1969-02-05

ROUTINE PROCEEDINGS

[Stage Direction]
[DOT] (2:10 p.m.)


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I rise on a point of privilege relating to remarks that were made last night during the "late show" by the Minister of Finance (Mr. Benson). These remarks were in reply to a complaint that was legitimately made by the hon. member for Edmonton West (Mr. Lambert) in regard to a press release that appeared in the Winnipeg Free Press on January 28 and provided to this newspaper by the hon. members for Portage (Mr. Cobbe) and Provencher (Mr. Smerchanski). Their release dealt with changes in the estates tax that they said would be brought about by the finance ministry.
As a result of the complaint made by the hon. member for Edmonton West in regard to members of the government party making statements to the press in advance of a policy statement being made to the house about government policy, the Minister of Finance stated, as reported in Hansard at page 5160:
First of all, in respect to the estate tax I did not receive a single letter or request for a meeting from any member of the opposition. Secondly, I should like to say that the most frequent submissions with regard to the estate tax dealt with the level of the exemptions and difficulties concerning payment of estate tax, as well as with what would happen to the estates of people who died before the law came into effect. Everybody knew this except the opposition members, who were not paying any attention to what was happening.
I rise on this point of privilege because I believe that the Minister of Finance is either ignorant of what comes into his office, is not aware of what is being said in the House of Commons, or else is intentionally misrepresenting the facts. I say this because this statement is not according to the facts.
A little further on in the debate I myself pointed out that I had received more than
1,000	letters protesting against the estate tax, in reply to which the minister said:
Why did the hon. member not speak to me about the matter or send me the letters?
I would remind the minister that I did write him a letter, to which was attached a number of petitions; I did not bother him with the individual letters. The text of the letter is as follows:
I am enclosing herewith copies of several petitions which have been received from communities in my constituency protesting against the pending estate tax which, together with the flood of mail to this date, reaches well into the hundreds. It is my impression that public opinion is overwhelmingly against this bill. I believe that such legislation, if enacted, can prove extremely detrimental whether it affects farm, business or home. It will also, in my opinion, be harmful to the economy in the sense that it will discourage initiative and, at the same time, drive much needed capital out of the country. I believe that you would be well advised to modify or withdraw altogether this part of the current budget proposal.
I have not received, as yet, a reply to this letter.
I wrote a similar letter to the Prime Minister, who did have the courtesy to reply. On January 30 I received the following letter from the Office of the Prime Minister:
On behalf of the Prime Minister, I acknowledge with thanks receipt of your letter of January 29, enclosing copies of several petitions from communities in your constituency, protesting against the pending estate tax.
Your comments regarding public reaction to this bill are being brought to Mr. Trudeau's attention.
I am not the only one in the opposition to protest against the new estate tax. Many others in the opposition protested. I know the hon. member for Crowfoot (Mr. Horner), spoke directly to the minister about this.


Mr. Speaker:: Order, please. The hon. member should state the question of privilege. I suggest that we should not have a full fledged debate on the question at this time. The hon. member should state the question of privilege and indicate whether it will be followed by a motion.


Robert Norman Thompson: Mr. Speaker, I have just mentioned these points to substan-
5164	COMMONS
Alleged Misstatement on Estate Tax tiate that what the minister said last night was not correct.


Some hon. Members:: Hear, hear.


Robert Norman Thompson: His statement was a gross misrepresentation of fact. In order to comply with your instructions I will not quote from Hansard. I could refer to 12 quotations from Hansard to show where hon. members of the opposition spoke against the provisions of the new estate tax. I could also quote from two major speeches made by my leader in the House of Commons in which he spoke against the provisions of the tax.
My point of privilege is this, sir. I believe the Minister of Finance owes the members of the opposition an apology and he owes me an apology because what he said last night was not correct. His statement makes it appear we are prevaricators and distorters of truth. I believe this is a legitimate point of privilege and there is overwhelming evidence to substantiate it.


Mr. Speaker:: I think I must indicate to hon. members that I have no inclination to allow a general debate on a subject which will be debated later today, and which is on the order paper for today. Basically, the hon. member's point is that he claims a statement made by the Minister of Finance is incorrect. Whether that constitutes a question of privilege I am not too sure. In any event, I suggest to hon. members that the Minister of Finance perhaps might be allowed to say a word and the ruling might be made after that.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, with regard to the point of privilege, I wish to say that I received many letters about the estate tax. I have had some checking done this morning because I also considered what I said last night, and I thought about it afterwards. I said I had not had a single letter from any member of the opposition or a request from an hon. member of the opposition to speak to me in my office about the estate tax. The latter part of my statement is quite correct.


Some hon. Members:: Oh, oh.


Edgar John Benson: Just a moment. Am I not to be allowed to conclude, Mr. Speaker? I have not had any members of the opposition make representations to me personally with respect to the estate tax. That is correct. I checked through my correspondence. I had it checked

DEBATES	February 5, 1969
this morning and learned I have received eight letters from members of the opposition with respect to the estate tax. That is exactly four times as many letters as I received from an independent hon. member of this house who sits1 in the Chair. I received 100 odd letters from hon. members who sit on another side of the house with respect to the estate tax. If I misled any hon. member last evening I sincerely apologize.


Mr. Horner:: You bet you did.


Mr. Speaker:: Order, please.


Robert Norman Thompson: Mr. Speaker, on the point-


Mr. Speaker:: Order, please. The hon. member for Red Deer has already spoken and made his point. The rules do now allow him to raise a second point of privilege.
[DOT] (2:20 p.m.)
Looking at the matter objectively-and I speak as>
the person who sat in the Chair last night when the matter was raised by the hon. member for Red Deer (Mr. Thompson) by way of interjection to the remarks of the Minister of Finance (Mr. Benson) who was replying to a question asked on the adjournment debate

it is obvious there is a dispute as to the facts.
The hon. member for Red Deer states that the Minister of Finance was in error when he said that no representations had been made to his office. The Minister of Finance says he was wrong. I am not sure whether the minister actually said that, but perhaps the Chair might say he admitted that representations were in fact made. Whether the situation constitutes a question of privilege, I have serious doubts.
In any event the hon. member for Red Deer has made his protest. The minister has answered and recognized that the hon. member for Red Deer was correct when he said he had made representations to the minister's office. I doubt very much in the circumstances whether we should embark upon a general debate on this matter because, according to the rules, no motion has been moved. The rules are very clear in this regard.
Hon. members have given the Chair these rules to interpret and I have interpreted them to the effect that no motion having been made the point raised by the hon. member for Red Deer should not be pursued. I suggest we should now go on to the business of the House of Commons.
February 5, 1969



QUESTIONS ON THE ORDER PAPER

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

Mr. Schreyer: 1.	Has the Minister of Transport made a decision relative to the claims submitted to him by those contractors that were engaged in the construction of the Great Slave Lake Railway for the C.N.R. and, if so, what is the decision?
2.	If such claims have been accepted as valid, is Treasury Board approval being sought for payment, either in whole or in part, of these claims?


Hon. Paul Hellyer (Minister of Transport):: 1.	A review has been made of the circumstances relating to the claims of various contractors against the C.N.R. in respect to the construction of the Great Slave Lake Railway.
Notwithstanding that one may have considerable sympathy for the circumstances in which the contractors find themselves as a result of these contracts, it appears that the claims to the extent that they remain outstanding, are matters which must be settled between the companies directly involved and the management of the C.N.R.
The C.N.R. has informed the Minister of Transport that some of the claims have been dealt with and additional payments have been made in some cases.
2.	Not applicable.


&quot;BLACK BAY&quot;-IRREGULAR LOADING PROCEDURE
Mr. Hees: 1.	Was the Black Bay of Canada Steamship Lines moved into the Montreal elevators on Saturday, November 16, out of turn, and was it loaded with American com?
2.	Were representations made to the Minister of Agriculture, or any other Minister regarding Part 1, and by whom?
3.	Was the grain trade in general consulted as to the advisability of this move?
4.	How much American corn has been brought into Canada from August 1 until the present time?
5.	What is the government policy at the present time on the importation of American corn?


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: I am informed by the Department of Agriculture, the Dominion Bureau of Statistics and the Department of Finance as follows: 1. The
Questions
M/V Black Bay discharged a cargo of American corn at Montreal on or about November 16, 1968, in accordance with Section 134 of the Canada Grain Act.
2.	Yes. Co-operative Federee de Quebec; Agro Co. of Canada Ltd.; L'Union catholique des Cultivateurs; Canada Steamship Lines Limited; Comptoir agricole de St. Lambert Inc.; Minister of Agriculture and Colonization, Province of Quebec; James Richardson and Sons Ltd.; Leblanc et Lafrance; Association professionnelle des Meuniers du Quebec; Paul Godbout Inc.; Benoit Gagne Ltee; Upper Lakes Shipping Limited; Parrish and Heim-becker Ltd.; Maple Leaf Mills Limited.
3.	No.
4.	The amount of "Indian corn, shelled" imported from the United States for the four months of August, September, October and November 1968 (latest figures available) is: August, 2,923,840 bushels; September, 4,476,402 bushels; October, 3,719,207 bushels; November, 4,587,627 bushels; Total, 15,707,076 bushels.
5.	There is no special policy regarding imports of U.S. corn. From October 30, 1968, to December 31, 1968, imports of corn from all sources not entitled to entry under the British Preferential Tariff or any lower tariff were subject to special valuation for duty. Since January 1st, 1969 corn imports have been subject only to the normal provisions of the laws regarding customs duty, valuation for duty and freedom from disease.


SUPPORT FOR EDUCATIONAL TELEVISION
Mr. Robinson: Is the federal government providing any financial support for educational television and, if not, for what reason and, if so, how much yearly has been spent during the years 1963-1968 inclusive?


Yves Forest: I am informed by the C.B.C. as follows: The C.B.C., in co-operation with provincial department of education, spends approximately $1.5 million annually on school telecasts.


HONOURABLE LIONEL CHEVRIER
Mr. Fairweather: 1.	What responsibilities did the Honourable Lionel Chevrier undertake for the Government of Canada during 1968?
2.	How much did these responsibilities cost Canada (a) in salary, honorarium or stipend (b) expenses?

February 5, 1969
Questions


Hon. Mitchell Sharp (Secretary of Stale for External Affairs):: 1. From January 1, 1968 to April 30 the Hon. Lionel Chevrier served as head of the special Canadian aid mission to French-speaking Africa under the auspices of the then External Aid office. Subsequently he served as Special Adviser to the Secretary of State for External Affairs on Aid to African Francophone Countries. During the fall he also undertook a number of speaking engagements on behalf of the Canadian Government in leading cities in the United States, in response to widespread interest in that country about developments in Canada following Expo '67 and our centennial celebrations. He also did a survey of the information and cultural activities of Canadian Government agencies in the United States.
2. (a) $27,712; (b) $13,356.04.


STATION CKUA, UNIVERSITY OF ALBERTA
Mr. Forlin: 1.	Is it the intention of the government to cancel the license of radio station CKUA of the University of Alberta operated by the Alberta Government owned Telephone Company?
2.	If not, is it the government's intention to extend this privilege to other Universities?


Hon. Gerard Pelletier (Secretary of State):: I am informed by the Canadian RadioTelevision Commission as follows: 1 and 2. The CRTC is studying the present ownership and operation of Station CKUA and hopes to be able to make a public announcement in the near future.


TRANSACTIONS BY CROWN ASSETS DISPOSAL CORPORATION
Mr. Schreyer: 1.	Were the following items disposed of by Crown Assets Disposal Corporation during the first half of 1968 (a) truck boxes (stake) at Westwinn Canadian Forces Base, Manitoba (bl one-half ton to one ton Dodge military vehicle previously under U.S. Air Force ownership, at Canadian Defence Base, Muskwa, Manitoba?
2.	If so, how many bids were received and what were the amounts in each case?
3.	What were the amounts of the successful bids and by whom were they made?


Hon. Donald C. Jamieson (Minisler of Defence Production):: In so far as Crown Assets Disposal Corporation is concerned: 1. (a) Yes (one only); (b) Yes (one only).
2. 1(a) 7: Interlake Salvage & Supply, $88.00; Syrota Bros. Metal & Cartage Ltd., $76.00; H. J. Carruthers, $67.37; Lockport
[Mr. Fairweather.J
Mower Service, $38.00; Edwards Oil Ltd., $26.00; Bermar Industries Ltd., $12.00; York Tire Service Ltd., $10.00.
1(b) 9: Beausejour Auto Body, $335.00; Regent Auto & Truck Parts Co. Ltd., $315.50; Interlake Salvage & Supply, $256.00; K & S Equipment Ltd., $175.00; York Tire Service Ltd., $165.00; Princess Auto & Machinery Ltd., $116.00; Lockport Mower Service, $148.00; Queen's Park Motors, $125.00; Mac-Cord Industries Ltd., $50.00.
3. 1(a): Interlake Salvage & Supply, Stonewall, Manitoba, $88.00.
1(b): Beausejour Auto Body, Beausejour, Manitoba, $335.00.


ICE-BREAKER &quot;LOUIS ST. LAURENT&quot; DESIGNERS
Mr. Godin: 1.	By which firm of architects was the ice-breaker Louis St-Laurent designed?
2.	What was the initial estimated cost of the ship, and what will be its final cost?
3.	What firm is carrying out the construction of the ship?


Donald Campbell Jamieson: 1. Gilmore, German & Milne, Montreal, Quebec.
2.	The initial estimated cost was $18,000,000 and the final estimated cost is $21,000,000.
3.	Canadian Vickers Limited, Montreal, Quebec.


BIG BRAS D'OR, N.S.-PUBLIC WHARF
Mr. Muir (Cape Breton-: The Sydneys):
1.	Has the Department of Public Works carried out the improvements to the road to the public wharf at Big Bras d'Or, Nova Scotia, as outlined in an agreement with the provincial Department of Highways of Nova Scotia?
2.	Has the property survey of the area in question been received by the Department of Public Works and on what date was it received?
3.	Has the Department of Public Works acquired the land in question as yet?
4.	When is it anticipated that the work will be completed?


Hon. Arthur Laing (Minister of Public Works):: 1. No.
2.	Yes, on October 17, 1968.
3.	No.
4.	In 1969.
February 5, 1969


ASSISTANCE PLAN PAYMENTS TO BRITISH COLUMBIA
Mrs. Maclnnis (Vancouver-Kingsway): 1.	What was the total amount of Canada Assistance Plan payments made to the Province of British Columbia since the inception .of the Plan?
2.	What was the total amount of such payments made to British Columbia in respect of claims for financing Day Care Centres throughout the Province?


Hon. John C. Munro (Minister of National Health and Welfare):: 1. As of December 31, 1968, the Province of British Columbia had been paid $56,414,551 under the Canada Assistance Plan.
2. A total of $18,315 was paid in respect to claims for Day Care Centres as of November 30, 1968.


FEDERAL TAX RECEIPTS
Mr. Matte: 1.	What is the total amount of estate tax received by the federal government from all parts of Canada and, from Quebec?
2.	What is the total income derived from all indirect taxes and duties of the federal government from all parts of Canada?
3.	What amount of indirect taxes come from the Province of Quebec?


Hon. Jean-Pierre Cote (Minister of National Revenue):: For Taxation Division.
1. Estate tax received for all of Canada for the year ended March 31, 1968, $102,192,358.00; Estate tax received by Quebec District Offices for the year ended March 31, 1968, $21,459,060.00.
2 and 3. ... To be answered elsewhere.
For Customs and Excise
1.	To be answered elsewhere.
2.	for the year ended March 31, 1968:
Sales Tax	$2,239,248,969.02
Other Excise Taxes	337,610,597.26
Customs Import	Duties 830,218,100.70
Excise Duties	495,252,393.32
Total	$3,902,330,060.30
3. for the year ended March 31, 1968: Sales Tax	$ 627,740,434.66
Other Excise Taxes	225,935,050.50
Customs Import Duties 249,137,778.08 Excise Duties	207,400,778.51

Questions
The answer to No. 3 reflects sales tax, excise taxes, customs import duties, and excise duties, collected at Customs ports and other collections offices in the Province of Quebec. It should be noted that such figures do not necessarily represent payments by residents of Quebec.
SASKATOON, SASK; PUBLIC WORKS


Mr. Gleave: 1.	What works are to be undertaken by the Department of Public Works in Saskatoon in the year 1969?
2.	What is the prospective cost of each and where is it to be located?


Arthur Laing: 1. Federal Building: Renovations; Replacement of windows; Air treatment. Post Office: Renovations; Air treatment; Alterations; Air conditioning. London Building: Alterations. R.C.M.P. Quarters: Renovations. C. W. S. Migratory Birds: Addition (I.A.N.D.).
2. It is not customary to reveal estimated costs before tenders are called.


DEVCO-MINES IN CAPE BRETON AREA
Mr. Lewis: 1.	Is Devco now planning a phasing out of the mines in the Cape Breton area and a phasing in of new industry?
2.	If so, what are the details of the steps or plans for establishing new industry, and the target dates for such plans?


Mr. Russell C. Honey (Parliamentary Secretary to Minister of Forestry and Rural Development):: The plans of the Cape Breton Development Corporation for the progressive reduction of coal production and for the development of new industry are described in an approved overall plan, submitted by the Corporation under Section 17(1) of the C.B.-D.C. Act and tabled in the House of Commons on November 18, 1968. Further details of these plans are contained in the Minutes of Proceedings and Evidence of the Standing Committee on Regional Development, Nos. 4 and 5, of November, 1968.


APPLICATION OF TRANSFER ACT TO TELEPHONE COMPANIES
Mr. Foriin: 1. As certain provinces have nationalized telephone companies, does the government intend to apply to the telephone companies the Public Utilities Income Tax Transfer Act?
Total

February 5, 1969
Questions
2. Has any province already requested such a transfer and, if so, which provinces?


Edgar John Benson: 1.
No.
2. No.


VOTING AGE IN FEDERAL ELECTIONS
Mr. Robinson: Is it the government's intention to lower the voting age in federal elections to eighteen years?


Yves Forest: Any announcement in this regard would be made only after the Standing Committee on Privileges and Elections has made its review of the Canada Elections Act.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Mazankowski: Did the federal government make a financial contribution to the sending of competitors to the Olympic Games, Mexico '68 and, if so (a) how many competitors participated in the Olympic Games '68 (b) what are the names and addresses of these competitors (c) what was the duration of their stay in Mexico, individually (d) what was paid to each competitor for travelling allowances, per diem expenses, etc. (e) what was the total cost of sending these competitors to Mexico (f) what Department was charged with this expense?
Return tabled.


RADIATION GUIDE NUMBERS FOR MICROWAVE TOWERS
Mr. Schreyer: 1.	Does any department or agency of the Government of Canada prescribe radiation guide numbers or levels which must be complied with by operators of microwave relay towers?
2.	If so, what department or agency does so for purposes of applying standards for safety to protect public health and protect against loss by agricultural operators?
3.	What are the present radiation guide levels or standards in force at the present time, showing the power output at each level of frequency?
4.	When were these guide levels or standards first adopted and have any revisions been made since their adoption?
5.	If such revisions have been made, for what reason and at what dates?
6.	Has any department or agency of the Government of Canada conducted any systematic study as to how the threshold of danger from microwave

radiation changes with humidity, air temperature, frequency of irradiation and the cumulative effect of exposure over long periods of time?
7.	If so, by what department or agency and with what result?
Return tabled.


UNEMPLOYMENT INSURANCE COMMISSION-ACTION TO PREVENT FRAUD
Mr. Knowles (Winnipeg: North Centre):
1.	What were the total expenditures of the Unemployment Insurance Commission on the pilot operation of its stepped-up drive against fraud during the first six months of the said pilot operation?
2.	What were the results of this drive during the same six months?
3.	What are the anticipated expenditures in connection with the recently announced larger scale operation against fraud, per fiscal year, and for how long is it planned to continue this operation?
4.	Has the Unemployment Insurance Commission made or had made a cost-benefit study with respect to the larger scale operation against fraud now in effect?
5.	In terms of (a) number of cases (b) dollars involved, what was the percentage of fraud to the total benefit program of the Unemployment Insurance Commission in 1950, 1955, 1960, 1965, 1966, 1967 and 1968, for such period as statistics are available?
Return tabled.



MOTIONS FOR PAPERS

Yves Forest: Mr. Speaker, would you kindly call notices of motions Nos. 54, 57, 58, 59, 60 and 68?


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker I would ask that number 57, 58, 59 and 60 be allowed to stand.


Mr. Speaker:: And number 68 will stand, also.


Yves Forest: I ask, Mr. Speaker, that the remaining notices of motions be allowed to stand.



INCENTIVE GRANT TO PRINCE ALBERT PULP MILL

[Stage Direction]
Motion No. 54-Mr. Burton:
That an Order of the House do issue for a copy of all letters, communications, reports, memoranda,
February 5, 1969
[Stage Direction]
or other data in respect of the incentive grant to be paid to Prince Albert Pulp Mill Company Limited and showing what amount of grant has been authorized and what amount of grant has been paid and on what date or dates payment was made.
Russell Clayton Honey: Mr. Speaker, this motion is acceptable, subject to obtaining the usual consent of the province concerned, and with the reservation that any correspondence or documents, the publication of which would be detrimental to the competitive position of the company, be excluded.


[Stage Direction]
Motion agreed to.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to direct a question to the Minister of Forestry and Rural Development It arises from the fact that the estimates tabled yesterday for the fiscal year 1969-70 show no separate vote for the Atlantic Development Board and that projects formerly listed under the Atlantic Development Board vote are now to be found in departmental estimates. I would like to ask the minister whether the government is liquidating the Atlantic Development Board and absorbing its activities into the proposed new department simply as departmental activities?


Hon. Jean Marchand (Minister of Forestry and Rural Development):: Mr. Speaker, as I said before in the house, the functions of the Atlantic Development Board will probably be absorbed by the department and the credits which would normally be affected to the Board will go to the department. If ever the house decides otherwise, it will be easy to make an adjustment.


Robert Lorne Stanfield: In other words the Atlantic Development Board is being liquidated and terminated as an administrative agency?


Jean Marchand: Mr. Speaker, I think that only the bill will give clear indications about that.
Inquiries of the Ministry


Robert Lorne Stanfield: As a further supplementary question, Mr. Speaker, with regard to the same estimates and the work of the minister's department, are we to assume that, since the projects under ARDA and ADA are now listed under departmental operations, these agencies are also being absorbed into the administration of the proposed new department and that these programs, in particular ARDA, are being eliminated as such?


Jean Marchand: Mr. Speaker, with respect to the administrative functions of those various bodies, I think it can be deduced from the estimates that they will come directly under the department from now on.
As for the duties assigned to those agencies, as I said they will be outlined in the provisions of the basic legislation governing the department.


Robert Lorne Stanfield: Mr. Speaker, I wish to ask one further supplementary question. In view of the apparent liquidation of the Atlantic Development Board, the apparent changes under way with regard to these other programs, and the uncertainty and the void that now exist, will the minister undertake to make a full statement within the next day or so as to precisely what the plans of this department are, how these matters are to be handled and how the fight against regional disparities is to be undertaken?


Jean Marchand: Mr. Speaker, I am going to make a full statement when the legislation is introduced in the house-


Robert Lorne Stanfield: When is that?


Jean Marchand: -and I hope this will be in a very short while.


Mr. Thomas M. Bell (Saint John-Lancasier):: Will the minister assure the house that this action is not punishment against the Atlantic provinces for voting against the government?


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.

February 5, 1989
Inquiries of the Ministry



INCREASED EXPENDITURES FOR PROFESSIONAL AND SPECIAL SERVICES

Mr. David Lewis (York South):: Mr. Speaker, I have a question arising out of the estimates tabled yesterday which I should like to direct to the President of the Treasury Board. It arises out of the fact that there is a 20 per cent increase in the estimates for professional and special services, from some $327 million to some $397 million. Could the President of the Treasury Board explain to the house the reason for this 20 per cent increase in that item relating to professional services outside the departments?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I think it would probably be more satisfactory if the hon. member were to put these questions in relation to specific departments when the programs of the individual departments are being considered in committee.


David Lewis: Well-


Mr. Speaker:: Order, please. Without wanting to interrupt the hon. member in the line of questioning which he intends to pursue, I wish to say I have some doubts whether it would be in order at this time to question all the items in the estimates. I have some serious doubts as to whether this can be done according to our rules, but this having been said I will allow the hon. member for York South to ask a supplementary question.


David Lewis: Mr. Speaker, I am not asking this question about specific departments. This might suit the minister better, but I do not think that is the point. May I ask the minister whether this very huge increase in outside professional services is due to the freeze on entry into the public service itself, so that work now will have to be done outside the department which otherwise could have been done by personnel inside the department, if those personnel were engaged?


Charles Mills (Bud) Drury: The policy in relation to engaging outside services is in each case a judgment as to how the work can be done most effectively and most economically. There is no general rule either that individuals must be hired to do work within the government service, or that the work must be contracted out.


David Lewis: I have another supplementary.


Mr. Speaker:: Order, please. I must again remind the hon. member for York South that it is not open to hon. members at this time to go into all the detail of the estimates and ask why there has been an increase or decrease in certain of them. That might lead to a rather complicated question period. I do not think this type of question is in order, but again I would allow the hon. member to ask a supplementary.


David Lewis: Mr. Speaker, if it is your ruling that I should not, I will not; but with very great respect to you, sir, I am trying to find out something that is applicable to all the departments which, under the new regime, I will never have the opportunity to do, since the estimates are to go to the standing committees. The further supplementary I had intended to ask the President of the Treasury Board is whether as a matter of policy Treasury Board enters into the question concer-ing whether outside or inside professional services would be more economic and would be to the advantage of the government and the people of Canada, or is this a decision made by each department?


Charles Mills (Bud) Drury: Mr. Speaker, in cases where it lies within the administrative competence of the department to make a judgment, such judgment is made within the department. Where in order to secure authorization there has to be reference to Treasury Board, the judgment probably is made by Treasury Board.
In reply to the first question I might point out that column 4, which I believe the hon. member has been reading, it appears could quite well contain an error.


Robert Lorne Stanfield: Not another one!


Mr.  R. Gordon L. Fairweaiher@Fundy Royal: Mr. Speaker, I should like to ask the President of the Treasury Board if the government has considered the necessity of these outside studies and reports to parliament, or is this a device to keep such information away from the chamber?


Mr. Speaker:: The question asked by the hon. member is argumentative.


David Lewis: Mr. Speaker, I rise on a point of order. In one of his answers the President of the Treasury Board said something about an error, which I did not entirely hear. Surely if in giving an answer there is an error, he ought to tell us what it is instead of leaving it
February 5, 1969

hanging in the air, as he did,-for what purpose I do not know. There must be some purpose which does not permit him to let the error be shown the light of day.


Charles Mills (Bud) Drury: I did not say there was an error. I said there may be an error which I should like to check.


Some hon. Members:: Oh, oh.


Mr. Mac T. McCulcheon (Lambion-Keni):: Mr. Speaker, I have a supplementary question for the minister. Could this loosely be called, for example, patronage?


Mr. Speaker:: Order, please.



EXTERNAL AFFAIRS


Mr. Real Caouetle (Temiscamingue):: Mr. Speaker, I have a question to put to the Secretary of State for External Affairs.
I have had recently the privilege of travelling around the world and I visited Taiwan. I noted that we have in Hong Kong and in Tokyo, for example, distinguished Canadian representatives, most charming ambassadors, and I am wondering why we do not have any such representation in Taiwan. Is the minister in a position to tell us if, eventually, Canada will have an ambassador or a charge d'affaires there to welcome Canadians?


Mr. Speaker:: Order, please. I remember that the same question was put very recently to the Prime Minister or to the Secretary of State for External Affairs, and I do not believe it need be asked again.


David Réal Caouette: Mr. Speaker, I have a supplementary question.
In view of your ruling that an hon. member has already asked that same question, I wish then to ask the minister whether or not the government has regular diplomatic relations with the government of Taiwan.


Mitchell William Sharp: Mr. Speaker, as the hon. gentleman knows, when the Nationalist government of China retired to Taipei the Canadian ambassador did not follow. However, since the ambassador of China was already in Ottawa he did not have to move. That remains the situation.

Inquiries of the Ministry [Translation]


OFFICIAL LANGUAGES
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to direct a question to the Prime Minister.
The Prime Minister announced recently that he would agree to submit to the Supreme Court of Canada the matter of the official languages. As judgments on constitutional matters by the Supreme Court of Canada have not always been recognized by all the provinces, would the Prime Minister agree to have the bill concerning the official languages referred to a special tribunal made up of judges appointed by the federal and provincial governments in order to obtain a decision acceptable to all the interested parties?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I would not object to any method that would result in reaching a prompt decision on this subject.
We are deeply convinced that the government should proceed urgently with the bill on official languages. It is our opinion that ours would be a strange country if it cannot be done, but we are agreeable to have the provinces refer the matter to the Supreme Court if they so desire. If the hon. member's suggestion were made by the provinces and if results could be more quickly achieved, I would not object to it, in principle. However, in my opinion, this would not be a more expeditious solution than the others and, as we deem this to be an urgent matter, I would not be inclined to readily accept the hon. member's suggestion.


Martial Asselin: Mr. Speaker, I wish to put a supplementary question.
Along the same lines, could the Prime Minister tell us whether, during the federal-provincial conference, government representatives will be asked to consider the opportunity of establishing a constitutional court to discuss such cases?


Mr. Trudeau:: Yes, Mr. Speaker. Where mention is made on the agenda tabled Monday of the institutions of federalism, we refer to the Senate and the Supreme Court, and that means there will be an open discussion on that matter. We believe that the constitutional court must be the Supreme Court, but other participants might want to suggest another one. We will listen to their representations in that respect.

February 5, 1969
Inquiries of the Ministry


Mr. Speaker:: The hon. member for
Malpeque.


Mr. MacLean:: Mr. Speaker, I should like to defer to the hon. member for Oxford if I might.


THE MINISTRY
Mr. W. B. Nesbiii (Oxford):: Thank you, Mr. Speaker. I should also like to thank my colleague, the hon. member for Malpeque. My question is directed to the Prime Minister. Has the Minister of Transport submitted his resignation as Minister of Transport, and if so has the Prime Minister as yet designated a successor?


Right Hon.   P.-E. Trudeau@Prime Minister: I have not checked with my office but I will be prepared to do so after I leave the house.


RURAL DEVELOPMENT
John Angus MacLean: Mr. Speaker, I should like to ask the Minister of Forestry and Rural Development whether the government has arbitrarily decided to reduce spending in respect of Prince Edward Island economic development plans, as I understand has been stated by the Premier of Prince Edward Island?


Jean Marchand: Mr. Speaker, the estimates tabled in the house yesterday provide for the granting of $25 million a year to Prince Edward Island, subject to the signing of an agreement which, unfortunately, has not yet been completed. In my opinion, that is not a reduction but a considerable increase in our assistance to Prince Edward Island.


Mr. McQuaid:: Mr. Speaker, has an agreement been reached between the governments of Canada and the province of Prince Edward Island as to how the cost of this proposed plan is to be shared as between the two governments?


Jean Marchand: Mr. Speaker, the whole agreement is still under negotiation. We hope to reach an agreement soon, but we are having some difficulty and I cannot report that there is an agreement as yet.


ATOMIC ENERGY
Mr. Barry Mather (Surrey):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. Having in mind the reported increase in radiation levels in a number of Canadian areas following the United States nuclear test of a few weeks ago, his Canada investigated the situation?


Mitchell William Sharp: Mr. Speaker, National
Health and Welfare officials have confirmed that radioactivity detected in air filter samples from Fort William, Toronto, Ottawa and Montreal increased between December 11 and December 15. No danger to public health was involved. Because of the small samples involved, it was impossible to determine whether, in fact, this increase could be attributed directly to the United States Schooner explosion test, which took place in Nevada on December 8. However, the coincidence with correspondingly higher levels reported in the United States some days earlier was brought to the attention of United States authorities.
No comment has been offered formally, but liaison concerning the levels of radioactivity is continuing. Because the higher readings could not be attributed directly to the schooner test, no formal representations were made to the United States authorities.
I should also point out that this test explosion was intended to explore possible peaceful applications for nuclear explosions in which Canada has been interested. The Canadian authorities were informed in advance of all details regarding the proposed test.


AIRPORTS
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I have a question for the President of the Treasury Board. In view of the fact that in the estimates tabled yesterday an allocation of $6,600,000 is provided for the acquisition of land where the international airport is to be built, and also that the Farnham authorities have made a proposal for the use of a tract of land which is federal property, does this mean that the town of Farnham has been rejected from the alternative sites considered by the Department of Transport, in respect of the location of the future airport?
February 5, 1969


Mr. Speaker:: Order. I must remind the hon. member for Shefford that a similar question was asked yesterday by a member from another province and was declared out of order; I believe I must decide likewise in respect of the hon. member's question.


THE CANADIAN ECONOMY
Hon. George Hees (Prince Edward-Hasl-ings):: Mr. Speaker, in view of the recent statement by Mr. G. K. Bouey, an economic advisor to the Bank of Canada, that policies to cure inflation have not been working satisfactorily since early last fall, has the Minister of Finance and his department been working on new initiatives to control this inflation which has been increasing steadily since last September; and may we expect an announcement soon?


Mr. Speaker:: Order, please. I must invite the Minister of Finance to be patient while I suggest that the question as asked by the hon. member is of a very general nature and of the kind which would require a statement during motions. I do not think it should be answered at this time.


George Harris Hees: Mr. Speaker, may I rephrase my question and ask the Minister of Finance what specific new proposals he has to make to the house to control inflation?


Mr. Speaker:: I would have to make the same ruling on the second question.


EXPO '67 WRITING OFF OF MONTREAL AND QUEBEC INDEBTEDNESS
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to ask the Minister of Finance whether he or his deputies have received requests from the province of Quebec or the city of Montreal to be forgiven their share of the loss in respect of Expo 67?


Edgar John Benson: Mr. Speaker, I should like to say that I have not received such a request from the province of Quebec or the city of Montreal.


Alfred Dryden Hales: Does the minister know whether any of the debentures held by him from the corporation have not been honoured or paid?


Edgar John Benson: I should like to take this question as notice, Mr. Speaker.
Inquiries of the Ministry [Translation]


Mr. Rene Matte (Champlain):: Mr. Speaker, I should like to put a supplementary question.
Did the authorities of the city of Montreal endeavour to get loans from the Bank of Canada so as to settle their financial problems?


Mr. Speaker:: Order, please.


INCOME TAX
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I wish to direct a question to the Minister of National Revenue in his capacity as minister responsible for the Tax Appeal Board. We have been advised today that the chairman of that Board has retired and it is implied that the Board could be abolished. Would the minister tell the house whether he intends to merge this Board with another judiciary institution, or what is going to happen to it?


Joseph Julien Jean-Pierre Côté: No decision has been reached in this respect, Mr. Speaker.


Marcel Joseph Aimé Lambert: Mr. Speaker, I wish to ask a supplementary question.
Can we expect an indefinite period of time to elapse before a new chairman is appointed or will the minister or the government announce within a few days what will happen to the Board?


Joseph Julien Jean-Pierre Côté: The new chairman will be appointed soon, Mr. Speaker


EXTERNAL AID
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I am sorry I did not send notice of my question to the Secretary of State for External Affairs. On November 26 during the debate on the Nigerian war the minister told the house that the government would work toward a better international legal framework within which humanitarian assistance could be provided to people affected by civil conflict. In view of the many thousands of lives that might be saved if a solution could be found to this problem, I should like to ask the minister to tell the house of any progress made with regard to his undertaking?

February 5, 1969
Inquiries of the Ministry


Mitchell William Sharp: Mr. Speaker, in an address I made to the General Assembly to the United Nations I referred to this matter. I should like to examine the records of the committee to which this question was referred, in order to give a complete answer to my hon. friend.


NORTHERN AFFAIRS
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to ask the Prime Minister whether the government is considering the re-institution of the roads to resources program and, if so, when the house may be made aware of the decisions the government has reached?


Right Hon.   P.-E. Trudeau@Prime Minister: There has been no policy decision made on this, Mr. Speaker. This is the kind of subject which will come under the authority of the new department to be created soon under the government reorganization act.




Mr. Robert Muir (Cape Brelon-The Sydneys):: Mr. Speaker, when can, the Secretary of State for External Affairs give a report to the house on the implementation of the Erance-Canada agreement, including amounts so far spent by France?


Mitchell William Sharp: Mr. Speaker, I referred this question to my department, and I will make Inquiries to see when the explanation will be available.


Robert Muir: Mr. Speaker, I should like to ask the minister whether Brittany is included under the agreement? May I ask whether the Prime Minister or the Secretary of State for External Affairs has received correspondence from sources in Britanny asking for discussions with Canada, and requesting for Brittany equal status with the province of Quebec?


Mr. Speaker:: I have some serious doubts as to whether the question should be allowed.


TRANSPORT
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, since the main estimates tabled yesterday contained no vote for the completion of construction of the Northumberland crossing, can the Minister of Public Works assure the house that items for this project will be included in the first supplementary estimates?
Hon. Arthur Laing (Minister of Public
Works): Mr. Speaker, I think this matter was dealt with by the Prime Minister yesterday, and I have nothing to add to what he said. I think his words were that a decision would be taken in due course.


NATIONAL DEFENCE
Mr. Ed Schreyer (Selkirk):: Mr. Speaker, since we have under way at the present time a genuine review of our foreign and defence policy relating to NATO, can the Minister of National Defence assure the house that the plans to allocate funds for the construction of permanent buildings at Canadian bases in Europe will be kept in abeyance until this review is completed?
Ron. Leo Cadieux (Minister of National Defence): Mr. Speaker, I am not aware of any such plans.


Edward Richard Schreyer: Mr. Speaker, will the minister assure us that he will look into the matter.


Mr. Cadieux (Labelle):: With pleasure, Mr. Speaker.


LABOUR RELATIONS
Mr. J. Edward Broadbenf (Oshawa-Whil-by):: Mr. Speaker, I should like to ask the Minister of Labour when we may expect the Woods commission report to be tabled?


Hon. Bryce S. Mackasey (Minister of Labour):: Mr. Speaker, as I have mentioned on previous occasions, this question should be directed to the Prime Minister, since the disposition of the Woods report relates to his office. I can tell you, and I am sure he will agree, that it will not be tabled before the French version is completed. At the present
February 5, 1969

time the English version is up for translation. Provided it is the intention of the Prime Minister to table it, I would say it would be tabled some time in March.


John Edward Broadbent: Mr. Speaker, I should like to repeat my question to the Prime Minister.




Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to direct a question to the Prime Minister.
Can he tell us if the Canadian government has received an invitation to the conference of the French-speaking community at Niamey? If so, will the Canadian government delegation be similar to that which was sent recently to Congo-Kinshasa?


Right Hon.   P.-E. Trudeau@Prime Minister: The answer, Mr. Speaker, is that we did indeed receive an invitation a few months ago, that we have discussed with the province of Quebec the make-up of a Canadian delegation, that we have, in fact, accepted the invitation and that the make-up of the delegation itself has not been definitely agreed upon. I know that discussions on this subject are taking place today in Quebec between provincial and federal officials.
As to the second part of the question, I will say that the delegation will not be similar to that of Kinshasa. In Niamey, the conference will deal with several subjects over which the federal government has jurisdiction.
Therefore, we intend to send federal ministers as delegates, as opposed to Kinshasa where the conference was on education, a subject which concerns only indirectly the federal government. That is why we sent officials there while all the provinces sent ministers.


FISHERIES
Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I have a question for the Minister of Fisheries. Recently the minister has had discussions with representatives of the Atlantic fishermen and with government officials, and he promised an announcement. Will the minister assure the house that this
Inquiries of the Ministry announcement will be made on motions in the house and not through some other channels?


Hon. Jack Davis (Minister of Fisheries):: Yes, Mr. Speaker.


DEMURRAGE CHARGES ON VESSELS AWAITING CARGO
John (Jack) Henry Horner: Mr. Speaker, I would like to direct a question to the Prime Minister. Because of the difficult weather conditions in the fall and the difficulties with grain shipment arising from the weather, is the government prepared to accept the demurrage charges on the boats waiting in Vancouver?


Right Hon.   P.-E. Trudeau@Prime Minister: The Minister of Industry, Trade and Commerce has been in Vancouver, since yesterday, I believe. He is there today and I understand it is his intention to make a statement on the whole matter when he comes back to the house tomorrow.


John (Jack) Henry Horner: I have a supplementary question, Mr. Speaker. It is reported in today's Vancouver paper that the minister stated that the demurrage charges will have to be picked up by the farmers. I urge the Prime Minister to consider accepting demurrage charges.


RURAL DEVELOPMENT
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I have a question for the Minister of Forestry and Rural Development. I should like to ask the minister whether the government has discontinued assistance through ARDA for rural drainage problems.


Mr. Speaker:: Order, please. I have an impression this question was asked earlier during the question period, although I may be wrong. If I am, I would certainly invite the minister to reply to the question.


Philip Bernard Rynard: Mr. Speaker, I dod not hear it and I do not believe it was asked.


Jean Marchand: Mr. Speaker, drainage programs are planned by the provinces.
Of course, there is a limit with regard to our financial contribution to that end. There was no provision for it in the estimates, and our policy has not changed in that respect.

February 5, 1969
Inquiries of the Ministry


FITNESS AND AMATEUR SPORT ACT
Mr. Sieven E. Paproski (Edmonion Centre):: Mr. Speaker, I should like to direct this question to the Minister of National Health and Welfare. In view of the herculean efforts of the Minister of National Health and Welfare to implant in all Canadians an idea of fitness through the formation of a fitness and sports task force, will he tell the house when the force is likely to report and what is the precise value of the off-the-cuff remarks now being made publicly by some of its members, such as the chairman, Dr. Rea?


John Carr Munro: Mr. Speaker, I expect the task force report to be completed some time next month. I believe the remarks of Dr. Rea are helpful, but would not affect the report in any way.


Steve Eugene Paproski: I have a supplementary question, Mr. Speaker. Will the minister see to it that the sports task force is fully apprised of its particular terms of reference, in order that something constructive may emerge to help young athletes in Canada and give them a feeling that the government is really behind them?


Mr. Speaker:: Order, please. The hon. member is making a submission and a representation to the government.


AIRPORTS
Yves Forest: Mr. Speaker, I should like to direct a question to the Minister of Forestry and Rural Development, who is responsible for regional development.
Since regional economic development will play a leading part in the selection of the site of the future Montreal international airport and since that aspect of the question was often raised by the Quebec provincial authorities, does the minister intend to have consultations with those authorities in the near future?


Mr. Speaker:: The hon. member is asking his question in the form of a representation. I
[Mr. Marchand (Langelier) .1
must remind him that it is quite similar to the one asked by the hon. member for Shefford. Should I be mistaken and should the hon. member deem the question urgent, it could be easily discussed at the time of adjournment tomorrow evening.


Yves Forest: Mr. Speaker, on a point of order.
My question is not similar to the one asked by the hon. member for Shefford. I believe those negotiations could take place before long and that it would be urgent for the minister to answer it.


Mr. Speaker:: If there is a difference between those two questions, we shall not discuss the one from the hon. member for Shefford tomorrow evening.


HOUSING
Mr. Lincoln M. Alexander (Hamilton West):: I have a question for the right hon. Prime Minister and it arises out of the answer given the other day by the Minister of Transport regarding urban renewal programs. If I recall correctly, the minister could not give the house any assurance that there would not be cut-backs with respect to urban renewal programs that have already been started. I was wondering whether the Prime Minister can advise this house whether the government intends to make a statement as to its future role in urban renewal programs that have already been commenced. I ask this question because the answer that was given to me has left a number of municipalities hung up in the air as to the future of programs that they have already started.


Right Hon.   P.-E. Trudeau@Prime Minister: I will take it up with the minister and see if I can add anything to what he said.


OFFICIAL LANGUAGES
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Secretary of State. I would like to ask the hon. gentleman what steps he is taking to deal with the injustices done to Corporal Walsh and Corporal Clark, both in terms of loss of wages and
February 5, 1969

rank, following their removal from the national museums.


Gérard Pelletier: Mr. Speaker, the hon. member and I are not getting our information from the same source. I am not aware that either of the two persons he has named would have lost his rank or salary, except that for one of them it could have been possible to have a salary reduction if he refused proposed employment in his own place of residence and insisted on working in Ottawa.
According to the last report I have received, this possibility existed. I would ask the hon. member to tell me where he got the information leading to his assertion because, according to the chief of the corps of commissionaires, no commissionaire lost any salary or seniority or rank as a result of transfers that were made.


Walter Gilbert Dinsdale: I have a supplementary question, Mr. Speaker. Could the Secretary of State inform the house whether he is still insisting on bilingualism for these war veterans, even though their jobs have to do exclusively with security.


Gérard Pelletier: I cannot be still insisting, Mr. Speaker, because I never did.


Some hon. Members:: Hear, hear.


Mr. Speaker:: The hon. member for
Waterloo.


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker.


Mr. Speaker:: The hon. member's supplementary is just a bit late. I have recognized the hon. member for Waterloo.


MACE-TESTS TO REVEAL POSSIBLE DANGERS
Mr. Max Saltsman (Waterloo):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Has his department been conducting tests in connection with the chemical called MACE and, if so, is he prepared to publish a report on the dangers which may be connected with the use of this chemical?


Mr. Speaker:: I would suggest the hon. member place this question on the order paper.
Inquiries of the Ministry


Max Saltsman: May I rephrase my question and ask the minister whether he would be prepared to make a statement in connection with tests which his department may be conducting in this regard?


John Carr Munro: I would have to take that suggestion under consideration, Mr. Speaker.


NATIONAL DEFENCE
René Matte: Mr. Speaker, I should like to direct a question to the Minister of National Defence.
Is the minister considering making a statement to the house as a result of recent discussions between General Allard and the French military authorities?


Léo Alphonse Joseph Cadieux: Mr. Speaker, I think I have already made a relevant statement on this subject.


FINANCE
Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Finance whether it is the view of the government that existing international monetary arrangements are satisfactory, if reinforced by appropriate domestic policies on the part of the various countries, and that further reform of the mechanism of international exchange is not urgently required?


Edgar John Benson: Mr. Speaker, I thought I had made my views on this subject fairly clear in a statement I made earlier. I believe the hon. gentleman is referring now to a statement made by the Governor of the Bank of Canada. We believe the existing system is working pretty well. There is continuing consultation taking place with respect to changes in it. However, we do not believe it would be to the benefit of the world monetary system if another Bretton Woods conference, for example, were called, because it would simply cause further speculation. We believe, rather, that within OECD, the Group of Ten and the governors of the central banks, continuing exchanges should go on with regard to the international monetary system.

February 5, 1969
Inquiries of the Ministry


Robert Lorne Stanfield: I should like to ask the
minister, without pressing him to divulge confidential information, whether the Government of Canada is promoting any specific reforms in specific areas of international currency arrangements with a view to improving the international monetary system? In other words, are the minister and his associates simply entering into general discussion or is the government of Canada advancing a specific point of view in this regard?


Edgar John Benson: Without disclosing any confidential information I can say there is continuing consultation with other western nations through the existing streams of communication which are available to us.


Robert Lorne Stanfield: I wonder whether within a reasonable length of time the minister would be prepared to make a statement on motions with regard to the official position of the government of Canada in connection with the present international monetary situation and the steps which might be taken and properly pursued by this country to strengthen international arrangements.


Edgar John Benson: I have made statements in this regard both inside and outside the house. However, I will be pleased to consider the suggestion made by the hon. gentleman.


HOUSING
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Minister of Finance. It arises from a statement attributed to the Minister of Transport in Vancouver yesterday to the effect that the Minister of Finance might juggle a future budget so as to eliminate the 11 per cent sales tax on building materials. Will the Minister of Finance tell us whether the elimination of this tax is now under active consideration by the government?


Edgar John Benson: No,


Mr.   Speaker.Mr. Carter@: A supplementary question, Mr. Speaker. Bearing in mind earlier statements by the Minister of Finance that the government may not bring in a budget until the spring of 1970, will any action on the financing and taxation recommendations of the task force have to await the presentation of a budget?


Edgar John Benson: Mr. Speaker, the basic
assumption was wrong.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: On a point of order, Mr. Speaker, in view of the fact that there has been an agreement to alter slightly today's program, I wonder whether the President of the Privy Council would not make the new arrangements known to everyone?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, I am glad to learn there has been agreement on this point. The suggestion is that after the Minister of Finance and perhaps a spokesman for each party have taken part in the debate on the bill to amend the Income Tax Act and the Estate Tax Act, we should then adjourn the discussion and proceed with the bill concerning the Prairie Grain Advance Payments Act. If there is general agreement on this point, perhaps we could make an order of the house now to that effect.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.



GOVERNMENT ORDERS


Edgar John Benson: second reading and reference to a Committee of the Whole of Bill C-165, to amend the Income Tax Act and the Estate Tax Act.
He said: First, Mr. Speaker, I should like to indicate, with deference to the hon. member for Red Deer (Mr. Thompson), that it was my intention at the beginning of my speech this afternoon to clear up any misapprehension which may have arisen in connection with my answer to a question on the late show last night. I was not trying to suggest that members opposite were not interested in the estate tax and that they had not made representations in writing. But the letters simply had not come to my attention at that point. As a result of a search this morning I found there were eight letters from members of the Official Opposition, as I indicated was the case.


Robert Lorne Stanfield: You can only see red ink, now.
February 5, 1969	COMMONS


Edgar John Benson: Most of the red ink is on the
other side of the house.
During the three month period since reform of the estate and gift taxes was announced in the budget, the country has engaged in a lively debate about the government's proposals. Some of the argument has been misleading and destructive, such as the expensive advertising claiming that the legislation means the end of family farms and small businesses, or that the whole thing is a communist conspiracy. This is just not the case. But there have been many constructive arguments. With some exceptions, Members of Parliament have tried to sift fact from fiction. They have tried to influence the government to legislate in the best interests of their constituents. This constructive attitude means, I believe, that most members and most Canadians recognize that the proposals represent a reform. They recognize that while we are retaining the estate tax, we should change the structure of exemptions to help widows, widowers and young children.
At the start of this discussion on second reading I want to describe to hon. members some of my reactions to the public debate. My mail and the discussion inside and outside parliament convince me that the criticism is far out of proportion to the impact of estate taxes. Ninety-five per cent of Canadians never pay any estate taxes at all, and we expect this ratio to stay about the same in the future. As for those 5 per cent who will pay some tax, more than half of the revenues are collected from estates valued at $500,000 or more. I can only conclude that much of the confusion and criticism results from misrepresentation of the government's proposal, though not all, of course. Some individuals have looked at the tables and concluded correctly that certain estates will pay more tax. For others, the October announcement may have been an emotional shock which forced them to think about their estate situations for the first time in their lives. Some mail I have received indicates clearly that a number of the writers thought there was no estate tax in Canada before last October.
[DOT] (3:10 p.m.)
My second reaction is that a good deal of the opposition stems from the view held by some persons that there should be no estate tax at all. These persons and groups condemn the proposed reform, but few suggest a return to the old system. They seem to want to have their cake and eat it too. They are not the government and they do not have to raise
DEBATES	5179
Income Tax Act and Estate Tax Act the funds to pay for the expenses of the state in creating an economic climate in which business can survive. Therefore they are seemingly unworried about the revenues that would be lost through abolition of the estate tax.
More than $200 million a year is raised through the estate tax and provincial succession duties. Some critics might argue that we could do away with this kind of tax if governments tightened their belts and reduced spending by this amount. Our conclusion as a government is that the estate tax is a fair and equitable part of our total tax system regardless of the amount of revenues we need.
This is because governments have at their disposal only two forms of taxation which are progressive. By "progressive" I mean a tax which can be weighted to take relatively more money from the wealthier persons in our society and relatively less from the poor. The two progressive taxes are the income tax and the estate tax. The rising demand for services from all levels of government makes it unlikely that the total revenues of government can be reduced. Therefore those who would abolish the estate tax and gift tax must produce a satisfactory alternative to raise more than $200 million for governments at the two levels.
We estimate that to raise about this amount from roughly the same group of persons who pay the bulk of estate taxes, that is, those with incomes over $10,000, would require a 15 per cent income surtax. If, instead, we raised this amount in income taxes from those whose estates are over $500,000 we would have to double their present income tax. Before proposing an end to estate taxes, abolitionists should produce a convincing argument that increases in income taxes of this dimension will not adversely affect incentive, will not speed up our brain drain and curb our rate of capital investment.
Perhaps the abolitionists would prefer that the same revenues be raised from all income groups instead of from those who pay most of our estate taxes now. At present fewer than 5 per cent of the population pays any estate tax. To spread the cost of this revenue loss to all taxpayers would, for instance, require an estimated increase of almost 1 per cent in the social development tax.


Robert Lorne Stanfield: Would the minister permit a question? He may have given this information already; if so, I regret asking him for it. Could the minister tell us how much revenue he expects will be lost by the concessions that
February 5, 1969
5180	COMMONS
Income Tax Act and Estate Tax Act he has made with regard to intramarital transactions?


Edgar John Benson: I think I made this clear previously both in the house and outside the house. The change in estate tax is designed to raise exactly the same amount of money that was raised before. There is a change in the burden of estate tax but the revenue will be exactly the same.


Robert Lorne Stanfield: I understand that, but would the minister indicate how much revenue he has to make up as a result of granting these proposed exemptions in respect of gifts to wives and the other additional matters?


Edgar John Benson: I do not have this information in front of me though 1 have seen it. I will be pleased to give it to my hon. friend before this debate is over. But I should point out that the changes in estate tax are not designed to take more money out of the Canadian economy. What they are designed to do is to help widows, young orphaned families and disabled children, and other people will have to pay for this. So there is a shift in the burden.
There are other reasons why an estate tax is desirable. Nowadays it is an integral part of the taxation system of most western countries. Our two major trading partners, the United States and Britain, raise a larger portion of their total government revenues from inheritance taxes than does Canada. Despite the opposition of a vocal minority through the years, the majority in all these countries consider it a fair tax.
In Canada, where about seven million persons pay income tax, it is fair that the relatively few who have accumulated the greatest wealth should contribute at death to the common good of our country. They are usually the ones who have benefited most from the collective effort of Canadians to build a strong economic and political system.
Federal abdication from the estate tax field probably would not result in their abolition in all ten provinces. Royal commissions in Ontario and Quebec, where two-thirds of our population resides, have recommended their continuation in one form or another. The provinces now receive about three-quarters of the money we collect through estate taxes. One should consider the provincial revenue requirements at this time before engaging in any wishful thinking about the total abolition of death taxes in Canada.


There has been a good deal of discussion recently in the prairie provinces about inheritance taxes. One province has abolished them, another is committed to doing so and a third is apparently considering such a change. Following their weekend meeting, the premiers of the three provinces sent a telegram asking us to postpone legislative consideration of this bill pending consultations with the provinces.
I would like to place on the record my reaction to these various developments. In provinces where the tax is refunded any changes in the federal law will not affect provincial revenues. A federal-provincial conference has been held since the reform was announced last October and there has been a good deal of criticism of our putting off introduction of the bill from October till the present time. At that federal-provincial conference I indicated that interested provinces would have every opportunity they desired to raise the subject with me. There was also consultation concerning the estate tax following publication of the Carter royal commission report on taxation.
I believe that this government has always made it clear to the provinces that any changes must first be proposed to parliament. In taxation matters in Canada we cannot go to the provinces and say that we are going to make these changes before we tell the parliament of Canada. Our responsibility is first of all to the members of this house. To do otherwise in our system of responsible government would, I believe, be improper.
Once the government decided to retain the estate tax it had to decide whether the tax was being levied in the fairest possible way. It considered, but rejected, the recommendations of the Carter royal commission on taxation which would have doubled the revenue from taxation of inheritances.


John Edward Broadbent: Why?


Edgar John Benson: Why? Because we decided that a buck is not a buck is not a buck. Instead it decided to keep the revenue yield about the same while instituting reforms to help widows, widowers and young children in this country.
[DOT] (3:20 p.m.)
On this point I was interested to read a report yesterday, I believe, which said that the United States treasury department has proposed that in the United States action be taken similar to ours to allow tax free transfers between spouses in that country. The
February 5, 1969	COMMONS
reform to exempt from taxation transfers between spouses is most significant for widows. It recognizes the contribution wives make to the accummulation of a family's wealth, but it also does much more. It helps to take care of a social need. On average, wives outlive husbands by at least seven years. If the husbands are Members of Parliament the wives probably outlive them by 10 years or even 20 years. In half the cases where estate taxes are collected there is a surviving widow. Most of us know of families where the father has died and the children have had to leave school early because there is a lack of money in the family. The reform removes any influence the estate tax may have had in these unfortunate situations. Annuities left to widows will now bear no federal estate tax. We expect this change to take on increasing importance in future years because of the tremendous growth in pension plans as well as the increasing benefits that will accrue under that excellent piece of legislation, the Canada Pension Plan.
Besides the basic $20,000 exemption for all estates valued at more than $50,000, a new exemption of $10,000 is provided for all adult children, that is, for children 26 years of age and over. For all healthy children receiving bequests of $10,000 or more there is an extra $1,000 exemption for each year the child is less than 26 years of age. This means that a healthy child under one year of age might receive an exemption of $35,000. For an incapacitated child, that is, a child which is unable to support itself, the total exemption may be as much as $80,000.
May I give some examples of how the new exemptions will work. First of all, certain estates left to widows are exempt. If a husband died-he would be a father-and had four children whose ages were 18, 16, 14 and 7 years, he could leave $105,000 on which no estate tax would be levied. He could leave that on top of any amount he might leave to his widow.
I think there is no quarrel about helping widows and small children. A good deal of the criticism about the reform, indeed, about retaining estate taxes at all, centres upon its effects on family businesses and family farms. Some groups have suggested total or partial exemptions for these kinds of enterprises. We believe this is not reasonable and I wish to explain our thinking at some length at this time.
During his lifetime the farmer or the small businessman benefits from government programs and from the general well-being of the 29180-328
DEBATES	5181
Income Tax Act and Estate Tax Act country as much or more so than the salary or wage earner benefits. Once exceptions are made for one group in society other groups feel aggrieved and demand the same privilege. Special privileges can also cause distortions in the effects of a tax system. Exempting farms, for instance, would encourage land buying by wealthy non-farmers seeking to avoid the payment of estate taxes. A development of this kind would only add to our difficulties with land speculation in the country and especially around our major urban areas.
An estate tax may place a special burden on estates in which the major assets are not liquid. I admit that. But how great is the burden? Let us consider a case where the impact is most severe, where a father leaves an estate directly to one son without any use of the $2,000 annual gifting provision prior to death. In that case the father would not have availed himself of provisions allowing him to sell the farm or the business to his son, something many fathers do when they contemplate passing their property on to a son. In the worst case, and we are considering a $200,000 estate-that is a net estate; after provision for all liabilities have been made the estate would be worth $200,000 in cash-the tax would be $43,200, or slightly less than 22 per cent of the value of the business. This falls well within the bounds of liabilities assumed by many Canadians as a matter of course. I do not think anyone would acquire a $200,000 business without assuming a liability against it of at least $43,000. By way of contrast, when a business is purchased, or if a farm is sold, it is normal for the incoming or new entrepreneur to assume a liability against that business or farm totalling 75 per cent of its worth, as against the 22 per cent tax liability that must be assumed by those inheriting businesses or farms under the worst conditions where the inheritance is worth $200,000 net.


John (Jack) Henry Horner: The government's credibility gap is growing all the time.


Edgar John Benson: I said that the $200,000 was net. But even the 22 per cent tax arose from an extreme example because in that case it was assumed there were no liquid assets in the estate at all. That example assumed that there was only one child. Usually there would be some cash-for example, the proceeds of an insurance policy. Two or three would be a more usual number of children. For farmers, perhaps three adult children is a more typical
February 5, 1969
5182	COMMONS
Income Tax Act and Estate Tax Act example. For farmers with three children the proposed tax is lighter than before until the estate exceeds $160,000. With four children, it is lighter until the estate exceeds $210,000. And with five children, it is lighter until the estate exceeds about $250,000.
About eight out of ten estates on which taxes are paid, are valued at $160,000 or less in Canada. About nine out of ten estates are valued at $200,000 or under. When you consider that taxes are collected on fewer than 7,000 estates each year, and that for families of three or four children the new taxes are less under these amounts, it becomes clear to me, at least, that this is a good reform in the estate tax field. Surely this puts the lie to claims that the changes will adversely affect hundreds of thousands of Canadians or that we have doomed the family farm or family business. That is just not the case.
Since the October budget there has been sincere concern that some might find it a hardship to pay estate taxes in one lump sum. Provision has always existed under the estate tax law for the Minister of National Revenue to permit payment of the tax by instalments in cases of hardship.
We knew there were only about 40 applications in the past ten years for permission to defer payment.


John (Jack) Henry Horner: At what rate of interest?


Edgar John Benson: It was at 5 per cent.


John (Jack) Henry Horner: Is it to continue at 5 per cent?


Edgar John Benson: No, it will not continue at 5 per cent. The large number of representations led us to believe that perhaps there were persons who failed to apply because they thought they would be turned down or because they were unaware of the provision. So we now propose to permit anyone who chooses to pay, with interest, in six annual instalments starting six months after the date of death. The interest rates will be those current in the market. I might explain to my hon. friend that we do not want to make the deferment of estate tax payments an attractive investment for people. The intention is to take care of cases of hardship and not to encourage people not to pay their estate taxes and invest their money elsewhere because their money can bring higher rates of interest.
The complete exemption of estates valued at $50,000 or less has been restored partly because of the confusion in the minds of hold-

ers of small estates created by misleading advertising. The new exemptions for close dependents meant that these estates would have paid little or no tax anyway. But there were some widespread claims that all estates worth more than $20,000, the basic exemption level, would be taxed. This change does not harm the basic principle of the reform and, I believe, has set many minds at rest.
To ensure that nobody suffers from the transition to the new from the old system, the Department of National Revenue is levying taxes according to the exemptions, old or new, which favour the estate during the interim period.
[DOT] (3:30 p.m.)
I know of no tax, Mr. Speaker, which has achieved universal popularity.


An hon. Member:: I wish I would have said that.


Edgar John Benson: All taxes have advantages and disadvantages for politicians who propose them. As I said earlier, the estate tax is one of our two progressive taxes. I believe in progressive taxation because it puts the burden to pay on the people who can afford to pay.


Marcel Joseph Aimé Lambert: It
is not my purpose this afternoon, Mr. Speaker to engage in a polemic with the Minister of Finance (Mr. Benson) on the subject of the desirability or otherwise of progressive taxes in a country that requires capital but has not accumulated capital. I suppose this could be deferred to some other occasion, but I understand from the minister's remarks that there is in these tax proposals more than just a grain of belief in the philosophy of spend now and be merry, for tomorrow when you and your wife die the government will take it from you. In other words, one could say: Don't save, don't invest, don't be successful, because the government will take it from you when you die.


An hon. Member:: How can they take it from you when you die?


Marcel Joseph Aimé Lambert: I am not
going to engage in the whys and wherefores, but I think Canadians must take cognizance of the attitude of this government. The government encourages small businessmen to devote their abilities for 16 or 18 hours a day in order to be successful. The penalty of success, according to the government's philosophy, is ulcers and high blood pressure.
February 5, 1969

I cannot subscribe to this philosophy. I am certain a great number of members on the government side who are successful in then-personal businesses have acquired ulcers and high blood pressure. However, they have not done this in order to have the rewards taken away from them. When these people die their children, who may have worked with them, will be heavily in debt.


Mr. Otto:: When you are dead you are dead.


Marcel Joseph Aimé Lambert: The hon. member for York East (Mr. Otto) says, "When you are dead you are dead".


Steven Otto: And they cannot take it from you.


Marcel Joseph Aimé Lambert: No, but it
is strange that people are still interested in developing. When a person dies and it is necessary to sell assets in order to pay taxes, the absentee home owner steps in. Let us look at the province of Saskatchewan. In southern Saskatchewan much land is owned by individuals or corporations from the United States and is no longer part of the tax base available to the Canadian government. The tax base becomes narrower as more Canadian assets become foreign owned. That is a consideration which escapes many hon. members and the government.
Let us talk about the background of these changes. First we had the Carter commission report. The former Minister of Finance indicated he would table a white paper for study by the house and there would be some consensus as to changes of the tax structure. In so far as succession duties and assets are concerned the Carter report recommended they should be lumped on the basis of a buck is a buck is a buck. If a son took over a farm and received title to it on his father's death, it would be taxed as income at the marginal rate. The government has repudiated the position of the Carter report but has almost adopted one part of it. The minister said there will be a bill later this year to block out or to indicate the substantial changes to be made in the tax structure. The minister did not wait for that bill, and already the government has moved into an area where suggestions have been made that the minister has out-Cartered Carter.
I refer to some phrases used by the minister on October 22 last. The minister indicated that transfers of property by title as between individuals are not, at least for the moment,
29180-328J
DEBATES	5183
Income Tax Act and Estate Tax Act being included as income. I would very definitely underline the words "at least for the moment". Is this an interim step to fool Carter? The changes proposed by the minister would eliminate a doubly felt grievance and it is difficult to project their effect.
The minister has indicated he does not expect there will be any change with regard to the revenue which will accrue to the federal government. I wonder whether the minister will be as accurate in this forecast as he has been in others, not only as to budgetary deficits or balancing the budget but as to the size of the budgetary expenditures or the estimates figures he gave us on October 22. Now that we have the bluebook the lid is completely off. I pay very little attention to what the minister has said regarding financial effects or revenue changes. I suspect that because of inflation the calculations will be out of line and certainly far more assets will be hit by these taxes and the rates will be much higher than anticipated.
With all his fancy words this afternoon, I am certain the minister did not take into consideration the inflation factor. I listened to the minister talk about farms and farm operations. I would like him to visit my province and estimate the value of farms. He will see that all farms are not close to cities and being held for speculation. These farms are valuable on the market today. My colleagues from agricultural areas can speak and give firsthand knowledge as to the effect the proposed changes will have on farm properties.
[DOT] (3:40 p.m.)
Take the case of a man who has been a good farmer, has not been a spendthrift and has built up a productive farm. When the man passes his farm on to his son we load it with debt, and this is to be done for generation after generation. We forget that many capital expenditures have to be made by farmers in order to keep up with technological changes in the farming industry. Therefore this bill runs counter to the programs of the provinces, and even to programs of other departments of the federal government designed to develop viable farms and businesses free of debt.
With all deference, Mr. Speaker, to the man who operates a small corner store, a peanut wagon, a small business or small shop or what have you, I wish to say that is not what makes the wheels of the country go round. Once again a crushing burden is to be placed on a segment of Canadian society. We
5184	COMMONS
Income Tax Act and Estate Tax Act are not concerned about the millionaires. They are few in number and are able to get excellent tax advice. They are able to go offshore, and this legislation will drive many more people offshore. There will be quite an exodus, and not only of those people whose assets are in seven figures. Other people will also say: If this is going to be done in Canada, we too will get out.
As a matter of fact, I have seen reports to the effect that estate tax rates in Canada will now be much higher on estates of $300,000 or more than rates on the same size of estate in the United States. It is true that such estates are not uncommon in Canada today, although certainly they are not a majority. As a result of the new estate tax rates people will be tempted to say to themselves: Once I have got it made I will get out.
Estates in Canada of $250,000 or even of $100,000 are not usually inherited wealth, certainly not in the provinces where a great deal of development has taken place. In the last 20 years many men in the province of Alberta who started out with a mortgaged property on which there was a large lien are today worth $250,000 or $500,000 simply because they had the guts, energy and initiative to work hard and become successful. Now we are going to penalize these people. This legislation is the greatest killer of initiative to be found. I speak as one who comes from that area of the country and I am sure the same holds true in many parts of Canada.
Yet the minister cites to us examples in Great Britain and the United States, both countries which have accumulative wealth. People in Great Britain exported their capital to the United States when the United States was in process of development. The United States is now exporting capital to Canada. We need capital. Yet when we ask Canadians to save, to invest in Canadian enterprise, when we tell them, "Don't spend, put your money to work," at the same time we tell them, "We will tax you because the more you save the more you have, and so the more we will take away from you."
I find this an extraordinary philosophy. On previous occasions when major changes in estate taxes have been proposed it has been customary to provide for some breathing space between the public announcement of the new policy and the actual implementation. Eor example, the present Estate Tax Act was first introduced, if I recall correctly, in late 1957 or early 1958. The bill was given first reading but was not proceeded with in order

DEBATES	February 5, 1969
to give the public an opportunity to make representations concerning hardships and anomalies contained in the draft legislation. May I say that the estate tax principle was far ahead of the succession duty principle. Yet by these proposals we are abandoning the estate tax principle and going back to the succession duty principle in part. To me this is a regressive step.
The present act was reintroduced in parliament in the fall of 1958 and was passed on September 6, 1958. However, and this is a significant point, it was not proclaimed in force until January 1, 1959 in order to give both the professional advisers and the persons affected an opportunity to examine their situation and to make the necessary changes. It was applicable only to estates of persons who died on or after January 1, 1959. Thus, not only was the public made aware of the proposed changes and given an opportunity to seek improvements in the legislation but when the legislation was actually passed a further period was granted to enable persons to rearrange their wills and financial affairs to fit the new legislation.
There is no doubt that the present proposals contain radical changes in the Estate Tax Act, and the effective date of the proposals has been stated to be October 22 last. The minister made an announcement on January 31 and people were prejudiced as a result of the government not announcing for over three months an optional date for the coming into effect of the present proposals. I do not think it is fair to approach the matter in this way.
I remember the two-month period after the budget disclosures and prior to the minister's press release on December 27 when all sorts of things were bothering tax advisers. First of all, they could not tell anybody if they could include a common disaster provision in a will. This applies whether the will covers a $5,000, $20,000 or $100,000 estate. I suppose I should not use the figure $5,000 and instead say $25,000 because at that time the exemption was only $20,000. But it was unclear at that time whether these wills could include a common disaster clause. The minister cleared up this matter, but that was two months after the disclosure of the proposals.
Then there were questions concerning exoneration clauses and remarriage clauses which appear in, shall we say, 80 per cent of wills other than simple wills. Yet there was this delay. It is no wonder so many letters were received protesting the uncertainty that
February 5, 1969	COMMONS
this created. I do not know whether it was a design of this participatory government that this be done merely to excite the populace, create uncertainty and get them to debate estate taxation, but certainly the effect was very profound.
At the time the Carter report was published some comments were made by a well known tax commentator, I. H. Asper of Winnipeg. Instead of the derogatory remarks made by the minister with regard to Mr. Asper I find that what he says makes a great deal of sense. On December 12 he wrote as follows:
[DOT] (3:50 p.m.)
I commented at that time: "One is inexorably led to the frightening impression that the commission views all capital and income as being the property of the state and if one is allowed to keep a portion, it is purely a gesture of munificence from on high.
While this tone might be expected in a post-revglutionary emerging state, it is both unbecoming and saddening to see it urged upon a young country competing for world markets, seeking talented people, and constantly requiring risk capital, all to the purpose of sponsoring a dynamic and productive wealth-base."
The comment still stands and applies equally to Mr. Benson's proposed legislation.
The government claimed in its budget speech that it was not accepting the Carter concept. But it now appears to have out-Cartered Carter.
As of Oct. 22, gifts will be taxed, not at rates stopping at 28 per cent, but escalating to 75 per cent. Clearly the making of large gifts will stop.
And the $40,000 estate tax exemption is cut to $20,000, while the tax rates are steeply escalated so that the privilege of paying 50 per cent of one's life savings is achieved once one's estate reaches $300,000.
What is the purpose of these tax changes? Is it to accomplish an increase in government revenues? In the light of the budgetary problems facing the government one would have thought the budgetary proposals would be designed to provide more revenue for the government, but instead we have legislation through these estate tax proposals which is asocial. Yet this legislation, because it is introduced through a budget proposal, does not go to a standing committee and is not subject to comment by the public through representations. Other legislation, such as a broadcasting bill, a bill on drug prices or something else, would of course go to a standing committee and the people would have a chance to comment on it. But no, not in this case. Simply by raising the gift tax to a high of 75 per cent and imposing estate tax rates based on what a man has at his death plus
DEBATES	5185
Income Tax Act and Estate Tax Act what he has given away during his lifetime, the federal government has made it impossible for people to deal with their property freely at any time.
Since we have operated until now on a system in which private property rights are important, it is only right that any negation of those rights should not be achieved through tax law. I think these comments by Mr. Asper are legitimate. I do not intend to go into the details of the schedules and so on because we can take any kind of situation. We can find examples under certain circumstances where at a particular time it would appear that the tax payable today on the assumption of death in the future, assuming the values to be today's values and not the values at the time of death, is less under these proposals than under the present estate tax. But equally-and I have any number of examples-it would appear that the tax incidence will be much higher and much more punitive.
If hon. members will bear with me I might go through a typical example in business. The minister discussed the situation of a farmer with one child. He indicated how much tax would be levied on an estate with a net value of $200,000 in the case of a farm and indicated that there would be some $40,000 payable in estate tax and that this was a fair proposition for one son to take on. Of course that does not take into consideration how much the son may have worked on the farm. He may have worked for practically nothing for many years contributing to the farm and this is his reward.
Let us look at another example. Certainly in my part of the world and I am sure in the part of the world of many hon. members it is a typical example. Say that a father when he starts out saves his money. He has a job, saves his money and at age 35 is able to buy or found a company with a capital of $200,000. Assume that he had $50,000 himself and financed the remainder. This typical business could earn $40,000 per year before tax.
This man has two sons who have worked with him over the years. He himself draws a salary of $10,000 a year, pays tax on that salary and puts the remaining $30,000 in the company which is taxed in the amount of $17,000 per year. This leaves an income after tax for the company of $23,000. From this amount the father extracts a dividend of $13,000 on which even after dividend tax credits he is taxed. He leaves $10,000 in the business for expansion and uses his dividend
February 5, 1969
5186	COMMONS
Income Tax Act and Estate Tax Act to pay the principal and interest on the $150,000 he borrowed to buy or finance the company. The interest alone, which is not deductible because it is his personal expense and not that of the company, is $13,350 a year at current lending rates.
The father and sons apply themselves, take low wages, work long hours, and increase the company's profit to $100,000 a year. This is not outstanding. Now the company is in the 53 per cent income tax bracket. Nevertheless, by hard work and by refinancing, one way or another, the business is paid for by the time the man is 60. In other words, it has taken him 25 years to pay for the business. For the next 10 years he extracts, say, $100,000 and then dies at age 70. He leaves $100,000 to his wife with which to buy an annuity, and the two sons inherit the business. It is now earning $150,000 a year before taxes. At present rates this would mean about $80,000 after taxes. Based on the estate tax valuation method used at the present time the business is valued at $800,000. Under the new estate tax the tax would be $340,000 on $800,000, 42 per cent of what is inherited. These sons are 45 and 50 years of age. They have accumulated no capital themselves because they took no salaries, retaining only their living expenses, because the extra funds were left in the company to help it grow. This is typical. The father had been running the show up to this time.
[DOT] (4:00 p.m.)


Charles Mills (Bud) Drury: He had been giving them
shares.


Marcel Joseph Aimé Lambert: Yes, but under the present tax all the gifts he gave during his lifetime are brought into his estate, so whether the shares were given before or after death matters little because they are all brought into the same basket and the sons are no farther ahead.
In any event, the only way the sons can keep the business is by borrowing $400,000. They could then pay about $60,000 in income tax and the remaining $340,000 would cover estate taxes. It would not be the company borrowing the money to pay the tax but the sons borrowing the money so that as the new owners with personal responsibility they could pay the tax. Therefore the company which at the time of death was worth $800,000 clear would now find itself owing $400,000. All the sons would see ahead of them would be the prospect of spending the rest of their working lives taking low wages and


paying 63 per cent in income tax and the rest of the earnings to pay back the $400,000 and at least another $400,000 in interest charges on the loan. Why should these boys not sell to foreign interests?
Let no one suggest that this is not being done. I know from personal experience how and why this is being done. It is being done because of the way Canadian tax law is being applied. Growing businesses are being sold to foreign interests. The heirs are quite prepared to take the capital gain they have earned. They take the $800,000, the proceeds of the sale, pay the $340,000 in estate tax and invest $460,000 in C.M.H.C. mortgages which pay 9.3 per cent interest. They then live comfortably on the income and never work another day in their lives. This is a typical example and I repeat, this is what is happening. Men in their forties who have worked day and night almost like demons for seven days a week to put together a viable business, because of the incidence of tax take the first good offer of a sale to foreign interests and then retire. What a shameful loss this is to this country. These people ask themselves the question, why should they be faced with this situation? They obviously decide to get out.
My criticism of the estate tax proposal is not that its greatest impact is on the very wealthy, and I made that clear at the beginning. What is the nature of estates in Canada? I am informed that in 1966, of about $900 million in taxable value of estates only 72 had assets of more than $1 million and that this total reflected 15 per cent. I suggest it is the small and middle-size estates that will be hit. In 1966, of 5,700 taxable estates, 4,694 or 82 per cent had taxable assets ranging from $50,000 to $300,000 and of these about 70 per cent were less than $100,000. Previously these estates were untaxed. They will now be subject to tax, although the number has been diminished tremendously by the changes proposed by the minister on January 30. These middle-range estates will feel the new rates the hardest.
We should not be concerned about any particular group of taxpayers caught by the provisions of this act. Our legitimate concern should be for all taxpayers. By far, however, the impact is much greater in respect of the broad strata of Canadians whose estates will exceed a net of $50,000 and reach up over $300,000. These are estates of independent businessmen, farmers and professionals, the broad middle class of this country. They are the ones to be hit by the estate tax and they also pay the heaviest income tax.
February 5, 1969

We must remember that estates are accumulated with tax paid dollars. These are the people for whom the minister has always expressed solicitous concern. We now see that this concern is a sham. I could quote from representations made by the construction association. In this field we find small contractors and large construction companies. Many of them are family concerns which will be adversely affected by these tax proposals.
I do not intend to go into detail about the changes proposed by the minister on January 30, but I should like to point out that on page 2 of the communique the minister refers to the $50,000 starting point and indicates in the third paragraph that this will mean, for example, that a small estate left by a brother to a sister or a grandfather to his grandchildren will not be subject to estate tax. In other words, if the estate is less than $50,000 the range of gifts is limitless. However, if the estate happens to be over $50,000 then one must look out because gifts other than those to a spouse will be subject to heavy tax.
Let me now refer to the question of instalment payments. We have been hoping to see this for quite some time. This is not the result of new representations. My colleague, the hon. member for Wellington (Mr. Hales), has had resolutions on the order paper for years in respect of instalment payments on estate taxes to avoid fire sales. The fact that there have been options open to the minister in cases of hardship does not alter the situation. The difficulties involved have been so great it was almost impossible for any estate to qualify, and there were very few which did qualify for deferment. I wonder how many companies were sold literally on a fire-sale basis and bought cheaply by foreign interests or larger Canadian entities? These fire-sales have taken place because the heirs to the estates had to pay estate taxes but had no liquid assets. If the minister would like to know what the effect is on estates which cannot be liquidated easily he should consider large farms such as those which exist in western Canada, or perhaps large companies existing in eastern Canada which are privately owned or closely held.
[DOT] (4:10 p.m.)
I want to terminate my remarks by saying that these proposals leave unanswered some very important questions. First of all, we have heard nothing from the minister, either by way of press release or in his speech in the house-and I trust the parliamentary secretary to the minister will note this
DEBATES	5187
Income Tax Act and Estate Tax Act point-as to how provincial tax credits will be handled. Has this been worked out? Second, what about foreign tax credits? Have these been worked out? Third, in view of the fact that a different philosophy has now been brought into play with regard to the estate tax, different in many ways from that prevailing with regard to the succession duty acts in the provinces of Ontario and Quebec, how can individuals living in these provinces be properly advised in arranging their affairs when the fact is that if they take a certain course of action under the federal proposals they lay themselves open to much heavier incidence of tax under provincial legislation, and vice-versa? There is no co-ordination.
As I have said before on many occasions, the tax structure changes that have to be made must be made not only on the basis of the Carter commission report and an ouija board here in Ottawa but must also take into account the proposals of the Smith and Parent reports on provincial taxation. These provincial reports affect two-thirds of the people in Canada. Surely to goodness we are going to compound the difficulties of Canada's taxation jungle if the federal government goes off on its own orbit and the provinces follow the bent suggested in their own taxation reports without the three of them consulting with one another to try to get some sense and purpose out of the taxation systems.
Lastly, what is the position in connection with estates in the province of Alberta? The minister indicated that action had been taken there. We know that, but it has come to my ears-and this is what I want to find out definitely-that it has been or it is the policy of the government to tax the refunds in the province of Alberta as a result of the elimination of succession duties on April 1, 1967, in that province. Are these refunds being taxed as revenues in the hands of the beneficiaries of the estates and, if so, on what grounds? I have not been able to substantiate these reports but I would like to know definitely whether this is being done.
There are a number of other points that could be gone into in detail, but we will deal with those matters at the time of the clause by clause study. A good number of my colleagues will have something to say about this bill, and many of them have made representations to the minister himself. As a matter of fact, at least one of my colleagues even made an appointment with the minister and told him to his face what was wrong with the act. Yet this was forgotten. My colleagues will
February 5, 1969
5188	COMMONS
Income Tax Act and Estate Tax Act now tell him what they think from their seats in the house, and I hope that as a result some changes will be brought about so that more sense will be brought into the tax situation than exists at present.


Max Saltsman: Mr. Speaker, like most members of this house I have received an inordinately large number of letters on the subject of estate taxes. Not since Nosey Charlie appeared on the balcony have I received as much correspondence, some of which was perhaps no more relevant than the statement made by the aforementioned gentleman.
I come to this debate with a considerable amount of anger over what 5 per cent of our population is doing to the 95 per cent who do not have estates to worry about. I marvel at the fact that these people can make use of advertisements to frighten almost the entire population into believing that everything they have worked for or owned is going to be confiscated. This is a typical example of what has gone on in our society since the beginning of its history. The very rich who do not wish to pay taxes try to convince those who will not be paying them that their interests are alike, in other, words, that the rich man is really and sincerely concerned about the poor man. The unfortunate thing about the situation is that so often these people are successful in their campaigns.
We have only to look through the newspapers to see what is being done. One would have thought from the advertisements and articles that have been appearing that every house and every car were going to be taken away. There has been no balance and no perspective in this whole debate. I took the occasion to make a personal call in reply to most of the letters that came to me because I knew some of the people who had written them. I could not understand their concern because I knew they did not have an estate that large, so what were they worried about? Some of them believed what they had read. Some of them had listened to one radio commentator who told them that 75 per cent of everything they had would be taken away. They also believed the stories that appeared in some of the farm journals and magazines that they would be deprived of the fruits of their work. When it was explained to them that the bill contains practically no change from the present law they were surprised.


I resent the people who spread this propaganda. They are full of cynicism in not standing up and making an argument giving the reasons why they should not be taxed. There is cynicism in trying to persuade and to make propaganda to convince those whose interests are not the same as theirs that they are in the same boat. I am angry at the Tweedledee and Tweedledum debate that has preceded this bill. One would think that the government has brought in some magnificent reform. What has it really done? Let us give it credit for some things that it has done. It has made it possible and universal that wives will not have to pay tax. This is a good thing, but is it really so new? After all, most estate planners made that provision for wives in the past. The government has made the tax somewhat more progressive at some levels but it has not altered the whole package. It has not increased the proportion of our revenues from this particular source but merely shuffled it around.
We are not asking who is more progressive in this debate as between the government and its nemesis in the opposition but who is most reactionary, because it is very hard to say on which side in this debate a reformer should stand. When I listen to spokesmen for the government I become incensed at what they are trying to palm off on the Canadian people as a worth-while reform. It is no such thing. It has made no major concession to the principle of equity. Then I have to listen to what is said by members of the Official Opposition, to the irrational arguments they have dragged out of the nineteenth century.
[DOT] (4:20 p.m.)


David Lewis: The eighteenth.


Max Saltsman: When I hear these views I begin to feel sympathetic toward the government, not because I think the government is right but because I think it is being unjustly condemned for something which it really has not done.
Our position is simple to understand. We want to see some genuine reforms in the tax system. We want to see the government move along the lines suggested by the Carter commission. I would point out that the Carter commission did not go all that far. Many people have justly called its report a capitalistic document. It does not really reform the capitalist system but at least it recognizes the inequity of our present taxation laws, particularly in connection with estates.
February 5, 1969

The Minister of Finance (Mr. Benson) pointed out that had he acted on the basis of the Carter recommendations the revenue obtained from estate taxation would have been doubled. That is the position he should have taken instead of the kind of proposal we are considering now. I hear people crying because a poor, unfortunate child who inherits a million dollars will only be left with half a million. I know thousands of people who are not sure how they will be able to meet their rent obligation. They are taxed on every single thing they buy. I find it difficult to work up sympathy for the poor, unfortunate child who only has half a million dollars left after tax. At least a quarter of the population of this country is living in poverty. These people do not even know whether they can secure accommodation for themselves or their children and their prospects are not very bright. If tears are to be shed in this chamber, let us shed them for those who deserve them.
When the Minister of Finance introduced his budget I had the opportunity to present my views on his proposals. I said then I thought it was a very reactionary and regressive budget. It ignored the needs of the Canadian people. In that budget two items might have been singled out for neutrality at least, if not for praise. One of them was the arrangement to tax insurance companies in a more equitable fashion, something which had been overlooked for a long time. As it turns out, this has imposed no great additional liability on the insurance companies. The other item was the measure we are now considering making some adjustments in estate taxation. When I looked at this latter proposal I thought: it is the minister's concession to his conscience; he had to introduce this little reform just so he could live with himself after introducing that regressive budget. I did not think he deserved a great deal of credit for it, but at least I recognized this was what might have motivated him. As I say, I was not very sympathetic toward the minister because I did not believe he was entitled to sympathy after the kind of budget he had imposed on the Canadian people.
My sympathy began to move in his direction when I saw how unreasonable, how biased, the arguments were against this minor reform. It became impossible to stand aside without attempting in some way to defend this small measure. Let me give the 29180-329
DEBATES	5189
Income Tax Act and Estate Tax Act house one example of the kind of advertisement which has been nationally circulated in this country. This one says:
The new tax is represented as a concession to widows. They will no longer pay any tax when they inherit a husband's property.
That is very true. But it is significant that the advertisement makes no comment about this. It does not say how important this is. I believe that most men, when they have married and raised a family, are far more concerned about what the future holds for their wives than they are about the future of their children. After all, a wife is generally not that young when the husband goes.


An hon. Member:: That is not very gallant.


Max Saltsman: She may be very beautiful, of course, but one cannot deny the facts. The children, on the other hand, have their lives ahead of them. If their parents have given them the opportunity to profit from a good education, if they have given them affection, understanding and a decent environment, they have surely done a great deal. The most important thing, therefore, is that the widow be left with some means of supporting herself after her husband goes to other fields-and, as has been pointed out, if he is a Member of Parliament he may depart sooner rather than later.


David Lewis: And to a warm place.


Max Saltsman: Hopefully, not. It depends on what side of the house he sits on, of course.
The advertisement goes on to say that widows will not long outlive their husbands and that when they die estate tax is levied at sky-high rates to be paid by the heirs. I suggest that seven years is a reasonably long time. During this period the widow has complete use of the assets of the estate, and in this sense the legislation moves in the right direction.
I stated earlier that it is already possible with careful planning and the advice of people experienced in these matters to ensure that an estate is passed on in trust to the widow, enabling the wife to enjoy the advantages mentioned. What this legislation does is to make it possible even to those who may be uninformed as to what may be gained by employing tax lawyers.
The advertisement goes on to say:
Many people think the new tax was designed to hit only rich men. This is not true. Most of its victims will be men or women in moderate circumstances.
February 5, 1969
5190	COMMONS
Income Tax Act and Estate Tax Act
In other words, the upper 5 per cent of our population is living in moderate circumstances. What, then, is to be said about the condition of the other 95 per cent? We are not really thinking here about people in moderate circumstances. People in moderate circumstances pay moderate taxes. We are really talking about those in other circumstances who are objecting to paying what should be considered a fair tax.
[DOT] (4:30 p.m.)
All of us, to some extent, take positions which arise from our experience and background. I have to admit that this is true in my case and that to some extent this debate has, for me, a personal aspect. It is also the case that my party has very strong feelings on this matter. We are a party that believes in equal treatment and fairness in the tax system, that each member of our society should be willing to carry his share of the challenges and responsibilities of that society.
Earlier I said that poverty in Canada has been carefully and incontrovertibly documented. We are not going to cure poverty by talking about it but by raising sufficient revenue to cope with it. What is necessary is a just and fair distribution of the resources of our society. We must have some sense of priority, of what is important and what is not important. I suggest to hon. members that the urgent need of society today is to find revenue to meet the needs of those people who are living at a level at which no human being should be asked to exist. These poor people are not to be blamed any more than the rich man is to be congratulated. I recall a famous cartoon that appeared during a United States presidential election campaign which depicted one of the candidates looking accusingly at a beggar and saying: "Well, it's your own damn fault for not having been born to a father who owns a department store." We may laugh at that sort of thing but we do tend to make this kind of value judgment.
It is not enough that the poor of our society inherit the disadvantages of their condition, that in so many cases these people are born with ill health or born into an unnecessarily harsh and unfeeling environment. On top of all this they suffer the disadvantage of having their needs ignored.
On the other hand, if the sons of rich men were never left any money they would be infinitely better off than the poor people I am talking about. First of all, they would be better cared for because their parents were in a


position to care for them and had the money to do so. How much more advantage do we give to those who have already been born into advantage?
I have heard on many occasions about the terrible things that will happen to the poor if they are given welfare or are helped. They will, I think the phrase is, lose their backbone. It seems to be a terrible thing to give somebody welfare or something which he has not earned by working. What about welfare for the rich? It does not seem to affect their backbone at all. No one seems to worry that an inheritance of $500,000 will affect the beneficiary's backbone. These people must have a different kind of anatomy from the poor, and the chances are they will probably do less well with it.
Another assumption that is made, one which I heard argued in this house a short while ago, is that it almost seems as though the wealth that an individual accumulates is entirely due to his own efforts. No thought or consideration is given to the inputs of our social system. Where would the rich be unless they could move their goods to market, unless there were forces to protect them against fire and disasters of various kinds, unless people were trained and educated to operate their enterprises? People of initiative, people who work hard and build up businesses, are entitled to credit. But so is society, and let us not forget that. No man can build anything on his own. He does it with the assistance of his wife, the people who work for him and all those around him in this nation. Therefore we have to assume that he has some sense of obligation, of responsibility to those who have helped him and made his success possible. Is this so much to ask? Is this such a terrible thing?
Historically speaking, if we removed the words "estate tax" from this debate and substituted "corporation tax" or "income tax", we would find that the arguments were just the same. I was reading a debate which took place in 1917, I believe, when income tax was first introduced in this country. At that time the tax was very small but it was going to change our whole social system. Business was going to collapse, it was said. The world was coming to an end. The pools of private capital needed to develop this country were going to disappear.
Although it may be anarchy, is it so terrible to yell "communism" any more? After all, the Minister of Finance has been accused of being a communist in almost every journal in
February 5, 1969

this country, so I guess that makes it legitimate now. We have heard this argument before and it has been a bad argument. One would think that General Motors was run like a corner grocery store. Today most of the financing and capital accumulation in our society does not depend upon private pools of wealth. We are only kidding ourselves if we argue that we can advance this country by means of small private pools of wealth and therefore, so it is argued, can reduce taxation and people can keep everything they earn. It is just not that kind of world.
We in this party feel very strongly for people like small businessmen and farmers, who in some ways are in a special position in our society. The small businessman and the farmer are more than just economic units. I have never been a farmer but I have been a small businessman and I know that many small businessmen might be better off working for somebody else if they were to calculate the number of hours they put in. I speak now as one who has put in long hours, and perhaps even made some mistakes, and I can tell the house that I could have worked for somebody else and made more. However, it was my decision to make. Nobody told me to open up a business. Nobody came to me on their knees pleading with me to go into business. I went into business because I chose to do so and because I wanted that kind of life. But I have asked as a small businessman for what I think farmers are also entitled to ask, namely, that if my business has to be sold but my family, my children in particular, wish to preserve it, then an opportunity should be provided for continuance of the enterprise. This is the case in this legislation, as it has been the case in previous legislation. This legislation spells it out a little more specifically, and to that extent we have been given an advantage.
[DOT] (4:40 p.m.)
We must also remember that in trying to assist a very small number of legitimate claimants who will be allowed to spread their tax payments over a number of years we have made available to the very rich a concession they do not need. That is one of the dangers arising from blanket proposals and blanket legislation. Such legislation does not consider the needs of some of the more worthy social organizations of our society.
I ask, Mr. Speaker-and I ask with sadness even though I began speaking in anger-what 29180-3291
DEBATES	5191
Income Tax Act and Estate Tax Act kind of dialogue has taken place on this legislation? Why is there an absence of a real focusing on the issues involved in the taxation of estates? How the powers to be in our society have poured out their sympathies for the very rich! How they have cried their tears in a misguided cause while ignoring completely elements in our society that are most worthy of all the sympathy we can muster! I do not know how many in this chamber inherited wealth. From my knowledge of most hon. members I do not think many inherited wealth. Most of them made it on their own and they are none the worse for it. We talk about inheritance. Should we not be concerned to hand down to our children not money which they may or may not be able to keep and which may or may not make them happy, but a more just, more fair and more equitable society. This we can accomplish by taking an intelligent view of estate legislation. And our view must be more intelligent than the one we have seen demonstrated in this house.
Before I sit down I wish to move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That Bill No. C-165 he not now read a second time, but that it be resolved that in the opinion of this house, the government should give consideration to a complete revision of the federal estate tax legislation with a view to making the rates of taxation under such legislation truly progressive and equitable.


Mr. Deputy Speaker:: I shall put this
amendment before the house with the caveat and postulate that it should be referred to Mr. Speaker.


Some hon. Members:: Question.


Mr. McCleave:: Before Your Honour recognizes the next speaker, may I ask the hon. member who has just sat down a question? How much thought has he, along with the other members of his party, given to the fact that some estates could be very liquid and thus able to raise estate tax money more readily than other estates? If he does not wish to answer the question now, perhaps one of his colleagues might answer it later in the debate. I think this is an important aspect to consider.


Max Saltsman: With your permission, Mr. Speaker, may I answer the question. We are very concerned about this matter. We do not wish to see estates liquidated any more than anybody else does. But I suggest to the hon. member who has had considerable business
5192	COMMONS
Income Tax Act and Estate Tax Act experience that an asset is still an asset and that banks and other financial institutions are prepared to lend money on the security of assets. We are not talking about getting rid of assets. We are merely asking whether assets ought to be handed down unimpaired or whether they should be encumbered with a mortgage or a liability. Speaking for myself- and I make an open offer to anyone prepared to be generous-if anyone were to leave me $1 million and I had to encumber that inheritance with a liability of $500,000 I would gladly accept the inheritance, encumber it to that extent, and hold myself most fortunate.


Mr. Bernard Dumont (Frontenac):: Mr. Speaker, as I listened to the hon. member for Waterloo (Mr. Saltsman), I was thinking over his statement that he had not received as many letters of protest since the general's visit and his statement from the balcony.
In our case, perhaps we did not receive as many letters, although there are at present 400,000 unemployed in Canada of whom 200,000 are in the province of Quebec. As a matter of fact, we are receiving thousands of letters, not on account of estate duties, but rather about problems resulting from unemployment and the tremendous difficulties it is creating.
On the matter of the amendment now proposed by the government, and knowing myself its insatiable desire to increase taxes,
I would be afraid that a proposal to review the present taxation system and the Estate Tax Act would be an invitation to levy more taxes. For this reason, I am somewhat reluctant to approve part of the amendment proposed by the Minister of Finance (Mr. Benson).
The proposed legislation has been a little improved in order to assist families. In other words, it is more or less what it was prior to October, 1968. That is why I hesitate a little to support that amendment. At any rate, I think the previous speaker has tried mainly to see in it a review of the estate duties that would result in the abolition of all taxation.
Consequently, as the members of the Ral-liement Creditiste are opposed to any kind of taxation in Canada, we will surely approve this amendment, or the proposed review, by having the amendment referred to the appropriate committee.
While the hon. member for Edmonton West (Mr. Lambert) was speaking, I wondered why, when his party was in power-since he seemed to criticize the act as a whole-he did

DEBATES	February 5, 1969
not ask that the Estate Tax Act simply be abolished. Since the hon. member seems to feel that we need such a severe tax system, he could at least have asked that the Estate Tax Act be handed over to the provinces; today, he would not have to criticize it.
Mr. Speaker, I should like, first of all, to point out to the Minister of Finance that we, of the Ralliement Creditiste, are opposed to any tax at all in Canada, and that the very fact of levying a tax on private estates discourages private enterprise. That is why we say that the Minister of Finance should seek another formula. Indeed, the Bank of Canada is at his disposal, and that is where he should turn to keep families from being choked systematically.
[DOT] (4:50 p.m.)
Unfortunately, as we are living under a tax-over-tax system, we must be content with it. It is coming to an end, anyway. We see that further pressures are to be exerted upon us since unemployment will be tolerated. As we must accept that system, we will support this amendment. We want the Minister of Finance to adopt it as soon as possible, for, had he levied a tax on $20,000 estates as he wished to do originally, through the October 1968 bill, he would have given the death-blow to many family enterprises.
The minister has seen fit to deal once more with the proposed legislation because we represent the official opposition from Quebec. I therefore conclude that he listened to the voice of the opposition, and that is the undeniable proof that we can be greatly helpful in this assembly.
Let me say also that I am in favor of adopting the amendment, which I shall read so that Canadian families will learn about this particular privilege which is, I think, the only really human aspect of the measure. So I quote from page 5 of the statement issued by the Department of Finance, on January 30, 1969:
In the case of a legacy to a crippled child, wholly dependent, the proposals provide for an exemption of $1,000 for each year until he is 71 years old, over the basic exemption of $10,000.
Therefore, the maximum exemptions are as follows:
Child in good health, over 25 years of age $10,000 Child in good health, under 25 years of age $35,000 Crippled child	$80,000
The human aspect is greatly important and we have said over and over again that we heartily support any amendment that makes a law more human and more logical. I think this lenient aspect will prompt parents to
February 5, 1969	COMMONS
keep at home the children who are not as lucky as we are and who cannot lead normal lives. The amendment will certainly benefit those families.
As for the amendment that provides that six months after the death, the unpaid sums must be paid in six instalments, I find it is only a way of getting the money little by little; besides, there will be interest on the unpaid amount. There is the risk that people with a small fortune, not seeing the urgency of the problem since they will have six months to pay, will probably forget about the urgency and will take, as they do now, a $50,000 or $100,000 insurance policy to cover the estate taxes. In the past, a person used to buy an insurance policy in order to pay the succession duties in one lump sum. I have noted that this legislation makes it possible to spread them over six installments and to pay them six months after death occurs. There is a danger that people will not be wise enough to buy an insurance policy on the life of the head of the family in order to pay off all those moneys, all those taxes levied by the government.
I wish to make another remark. When drawing up these amendments to the Estate Tax Act, the government forgot to return all those duties to the provinces. I have already referred to that point. If this had been the case there would probably be no need for discussing today the matter of succession duties that have been claimed for so many years by the provinces. Such an amendment would have enabled the federal-provincial conference, which is to convene in a few days, to open on the right foot, because the provinces, the same as the federal government, the municipalities, the school boards, etc., thirst for money. I am sure all hon. members would agree that succession duties must be transferred to the provinces.
I also regret that the government has not, in this amendment to the Estate Tax Act, exempted insurance brotherhoods. I think the government missed a good chance to help those organizations which are not taxed anywhere else in the world. They grew up on many sacrifices for the purpose of helping our people and they are going to be smothered by the new tax. I am really disappointed that provisions concerning brotherhoods were not included, as we had requested, in the amendment to the Estate Tax Act.
Finally, I have just read a newspaper article stating that, by a quick calculation, it can be concluded that the government will suffer
DEBATES	5193
Income Tax Act and Estate Tax Act a loss of $15 million by adopting the proposed amendment. As everybody knows, problems resulting from lack of money will continue to exist for all federal and provincial governments, as well as for school boards.
What is the solution then? I gave it at the beginning of my remarks, when I recommended that the Bank of Canada be put at the service of Canadians. Moreover, after assessing the production of wheat which seems to be a thorn in our side, we could simply distribute it to Canadians and to countries all over the world.
Anyhow, I am convinced that the major problem which will be discussed next week, during the federal-provincial conference, will be that of finance. Let us be logical once for all and let us settle the problems in a different way. For 35 years, we of the Ralliement Creditiste have been requesting a solution whereby credit given to society will put an end to all those taxes which prevent private enterprise from progressing. In fact, we know that truth will prevail one day and I urge this government to pass immediately legislative measures which will make it possible to grant credit to the people, through the Bank of Canada, instead of taxing individuals and hence discouraging private enterprise.
a (5:00 p.m.)
LEnglish]


The Acting Speaker (Mr. Bechard):: Pursuant to special order made earlier this day this debate is adjourned and the house will now proceed with the next item of business.



PRAIRIE GRAIN ADVANCE PAYMENTS ACT


[Stage Direction]
The house resumed, from Tuesday, February 4, consideration in committee of Bill C-162, to amend the Prairie Grain Advance Payments Act-Mr. Pepin-Mr. Bechard in the chair.
Albert Béchard: When the committee rose last evening clause 1 of the bill was under consideration.
On clause 1-Emergency advance payments.


Mr. Cadieu (Meadow Lake):: Mr. Chairman, I had not planned to speak on this bill. I thought that the quicker it was passed the sooner it might be some help to the farmers,
February 5, 1969

Prairie Grain Advance Payments Act but after hearing the Minister without Portfolio last night I think I should try to set the record straight. He misrepresented the situation to members of his own party who are not familiar with western Canada when he said, as recorded on page 5148 of Hansard:
Again, members of the opposition have used the three-bushel quota in an attempt to assess blame in connection with that. I should like to draw their attention to the many months which went by after that quota had been brought into effect before they began to think they could use it for petty political advantage, though they welcomed it at the beginning.
I think this is a terrible statement to be made by one who should be familiar with the situation. The government put a three-bushel quota on damp grain, but what good did it do? It was detrimental to western farmers because in many cases they would have been better off to leave their wheat lying in the swath inasmuch as they found out later that there was no room in the elevators for the damp grain. Farmers in my own constituency had only a one-bushel quota and they were not able to take advantage of the three-bushel quota. The three-bushel damp grain quota was useless in my constituency.
Just yesterday I was in contact with the largest shipping area in my constituency and I was informed it still has only a one-bushel quota and, as one man put it to me, it has not had a box car since God knows when. If this is all the minister saw of the seriousness of the situation when he was out west I think he had better go back there again and take another look.
The situation is very critical. Yesterday I was informed that very little, if any, drying equipment has been placed in position in the Meadow Lake area. It is being moved into position, but I point out that we are now in the month of February. Why was this equipment not put into position much earlier? The minister talked about drying charges of eight cents to ten cents a bushel, but the reports I received from my constituency say the charges run from 18 cents to 20 cents a bushel.
Furthermore, in this difficult situation for western farmers I understand that few, if any, payments have been made under P.F.A.A. This is something this glorified parliamentary secretary should start looking into. I have not yet heard of one single P.F.A.A. payment going out to my constituency although many districts there have had crop failures.

On September 25 last year I asked the Minister of Agriculture to inquire whether a survey of P.F.A.A. needs was being made. We are now well into the month of February and I have not heard that one single farmer in my constituency has received a payment under P.F.A.A. I thought this was a matter which I should bring to the attention of the house.
I certainly welcome any assistance that this legislation will provide farmers to meet the cost of drying their grain. As I say, the three-bushel damp grain quota encouraged many farmers to thresh damp grain when it would have been better to leave it lying in the swath until good weather in the spring. As I indicated at the outset of my remarks, I thought the record should be put straight about the very serious situation in western Canada.


Mr, Peters:: Mr. Chairman, last night I was surprised at the partisan way in which the Minister without Portfolio spoke. I am interested in this legislation and in the support it has received from the opposition, but now the government is trying to take considerable credit for this important step.
I have been long enough in this house to see the farming situation in western Canada deteriorate on at least four occasions and the situation that has developed this year occurred on each of those four occasions. By August last it was realized by western farmers, members of the government and members of the opposition that a serious situation was developing. By September, when grain was in the harvesting stage, people were able to ascertain that there would be a great problem to meet in drying damp grain. But when members of the opposition brought this matter to the attention of the government, what did the government do? Frankly, I am not sure what it did but I am sure of what it did not do. It did not really get around to solving the problem.
When the Minister of Industry, Trade and Commerce returns from the west I am quite sure the recommendation he will make will be to appoint a controller to regulate the flow of grain. It is all very well to supply a farmer in a desperate position with an additional $600, which in effect will be a debt, and ask him to dry wheat, but is it not time we got around to handling the wheat we have on a more equitable basis? Every day some hon. member gets up and asks why we are not able to fill the ships waiting at the ports on the west coast. Then the question is asked what assistance is being given to those areas
February 5, 1969	COMMONS
where damp grain is such a serious problem, and why an open quota is not put on damp grain so that it can be dried. The situation is now so bad that the damp grain will not even be any use for commercial feed come springtime.
[DOT] (5:10 p.m.)
I notice in the Western Producer that in some areas the unit quota has not been fulfilled, and on the prairies there are 345 points where the unit quota is not available. At the other end of the picture you will find there are some areas which have a four bushel quota. There are 329 prairie shipping points which are on a three-bushel quota today. Obviously there is inequality in this regard.
The minister made an attack on hon. members. I have heard this sort of thing many times not only from this government but from the previous government. On every occasion when the problem finally was settled it was because the government appointed an overall controller to deal with it. A controller would decide where the grain would be moved from, from what farm points, from what country elevators, and he would decide what box cars would be delivered to the elevators and what grain would be moved from the inland terminals to the coastal terminals. He would also have control over the vessels and the expenses that were incurred by the vessels.
Let us make no mistake about this. It does not do any good for farmers to pay the demurrage in respect of boats which cannot be filled through no responsibility of theirs but through the inability of the transportation facilities, the Canadian Wheat Board and the Board of Grain Commissioners to put the proper grade of grain in position for loading. If this advance of $600 interest free to be added to the debt of the farmer is considered to be a solution, then the minister obviously has not looked into the matter.
Last night the minister did a good deal of talking. I do not know why he was belligerent. He will not win many votes for a long time. His handling of this situation certainly would not win him any votes this year in western Canada if there were an election. If the minister really is serious in bringing about a solution to this problem he should sit down with the Prime Minister and decide who will handle this problem. There should be one person appointed who would decide how to solve this problem. It is not a new problem. We learned about it in August last year.
DEBATES	5195
Prairie Grain Advance Payments Act We heard about it in September, October, November, December, January, and now we are in the month of February. It will probably be another three months before the situation comes finally to a head, and if the grain is not dry it will be lost to the farmers and to the economy of the nation.
I have a great deal of respect for the Minister of Industry, Trade and Commerce. I am also of the opinion that he has far too much responsibility for any minister, even one with his capabilities. He has at least three times the responsibility any minister should assume because it is impossible to do the job well. However, I am sure that when the minister discusses this problem with those who are involved with transportation and transportation facilities in western Canada he will come to the conclusion that it is necessary to have a transport controller in western Canada in order to solve it.
The Minister without Portfolio was wined and dined by the Grains Council, the people who are involved in one aspect of this problem, while he should have been turning his mind to the whole problem. I asked a western farmer about the Grains Council, its membership and what happens when a person brings grain to a country elevator which does not want it. The elevator agent is told he must move it, that there is a necessity that he do it, but I am sure they are not expediting the situation. Mention is made of the Canadian National and Canadian Pacific Railways, but I am sure they will not expedite a solution to the problem in western Canada. I am told that it is not as profitable to haul grain as it is to haul almost any other commodity. So the transportation facilities will be used for any purpose other than hauling grain. This will be the last resort when they cannot do anything else.
A controller would allocate the shipping points and see that a certain number of box cars are kept fluid for the transportation of grain at all times. He would decide to what points they would be delivered. In this manner the inequity could be cleared up. There is quite an inequity in respect of the shipping quotas. The controller obviously would work toward rectifying this situation.
Each and every member of this house, if he is really interested in the national good rather than in playing party politics, will be interested in solving the grain crisis in western Canada in the most satisfactory way. I suggest that the minister, instead of lecturing members about things which he does not
519S	COMMONS
Prairie Grain Advance Payments Act understand, should try to create, as the Prime Minister would say, some participation with the members of the house through dialogue. If he would look at the problem and see how it has been solved in prior years he would find that the solution is fairly obvious and is one which this government should take.
I think it is a credit to the controllers who have been appointed in years when we have had difficulty that they have been able to solve the problem quietly and efficiently. They have been very pleased when they have terminated their duties to report wholehearted co-operation by the wheat pools, the grain companies, the transportation facilities, the harbour personnel and all other persons connected with the grain industry. They obtained this kind of co-operation. Never since I have been here have they made a report to parliament which indicated they did not receive this kind of co-operation. I suggest that the government does not have the same kind of co-operation. This $600 will only make the farmers $600 poorer. I have been told that 10 cents a bushel for drying grain will not accomplish very much for most of the farmers who have 90 per cent or 100 per cent of their grain in a damp condition.
I hope the Liberal members of this house, on the passing of this legislation, will not thump their desks and say that this is the end of the problem in respect of the grain crisis in western Canada, because I think it is only a start. I was interested to note that the Minister of National Revenue indicated that very little advantage has been taken of the removal of the tariff on grain drying equipment and the provision that certain types of grain storage facilities may be imported without additional cost. These actions really have not done anything to solve the problem. The problem will only be solved when there is equality of opportunity to move damp grain into market position and when we have the full co-operation of and direction over the transportation facilities so that no ships will be standing idle waiting for grain which has been contracted for and then not delivered.
The problem will not be solved until every area in western Canada has a three-bushel quota which will allow the farmers to make arrangements for drying facilities on a cash basis. I suggest that the minister really has not done anything about the problem in western Canada. The introduction of silly pieces of legislation such as this as a solution to a crisis is a pretty ineffective way to solve the problem. I hope the Minister of Industry,

DEBATES	February 5, 1969
Trade and Commerce, when he returns from western Canada, will rise in the house and recommend the immediate establishment of the office of transport controller so that the actions now being taken by provincial governments and by other interested parties may be co-ordinated. The situation certainly has been helped little by the Minister without Portfolio who is now trying to do something about grain dryers when they should have been in operation for the last five months. If this problem is not solved in the very near future many farmers will discover that their losses will be considerably greater because of frost damage and an anticipated early spring. Therefore the loss to Canada will be much greater.
[DOT] (5:20 p.m.)


John (Jack) Henry Horner: Mr. Chairman, I want to say a word or two more about this matter before this legislation passes this afternoon. I regret that the minister in charge is not here. I understand he is on a fact-finding mission in Vancouver. It is unfortunate that this debate could not take place after his return. We might then hear more proposals to solve the damp grain problem in western Canada and perhaps suggestions to transport grain more efficiently.
Let me quote briefly from an article which appeared today in the Vancouver Province under the heading "Pepin Hopes But Hedges". Those words do not give a great deal of confidence to the agricultural industry in western Canada. The article states:
The grain crisis in western Canada could be over in a matter of weeks, perhaps in a month, Trade Minister Pepin said Tuesday in Vancouver.
A grain crisis could well develop after the month of March. It was estimated that there were 200 million bushels of damp and tough grain harvested in Alberta alone. It is also estimated that up to this time 15 million bushels of that grain have been shipped or loaded into elevators. It might well be estimated that 85 million bushels have been fed to cattle during the winter or will be fed to cattle before spring. That leaves some 100 million bushels of damp and tough grain in the province of Alberta to be dried between now and spring.
If we assume there are 100 days of cold weather left during which the grain will be preserved, and there will not be that many, we are still left with one million bushels of grain to be dried per day between now and spring. I suggest through you, Mr. Chairman,
February 5, 1969	COMMONS
to the minister that this crisis will remain with us much longer than another month unless greater action is taken by the government to dry the grain and to assist the farmers to dry more grain on their farms.
As I suggested last night, there are seven ways the government might have acted and might still act to improve the situation in respect of damp grain. Let me suggest one more. Before doing so let me read from an article in the Vancouver Province. It states:
After conferring all day with senior port, transportation and Wheat Board officials, Pepin's smiling optimism at a press conference was mixed with a cautious spreading of blame for the shipping snarls of recent weeks.
At least we have accomplished something. The minister admits there were shipping snarls. While he apparently could not find any particular person or persons to blame, the minister did attempt in a cautious way to spread the blame around. The article then continues:
He admitted there had been serious misjudgments, such as the hasty and premature shipment of too much inferior damp grain to the coast for drying when priority should have been given to better grades.
This is what I said earlier in the debate on this subject. Damp grain should not have been moved to the coast in greater quantities than could be handled by the grain drying equipment there. Apparently someone thought he might be the saviour of the grain industry by one stroke of the pen. The article then continues:
Both the railways, said the minister, are taking extraordinary steps to make up for delays, but he added that he could not say until noon today, when they are due to report to him, just what further shipping commitments they are prepared to accept.
In other words, the railways still have not made any further commitments in respect of eliminating this difficult situation.
I should like the minister now in charge of piloting this bill through the house to understand clearly, as other members from western Canada understand, what the situation is. The article states:
The minister made it clear that, in the matter of demurrage, the full load will eventually have to be carried by the grain producers themselves.
Those are the words of the minister as reported in this article. The demurrage charges in respect of these ships in Vancouver will have to be carried by the grain producers. The article states:
Twenty-one ships are idle in Vancouver harbour waiting to load.
DEBATES	5197
Prairie Grain Advance Payments Act
Who is responsible for these shipping snarls which the minister has tried to put on somebody's shoulders? He has admitted there are shipping snarls and he tried to spread the blame. Surely he cannot find any way of placing the blame on the farmers.
Some time ago we had a special debate on this matter and we were told that the problem had developed as a result of weather conditions and that everything was being done by the minister, the Wheat Board and the government. We were told that the railway companies were working overtime but that weather conditions created special problems. For the sake of argument let us assume that the weather did create the problem which resulted in shipping snarls. Weather conditions surely can be classed as acts of God. Why should the producers have to pay the demurrage charges as a result of these shipping snarls?
If the government is conscientiously concerned about the farmers in western Canada, the very least it should do is to pick up the demurrage charges, perhaps not for the full year or even half a year but at least for the time during which the shipping snarls existed. The minister suggested in Vancouver, as reported in this article, that the trouble may be over within a matter of weeks or in a month. Perhaps the government could pick up the demurrage charges for that period of time.
At least 21 ships are still idle in Vancouver harbour, and two weeks ago there were 33 ships waiting to be loaded. We know that at least two or three ships left empty. This means that we have loaded perhaps nine ships. During this period more ships might have entered the harbour had there been any prospect of their being loaded. In any event, 21 ships are still waiting. Surely the farmers should not have to pay the demurrage charges in respect of these 21 ships.
Let me make another suggestion to the government in respect of the movement of this grain. The government should immediately accept the demurrage charges caused by the shipping snarls which have existed throughout the period of processing damp grain at Vancouver. Perhaps this could be done at least in respect of that one port. It is not a great deal of money, and if the government would pay these charges it would show that it is really concerned.
February 5, 1969
5198	COMMONS DEBATES
Prairie Grain Advance Payments Act
[DOT] (5:30 p.m.)
The previous speaker dealt with the appointment of a controller and so did I yesterday. We are both of the opinion that a controller should be appointed. The three prairie premiers also suggested that a controller should be appointed. An article in the Vancouver Sun of February 5 says that the minister stated that "he intends to determine whether a prairie co-ordinator is needed to improve movements of wheat from farm to port." He still has not determined whether this is necessary. It is now February 5 and we have had this problem with us for nearly a month.
I stated yesterday that at a C.P.R. point in my constituency on January 1 there were 214 box cars loaded with wheat, 75 per cent of which were loaded with No. 2 and No. 3 wheat in dry condition. At the end of January there were still 120 cars on that same siding still loaded. I gave just one instance but I could cite several more. Many hon. members could cite many more incidents of box cars loaded with wheat not being moved now and not having moved since December. Is this not sufficient evidence on which the minister should by now have made up his mind that a prairie co-ordinator is necessary, and should he not now urge the railroads to greater action? The minister admitted in the press conference he gave yesterday in Vancouver as quoted in the Province that he does not know "just what further shipping commitments the railroads are prepared to accept". The Alberta Wheat Pool has advised me that the railways can handle around 120 cars a day at their terminals in Vancouver but the railroads advise us that the best they can move in there is 85 cars. This is not enough; the railroads have to move grain with greater speed.
The hon. member for Timiskaming, who resumed his seat a moment ago, suggested that grain was the lowest paying product that the railroads move and therefore they move it last. May I say that grain has been the bread and butter of the railroads on the prairies for the last 50 years.


Mr. Benjamin:: Not according to the
railroads.


John (Jack) Henry Horner: That is right; the railroads always like to have a little more butter on their bread and a little more cream with their milk. Every year that grain shipments have been large the revenues of the railroads have gone up, and every year that grain shipments

have gone down to a minimum the revenues of the railroad have also gone down. There is no way in which the railroads can say that they can operate on the prairies without hauling grain. Immediately many miles of track become inefficient. The railroads know they are the only ones that can haul grain and so they haul anything else in its place because they know that the grain will wait for them. Grain movement is a national concern and so is the movement of damp grain. The railroads have a monopoly in this field and are morally obligated to share the national concern and to do their utmost to assist the economy of every region of Canada, not only with regard to the wheat problem on the prairies but other problems in other regions of Canada.
I would like the minister who is piloting this bill through the house to give us his views. The Minister of Industry, Trade and Commerce suggested he has yet to determine whether a prairie controller is necessary. But what is the position of the hon. member for Saskatoon-Humboldt who represents the prairies? Does he believe a prairie controller is necessary? Will the hon. member for Saskatoon-Humboldt, the prairie representative in the cabinet who is particularly concerned with wheat, urge the minister to appoint a prairie co-ordinator? Let us have a little dialogue between these two ministers. We have seen a public dialogue between two other ministers with regard to the subject of NATO and defence. Perhaps the minister is prepared to tell the house whether he believes a prairie co-ordinator is necessary. Most of the prairie people, particularly those in the grain trade, believe that a prairie co-ordinator has served their industry well in the past and could do so now in this crisis as well as in the future, even though the Minister of Industry, Trade and Commerce suggests this emergency will only last for another month. He is doing a lot of wishful thinking in that regard.
I would also like to know from the Minister without Portfolio what he will tell the Minister of Industry, Trade and Commerce with regard to the demurrage charges on the 33 ships which were in Vancouver two weeks ago and the 21 which are there today waiting to be loaded. The article says that 21 ships are idle. What is the minister's position in this regard?
He and the Minister of Agriculture have said that the main cause of the snarling of the shipping traffic has been the weather and that this was an act of God. The difficulty in the handling of damp grain which froze in box
February 5, 1969	COMMONS
cars was the weather. The Minister of Agriculture said it took eight men with crowbars three hours to unload one car. He painted a very gruesome picture. For the sake of argument let us accept the fact it was the weather. Surely the government should be prepared to accept the responsibility and pick up the demurrage charges instead of charging the farmers and telling them: "You have not had enough to contend with. You have just had six weeks of 40 below weather in Alberta and Saskatchewan so we will give you the demurrage charges also because they were brought about by the weather and you are able to cope with severe weather conditions." The least the minister can do before this bill passes and before six o'clock is to answer these two questions.
In conclusion I should like to repeat the two questions to make them quite clear to the minister. What is his opinion with regard to the appointment of a prairie co-ordinator for the movement of damp and dry grain so as to eliminate in the best possible way the shipping snarl that has been troubling us and that will be with us for at least a month, according to the Minister of Industry, Trade and Commerce? Second, what is his opinion of the suggestion I have made that the government should pick up the demurrage charges, particularly at the port of Vancouver, brought about by the shipping snarls of late January and early February and which may continue for another month, as suggested by the Minister of Industry, Trade and Commerce?
[DOT] (5:40 p.m.)
These are the questions I ask. The minister can give us his opinions. Naturally the Minister of Industry, Trade and Commerce will make a statement when he returns tomorrow. We may comment but we shall not be able to debate the issue. We are prepared to allow this bill to go through, but if the minister does not give us an assurance that he will fight and work for the prairies it might be wise for prairie members to hold up this legislation until the Minister of Industry, Trade and Commerce returns. We would then have an opportunity to debate with him the suggestions I have made and to find out exactly where the minister places the blame for the present situation. A press cutting I have here states:
Pepin's smiling optimism at a press conference was mixed with a cautious spreading of the blame for the shipping snarls of recent weeks.
It might be advisable to hold up this legislation until we find out where he spread the
DEBATES	5199
Prairie Grain Advance Payments Act blame in his cautious way. Certainly he could never spread the blame on the backs of the farmers, although it is the farmers who will have to pick up the demurrage charges.


Mr. Gleave:: Mr. Chairman, I just want to say that when this legislation is passed I hope the government will follow through by assessing the precise nature of the situation on the prairies. I think it is necessary to estimate how much grain there is to be dried locally on the farms. A good estimate could be made through the Wheat Board and the grain companies. This figure should then be related to the amount of equipment, including local driers, which is available, and an effort made to determine whether there are sufficient man hours available to do the job adequately in the time left. If the answer is that the amount of equipment available is insufficient or that there are too few man hours available, something should be done immediately. We should not wait until next spring when we hear cries of grain spoilage.
This must also be related to the cost. I agree with an hon. member to my right that the cost is likely to come closer to 15 or 20 cents a bushel than the 10 cents we have been talking about. This would be another factor. If the farmers have a feeling that this administration is really concerned about the problem and is ready to go to work with them to meet it, we shall get the kind of action needed.
I do not propose to say anything further about the movement of grain because the subject has been debated thoroughly. As to the need for a controller, I made that point myself weeks ago without effect. Farmers have done their part. We put millions of dollars into a pool terminal out on the west coast. Let me tell hon. members that the farmers-and I was one of them-put up the money out of their own pockets to build that terminal because there was a shortage of storage. It is indeed distressing to find out now after paying these millions of dollars that the grain has not been effectively moved into position.
I do not want to belabour the point further. I merely wish to make this final comment. I do not think the government can assume that if this bill passes they can forget about the problem and that the tangle which now exists will automatically unsnarl. That is not the way it will happen.


Leslie Gordon Benjamin: Mr. Chairman, I am glad of this opportunity to make one or two further
February 5, 1969
5200	COMMONS DEBATES
Prairie Grain Advance Payments Act points because this may be the last occasion on which hon. members-I am thinking particularly of those from western Canada-can discuss this subject in any detail.
Last night the minister finally and unequivocally said no, on behalf of the government, to the idea of making direct cash payments to farmers for the purpose of drying grain. I accept this as being the government's position, though I do not agree with it. In these circumstances I have a suggestion to put forward. Perhaps the minister will go at least this far, and try to persuade his colleagues to agree that the farm industry should not be expected to bear all the extra cost caused by the condition of the crop. If the hon. gentleman would agree to this principle, then something at least could be done to assist western farmers.
May I suggest an alternative method by which the treasury would bear some of these costs. The Wheat Board will be faced with additional costs amounting to millions of dollars because of the difficulty of dealing with tough and damp grain. It will be paying out extra money in demurrage charges on ships and box cars. It will be paying out tens of thousands of dollars in respect of carloads of grain charged as dead freight because grain is light in weight and cars cannot be loaded to the limit. There will be additional costs in diversion charges and switching charges directly attributable to the condition of the grain. If the federal treasury were to bear the additional cost attributable to tough and damp grain, the amount of money received by farmers next spring need not be reduced, and in this way indirect assistance could be given to our farmers.
May I support the pleas of those who have called for the appointment of a transport controller. We should like to see such an appointment made as soon as possible. There are three members of our group in the house who worked on the railway, and we have some knowledge of the way in which chief despatches, chief superintendents and transport supervisors operate in the allocation of railroad equipment, both box cars and motive power. Their attitudes have not changed. Unless someone tells them how much equipment they are to allocate for the movement of grain they will only act at their convenience. I cannot overemphasize this point.
Finally, may I gently remind the minister to reply to the question I asked him in connection with the submissions of the farm

organizations concerning direct federal payments? Again, would the minister indicate where I might find, either in the act or in the regulations, provisions concerning the payment of advances and the circumstances in which farmers would not be considered in default?


Mr. Lang (Saskaioon-Humboldi):: I should begin by referring briefly to some of the questions which have been put to me by hon. members opposite. I may say that the kind remarks last night of the hon. member for Crowfoot left me in any case with a desire to reply to a couple of questions which he had brought up previously.
I want to draw attention to the fact that the figures I have are very different from those he used with regard to the quantity of grain involved. He used a figure of 800 million bushels. The Wheat Board, as a result of its survey, has indicated that the figure is some 217 million bushels. This includes both damp and tough grain.
The hon. member asked about the Grains Council. I should like to assure him that when the council met in Winnipeg it talked about holding a very early meeting to deal with the process of launching its endeavours. He asked, further, about money for the Grains Council. I refer him to vote 35 in the estimates of the Department of Trade and Commerce tabled yesterday and to a similar item in the estimates of the Department of Agriculture.
Today, he and other hon. members asked about demurrage. May I simply say it would be out of step with ordinary policy if the government were to undertake to pay demurrage charges. This responsibility should really belong to those who make the decisions about when boats are to load, in order that this measure may be operated responsibly, and decisions like this are taken by the Wheat Board.
I was asked about the appointment of a co-ordinator. I should like to say that the Minister of Industry, Trade and Commerce would, at any moment he felt the appointment of a co-ordinator would improve the situation, recommend such action. But at no time up to the present has this necessity been apparent. It was with the purpose of staying close to the situation that my hon. friend went to Vancouver to investigate the matter.
February 5. 1969	COMMONS
[DOT] (5:50 p.m.)


John (Jack) Henry Horner: Would the minister permit a question on that point? I did not ask him what the Minister of Industry, Trade and Commerce would do about a controller; I asked him for his opinion whether a prairie controller would help at this time in light of the premier's statement in that regard.


Mr. Lang (Saskatoon-Humboldt):: I agree completely with the action and decision taken by the Minister of Industry, Trade and Commerce in this regard.
The hon. member for Regina-Lake Centre asked about the right to take an advance on an amount outstanding. As a matter of interpretation of the act this is not specifically barred and I think really follows. But let me refer him specifically to section 3, subsection 4, and section 4, subsection (1) (e), which make clear the procedure that is used in an ordinary case to take an advance when there is an outstanding amount from a previous year.
A number of members referred to the price of grain drying. In my remarks last night I referred to a discovery that pleased me very much during my most recent visit to the prairies. Previously on other visits costs were kept fairly low only in exceptional cases. On this occasion I found that in many cases, when grain drying equipment was set up near the elevators, a cost of eight to ten cents was being charged. I emphasized that setting up this equipment near grain elevators was a very important development. In this regard I am confident that there is adequate equipment on the prairies to do the drying and that it is really a matter of moving it into place.


John (Jack) Henry Horner: One more question before the minister finishes with this subject. If the cost of grain drying has now been reduced to eight to ten cents a bushel, can I assume that the minister will work hard to reduce the difference between that figure and the cost of drying damp wheat of 16 cents a bushel?


Otto Emil Lang: I would have thought the hon. member would know that there is no direct relationship between the cost of drying grain and the appropriate figure to be deducted when grain is delivered in a damp state. In addition to the cost of drying there is a significant change in the value of the wheat because of shrinkage. A man who delivers damp wheat gets an advantage because included in his price is the
DEBATES	5201
Prairie Grain Advance Payments Act water that he is delivering at the same time as he delivers the grain.


John (Jack) Henry Horner: Is the minister suggesting that there is a considerable difference in the wheat, whether damp or dry, because of deterioration in quality?


Otto Emil Lang: This
depends very much on a lot of factors.


Alfred Pullen Gleave: In regard to charges for drying grain, would the minister indicate how wide his survey was and give instances of charges that were assessed for drying grain?


Otto Emil Lang: I will be glad to give the hon. member some specific examples.


Alfred Pullen Gleave: The reason I ask the question is that my own personal experience indicates a charge, on a custom drying basis, much higher than that indicated by the minister.


Otto Emil Lang: As I say, Mr. Chairman, with no fee I will be glad to give the hon. member the names of a couple of places where he can get his grain dried a little less expensively.


Alfred Pullen Gleave: I would not expect the minister to charge a fee. What I want is information.


Mr. McIntosh:: Mr. Chairman, I have two questions to put to the minister. He may have answered the first which relates to the one clause in the bill and its reference to advances. I do not know whether these circumstances will ever arise, but where a farmer has had a $6,000 advance and then applies for the maximum advance for drying wheat, would this prohibit him from receiving the $600 since he has already received the maximum of $6,000? Is the one provision contrary to the other?


Otto Emil Lang: A farmer who has obtained the maximum of $6,000, or indeed any farmer who is in any position regarding applications under the existing act, will be able to obtain an additional $600 under this bill regardless of his delivery position.


John (Jack) McIntosh: My second question is with regard to wheat that has actually been spoiled during the drying process. I believe the Wheat Board sends out instructions to operators on how to dry wheat, at what temperature and so on. I understand that in some cases the heat has perhaps been excessive and grain has been spoilled. In such cases farmers have refused to pay the operators of the dry-
February 5, 1969
5202	COMMONS DEBATES
Prairie Grain Advance Payments Act ing equipment for drying their wheat. In addition, farmers have had to take a lower grade for their wheat because their wheat was spoiled in the drying process. It has gone down from No. 2 or No. 3 grade to feed grade, and as the minister knows this is a great loss. What happens in cases like this? Will there be any court cases, and who is responsible?


Daniel Aiken Lang: I am sure that as far as the farmer satisfying the provisions of the bill to qualify for the advance is concerned, no difficulties will arise. I will not comment on the position as between the farmer and the person who dries his grain.


Leslie Gordon Benjamin: Mr. Chairman, may I go back to the minister's answer about the repayment of the advance and the fact that the act now says farmers may go till the end of December in the ensuing crop year in making repayments. Am I correct in the event of a farmer taking the full advance-to take a hypothetical case, $6,600-and having delivered all the wheat required under his quota until the end of December but having failed to haul sufficient to repay the entire advance, this would mean that in order not to be in default he would have to take out another advance to repay the old one?


Daniel Aiken Lang: No. That situation, as the hon. member put it, would not arise until December 31 at the earliest.


Leslie Gordon Benjamin: That is what I meant.


Daniel Aiken Lang: If by
December 31 the farmer's grain deliveries had not repaid the earlier advance, he would then be in the position that, unless the Wheat Board exercised its discretion in his favour, he would have to take out an advance to cover the previous advance or he would be in default. This is a matter within the administration of the Wheat Board at that point, and it is really only at that point that this position would arise.


John (Jack) Henry Horner: May I quickly ask another question. The minister will correct me if I am wrong, but if a farmer has already dried his grain and has taken out the $6,000 cash advance, if he has sufficient grain can he still take out the $600 even though the grain may well have been dried?


Daniel Aiken Lang: He may. However, there is one limitation to this and that is that if he has already delivered all of this dried grain then, according to the act, he would not be able to get an advance on it.


John (Jack) Henry Horner: According to the bill it is provided at the top of page 2 that only grain that is damp and on the farms will qualify. It does not imply that if the grain is already dry the farmer can still get the advance.


[Stage Direction]
Clause agreed to.
[DOT] (6:00 p.m.)
Leslie Gordon Benjamin: Mr. Chairman, may I raise a matter before you ask the committee to deal with the preamble and title of the bill. I am still very much concerned about the position at the end of December of the farmer who takes out a cash advance. If he is in default with respect to any repayment he is accountable to the board. It seems to me that many thousands of farmers might be in that position at the end of December and, frankly, I do not see how the board could administer such a great volume of cases. I hope there will be unanimous consent for Your Honour not to see the clock in order that we may finish this bill. I wish to move an amendment which will deal with the matter I have raised. I hope the minister will permit it to pass. I move:
That Bill C-162 be amended by adding thereto the following new clause 2:
"2. Paragraph (c) of subsection 1 of section 13 of the said Act is amended by substituting the word "March" for the word "December" in the first line thereof.


Daniel Aiken Lang: Mr. Chairman, I hope this amendment does not carry. I regret the hon. member found it necessary to move it. The administration of the Prairie Grain Advance Payments Act has been marked with tremendous success over the years and the rate of default under the act has been very low. If the hon. member's amendment were adopted and the date changed to March from December, serious inconvenience would be felt by many in an ordinary year. The law adequately covers the situation at present. The Wheat Board has over-all discretion in the matter of payments. The provisions of the act do not allow the Wheat Board to recognize any default in payments until December 31 of any year. The proviso, of course, is that farmers are making appropriate deliveries. After December 31, of course, although the Wheat Board has the right to proclaim that a default exists it would not do so in a year like the present one, especially since parliament has permitted farmers an additional $600 advance. The board would not institute default procedures unnecessarily. In fact, it would be most difficult for it to do so under the present circumstances. One could expect
February 5, 1969	COMMONS
the board to display a generous attitude in present circumstances. I hope the amendment does not carry since the law at present is perfectly adequate to meet existing circumstances.


Leslie Gordon Benjamin: May I point out to the
minister that the present act, from my reading of it, says that any farmer, even if he did not want to avail himself of a cash advance, damn well has to. That is my interpretation of the legislation although I admit I am not an expert in these matters. If my assumption is incorrect all I can say is that the wording of the bill is not clear. Certainly farmers would find it more convenient to make their payments in March. After all, they would have in their pockets the final payment and would be able to repay existing cash advances without having to avail themselves of additional cash advances. I still think the minister ought to accept the amendment. I can see difficulties facing the Wheat Board in administering cases involving thousands of farmers who have to meet the December deadline. Such a backlog might take a long time to clear up.


Albert Béchard: Is the committee ready for the question?
DEBATES	5203
Business of the House Amendment (Mr. Benjamin) negatived: Yeas, 13; nays, 24.


Albert Béchard: I declare the
amendment lost. Shall the title carry?


Some hon. Members:: Agreed.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and
passed.

Thomas Miller Bell: Mr. Speaker, I would ask one of the ministers of the old guard to confirm that tomorrow we will take the estate tax bill.


Mr. Mcllrailh:: As far as I know, Mr. Speaker, there has been no change from what was announced last night as the business of the house. If there has been, I will advise the hon. member.


The Acting Speaker (Mr. Bechard):: It being six o'clock this house stands adjourned until tomorrow afternoon at 2 p.m.
At 6.05 p.m. the house adjourned, without question put, pursuant to standing order.

Thursday, February 6, 1969



ROUTINE PROCEEDINGS

[Stage Direction]
[DOT] (2:10 p.m.)