 per cent tax on income is not a good tax. Ostensibly it was levied to finance social development. It was introduced as a result of the introduction of medicare and is in effect passed on to the provinces in the form of contributions to this program.
In a sense this tax is what one might call a premium type tax in that there is an upper limit. It is debatable whether social welfare programs should be financed by this type of program. In any case this is a premium tax; therefore it should be specifically earmarked to finance social programs. This money is apparently going directly into the consolidated revenue fund.
We might find it easier to support this tax had the minister and his department, in introducing the medicare program, attempted to introduce more economies, and had they been more co-operative with the provinces by introducing programs which acted as brakes on expenditures. We might have supported these programs had they confined expenditures to limits or amounts that could be carried through shared cost programs.
This tax as introduced in this form seems to prevent the provinces from participating in such a program. Perhaps it would be the intention to absorb this tax in a more equitable way in the tax structure in the future.


Philip Bernard Rynard: Mr. Chairman, I should like to say a few words about this measure. It is of interest that the hon. member for Winnipeg North Centre and I have arrived at the same conclusion, although by divergent roads.


Stanley Howard Knowles: You
took the right road and I took the left road.


Philip Bernard Rynard: In any event we arrived at the same conclusion on this occasion. My feeling is that when putting on this tax we should have made it sufficient to cover the cost of medicare throughout the provinces.
The second fact which stands out is that we should have first of all brought in a measure
June 4. 1969

to cover only those who are in need of medicare. This would cut the total cost of medicare by 70 per cent. Under these circumstances I am sure every province would have been happy to opt into the program. We then might have had this program two years ago, or at least a year previous to its inception. Under these circumstances we would know where the costs were being incurred and what they were, and it would not have been necessary for the minister to cut back the resources fund in respect of medicare. This, I might say, was a very disturbing step.
[DOT] (4:40 p.m.)
We should have embarked upon a program of medicare coverage for those who need it. This has not been done; instead, the government has imposed a tax that hits everyone. Those of us who practise medicine know that the poor have been looked after. Under previous medical schemes doctors as individualists have collected 70 per cent to 80 per cent of their accounts and the rest have been written off. Any doctor will tell you that this is a fact. As a matter of fact, the Minister of Finance does not need any proof of this; he knows it because he is an accountant.
We now have a situation where we are taxing those who can least afford it. They are being taxed in the same way as the millionaire. This is not just. The same principle is involved in this situation as that which applies to the old age pensioner between the ages of 65 and 70 who has to pay half his medicare costs and all his hospitalization costs. This is anti-social. The province of Ontario is now considering allowing people on welfare to perform some work without their welfare payments being affected; yet the federal government proposes to penalize people by way of this measure. The principle is wrong; these people should not be taxed any further at present tax exemption levels.
I am sure the minister has a great deal of common sense. He can get around this problem by raising the income tax exemption. He knows as well as anybody in the house that the income tax exemption was last raised in 1948. I ask hon. members to consider the cost of living today. It has risen tremendously. The cost of living index is now well over 150; in fact, it is about 160. I cannot keep track of it because it escalates so rapidly. Nevertheless, the income tax exemption has not been changed since 1948. Despite this fact, we in the house talk about social justice. I know that the minister fully appreciates the situation because he, like myself, was fortunate
Income Tax Act
enough to come up the hard way and worked his way up in the world. I am sure that upon consideration he will introduce legislation which will make taxation changes that I suggest are necessary and that he knows are necessary. In the meantime, Mr. Speaker, I shall support the amendment of the hon. member for Winnipeg North Centre.
tTranslation]


Gilbert F. Rondeau: Mr. Chairman, the amendment before us is certainly in order, because we cannot ignore clause 104, even if the hon. member for Trois-Rivieres (Mr. Mongrain) says that we are recommending a Santa Claus policy. We do not think that parliament is Santa Claus, we never said so and we do not rely on a Father Ovide policy, either.
It is unfortunate that we are unable to maintain the discussion on a higher parliamentary level, and that we have to listen to statements as stupid as these.
Mr. Chairman, the 2 per cent tax on taxable income or the $120 maximum imposed will result in those with an income of $6,000 or more paying not more than those with a lower salary.
Where, then, is the just society? In fact, there is no just society if a person earning $6,000 is treated in the same way as one who earns $10,000 or more, even though we are opposed to the principle of the present type of income tax. It is foolish to say that the government must apply the same principles as the insurance companies, that we must buy an insurance policy and pay for it.
To date, the insurance companies have shown that for the same amount of money, no government, whatever the hon. members on the Treasury benches may say, can offer a better bargain than the private companies.
This government goes astray in attempting to provide, in the place of private companies, medicare to Canadians. We know by experience that the government cannot, because of bureaucracy-and it is simple to consider that subject-offer as many benefits, and as efficiently and competently as private companies did in the past.
When the government speaks of social development with regard to medicare or other things that it intends to introduce, it is ridiculous to ignore private competition as we have always known it, and which gave us both service and efficiency.
It is also ridiculous to base social development on one tax. Nothing in this bill guarantees that this 2 per cent, this $120, will be

June 4, 1969
Income Tax Act
used for social development. Nothing tells us that that money will serve the said purposes. Nothing guarantees us that that money will be used for medicare or another project. It will be put in the consolidated revenue fund.
Last week, while another legislation was under consideration, we understood that from now on such a fund would permit greater loans through the Central Mortgage and Housing Corporation.
The proceeds from the social development tax will eventually go to the consolidated revenue fund and will be used mostly to pay increased interests on the public debt and to allow a higher interest rate on loans that may be offered in the future.
It is useless to try to persuade the hon. member for Trois-Rivieres who, at one time, with his white beret crammed on his head, would have been able to understand something else, so we believed, from the point of view of social justice than what he has been preaching in the house since September. But he was wearing the beret only as a matter of form at that time.
We Creditistes, have been repeating in the house that the government must not be Santa Claus, that the government is not a private enterprise, that the government must not throw money right and left, that the government must try to stabilize the economy. When, for example, the government decides to find money for war, there is no problem. There is no question of austerity. But, in 1969, 24 years after the end of the war, the question of austerity is brought up, although it was not mentioned during the war.
As I have already said in the house, we have a policy of austerity in peacetime, a sick policy. There is a tremendous lack of money. Money is more easily found in wartime. For that reason we say that this bill is contrary to the social justice in which the government would like to have us believe, because the poor will be taxed. The largest possible number will be taxed; the government will tax the poor earning less than $6,000 in the same way as the person earning more than that amount.
As we did this afternoon, we shall vote against the implementation of that 2 per cent tax or the maximum of $120, not only because the government impinges upon the rights of private enterprise in that field, but also because it will exact more from the poor. Through that measure, people will be poor in greater numbers and, in that respect, I agree with the hon. member for Trois-Rivieres.

Unfortunately, if some day there is no more incentive for private enterprise, if the rich people find no more capital funds in their pockets to develop our country, the poor people will no longer be able to earn a decent salary.
That is the reason why we submit that there is another means to help the poor without destroying the rich. That legislation is crushing the poor more than before, without touching the rich, and we, of the Ralliement creditiste, have always argued that there is enough abundance, enough resources, enough values, enough guarantees in Canada to raise the standard of living of the poor who earn less than $6,000 a year, without affecting those who have more talent, more initiative and more money.
There is no question for us to approve legislation which will affect the rich and tax the poor still more. We are in favour of helping the poor, without discouraging those who have ambition, talent and initiative. This is why we say that in order to make real economic reforms in the country, we must go to the root of the evel and leave alone the small wage earners who are the majority in Canada, the workers whose salary is low and who must live between two periods of unemployment or two wars with welfare allowances. We must fight against the economic system affecting both the poor and the rich since now employers, employees, white-collar workers and labourers earning less than $3,000 a year are all in the same boat. It is a financial boat which does not allow the Canadian economy to thrive in peacetime. It could have done so in wartime, but debts have been made.
[DOT] (4:50 p.m.)
As for us, Creditistes, we say that if we have been able to develop Canada during the war, when the country ran into debt, it is possible to develop the same country, with the same Canadians, with a manpower that is even more skilled and a more adequate technology. It is possible to develop our country much better in peace time than in war time, but not by means of a fiscal policy of restraint which compells the Canadians to tighten their belts, as the Liberals say.
Indeed, why should we tighten our belts while stores are full and warehouses are crammed with goods, when factories are slowing down and when the province of Quebec has over 40,000 people who depend directly on social welfare or public assistance? When those families or individuals
June 4, 1969

must live on public relief, we are being told about restraint in Canada and in the nation's parliament.
I think we should pursue another policy designed to develop the country rather than proposes austerity or inflationary measures. The government wants to fight inflation but how can they do it when they are themselves responsible for it, when they themselves have brought about the crisis in relation to the cost of building materials by imposing a sales tax on such materials and by raising the interest rate on the C.M.C.H. loans?
And this same government is telling us that they want to fight inflation. This is not serious.
I say the Minister of Finance (Mr. Benson) knows what the situation is, but he is obliged to tell the house what the financiers, and not the people who elected him, ask him to say. He despises the slogan of the Liberals with regard to a just society. There will never be a just society if austerity measures are adopted, measures that force us to tighten our belts, at a time when we do not know what to do with our surpluses and with our labour, when we speak of social welfare and poverty in Canada.
Mr. Chairman, I did not want to speak too long on this clause, but I find it illogical. First of all, that money will not go into the Consolidated Revenue Fund; instead it will help the rich to grow richer and the poor to grow poorer. In addition, it constitutes a social injustice which clearly runs counter to the slogan according to which the Liberals want to achieve a just society.
As I said in this house during the debate on the address in reply to the Speech from the Throne, last year, it will only be a "just for fun" society. Today, we have proof of what I said at that time, as we read the amendments proposed to the Income Tax Act.
How many Canadians could develop the country further! We are however paralyzing those who still have some spunk. We are paralyzing those who have talents, who would like to develop them. Because, through our taxes, we will have to provide for those people who are on welfare, because the government, instead of finding employment for the workers, can only offer the security of social welfare to the poor, we find ourselves in an appalling depression.
How many young talents, how many professionals, architects, engineers, qualified people, students will come out of our universities in a few weeks and, finding nothing on
Income Tax Act
the labour market, will want to seek employment anywhere in the world? The government has failed to provide an economic development policy. The more austerity there will be, the more the citizens will go abroad to seek-


Albert Béchard: Order. I regret to interrupt the hon. member but I do not think he is restricting himself quite enough to section 27 now before us, which deals with the social development tax. I would ask him to restrict his remarks to that section.


Gilbert F. Rondeau: Thank you, Mr. Chairman. Indeed, social development means a lot of things.
It involves all classes of society including the father and mother, the worker, the farmer and all those who are going to be taxed under this legislation.
It means a lot of things and it is very important. That is perhaps the reason why my remarks may seem to have gone beyond the scope of the discussion, but a 2 per cent tax for those who make $6,000 a year involves quite a number of people and will affect the great majority of our Canadian people who will fail to see, in this legislation, a means towards fulfilment and development. Rather, they will say: "This is a tax-happy government, a pickpocket government; let us go and find a job somewhere else." That is why there are now in Canada so many talented people, people with initiative, who want to fly the country in quest of the social justice and social progress they cannot find in the present bill.


Mr. Barnett:: Mr. Chairman, I think the hon. member for Trois-Rivieres has been quite adequately put in his place by the eloquent speech in the French language to which we have just listened. It may be a little while before the hon. member again raises that old saw about soaking the rich to help the poor which he tried to tag on my colleague, the hon. member for Winnipeg North Centre. It should be obvious to the hon. member for Trois-Rivieres that my colleague was not suggesting that anybody in this country be soaked. He was simply suggesting that there should be some reasonable measure of equity in the application of the necessary taxes which the government must levy from time to time to meet necessary public expenditures.
It seems to me that the eloquent speech to which we have just listened and the discussion in which we are now engaged are centred on two or three very short words in this bill. The words to which I am referring are "or

June 4, 1969
Income Tax Act
(b) $120". That appears to me to be the nub of the question now under debate. There might have been room for debate had the clause simply read "2 per cent of taxable income for the year as determined for the purpose of Part I". We could then have argued whether or not this was a necessary imposition of extra tax. But we would not be engaged in discussing the basic fairness of an approach to taxation such as the minister is now proposing.
[DOT] (5:00 p.m.)
My hon. friend from Winnipeg North Centre pointed out that for a long time this principle has been incorporated in the levying of taxes for the old age security fund. This limitation has been the subject of many debates in the house over the years and has been vigorously opposed, as hon. members are aware, by my hon. friend from Winnipeg North Centre and other members of our party. It is true, however, that the proceeds from this tax are placed in a special fund for a specific purpose, as hon. members opposite have often argued. By contrast, the tax we are now considering is not intended for a purpose of that kind and it is not placed in a special fund.
The label attached to this tax is, therefore, false and misleading. I say it is false and misleading because it incorporates the principle represented by the words "or (b) $120". This means that no one will pay more than this amount into the Consolidated Revenue Fund as a result of this tax, no matter how high his income may be. I thought we had made some real advance in our approach to taxation when following the defeat on third reading of another bill which would also have levied a surtax, the government was obliged to bring in an alternative surtax proposal without the equivalent of "or (b) $120". There was a 3 per cent levy on everyone according to the amount of income received, in other words, according to ability to pay. There was, too, a surtax on the taxable incomes of corporations in the same amount, without provision for a ceiling.
It is significant that in the face of a decision by this house in another parliament which forced the government to abandon the principle of placing a ceiling on tax levied under income tax principles, the first taxation bill to be brought in by the present government should reintroduce this unfair principle. Nobody in this party suggests that millionaires or anyone else should be unfairly taxed. But in a democratic society we long

ago reached a consensus, I thought, that taxes should be levied in a reasonable way based on ability to pay. Clause 27 negates this principle, and the government's action in this regai'd is especially to be condemned because of the way in which it bears down on the lower income groups.
The hon. member for Simcoe North pointed out that the Minister of Finance could have at least mitigated the unfairness of this proposal by raising the basic exemption level. Quite frankly, I had been hoping that in the announcements made by the hon. gentleman last night something of that nature would be included. I realize we cannot at this point discuss the full implications of the minister's budget statement last evening, but I certainly agree with the hon. member for Simcoe North that if the Minister of Finance had announced his intention to raise this ceiling he might very well have taken some of the wind out of our sails as far as the discussion this afternoon was concerned-and I, for one, would have been quite happy about such a situation.
The fact is that as a result of this measure those who are living on old age security pensions plus the supplementary benefit will be obliged to pay an additional tax. The levy imposed by the income tax law is such that they have to pay back more in income tax than they are getting by way of cost of living bonus under the old age security provisions which, to some of us, at least in this party, represented an advance. I might add that in consequence of the rules under the British Columbia medical plan in connection with premiums to be contributed by those in receipt of taxable income, the people to whom I refer have lost the benefits of the lower rate under the program to the point at which those who have no incomes other than old age security pensions plus the guaranteed income supplement are actually losing money if one takes into account the difference in their payments under the medical plan as a result of the fact that their incomes exceed the level of the basic exemption.
All these things taken together lead me to conclude that we are now considering one of the most unfair pieces of tax legislation which the house has been asked to approve for a long time. For the hon. member for Trois-Rivieres to get up and talk about soaking the rich to help the poor in the context of this clause at this time seems arrant nonsense to me. I suspect he is living back in the 19th century world from which we hoped all members of this house had escaped a long time ago. Apparently all the Prime Minister's
June 4, 1969

supporters are not with it at all so far as an understanding of the modem world is concerned. I do not know whether the hon. member for Trois-Rivieres follows the example of the Prime Minister. Perhaps I should turn my previous statement around and suggest that the Prime Minister's thinking is just about on the level of the hon. member's when it comes to economic and social questions, and shows the same 19th century attitude.
Until the Minister of Finance made his statement last night we did not know for certain what assumptions he was making as to the budgetary position. We know now, from what he had to say last evening, that he expects a surplus. To my mind this is all the more reason for our opposing today the proposals contained in this bill, and particularly in this clause, which arise out of the minister's last budget. If the minister had been prepared to recognize that those at very low levels of income, particularly those receiving a retirement income only, are being ground into the ground by the effects of the inflation to which he refers-and certainly nothing he has indicated suggests that their position is going to be altered by what he calls his anti-inflation proposals-if he had been prepared to recognize as a matter of simple justice that in asking this house to follow through with the passage of this income tax bill he could have used some of the $250 million to rectify some of the more glaring injustices that this proposal has created, then perhaps we might have been able to let this provision pass with a somewhat clearer conscience and with less objection that some of us feel we must make to it at this stage. It all adds up to what I tried to suggest to the minister on second reading, that his whole approach is turning the concept of justice and equity in the application of necessary taxation completely upside down.
[DOT] (5:10 pjn.)


Mr. Matte:: Mr. Chairman, I should like to make a few comments on this notorious social development tax.
We have before us a clause which normally involves most people, because whenever taxes are mentioned, everybody is all ears and a little anxious. In fact, we are all annoyed when we have to pay our share to administer the community.
However, those constant tax increases are, in my opinion the real causes of the economic inequalities we are experiencing now, and 29180-617
Income Tax Act
have known practically all our lives. Because this system is basically wrong, the recurrent solution applied is a further tax increase.
We have heard over and over again this year the old saying "Money does not grow on trees", but neither does it grow in our pockets, and this they fail to understand. It is true that money does not grow on trees, but nobody ever wakes up in the morning with his pockets full of money or seeing trees all covered up with bank-notes.
But money is only a means of facilitating trade and the distribution of goods, as we have been asserting for years. It is useless to coat the pill with new words by calling it a social development tax, for instance. The wording has been changed, since it used to be called a tax, a tax increase. But now they are trying to sugar-coat things by calling it a social development tax, so that it will be more easily accepted by the population.
I remember that during the last election campaign, the hon. member for Trois-Rivieres (Mr. Mongrain) was cheered by five or six people in Saint-Casimir, in the Champlain constituency, when he said that he would increase taxes. It was the first time that I witnessed such a feat, to be cheered for promising to increase taxes.


Joseph-Alfred Mongrain: Mr. Speaker, I rise on a question of privilege.


Albert Béchard: Order. The hon. member for Trois-Rivieres rises on a question of privilege.


Joseph-Alfred Mongrain: Mr. Speaker, I always knew that my friends of the Ralliement Creditiste did not know how to count. The hon. member said that five or six people heard me in Saint-Marc-des-Carrieres, but there were exactly 159.


René Matte: Mr. Speaker, we can see that the hon. member for Trois-Rivieres is not only in favour of tax increases, but that he has a certain talent for increasing the number of people present at a meeting.
No matter how nice a simple tax increase is made to loop, the choice of words will not make it go down more easily.
We have finally found out that the social development tax represents the share of public revenues which normally goes to the provinces to help them establish medicare. It might just as well have been called the health care tax, and I presume that in the future, we will come upon other expressions to replace the word "tax".

June 4, 1969
Income Tax Act
People will finally realize that words alone are powerless and that nothing much is changed by adding "development" to "social". In order to really change a situation, we should come to grips with the causes of the economic unbalance and not just toss words around. Instead of calling it a social development tax, it would simply become Social credit.


Malcolm MacInnis: Mr. Chairman, this party began a fight against this clause many months ago, and the fight that we put up contributed in part to the defeat of the former government. The people of this country are in no mood to put up with this type of taxation. They may be overcome by lethargy for a while, but a great many of them hope that the government means what it says when it talks about a just society. However, they will only retain their hope for so long.
My colleague from Comox-Alberni has spoken of our strong objection to this measure in the ground that it imposes a ceiling of $120 on the tax no matter what the income of the taxpayer is. This flouts the entire principle of taxation according to ability to pay, and we are very much opposed to this tax on this ground.
[DOT] (5:20 p.m.)
The other ground which has been dealt with relates to the term "social development tax." My colleague from Winnipeg North Centre discussed the ramifications of that title, and I want to say a few words about it also. When certain people heard the term "social development tax" they were taken in, believing that the tax would be used for social development purposes. The Canada Welfare Council recommended, for instance, in its report of last January and in earlier reports also, that family allowances be raised. Recipients of the old age security pension have been complaining bitterly that the new so-called income supplement has added to their difficulties because they have had to pay tax on their increased income. That tax has added to their difficulties which have been brought on in large measure by rising living costs. I also wish to raise the question of veterans allowances. Many think that the money the government is raising with its social development tax ought to go toward increased allowances for veterans and their families.
May I also raise the question of how we are to protect our homes. When I put forward the idea in the house that we can protect homes

by paying wages to mothers who otherwise would have to go out to work and enable those mothers to remain at home, hon. members displayed great amusement and scorn. Nevertheless, quite a few people are looking at this proposal because they realize that it is very sound indeed. They know that if we were to pay wages to mothers and enable them to stay home instead of forcing them to go out to work and leave their children unprotected, we would be making a good social investment. Many people believed that the social development tax would be used for programs of this type.
I say that we ought to look at family allowances. We should try to raise the old age security pension, increase veterans allowances and pay wages to mothers in the home. In the previous government hon. members and even ministers were making encouraging noises and promises. They said they would support the idea of having all Canadians enjoy a minimum guaranteed annual income. Yet what has happened, Mr. Speaker? Our people now realize that the social development tax is not a social development tax. It merely imposes a greater tax burden on those in low income groups least able to bear it. It is not a social development tax. It is a social deception tax. People recognize it as such.
After the Minister of Finance said tht he hoped to have a surplus of a quarter of a billion dollars in the coming fiscal year, I could hardly believe my ears when I heard that this so-called social development tax is to remain in force. In my opinion it is a completely unjust tax. Surely the government could have raised exemption levels if it wanted to find ways of lifting the burden of taxation from some of our people. Many of our people, including those receiving veterans allowances, old age security pensions and family allowances, do not earn enough to be taxed. Clearly increased income tax exemptions would not help them. It is in this field that taxation must be made fairer. Measures other than income tax exemptions could be used to help those in the very low income group.

The hon. member for Trois-Rivieres (Mr. Mongrain) said that the opposition members consider the government as some kind of Santa Claus handing presents to all and sundry, but I wish to point out to him that Santa Claus does not start by stealing pennies from children's piggy-banks-


Some hon. Members:: Hear, hear.
June 4, 1969

Income Tax Act


Malcolm MacInnis: -and deceiving them by making them believe that it will give them presents for social development and social progress.
That is precisely what this government does. It stole pennies from the poor by raising this tax, even before it was authorized by legislation. It robbed them to give them what? More taxes and an increase in the cost of living. In fact, the Minister of Finance (Mr. Benson) and the Minister of Consumer and Corporate Affairs (Mr. Basford) gave no indication that things would cost less in a foreseeable future.

If I could continue in French I would, but I am afraid I cannot as yet. I am more fluent in English. One of these days, though, I will become desperate and deliver an entire speech in French and hon. members will have to put up with my grammatical mistakes and unscramble my blunders. I feel most strongly on this question and I know that no matter which language the people of this country speak, they all suffer from the same problems. I am as concerned as the Prime Minister is about the language question and I support the languages bill. Nevertheless, the government ought to bring down the cost of living. It should make those best able to pay carry the greatest burden of taxation, because that is the way to national unity. You create national disunity when you discriminate against some parts of our population. If the government wants national unity in this country it had better control rising living costs and impose greater taxes on those best able to pay. We need the official languages bill, but that bill alone will not bring unity if other problems are not dealt with. The government must act on both aspects. In the meantime something must be done about the cost of living.
When we in this party talk about the need for certain universal services and ask the government not to take the backward step of applying a means test on those social services for which we fought so hard, a great hue and cry goes up on the government side of the house. Hon. members ask, "Would you give these services to millionaires?" I say, certainly I would, but I would let the computer take back any money so spent. I would take that money back in the form of income and corporation taxes which would be based on the taxpayer's ability to pay. When some of us ask, "Why not take additional taxes from our millionaires?" the cry goes up, "No, no, a 29180-617*
thousand times no, we will not take anything from our millionaires. Our poor millionaires are groaning now under their heavy tax burden. We dare not raise their taxes."
May I refer to an article about MacMillan Bloedel, a company that operates in my part of the country, in the Monetary Times for June, 1969. The article says in part:
Giant MacMillan Bloedel Co., for example, has size (1963 sales: $584.5 million), balance (lumber, pulp, paper, packaging) and international muscle.
[DOT] (5:30 p.m.)
Though it slightly trails other west coast producers in recent earnings gains and profit margins, its first quarter net was up 39 per cent and in March, according to Chairman John V. Clyne, 67, MacMillan Bloedel had the highest operating profit in its history. The company earned $38.8 million in 1968, despite a whopping 56 per cent tax rate.


An hon. Member:: There is some money, Benson.


Malcolm MacInnis: There is where the minister can get some. It is not the whopping 56 per cent tax rate that is important. The important thing about taxes is what you have left after taxes are paid. If with this whopping 56 per cent tax rate MacMillan Bloedel is still making the highest percentage profit in its history, then the taxes on MacMillan Bloedel are too low. I warrant that the same thing is true of a great many other corporations in Canada.
We do not want to soak the rich. We want to soak the people of this country according to what they can bear in the way of soaking. Taxation should be a way of collecting fairly and distributing fairly the cost of the goods and the services we need. The Carter Commission report, which has been pigeonholed and is gathering a lot of dust, enshrined a mighty good taxation principle, namely, fairness according to ability to pay. Sooner or later that report will have to come out of its pigeonhole. When the people of Canada realize that unfairness is going to continue they will become very upset about this legislation and other pieces of legislation like it.
I receive dozens of letters each day. I do not know what kind of letters the minister gets from his constituents, but this one that I got this morning is typical of most letters I receive. It is from a veteran and it reads in part:
What most people need is more money and it makes it hard on old age pensioners. It is hard on them when prices are out of line and the stores are raising prices every time there is the least increase in wages. But pensions don't rise. I have no idea what will happen but one thing is sure: it can't continue this way much longer.

June 4, 1969
Income Tax Act
High level commissions, boards, task forces, reviews of policy and all that sort of thing will not prevent people much longer from seeing what is happening. People must have the assistance they need.
We in this corner of the chamber make no apology for having carried on this fight so strongly. We have carried it on ever since this retrogressive step was first taken, now a couple of years ago or more. We want it labelled a regressive step. It is a deception tax. We want the minister to reverse his course and adopt the principle of taxation according to ability to pay outlined in the Carter Commission report. If he will do that he will really be flexing the muscles to good purpose that he attempted to flex last night.
You cannot fight inflation with the nickels and the dimes of old age pensioners, children and other people on social welfare assistance. If you want to fight inflation you have to collect the revenue where the revenue is and impose controls where controls are needed. If the minister will do that there will be some hope of getting some kind of just society and of retaining the people's faith in democratic government.


Mr. Lalulippe:: Mr. Chairman, it is with pleasure that I rise to say a few words on Bill C-191, and especially on the clause respecting the social development tax which should be called the antisocial tax, because it is for the citizens a burden that deprives them of purchasing power when they do not even have enough of it.
It is a deceitful tax. They have used rather familiar terms to make the people believe that it is really a tax to help society, to give it more stimulus, when it will have quite the opposite effect.
This tax deprives society of its purchasing power when it has not enough already; moreover, it will be used mostly, as the hon. member for Shefford (Mr. Rondeau) said, to replenish the consolidated revenue fund and to pay increased interest rates. It will be used mostly to pay the increase in the interest rate on debentures that are renewed at the higher rate.
I am wondering how this government can do everything while it has a clear majority that should enable it to help society. It does not find anything else to do but to cause trouble.
It is not by increasing interest rates and the cost of living that we will be able to check
IMrs. Maclnnis.]
inflation which is precisely due to the increased interest rate, one of the main causes of inflation.
Inflation is caused by 20 per cent of the people, while 80 per cent are in a state of deflation. And everybody is put on an equal footing. They say that inflation is created by everybody, but it is paid for by those who are in a state of deflation.
The present government is leading us into bankruptcy. It could find other sources of revenue instead of taxing the little people, the poor, instead of reducing the purchasing power of those who already do not have enough.
[DOT] (5:40 p.m.)
A great number of people pay taxes-I say this to the Minister of National Revenue (Mr. Cote)-and are compelled, for this purpose, to borrow on a promissory note at an interest of 10 and 12 per cent from banks or credit unions. I have endorsed many promissory notes to help people get the money needed for their taxes. I, myself, have borrowed from financial institutions to pay my taxes.
The people have no money and cannot pay more taxes; yet, the government taxes increasingly. The economic imbalance is getting worse, and this creates new problems for the people.
The financiers get rich by means of exorbitant and unreasonable interest rates, since they reduce the purchasing power which should be increased as production increases. The gross national production increases-it will increase by 5 and perhaps even by 6 per cent this year-but the purchasing power of the people decreases. Now, if the gross national production increases, the personal income should also increase.
The government is doing exactly the opposite and the solutions proposed are more trouble than we ever had before. While we are in a period of full prosperity, we should build, because anything that is physically possible should be financially possible.
There are a considerable number of programs or developments that we could carry out, but on account of the austerity system, social development is being hindered and the government has the nerve to tell the people: We are imposing a social development tax. It is the most hypocritical and ignominious tax ever seen in a country.
Communist tricks, and tricks from countries behind the iron curtain are being used to make the people believe that they are
June 4, 1969

being helped, whereas, at the present time, they no longer have enough to live. Nowadays, people lack the necessities of life. Those who enjoy a decent standard of living have to borrow money at the rate of 10, 12 and even 24 per cent. The people live on borrowed money and get deeper into debt every day.
The financiers who charge interests of 10, 12 or 24 per cent get richer all the time, in order to have more money to loan the people and get them deeper into debt, in short, to reduce to nothing any progress they make from day to day. In fact, that progress, under the form of savings, goes into the pockets or the bank accounts of those who control credit, because such people have enough power to cash in on any development. They are exploiting developments for their own benefit and at the people's expense.
Let us look at the reports of the financial tycoons. They are making $1J billion or $11 billion in profits which they take from the people's pockets, from labour, from people's savings and properties. They appropriate all that to themselves. The government has no say in the matter. It is an accomplice. It only gets deeper involved in this shocking barbarity which throttles the people and deprives them of a living.
It is claimed, as I said a while ago, that people have two or three cars, but all those cars are financed by loans at 10, 15 and even 24 per cent interest. Government has nothing to say about that. There is talk of inflation while people are destitute. Has the Minister of Finance understood the meaning of the word "inflation"?
The cost of living is increasing while it should be going down, as it would if we had a government able to balance the economy. Our government is the first responsible for the rise in the cost of living with its taxes of all kinds. This is what it is doing when it should cause the cost of living to go down by lowering, for instance, the interest rate. There is some talk of fixing prices, of fixing this or that, but no mention is made of a ceiling on interest rates. Those rates are allowed to rise and they want to fix prices on the grounds that industries or businessmen are taking advantage of the people.
Tradesmen do not take undue advantage of the people. There are some exceptions, but in general, people are not exploited by industrialists but rather by finance and governments at every level.
Indeed, provincial governments are allowed to borrow money at a rate of interest of 9 or
Income Tax Act
10 per cent and the federal government refuses to interfere. They let provincial and municipal governments borrow money on foreign markets and give away our inheritance. Everything is handed over to foreigners, because the government does not want to assume its responsibilities which, after all, are not so dreadful.
The federal government could authorize the provincial governments to borrow on the basis of the administration charges instead of having them pay a 10 per cent interest as a result of which, provincial governments are deep into debt. They overtax the people and this goes beyond all logical, normal and social bounds.
Everything is bungled on account of this system. This bungling extends throughout Canada. The economy is unbalanced and the more we apply the old solutions, the more we are unbalancing our system which is on the road to ruin. And if we bankrupt the people, our governments will also be bankrupt.
They said: "We will levy taxes and the citizens will borrow at any rate of interest to pay them." Who cares. As the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) said a while ago: "Money does not grow on trees"; but it does not grow either in the taxpayers' pocket. Taxpayers are compelled to borrow to obtain some and then, they run into debt which they cannot repay. It is on those loans that the government is levying taxes. Taxes are levied on debts and loans and nothing else. The government could find other sources of income to finance its requirements and run the economy. The more the system will be applied, the more taxes we will have to impose, because as we go along, federal and provincial deficits get bigger.
There is an attempt to balance federal and provincial budgets by upsetting the budget of individuals. Is that a solution, Mr. Finance Minister? Tell us. Do your bills and budget contain any solution? Are there reasonable, practical proposals? No, there are not any. The proposals that are made will continue to upset the economy and increase the poverty of the people who are already more than poor, destitute, in debt up to the hilt, and already paying three times more than they can afford.
It is even impossible to pay the interests on debts. The federal government is unable to pay the interests on its debt. Individuals cannot pay the interests on their own debts, and interests on government debts, at all levels. It is impossible. That cannot work.

June 4, 1969
Income Tax Act
The hon. member for Trois-Rivieres has never understood anything about that. He says that money does not grow on trees, that we must get it from the pockets of citizens. Has the hon. member for Trois-Rivieres a formula to put money back into the pockets of taxpayers? You know how to get the money, not how to give some back. You will never find a way. I do not know why the hon. member for Trois-Rivieres cannot understand the economic situation.
I do not know whether it is from partisanship or self-interest, but he ignores the whole population, their poverty and their hardships, and he pays no heed to the forthcoming revolution which will soon be upon us because we have not kept our eyes open and have not taken up our responsibilities.
That is where we are going. The so-called social development tax should be abolished. It should be replaced by a dividend to be paid to every citizen. This would be a welcome measure, seen from another angle, if the minister were to say: A 2 per cent discount or dividend will be paid to all workers earning less than $6,000. The minister would then be commended.
Never in the history of the old parties, Grits and Tories alike, have they thought of that. And those who suggest it are considered fools, unfamiliar with logic, and walking on their head instead of on their feet.
In my opinion, those who walk on their head instead of on their feet are the two old parties that have led us to our downfall since confederation. Canada is doomed, it is on the brink of bankruptcy. As a matter of fact, the citizens, the municipalities, the provinces, everybody is on the verge of bankruptcy. This is where you have led us, dear representatives of the old parties, Liberals and Conservatives, who are applying the same solution. You never wanted to do anything else but to embarrass us and to walk upside down.
[DOT] (5:50 p.m.)


Lorne Edmund Nystrom: Mr. Chairman, first I should like to make a few points that I do not think have been made so far in the debate. I was both shocked and astounded last fall when the Minister of Finance brought in the so-called social development tax. I was shocked and astounded because I think it is one of the most regressive types of taxation he could possibly have introduced. It is but one example of the type of philosophy behind the government today, a government that has this

philosophy not only in the field of finance and taxation but in all other areas and jurisdictions.
I must also say that I was mildy amused but somewhat horrified by the remarks made by the hon. member for Trois-Rivieres. I must say that I find it difficult to understand his position even though he may actually believe what he said. It is no wonder that many young people in our society are becoming very frustrated with the way things are going. It is no wonder they are feeling restless. They want many social and economic changes. They want equity, they want equality of opportunity, and they want some say over the way their lives are going and over the decisions that are being made in our society. So I must say I was quite appalled when I heard the member from Trois-Rivieres make some of the statements he made in the house today.
I have made the comment that the social development tax is very regressive. It is a 2 per cent tax on taxable income up to $6,000. A person with a taxable income of $6,000 pays just as much as members of parliament who make $18,000 a year. He also pays as much as a person who is the president of a huge corporation and makes $50,000, $60,000 or $100,000 a year. This is a regressive tax, and it is especially so in light of the poverty in Canada, with western farmers merely subsisting in many cases. This is something that should not be happening in today's society.
As a matter of fact, I believe this tax represents the Robin Hood theory in reverse, when we take money from the lower and middle income classes in this way. It is a very regressive tax and should be removed immediately.
What is social development? We have to develop our country in many ways socially, but we should not do it by imposing a tax upon the people in the lower and middle income groups. We should do it by providing these people with opportunities to improve their lot, to escape from poverty, and by giving them cultural and academic opportunities. We are not doing that.
I often ask what the priorities of the government are. What are they? Are they human priorities or are they materialistic priorities? The Minister of Finance, for example, brought down a budget last night and forecast a surplus of $250 million. In view of that fact he should have removed this tax. If he did not want to do that he could have done many other things. He could have helped the
June 4, 1969	COMMONS
western farmers through some kind of an emergency plan. He could have invested some of this money in some of the economically depressed areas of the country. But this was not done.
With regard to reform of the tax system, I know the hon. member for Vancouver-Kings-way made a number of comments on this matter earlier this afternoon. We must have radical reforms in the taxation system. Today, in many cases we have essentially a system of socialism for the rich and free enterprise for the poor. Huge corporations and many of the rich people, through various ways and means, are getting off without paying their fair share to their country. After all, in a democracy, all the people should contribute as much as they possibly can for the betterment of one another.
I know that in my own constituency of Yorkton-Melville, for example, there are many people who cannot afford to pay an extra $120 in so-called social development tax. I think the hon. member for Vancouver-Kingsway was right in calling it a social deception tax because these people cannot afford to pay it. They are confronted with an agricultural crisis. Many of our people are on old age pensions. Many of them are workers in unskilled jobs who just cannot afford to pay this tax while other people with higher incomes get away at a much lower rate.
As I said in the beginning, this is most indicative of the type of government we have today. I think it is basically a small "c" conservative government. It is a government that is forcing the low and middle income people to make many sacrifices because the members of the government are afraid to stick out their necks and ask for money from the huge corporations and the millionaires in this country.
There is a great need to implement many socio-economic reforms in this country, and we cannot afford to take regressive steps like this tax. We cannot afford to do so because the people are not going to put up with this kind of thing forever. The people are naturally going to rebel; they are naturally going to become very frustrated and lose more and more of their faith in the government. We
DEBATES	9759
Business of the House
have to do these other things if we want national unity in our country. The languages bill is not enough. We have to do more than that.
I appeal to the Minister of Finance to consider seriously wiping off the books his so-called social development tax.
At this time, Mr. Speaker, I should like to call it six o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Donald Stovel Macdonald: Mr. Speaker, I wonder whether I might, for the benefit of hon. members, give some indication of our intention in respect of the business for tomorrow. There is some expectation that the Income Tax Bill might be dealt with by the house by tomorrow afternoon. On that assumption, it would be our intention to call first item No. 63. the report stage of Bill C-183, to establish the Export Development Corporation, to be followed by No. 66, the report stage of Bill S-29 with respect to oil and gas conservation and, thereafter, No. 64, the report stage of Bill C-184 with respect to Telesat Canada. We hope to complete the third reading of these bills tomorrow by consent, if possible, or failing that, on Friday. If that business is disposed of we will then call Item No. 84, the second reading of Bill C-202, with respect to area development incentives.



MESSAGES FROM THE SENATE

Mr. Deputy Speaker:: I have the honour to inform the house that a message has been received from the Senate informing this house that the Senate have passed Bill C-102, an act to amend the Patent Act, Trade Marks Act, Food and Drugs Act without any amendment. Also, a message has been received informing this house that the Senate have passed Bill S-35, an act to amend the Canadian and British Insurance Companies Act, and other statutory provisions related to the subject matter, with certain amendments to which the concurrence of this house is desired.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, June 5, 1969