1969-03-07

[Stage Direction]
Seventh report of the standing committee on agriculture in French and English-Mr. Marcel Lessard (Lac-Saint-Jean).
[Editor's Note; Text of foregoing report appears in today's Votes and Proceedings.]


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I have tabled copies in English and French of a report by the Tariff Board on Reference No. 140, greenhouse vegetables, together with a transcript of the evidence presented at the public hearings held by the board.
This report contains recommendations relating to fresh tomatoes and cucumbers. I assure hon. members that these recommendations will be carefully considered by the government. May I urge any interested parties who wish to comment on this report to do so promptly.


MOTIONS TO ADJOURN UNDER S.O. 26 EXTERNAL AFFAIRS ACTION TO BE TAKEN IN LTGHT OF NIGERIA-BIAFRA CONFLICT-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 26
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I ask leave, seconded by the hon. member for York South (Mr. Lewis), in accordance with Standing Order 26, to move the adjournment of the house under the said Standing Order for the purpose of discussing a specific and important matter requiring urgent consideration, namely steps to be 29180-401}
taken by the government of Canada in the light of the continuation of the war in Ni-geria-Biafra and the continued threats of mass starvation and the indiscriminate bombing of civilian targets such as hospitals and market places.
This matter was considered by the house on November 26 last. Since that date the situation has changed, first, by reason of well authenticated reports of frequent instances of bombing of civilians in market places and hospitals far removed from military targets, causing immense loss of life; second, the new initiatives taken by the President of the United States in the appointment of a special coordinator on relief to Nigerian and Biafran war victims and the action of the American government in making stratosphere transport planes available to both the International Red Cross and the church operations; third, the offer of Colonel Ojukwu to construct, with needed outside assistance, an airstrip within Biafran occupied territory to be used exclusively for daylight mercy flights; fourth, the continued Biafran resistance and the prospect of prolongation of the war in the absence of international action, with an increasing toll of lives from starvation.
[DOT] (11:10 a.m.)
In view of these facts urgent consideration by the house is required in order that the government may be directed by parliament to deal effectively with this tragic and urgent humanitarian challenge, which affects the conscience of Canada and the world.


Mr. Speaker:: The hon. member for Greenwood (Mr. Brewin) has given the Chair the notice required by virtue of Standing Order 26. After serious consideration I have come to the conclusion that the motion proposed by the hon. member for Greenwood cannot be put to the house at this time. While the subject proposed to be discussed is obviously one of considerable importance and urgency it would appear to be of a continuing nature. I cannot recognize the element of sudden emergency without which it is difficult to justify setting aside the business of the house under the terms of Standing Order 26. It may not be unreasonable to expect there will be other opportunities for the house to consider and debate this very serious situation.
March 7, 1969
6334	COMMONS DEBATES
Failure to Build P. E. Island N.B. Crossing
TRANSPORT	ORAL QUESTION PERIOD


Mr. Heaih Macquarrie (Hillsborough):: Mr. Speaker, under Standing Order 26 I beg leave, seconded by the hon. member for Egmont (Mr. MacDonald) to move the adjournment of the house for the purpose of discussing a specific and important matter requiring urgent consideration, namely the repudiation by the government of Canada of its commitment to build a solid crossing between Prince Edward Island and the province of New Brunswick.
In any federal state it is essential that undertakings given by one government to another be honoured and respected. The repudiation and disavowal of the commitment by the government of Canada to the people and province of Prince Edward Island in reference to interprovincial transportation, a matter falling within the responsibility of the government of Canada, constitutes a serious diminution of the faith and confidence which is the sine qua non of a viable federal state. It is urgent therefore that a matter of such significance be debated in this chamber forthwith.


Mr. Speaker:: Again I have studied very carefully the hon. member's statement, particularly in view of the fact that the situation to which he refers is one of such serious concern to the hon. member who has proposed the motion and to other hon. members of the house. The subject he proposes for the consideration of the house under Standing Order 26 is what he terms "a serious diminution of the faith and confidence" essential to a federal state. In this way it seems to me that the hon. member's motion is so general in nature that it can hardly qualify under the terms of the standing order. There are other methods by which executive decisions may be called into question or criticized. The suggested motion is essentially a want of confidence motion which should normally be proposed to the house under the provisions of Standing Order 58.
In the circumstances I must rule that the business announced for today cannot be set aside for the purpose indicated in the proposed motion.
fMr. Speaker.]



POST OFFICE DEPARTMENT


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, in the absence of the Postmaster General from the house today I should like to ask the Prime Minister whether he has asked the Postmaster General for a report on the chaotic conditions in the postal department. I ask the question in view of the walkout this morning by over 400 postal workers, in view of a similar incident a few weeks ago and especially in view of the Postmaster General's repeated assurances to this house that morale in the department is consistently high. Therefore I ask the Prime Minister whether he will give his personal attention to the necessity of restoring the post office to something approaching normal conditions and ensure that the country can depend on reasonably efficient and uninterrupted service in this essential department.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I have given personal attention to this and would inform the house that the department is now in the process of negotiating with the strikers alluded to, I believe, by the Leader of the Opposition. The negotiations are going on at this moment.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. I wonder whether the Prime Minister would perhaps discourage the Postmaster General from taking such an interest in the responsibilities of other departments and try to prevent anarchy from taking hold in essential services in his own department.


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I should like to address a supplementary question to the Minister of National Defence, asking him when he will take the opportunity under the ground rules of the present regime to give the house and the country the benefits of his views as to how the postal department should be run?



TAXATION


Mr. David Lewis (York Souih):: Mr. Speaker, I have a question for the Minister of Finance arising out of the budget recently
March 7, 1969	COMMONS
presented in the legislature of the province of Ontario, during which the provincial treasurer of that province forecast the introduction at a later date of provincial income tax and provincial capital gains tax. I should like to ask the minister whether he will call a conference of federal and provincial finance ministers for the purpose of considering methods of co-ordinating such taxes across the country so that Canadian taxpayers will not be taxed on different bases and structures of taxation?
Hon. E. J, Benson (Minister of Finance):
Mr. Speaker, I would hope that this will be the case. I found the views of the treasurer of Ontario interesting. He was putting forward his case very well, I thought. As I previously stated, as soon as the white paper on taxation is presented to this house it is my intention to ask for meetings with the provincial finance ministers in order to discuss the matter.


David Lewis: In view of the fact that these steps by provincial finance ministers were in fact invited by the federal government when the provinces were asked to impose their own taxes, is there any reason to wait for this white paper, and should not steps be taken immediately to see to it that taxes are not imposed in an unco-ordinated way so as to create a tax jungle in Canada?


Edgar John Benson: Mr. Speaker, first of all I should like to make it clear that the provinces presently do impose their own corporate and personal income taxes, which we collect for them. In the province of Quebec the base is not quite the same as in the other provinces, and they collect their own taxes.
The proposal, as I understand it, as put forward by the treasurer of Ontario had reference to a two year period. He said within a matter of two years he would do this or that. I think there will be ample time to discuss the matter and to consider the views of the provinces as well as the views of the federal government, when the white paper is presented to the house and referred to a committee.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, would the hon. minister not think it advisable and better to have these conferences with all the provinces before the government issues its white paper, since there is a quasi committal to the provinces by the inssuance of a white paper? This would be merely following the advice the minister has received from this side of the house.
DEBATES	6335
Inquiries of the Ministry


Edgar John Benson: There have been a good many meetings of the tax structure committee and the Ministers of Finance at which the views of the provinces in respect of tax reform generally have been put forward. I think it would be terribly unfair to this house if I met with the provincial ministers of finance and discussed in detail what might be in the white paper, before it is presented to this house. We certainly welcome ideas from the provinces, and have indeed received their views on many matters.



AGRICULTURE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
Following the invitation sent to the members by the president of the organization committee of the Canadian Congress of Agriculture, would the minister tell the house whether the members of the permanent committee on agriculture will be invited as observers only or as members of the said committee? In other words, will the members of the committee have a part to play or will they attend in their individual capacity?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I understand this matter was discussed during the proceedings of the Standing Committee on Agriculture, where it was determined that it would be most useful to the members of that committee if they were invited as observers, so they would have freedom to attend any or all of the workshops at their own discretion, while the agricultural congress was on.



TRANSPORT


Mr. Jack Marshall (Humber-St. George's-Sl. Barbe):: Mr. Speaker, I have a question for the government house leader. In view of the Prime Minister's remarks yesterday in the house concerning the tunnel across the Strait of Belle Isle connecting Newfoundland and Labrador, would the government house leader refer the report of a feasibility study carried out by a subsidiary of Northumberland Consultants Ltd., which I am prepared to

March 7, 1969
Inquiries of the Ministry table, to the Standing Committee on Transport and Communications?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, the hon. member must know that the estimates of all the departments have been referred to the standing committees. I am sure that if he wanted to participate in the work of the relevant standing committee, the information which he says he has could be very useful to all members.


Mr. Baldwin:: He wants you to unmuzzle your committee members.


Jack Marshall: Mr. Speaker, would the government house leader then be prepared to allow my Bill C-125, an act to establish a Newfoundland Tunnel Authority, to come before the house for second reading?


Donald Stovel Macdonald: Mr. Speaker, I suppose every member of the house could insist that he should have priority for his bill, and on that basis we would be back in the same place.


Mr. Donald Maclnnis (Cape Breton-East Richmond):: A supplementary question, Mr. Speaker. Would the house leader accept the study in order that he and the Prime Minister may familiarize themselves with the original idea and possibly support an idea which Premier Smallwood put before the former prime minister, Mr. Pearson, on a number of occasions and about which the premier has indicated he intends to speak to the present Prime Minister?


Donald Stovel Macdonald: I did not quite follow the question, Mr. Speaker, but I suggest also to the hon. member that it might be a useful topic for discussion in the Standing Committee on National Resources and Public Works.


Donald MacInnis: Mr. Speaker, in order to clarify this matter for the house leader, would he accept this feasibility study in order to familiarize himself and the Prime Minister with the origin of the idea, and possibly make it easier to follow, instead of going off on tangents all the time?


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed

to the Prime Minister. It has to do with ownership of and sovereignty over the Arctic archipelago. I asked the question a week ago. It is a matter that falls particularly within the purview of the Prime Minister. Is he in a position to say whether representations have been made to the Department of State of the United States in connection with certain areas in the north that today are in the position of being uncertain, by reason of maps issued which indicate that it is doubtful whether or not Canadian sovereignty prevails there. All of these areas were over the years regarded as Canadian. Now that they have become very valuable, and the suggestion is made that the Americans really have a prior interest in them, would the Prime Minister be prepared to make a statement in this regard and assure Canada that Canadians as a whole support wholeheartedly the areas of the north being-


Mr. Speaker:: Order, please. The statement should be made by the Prime Minister, not by the right hon. gentleman.


John George Diefenbaker: I find that very interesting, Mr. Speaker, because I asked this question a week ago and there was no answer. It is a matter of such importance that I am sure the Prime Minister would want to assure Canadians that the Canadian government will stand firm.


Pierre Elliott Trudeau: It is a very important question, Mr. Speaker, and I have asked the several departments concerned to review the Canadian position on this matter. A position has developed over the years-


Mr. MacDonald (Egmont):: Another review?


Pierre Elliott Trudeau: Well, yes.


John George Diefenbaker: A supplementary question, Mr. Speaker. Would the Prime Minister next week have a statement made on motions, so that Canadians may not be pushed aside on a matter so important to this country? I am sure he is just as anxious as anyone in the house and the country to know where we stand and where the Americans stand on this question.


Pierre Elliott Trudeau: Mr. Speaker, I know that perhaps on some aspects of this matter the Secretary of State for External Affairs may be able to report next week. But I would find it preferable to have all aspects of this question examined before reporting to the house. I do not think it will be a very long procedure.
March 7. 19G9

It is a very complicated situation, which some members of the Conservative party do not seem to realize. There is a difference between internal waters and territorial seas. The question of innocent passage differs according to whether it is one or another.
I recognize that over the years the intentions and the policy of the Canadian government under various administrations have been clear, but this particular aspect of it has never been established. Because of the international implications which would result from a claim made by us regarding territorial rights, it is important that all the departments report on this matter before a statement is made.


John George Diefenbaker: There should be an early statement.


Mr. A. P. Gleave (Saskaloon-Biggar):: I
wish to address my question to the Minister of Industry, Trade and Commerce. In view of the fact that the rapeseed association meeting in Saskatoon last week reported that a $35 per ton increase in duty on refined rapeseed oil exported to Australia was imposed by that country last December and that at the same time no tariff changes were put into effect in the Australian market affecting entry of soybean or other edible oils, will the minister approach the appropriate Australian authorities to have this increased tariff reduced or abolished?


Hon. Jean-Luc Pepin (Minister of Industry. Trade and. Commerce):: I will certainly look into this matter and report to the hon. member as soon as I review the situation.


Alfred Pullen Gleave: I have a supplementary question. Would the minister also have his staff investigate if this is a violation of the GATT agreements?



FINANCE


Marcel Joseph Aimé Lambert: Mr. Speaker, my question is for the Minister of Finance. Will the minister please advise the house whether the over $400 million bond issue to be put on the market in April will consist of medium term or long term maturities?


Edgar John Benson: The date, amount, and terms of the issue
Inquiries of the Ministry have not yet been announced. They will be announced in due course.


Marcel Joseph Aimé Lambert: I have a supplementary question, Mr. Speaker. In contemplation of this bond marketing, has the minister considered the extensive erosion of the bond market by inflation, and the fact that there is every indication of further rises in long term interest rates as well as rises in interest rates for short term money? In what way is he going to handle the issue?


Mr. Speaker:: Order, please. For a number of reasons the supplementary question cannot be accepted.



INVITATION TO PLACE OBSERVER IN VESSEL &quot;MANHATTAN&quot;

Mr. Paul St. Pierre (Coast Chilcotin):: wonder if the minister in charge of northern affairs could respond to a supplementary question which I asked last week in this regard, that is whether Panarctic had been invited to join in the American attempt to force the northwest passage over ice of the ship Manhattan.

Hon. Jean	Chretien	(Minister of IndianAffairs	and	Northern	Development):	Mr. Speaker,	the	Panarctic Oils Limited	was
invited by the group of businessmen who started the Manhattan program, and I do not know what its answer was. Its board of directors met this week and as soon as I have received a report, I will be glad to advise the house.


Paul St. Pierre: In view of the fact that the French	government's	subsidiary in	the
north has been invited and has accepted, would the minister consider recommending to Panarctic Oil that the Canadian position be ensured by our participation in this venture.


Mr. Speaker:: Order, please. The hon. member is now making a proposition, a suggestion or a recommendation to the minister, which he must assume will be considered.



DISCUSSION OF CONTINENTAL POLICY IN NEGOTIATIONS WITH U.S.

Mr. Eldon M. Woolliams (Calgary Norlh):: Mr. Speaker, on March 3 I asked a question of the Secretary of State for External Affairs,

March 7, 1969
Inquiries of the Ministry and he said it would be answered by the appropriate minister when he was in the house. Now I direct my question to the Minister of Industry, Trade and Commerce because it deals with exports. Has the Alberta government made the suggestion to the appropriate minister in the Canadian government that a continental oil policy should be at the heart of negotiations with the United States when the Canadian Prime Minister meets with the President of the United States to discuss the matter of petroleum?


Mr. Speaker:: Order, please. I did not hear the beginning of the question asked by the hon. member but I have some doubts about the question. However, it would be much easier to allow the minister to reply to it since he seems ready to do so.


Jean-Luc Pepin: I was going to say, Mr. Speaker, that the Alberta government would address these representations to the Minister of Energy, Mines and Resources.


Mr. WooIIiams:: I addressed it to the Minister of Industry, Trade and Commerce since it was a matter of exports. May I then direct my question to the Acting Minister of Energy, Mines and Resources and ask him whether the Alberta government suggested to the Canadian government that so far as the demand for petroleum is concerned a continental oil policy should be at the heart of the negotiations.


Hon. Oito E. Lang (Minister without Portfolio):: Terms like "the continental oil policy" are a little too easy and flexible to mean very much in discussions between two governments, so I would have to answer no to the question in terms of actual representations in those words. But with that qualification I may say that I expect in a number of days to have conversations with the minister of resources of Alberta.


Donald Paul Wood: A supplementary question, Mr. Speaker. Would the minister be prepared to table the brief presented to his department by the former premier of Alberta, Mr. Manning, with reference to submissions made by the Alberta government respecting their representations on this industry?


Otto Emil Lang: I will be glad to give consideration to that.



POSSIBLE APPOINTMENT OF TASK FORCE TO STUDY POLICY

Mr. John Burion (Regina East):: I would like to ask the acting minister whether the government will consider the appointment of a task force to study oil policy, in the light of recent developments and suggestions that political concessions may be involved in the continuance of present policies?


Marcel Joseph Aimé Lambert: Mr. Speaker-


John Stratford Burton: On a point of order, Mr Speaker, I believe the Acting Minister of Energy, Mines and Resources was about to answer my question.


Otto Emil Lang: I was willing to make a comment in regard to the representation. Certainly the government is very actively concerned with the question of oil policy now and in the future. This whole question is being given active attention.



TELEGRAM PROTESTING FEDERAL SUBSIDY TO EASTERN REFINERIES

['Mr. Speaker, when the reports presently being prepared within the government are ready and form governmental policy, that policy will be announced in his house.']
Marcel Joseph Aimé Lambert: supplementary question to the Prime Minister. Has the Prime Minister received a telegram from the premier of the province protesting against federal subsidy for the construction of eastern refineries to reduce offshore crude?


Pierre Elliott Trudeau: I have received a telegram to that effect, Mr. Speaker. A reply is being prepared.



Mr. J. P. Nowlan (Annapolis Valley):: My
question is supplementary to the question asked earlier by the right hon. gentleman from Prince Albert to the Prime Minister in regard to oil policy. From the earlier reply of the Prime Minister, are we to understand there is some question of a practical political problem as to whether we have sovereignty of the lands of the north regardless of the academic legalistic problems which might be involved? Is there any problem of sovereignty?


Pierre Elliott Trudeau: I do not think it is possible to separate the practical problem from the legalistic problem.
March 7, 1969	COMMONS
Of course we claim we have sovereignty to all the lands in the north. This claim will have to be established in law, and internationally. I do not think there will be any great difficulty about the land itself, but the problem has arisen about the ice and the water and whether the water is inland or territorial water. That is a rather difficult question.


John Patrick (Pat) Nowlan: Has there been any question about sovereignty? If so, what practical steps is Canada taking to assert its sovereignty to these lands?


Mr. Speaker:: Order, please. The hon. member is asking for a general statement, as the right hon. member for Prince Albert asked. Perhaps all these questions might be answered at the same time.


John Patrick (Pat) Nowlan: With due deference, I asked two particular supplementary questions. First, has there been any question from any other country about our sovereignty? If so, what practical specific steps are being taken to assert our sovereignty? These are two specific questions on a very important subject.


Pierre Elliott Trudeau: I do not see how any doubt has arisen in the mind of the hon. member, unless he wants to claim the ice up there is ours also. This is not only a question of fact, but of law. The question was asked if there has been any doubt cast on this, and I know of no recent occasion of doubt having been raised on this. There was the question of maps purportedly issued by another country, and the Secretary of State is investigating this. As far as I know, there is no assurance on that yet.
As to the practical steps which have been taken, they have been taken over many years. The right hon. gentleman from Prince Albert initiated a number of those steps-effective occupation of the islands and deployment of the R.C.M.P. They have been going on for quite a while and I believe were intensified under the right hon. gentleman's leadership. We have continued in this direction. There have been no new steps taken in the last few weeks, if that is the question.


John George Diefenbaker: Has there been any question raised by the United States Department of State respecting ownership of these northern areas? That question did not take place under my administration as we made perfectly clear from the time of Captain Bernier and V. Ste-fansson that the northern areas belonged to 29180-402
DEBATES	6339
Inquiries of the Ministry Canada. Is there any question of that now, in view of those maps?


Pierre Elliott Trudeau: When the hon. gentleman speaks of northern areas, does he mean the land or the sea? If it is the land, there is no question about it. If he means the sea, there is a question whether it is a territorial or inland sea. If it is an inland sea, of course there is no question of passage by any vessel in those waters whether it be military or otherwise. The doctrine of innocent passage would not apply. This is the essence of the question. I do not believe the government under the leadership of the right hon. gentleman ever answered-


John George Diefenbaker: We never had to. If we
had had to answer, we would not have pussyfooted.


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: You should have had foresight.


Mr. Speaker:: I am sure hon. members will agree that the questions and answers have now reached a point of debate. Perhaps the answer to the situation would be the suggestion made by some hon. members, that a statement should be made.


Eldon Mattison Woolliams: This is in regard to answers we have been getting in connection with the north. I want to clear up a question with the minister of mines. As I understood your answer-


Mr. Speaker:: Order, please. The hon. member should direct his question to the Chair.


Eldon Mattison Woolliams: As I understand, Mr. Speaker, the minister stated last week that there is a study group now in relation to a task force. When can we expect a report covering all these matters with reference to petroleum from that group?


Otto Emil Lang: Mr. Speaker, when the reports presently being prepared within the government are ready and form governmental policy, that policy will be announced in his house.



LABOUR RELATIONS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Defence Production? In view of the fact that Canadian Aviation Electronics

March 7, 1969
Inquiries of the Ministry in Winnipeg has given lay-off notices to 150 employees, reportedly because of a transfer of government contracts to a firm in Ontario, will the minister look into this matter, will he make a statement, and will he do his best to keep this work in Winnipeg?


Hon. Donald C. Jamieson (Minister of Defence Production):: Yes, Mr. Speaker. I
shall be glad to look into this matter for the hon. member.



NATIONAL PARKS


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I wish to ask a question to the Minister of Indian Affairs and Northern Development.
Is he now in a position to tell us what are the results of the federal-provincial negotiations with respect to the establishment of the first federal park in Quebec; if not, when will he be able to do so?


Hon. Jean Chrelien (Minister of Indian Affairs and Northern Development):: As I
have said before, Mr. Speaker, I have made propositions to the provincial authorities, in September or October, and I have not yet received a final answer.



BARLEY-DECREASE IN SHIPMENTS OVERSEAS

Robert Lorne Stanfield: I would like to direct a question to the Minister of Industry, Trade and Commerce. Is the minister concerned about the fact that less than six million bushels of barley have been shipped overseas to date this year, compared with over 17 million during the same period last year? Has the minister been in touch with the Wheat Board concerning the non-existence of any forward sales of barley and the question of some 200 million bushels of barley in storage? Does the minister or the Wheat Board have in mind any new policies or changes in existing policies to meet this problem?


Jean-Luc Pepin: Yes I am concerned, Mr. Speaker. I do not know what the exact statistics are but I do know there is a difficult situation there. I have been in touch with the Wheat Board and we are doing what we can to boost sales.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. From the findings of the task force, apparently the price factor is very important in export sales of feed grain. Is the Wheat Board considering a change in policy in light of the large quantities of barley still in storage and the fact that apparently France and Australia have been underselling Canada, consequently capturing markets from us in this area?


Jean-Luc Pepin: Mr. Speaker, pricing is the main factor in this matter. We are doing our very best, because it is in our best interests, to keep pricing under the I.G.A. system as it is now. We are defending it as strongly as we can and would not like to be accused by anybody of having damaged the system. As I said, it is in our best interests, and we believe in the interests of all countries, not to damage it.



AIR TRANSPORT


Mr. W. B. Nesbiii (Oxford):: Mr. Speaker, I have a question for the Minister of Transport. Is the minister in a position to answer the question that I put to him a few days ago in the house as to whether or not the Canadian Transport Commission is giving permission for Eastern Provincial Airways and Nordair to amalgamate, which would, constitute virtually a third main line carrier in Canada?


Hon. Paul Hellyer (Minisier of Transport):: Mr. Speaker, I have had an opportunity to look into this question and the answer is that approval has not been given., However an application from Nordair was received on March 3, 1969 by the Air Transport Committee of the Canadian Transport Commission to acquire all outstanding common shares in Eastern Provincial Airways. This application will be dealt with in the course of normal procedures.



ARTS, LETTERS AND SCIENCES NATIONAL ARTS CENTRE-MLLE. MADELEINE GOBEIL

Mr. Thomas M. Bell (Saini John-Lancasier):: Mr. Speaker, I have a question for the Prime Minister with respect to the answer to question 1189 concerning the appointment by order in council of the trustees of the National Arts Centre, and in particular the appointment of Mile. Madeleine Gobeil. Will the Prime Minister say whether his repertoire in his little black book is sufficient to provide similar representation on all government boards and agencies?
March 7, 1969

Inquiries of the Ministry TRANSPORT



AGRICULTURE


Mr. Ed Schreyer (Selkirk):: Mr. Speaker, my question is directed to the Minister of Agriculture. According to data published in the Canadian Dairy Review and the Manitoba Dairy Association publication, dairy production in the prairie region of Canada has declined by 15 per cent compared with the base period of ten years. In light of that information, would the minister care to revise his answer to me Wednesday when he said that present dairy policy was not militating against the dairy producers in western Canada?


Mr. Speaker:: Order. The question as asked is academic.



REGIONAL DEVELOPMENT


John Angus MacLean: Mr. Speaker, may I direct a question to the Prime Minister. Since the government decided apparently some little time ago that it could not afford both the construction of the Northumberland causeway and the comprehensive development plan for Prince Edward Island, did the government inform the government of Prince Edward Island of this fact and seek their counsel as to which of the two projects was more essential to the economic progress of Prince Edward Island?


John Angus MacLean: A further supplementary question that I should like to direct to the Prime Minister. Did the government of Prince Edward Island agree that the comprehensive development plan should take priority over the construction of the causeway if both projects could not be proceeded with at once?


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


Mr. Hees:: On a point of order, Mr. Speaker, the two questions posed by the hon. member for Malpeque are perfectly proper and it seems ridiculous for the Prime Minister, who welcomes dialogue both in the house and in the country, to refuse to answer.
29180-402*



RAILWAY SERVICE IN WESTERN CANADA

Mr. J. H. Horner (Crowfoot):: Mr. Speaker, my question is for the Minister of Transport. Has there been any discussion, recently or in the past, between the British Columbia government and the Alberta government as to the desirability of declaring that the P.G.E. railroad of British Columbia or the A.R.R. in Alberta work for the general good of Canada?


Paul Theodore Hellyer: Mr. Speaker, I could not say offhand; certainly not that I am aware of. However, I shall be glad to inquire and if there is any information I will report it to my hon. friend.



P.E.I.-SUGGESTED ABANDONMENT OF PROJECTED CAR FERRY RATE INCREASE-REQUEST FOR DOCUMENTS

David Samuel Horne MacDonald: Mr. Speaker, I have a supplementary question for the Minister of Transport. Yesterday the hon. member for Hillsborough asked the Prime Minister about the continuing difficulties that have now been created with the cancellation of the causeway program. I wonder whether the minister would assure us that the proposed 50 per cent increase in car ferry rates will not now be implemented?


Paul Theodore Hellyer: Mr. Speaker, I would not want to give that assurance. If I recall correctly, there are some adjustments proposed, but I think more important from the standpoint of my hon. friend is the tremendous increase in services which would also be put into effect and which I think will help relieve some of the congestion that has occurred the last couple of years.


David Samuel Horne MacDonald: A further supplementary question. Since members of the house have been promised for some days copies of the documents relating to the cancellation of the causeway project, can the minister tell the house when these documents will be tabled, as agreed to some weeks ago, as a result of my notice of motion for the production of papers?


Donald Stovel Macdonald: Mr. Speaker, I will make inquiries and find out the state of this matter.

March 7, 1969
Inquiries of the Ministry



P.E.I.-REQUEST FOR IMPROVED CARIBOU-WOOD ISLAND SERVICE

Mr. H. Russell MacEwan (Central Nova):: further supplementary question to the Minister of Transport. In view of what has happened during the last two days, would the minister give full consideration to the bettering of the ferry facilities between Caribou, Nova Scotia and Wood Island, P.E.I., 'and also provide another ferry for that service? In this regard the minister has something in writing, so I would ask him to give it full consideration immediately.


Mr. Speaker:: Order. The hon. member has made a representation to the minister.



WATER RESOURCES


Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Has he had a request to meet a delegation from Manitoba to discuss the development of the Pembina River basin, and has any arrangement been made to meet this delegation?


Mr. Speaker:: Order. I think that the question might be considered at the time of adjournment.



INQUIRY OF THE MINISTRY

Mr. Donald Maclnnis (Cape Breion-Easi Richmond):: Mr. Speaker, I have a question for the Prime Minister. Is the Prime Minister aware of the dissatisfaction that is being expressed in his own party, despite the fact that all members who attended the function on Wednesday evening received medals for listening to his speech?



FINANCE


Mr. A. D. Hales (Wellington):: Mr. Speaker, I should like to address my question to the Minister of National Revenue. Before asking it however I should like to say how happy we are to see the minister looking so well, and in the house these days.


Some hon. Members:: Hear, hear.


Alfred Dryden Hales: My question arises from the many inquiries that I have had, and I am sure that many others in this house have had, in regard to why the banks and trust companies have been asked or are obliged to report

all interest and dividends over the amount of $10, when this amount was formerly $100. I would ask the minister by what authority he advised the banks to make public this information.


Mr. Speaker:: Order. I have some doubt as to the question the hon. member is asking, which is what authority the minister has to take executive action. In this form the question cannot be accepted.



ADMINISTRATION OF JUSTICE


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Prime Minister. It relates to hearings now in progress in Montreal concerning students involved in the recent destruction at Sir George Williams University, where yesterday a document and letter was seized by the court which asked that a statement of position, including progress reports of the hearing, be forwarded to the embassies of Cuba, U.S.S.R. and certain African countries. In view of the fact that it is well established that any action in communist countries such as this can only be directly related to the government of the country concerned-


Mr. Speaker:: Order.


Robert Norman Thompson: -is the government taking any steps to protest this interference in Canadian affairs?


Mr. Speaker:: Order, please.



LABOUR RELATIONS


Mr. J. Edward Broadbenf (Oshawa-Whit-by):: Mr. Speaker, may I direct a question to the right hon. Prime Minister. I understand that the Woods report is now available in French and English. In view of the requests we are getting from the trade union movement could the Prime Minister announce when this report will be tabled?


Pierre Elliott Trudeau: Not the exact date, Mr. Speaker, but the hon. member is right when he says that the translation is finished. It is being printed now and I believe it is at the proof reading stage. I can give the assurance that as soon as it is ready it will be tabled.
March 7, 1969	COMMONS



INDIAN AFFAIRS


Mr. Robert Simpson (Churchill):: Mr. Speaker, I have an urgent question for the Minister of National Health and Welfare but in his absence possibly his parliamentary secretary could answer it. In relation to the meetings held yesterday by the minister and representatives of The Pas Indian band can the parliamentary secretary advise the house if whether at that time any agreements were arrived at?


Mr. Speaker:: Order, please. I think the hon. member is asking a question which normally would be answered by way of a statement.



WHEAT-MEASURES TO COMPENSATE FOR REDUCTION IN ACREAGE

Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. In view of the conclusion of the task force on agriculture that wheat acreage should be reduced in favour of feed grain, which would result in further income reductions at present quota levels, will the government be making recommendations prior to seeding time as to what steps farmers might take to maintain if not to increase farm income despite increasing costs?


Horace Andrew (Bud) Olson: Mr. Speaker, as I have said a number of times in this house, the reports that are being made by the task force for the congress will be discussed there, and that will be later this month. I would also like to advise the hon. member that the Department of Agriculture as well as the Department of Industry, Trade and Commerce will make as much information as possible available to farmers with respect to grain sales and prospects, but it is not possible to predict accurately what the markets will be a year from now. I think the hon. member knows this.



MACE-STEPS TO PROHIBIT USE BY R.C.M.P.

Mr. John Gilbert (Broadview):: Mr. Speaker, I wish to direct a question to the Solicitor General. In view of the statement a few days ago by the Attorney General of Ontario that the use of Mace is likely to result in permanent injury to the eyes, is it the intention of the government to prohibit its use by the R.C.M.P.?
DEBATES	6343
Inquiries of the Ministry


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


John Gilbert: On a point of order, Mr. Speaker, this matter is of very urgent importance and I am sure that the Solicitor General would like to speak on it.


Mr. Speaker:: The hon. member is suggesting that the Solicitor General would like to speak on it. If a statement is contemplated, perhaps a better time to make it would be at the time of adjournment.



FISHERIES


Mr. R. E. McKinley (Huron):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. Because of increasing condemnations of fish products for pesticide residue, would the minister consider introducing legislation similar to Bill C-155 which is to compensate farmers for loss of farm products condemned for pesticide residue, and provide similar compensation for fishermen?


Hon. Jack Davis (Minister of Fisheries):: am sorry, Mr. Speaker, I did not quite catch the question.


Robert Elgin McKinley: I will ask it again, Mr. Speaker. Because of increasing condemnation of fish products for pesticide residue would the minister consider introducing legislation similar to Bill C-155, which is to compensate farmers for loss of farm products condemned for pesticide residue, and provide similar compensation for fishermen?


John (Jack) Davis: Yes, Mr. Speaker.
{Later:]


Robert Elgin McKinley: Mr. Speaker, I have a supplementary question. I was taken a little off guard by the minister's quick and short answers. I would like to ask him how soon this legislation will be introduced.


John (Jack) Davis: Possibly in the next session, Mr. Speaker.



UNEMPLOYMENT INSURANCE


Mr. Jack Cullen (Sarnia):: Mr. Speaker, I got up at five o'clock this morning to catch a plane so that I could ask this question.


Some hon. Members:: Hear, hear.

March 7, 1969
Inquiries of the Ministry


Jack Sydney George (Bud) Cullen: My question is directed to the Minister of Labour and in his absence I would ask his parliamentary secretary to take notice of it. In view of announcements by the minister's department that it is seeking out people who are improperly collecting from the Unemployment Insurance Fund, would the minister advise his investigators that crossexamination and the asking of loaded questions of retired people drawing this insurance is inviting serious protests? As a supplementary question, in regard to the refusal to permit a union representative to be present while questioning is taking place, would the minister consider that this procedure should be changed?



TELEVISING OF HOUSE AND COMMITTEE PROCEEDINGS

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I would like to direct a question to the right hon. Prime Minister. Is the government now thinking seriously of bringing parliament to the people by allowing television coverage of this chamber and, if so, when can a decision be expected?


Mr. Speaker:: Order. The hon. member realizes that this is a question which has been asked from time to time. I wonder whether it is in order to ask it again today.


Steve Eugene Paproski: Then, Mr. Speaker, may I just ask whether the Prime Minister will give serious consideration to placing before this honourable chamber an appropriate motion embodying the considerations outlined in my first question?



THE SENATE


John Patrick (Pat) Nowlan: Mr. Speaker, I wish to ask a supplementary on the question of participatory politics, which is related to television. While television may bring the general public into this chamber, when is the Prime Minister going to bring the people of British Columbia into the parliament of Canada and make the four appointments to the Senate that have long gone unannounced in that chamber?


Mr. Speaker:: Order, please. Orders of the day.



BUSINESS OF THE HOUSE

Mr. Speaker:: Is the hon. member for Winnipeg North Centre rising on a point of order?


Stanley Howard Knowles: Yes, Mr. Speaker, if I may. Yesterday the President of the Privy Council said that if the house agreed, the government would be willing today to ask for first reading of the bill to amend the Statute Law (Superannuation) Amendment Act. Since notice of this has appeared on the notice paper I wonder if the President of the Privy Council would ask the house for consent to give it first reading so that we can see what is in it? I hope there will be something in it worth seeing.


Donald Stovel Macdonald: Yes, Mr. Speaker. Would the house give unanimous consent to waiving the 48 hour notice requirement so that this bill could be given first reading today?


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Donald Stovel Macdonald: for leave to introduce Bill No. C-178 to amend the Canadian Forces Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian Mounted Police Superannuation Act, the Royal Canadian Mounted Police Pension Continuation Act and the Public Service Superannuation Act.


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


[Stage Direction]
The house resumed from Monday, February 24, consideration of the motion of Hon. E. J. Benson (Minister of Finance) that Bill No.
March 7. 1969
[Stage Direction]
C-138, to amend the Bretton Woods Agreement Act and the Currency, Mint and Exchange Fund Act be read the third time and passed.
Hon. Robert L. Staniield (Leader of the
Opposition): Mr. Speaker, I would like to make a few remarks on this bill at this stage. It is concerned with the matter of increasing drawing rights. As previously explained in the house, it is concerned with the matter of providing working capital to countries in connection with expanding world trade. By virtue of the extent of the drawing rights created it may be of some assistance, and no doubt will be of some assistance in providing more time to avert crises and to correct situations where disequilibrium exists; but primarily it is a matter of providing the world with the means of handling expanding world trade.
[DOT] (12 noon)
There has been some discussion in the house concerning whether more measures are required, whether this bill, for example, together with other provisions being made, is adequate to avert the kind of recurring crises we have had in terms of international currencies. I believe I am correct in saying the Minister of Finance (Mr. Benson) has stated that the government of Canada is giving no consideration to reverting to a floating exchange rate. We recently had a speech by the Governor of the Bank of Canada in which he emphasized the importance of countries pursuing appropriate domestic policies. The Governor has given his view that no possible reforms in international currency arrangements would be able to offset weak or misdirected domestic policies. I wish to state, Mr. Speaker that I discuss any statement made by the Governor of the Bank of Canada with great respect to him. I admire very much the contribution he is making in his office.
I think it is perfectly correct to say, as the Governor of the Bank of Canada said, that no reform of international currency arrangements can possibly be devised which would offset weak or misdirected domestic policies. I believe this is true, but I believe also that it is only part of the story today. This is what I want to emphasize. It is true we could not possibly devise any system of international currency arrangements which would offset or neutralize misdirected domestic policies. Nevertheless, where there is a seriously undervalued or seriously overvalued currency this substantial undervaluation or overvaluation
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does constitute a continuing source of trouble and danger to other countries.
For example, if it is true, as has been suggested, that the German mark is substantially undervalued, this does provide a competitive advantage to West Germany. It also constitutes a constant threat of crisis as a result of continuing speculation that sooner or later there will be some change made in the value of the German mark, that is, that it will be valued upwards or that other currencies will be devalued downwards. As long as this kind of situation exists it constitutes a potential source of crisis. On the other hand, when a situation exists in which a currency is substantially overvalued, as apparently was the case in Britain before the pound was de< al-ued and is now sometimes asserted to be toe case with regard to the French franc, this again constitutes a potential source of crisis.
We can never know when a loss of confidence will suddenly develop with regard to the continuation of affairs as they now exist. Once such a loss of confidence sets in a crisis develops, and it is very difficult to know what countries may be caught up in the crisis. Wt in Canada ought to be very much aware of this after our experience last winter which in turn, of course, followed the devaluation of the pound and the resulting feeling of uncertainty that arose from the devaluation of the pound. No country should have a better understanding than Canada of the rapidity with which crises can develop and the significance that crises can have for our country. Therefore I think we must recognize that where there is in fact either a substantial overvaluation or undervaluation of an important currency this constitutes a source of danger to us.
With all respect to the views expressed by the Governor of the Bank of Canada, I submit it is necessary to provide better machinery than we now have for correcting these situations and for revaluing currencies when they are substantially out of line with reality. Certainly we need arrangements for policing; we need arrangements for encouraging countries to follow appropriate domestic policies. Certainly I agree, as I said before, that no arrangements we make could possibly offset the detrimental effect of misdirected domestic policies. Where a serious disequilibrium develops, however, I suggest we must regard that as a potential source of crisis and danger to other countries including ourselves. We must be interested in developing more satisfactory arrangements for correcting these
[Stage Direction]
March 7, 1969
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overvaluations or undervaluations, as the case may be.
I realize that a good deal of progress has been made with regard to international currency arrangements. We have this bill now before us which represents a very substantial step forward. I would not question that at all. I believe that recently agreements have been reached between the governors of the important central banks in the world with regard to control over the movement of hot or speculative money. These are important steps forward, but I submit in all seriousness that the machinery we have now still remains inadequate and that our own monetary stability can be threatened any time by developments abroad in virtually any part of the developing world. There is a need for an orderly readjustment where necessary rather than just a policy of letting nature take its course because finally we would be confronted by very disorderly readjustments postponed to the point where they are virtual explosions when they take place.
This very day when we are discussing this matter fears exist with regard to uncertainties relating to currencies, which again remind us of how these crises can blow up quickly, of the experience we had last winter, and that it is not good enough, I suggest, simply to put the emphasis upon the importance of countries following appropriate domestic arrangements. Certainly we must emphasize that, but it is in the interests of Canada to seek improved international arrangements for removing serious disequilibriums where they exist.
I say with all respect and I hope all humility that undervaluations and overvaluations can exist which domestic policies will perhaps not correct because they have gone beyond the point where domestic policies can effect the necessary corrections. We must recognize that efforts to correct overvaluations or undervaluations of currencies may result in the development of very severe restrictions on and interference with the flow of international trade. So we need machinery to improve the methods of readjustment. As Canadians we cannot feel easy with matters as they are now. We cannot feel that arrangements today are adequate because we cannot know when we in Canada or indeed the people in virtually any country may suddenly be confronted with a crisis that has developed as a result of a lack of machinery for orderly readjustment.

[DOT] (12:10 p.m.)
No country has a greater interest in this matter than has Canada.
This is one reason I was very concerned by the attitude of the Minister of Finance (Mr. Benson) when he returned from Europe at the time of the crisis involving the franc and the mark and suggested to the Canadian people that this was really a European problem which did not relate to the Canadian dollar. It is very true that the Canadian dollar was not under attack at that time but it is most unfortunate when the Minister of Finance suggests to the people of Canada, either intentionally or otherwise, that we ought not to be seriously concerned about developments which profoundly affect another country. Anyone who knows what we went through last winter must be very conscious of the danger which may result to Canada from these crises wherever they may develop in the world.
I realize that the influence of Canada is necessarily limited. We are only one country and not the largest in the world in terms of population and influence. I realize that achieving better arrangements represents a very complicated and protracted task. I know something about the time it took to achieve international agreement between the major countries on the matter we now have under consideration, the creation of increased drawing rights. The complexity, the difficulty and the length of time involved in reaching such agreements are however, all the more reason for Canada to be pushing as hard as it can and giving whatever leadership we can in emphasizing the inadequacy of the present arrangements and working for the necessary improvements. The length of time required, plus the obvious dangers with which we are confronted, makes it imperative that we view our situation realistically, that we realize that we and other countries, perhaps Canada in particular, are in a very exposed position. I am not speaking as an alarmist, but I am speaking as one who tries to see the realities as they exist. So I urge the Minister of Finance, the Parliamentary Secretary and the government not to feel for a moment that the measure now before us makes adequate provision to meet the dangers which exist. I urge them to recognize that we do need improved arrangements and that we never know when a crisis will occur. And when it does strike it may hit us a blow which we would find difficult to fend off.
March 7, 1969
[Stage Direction]
For these reasons, since the Minister of Finance is not in the house, I urge the Parliamentary Secretary to bring to the minister's attention the representations I am making today. I urge him and his colleagues to do their best to rally the interest of other countries in this subject and to push forward toward achieving the necessary reforms in international currency arrangements so as to provide us, not with security, because we cannot have security unless we handle our own affairs properly, but at least with a feeling that we shall not constantly be menaced by crises which develop abroad over which we have no control and which we cannot affect through the conduct of our own affairs.
Mr. Alastair Gillespie (Etobicoke):: March 7, 1969
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minutes that the United States dollar is the strongest currency by far in the world at large. I also want to draw attention to the fact that too often if we think of the international monetary system purely in terms of foreign exchange we may be overlooking one of the most important things as far as Canada is concerned. I refer to the net debt position of Canada in holdings of foreign assets.
Part of the problem of dealing with the sophisticated area of international finance is a problem of language. This can also be associated with ideas of mystery, gnomes of Zurich, stealthy, shadowy characters and speculators, particularly when one refers to gold standards, gold exchange standards, which followed the gold standard, and convertibility, hot money and cool bankers, floating rates and sinking funds, runs on the pound and crawling pegs, billions and bullion. To most of the public these are terms which do not inform or illuminate.
Let us examine in a few minutes, if we may, some of the fundamental transactions which occur in the international foreign exchange system. It seems to me we are concerned primarily with three types of transaction. We are concerned with transactions which relate to financing of foreign trade. We are concerned with those things which I referred to earlier, the financing and handling of short-term capital flows, and we are equally concerned with the financing of long-term capital flows.
The financing of foreign trade is of particular importance to Canada. Last year Canadian exports rose to a record level. They increased by 19 per cent over the previous year. Canadian exports reached the unprecedented figure of $13,576 million. This put exports on a per capita basis somewhere around $650 per person in Canada. In other words, the exports Canada makes are equivalent to $650 for every person in the country. This shows enormous improvement in foreign trade by our country. This is important to a far greater extent relatively to Canada than to the United States where their exports are roughly 4 per cent of the gross national product compared with the Canadian figure which is close to 20 per cent.
What are the foreign exchange reserves which are used to finance this movement of capital in respect of the trading account, short term or long term? Essentially, up to now they have been two, gold reserves and what are called reserve currencies. The reason for the S.D.R.'s is that international liquidity as reflected by these two units, that

is gold and reserve currencies-primarily United States dollars

has not been expanding very quickly. Gold, for instance, has hardly expanded at all. The gold supply in international affairs for handling international transactions is of the order of about $40 billion. This has increased since 1950 by about $6 billion and has since tapered off. Reserve currencies, primarily United States dollars, have risen. That is to say, the holdings by other countries of United States obligations increased from $5.4 billion in 1950 to $18.3 billion in 1967. This is an increase of some $13 billion. The major part of the increase in world liquidity for the last 15 to 20 years has been provided by an increase in the gold supply of $6 billion and an increase in United States obligations of $13.5 billion. This is roughly $20 billion out of a total increase of close to $24 billion.
The United States has made it clear it is not prepared to increase its obligations abroad at the rate it has in the past. As I indicated already, the gold supply has not been increasing relatively in recent years. If we are going to finance more world trade on trading account we are going to require a new unit. This is what the special drawing right is designed to do.
Let us look then at the question of the intermediate, that is to say, the short-term massive flows which have been destabilizing the system, and which I think will continue to act as destabilizers. There is no question but that this will continue and I see no way of preventing it. We have to recognize that the frequency of short-term massive flows will grow because the relative positions of some countries will diminish through lack of productivity, lack of will, mismanagement or inflation. Their foreign exchange positions are likely to degenerate into deficits in their balance of payments. Those who are interested will start to speculate against the exchange value of that currency.
Similarly, in recent years, particularly within the last year, one can see the effect of unexpected disaster and I refer particularly to the situation in France-the student riots which stimulated or generated the situation we see in France today and about which the rest of the world is jumpy. One of the prime reasons for the current nervousness in the international monetary system, which we have noted within the last two days, is the apparent unwillingness of labour unions to accept the suggestion put to them by their leaders. In other words, there is an increasing
March 7, 19G9

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lack of confidence in the ability of France to manage its economy and retain the value of its exchange rate. At the same time the economies of other countries may grow stronger. This will happen because countries like Germany will grow faster for some of the reverse reasons I have already mentioned- better management, better technology and perhaps fortuitous circumstances. We are going to see a change between the relative positions of countries throughout the world. This will always result in speculation by those who are looking ahead in respect of the effect on the exchange value of the currency.
e (12:30 p.m.)
As we have seen, there has been an unwillingness throughout history, certainly postwar history, on the part of various countries of the world to adjust their exchange rates, as the original I.M.F. provisions anticipated, on a more gradual basis. The original figure was 10 per cent. Very few countries took advantage of this and in many cases went beyond the 10 per cent in the first bite. This has had a destabilizing effect.
Listening to the remarks of the hon. member for Waterloo (Mr. Saltsman), I was curious about his views on the floating exchange rate and how it might serve to solve some of these problems. It was a rather curious, tentative flirtation, it seemed to me. Each time he came close to his subject, each time he was just about to embrace her, he backed off and said that what we really need to do is talk about it some more.
I have referred to the short-term swings, the fact that there will almost inevitably be speculation against the rate because there will be changes occurring as between countries, the unexpected disaster aspect, possibly war, and the temporary measures that may be introduced by governments such as those introduced a little over a year ago by the United States government.
I refer now to the guidelines and to the effects of direct investment. There has been an enormous increase in foreign holdings throughout the world, that is to say, holdings by countries in the fixed assets of other countries. This has been associated with the growth of the multi-national firm. With this growth one can see that there is likely to be greater opportunity for short-term swings as far as capital flows are concerned, because the multi-national firm itself, the international firm itself, will become an agent of moving funds to protect its interests.
As I said earlier, we have seen the defensive actions taken by governments trying to prop up their balance of payments positions by increasing interest rates. This undoubtedly will continue, and undoubtedly we will see more interest arbitrage in years to come. I am trying to emphasize that I think this is the kind of world to which we must adjust ourselves. I do not think we will find easy or quick solutions. I believe we will have to continue to rely on bilateral arrangements, on massive standby credits, and in particular on the enormous strength of the United States foreign assets position. I would like to refer to that for a moment.
In 1950 the United States net external assets were $14 billion, that is to say, United States residents owned abroad $14 billion of assets more than others owned of assets within the United States. By 1966 this figure had risen to $52 billion. I am not including their gold position in this figure. This was a net increase of $38 billion in the foreign holdings of the United States. They financed this in part by a decrease in their gold supply, that is, they sold off approximately $10 billion, and by increasing their obligations in U.S. dollars. With this kind of net position abroad they are in a position at any time, through their corporations, to raise foreign exchange in very much the same way as when a company is short of liquid capital, working capital, it can raise a mortgage against its assets.
Too often we are reminded that the United States is in a deficit position in regard to its current account. It is. The United States, because it has sold off a large part of its gold holdings, because it has increased its foreign obligations, is in deficit by $3.5 billion. In the United Kingdom the figure is a little higher. But both these nations have substantial foreign holdings in fixed form. I suggest that their position is not nearly as serious as it might first appear, if we recognize this strength in behind. For instance, if the United States, as it has been doing, sells its gold, a non-revenue producing asset, to invest in new technology in Europe, surely the United States and the United States dollar are more secure, not less.
I would now like to turn to the position of Canada in the same context. We have foreign exchange reserves of the order of $2.6 billion. They have varied between $2.5 billion and $2.8 billion and may go higher as a result of certain understandings arrived at between Canada and the United States not long ago. I am concerned about the fact that we are likely to become so concerned about the level of

March 7, 1969
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our foreign exchange reserves that we will overlook one of the most important figures to Canada and Canadians. I am referring to the Canadian external assets and liabilities account and the increase in our net deficit position from $4 billion to $24 billion.
In 1949 Canadians owned foreign assets, assets abroad, of $5.3 billion, and foreigners owned in Canada $9.3 billion; in other words, others owned $4 billion more of us than we owned of them collectively. By 1907, according to the latest estimates I have, we increased our assets position by $10 billion; in other words, Canadian holdings abroad increased from slightly over $5 billion to $15 billion. At the same time, our liabilities, that is to say, what others owned of Canada, increased from $9.3 billion to $39 billion, an increase of the order of about $30 billion.
This is the mathematical reflection of the foreign ownership argument, the foreign investment argument, about which we have heard a great deal. I am sure we will hear still more about it. In my view, the fact that others own $24 billion more of us than we own of others collectively, and the fact that this has been increasing year by year, is of major concern to Canada and Canadians.
The classical economic argument was that the young country would be a debtor country but as it developed its own, infant industries, as it developed its own technology, it would break out of the debtor position and become a creditor nation. This was associated, and I think still is associated in many minds today, with Canada contributing to the under developed countries. But we are $24 billion in deficit on our foreign assets account. If we are to make major investments in the underdeveloped world we will have to find ways that we have not yet found of increasing our own wealth.
[DOT] (12:40 p.m.)
In closing I would like to emphasize that the special drawing rights are not a solution to the major problem that we have, that is, the control and understanding of short-term capital flows, but they do indicate an interest and an awareness on the part of the international community in dealing with this prob-em. They represent a very useful enterprise in co-operation on the economic front. To that extent, and to the extent that they impose disciplines on surplus nations and disciplines on deficit nations which use the S.D.R.'s they are a significant contribution to the stability of the international monetary system. We

have to recognize that there will be recurring crises. I think we should be encouraged by the fact that the United States dollar, which is the keystone of the system, is very much stronger than it appears to be, and on the other hand Canadians have to face up to the question that their deficit is increasing. We have not arrested it; it is still continuing, and each time we make ourselves more vulnerable because if at any time those who have invested in Canada decide they want to repatriate their money, to that extent they put the Canadian dollar under pressure.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in rising to speak on this bill may I say first of all that I support it. I would like to make a few brief comments on the international money system and a few suggestions as to avenues that we might explore as a nation to help in the recurring monetary crises. I am sure all of us know that it has been a bad year for the international payments system. First we had sterling devaluation, then the gold crisis and the introduction of a two-tier price for gold, and then massive speculation stemming from the belief that the mark would be revalued and the franc devalued. I have not included the so-called Canadian dollar crisis last winter because it was not in reality a crisis at all. At that time the United States spending guidelines for American corporations which were extended to subsidiaries operating in Canada caused an air of panic in the Canadian government which was both unseemly and unnecessary. A repetition of those events must be avoided at all costs.
The most recent crisis, however, has been exceptional in its sudden onset, in the degree of international disagreement it has revealed, and in its likely political and economic consequences. The immediate starting point was the political difficulties in France last spring where stability was restored by another inflationary push to the economy. France has pursued a policy of economic expansion reinforced by substantial drawings from the International Monetary Fund. Confidence in the monetary system was not forthcoming.
Germany played a crucial role in these events. It is unfortunate that our government was in hiding as our strong balance of payments position could have enabled us to participate fully in a restructured international monetary system. The franc crisis accelerated the trend toward tax increases and trade restrictions. It might be added that our intervention, if indeed there was any, was singularly unproductive. The policies that
March 7, 1969

were announced were greeted with consternation in many quarters.
The immediate question is: Will the measures be sufficient to preserve the system? Only time will tell, but few observers believe that the conference proposals have much chance of success. If this view is correct, will the revisions of the Bretton Woods Agreements Act as outlined in Bill C-138 solve our problems? Some particular tensions could be healed, but the important fact is that an imaginative approach is lacking. Political leadership appears to be lacking here. This will have important consequences, such as speeding up the attempt to enter the European Common Market with further harm to our export potentials.
It is clear, however, that major reforms can no longer be delayed in the international payments position. The United States played a less dominant role than usual recently because of the interregnum following the American election. This should have presented Canada with a greater opportunity to submit some bright new ideas.
Bill C-138 provides for special drawing rights. These apparently are allocated according to the size of each country's international monetary subscription without any further outlining of objectives. These special drawing rights provide additional lending power. The lending power that is created in this way should be used creatively, possibly in conjunction with World Bank loans or the International Development Association, or perhaps as part of a price stabilization program for primary products. This could be a big help to Canada where various products are subject to international price competition, and therefore this is something that we should push.
Some change in the American approach to the price of gold cannot be ruled out. More radical are other ideas, such as to allow greater exchange rates flexibility by using perhaps the so-called "crawling peg".
The proposed legislation could be improved in other ways too. There must be a better way to combat currency speculation.
The interrelationship of trade and aid is well known, and the dependence of our economy on exports makes it logical that we should try to think ahead, to be more pragmatic and to exert our influence in a constructive fashion. One of our problems will be to restore confidence to the international trading community.
The present policies do not have much chance of success over the long run. If this
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view is correct, it would be appropriate for Canada to be in the forefront of change and to suggest those policies which would be in our interest as long as they are consonant with the interests of the major powers. It might be added that there is little evidence that we have anyone standing up for Canada in these discussions.
May I close by saying that I feel this bill is a step in the right direction but that much more needs to be done.


Mr. Cliff Downey (Battle River):: Mr. Speaker, I believe that Bill C-138 lacks certain features. Today as never before we need new leadership in this field. After all, it is more than a generation since we instituted major reforms in our monetary system. The opposition is often erroneously scorned for its lack of constructive proposals, but I think it is a well known human failing that one blames others for one's own faults. In general I believe this bill should be approved. However, I would like to re-emphasize the words of the Leader of the Opposition (Mr. Stanfield) that international monetary systems, no matter how well they function, will not take the place of well directed domestic and trade policies within the country itself.
Most people who have thought about and studied the international monetary system agree that there is need to enlarge the world's monetary reserves, and there is no easy or simple solution to our problems in this field. For example, merely increasing the price of gold would not really solve anything. At this time we must find new solutions to new problems when the leadership and system that have been wanting must be replaced by a new point of view.
For example, the special drawing rights created by this agreement can best function if they are allied with all the reserve assets of the various participating nations. Each country could earmark part of its reserves to this new fund but would retain title to them. If Canada put in $800 million in gold, $1 billion in dollars and $500 million in special drawing rights, it would have a total credit of $2.3 billion. It could use this reserve to settle its account and would use its reserve assets in the proportion earmarked.
[DOT] (12:50 p.m.)
Again, it seems that this reserve fund could be used productively. The mere existence of an important reserve balance would enable us to put a larger percentage of our foreign exchange reserves into, for example, an aid

March 7, 1969
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program to the Colombo group. Our foreign exchange fund of $2.5 billion was inadequate a year ago, but it was supplemented by I.M.F. credits. If reserve assets were placed in a new organization, a greater proportion of those assets could be put to work in some constructive enterprise.
It has been suggested that there should be a better way of dealing with sudden capital movements in various markets such as brought about the quick flight of capital from Canada a year ago. There should be new methods to offset destabilizing but reversible short-term capital movements. Last year we had to appeal to Washington to amend its guidelines with regard to United States corporations operating in Canada. It would have been a lot less demeaning had there been some international assistance on which to call. The International Monetary Fund eventually provided us with credits, but we had to make urgent pleas to the United States first. Reserves had to be borrowed in Europe and in the United States, and subsequently our bank rate was raised to 7J per cent and the money supply was tightened. These moves, of course, hurt business activity.
Perhaps we could assist in establishing regional arrangements under the umbrella of an over-all I.M.F. system. Caribbean countries would welcome something along this line. The more these nations are helped to establish their credit, the greater the trading opportunities for us. The developing Commonwealth countries would buy more if they could obtain credits and if their currencies were more solidly established. The great resources of the free world are not in doubt. All that is needed is their effective utilization, and we must now think about taking a few steps in that direction.
Most economists now call for greater flexibility in determining exchange rates. Fixed exchange rates are not fixed forever, of coruse. All that happens is that the changes, when they occur, are bigger than they would be if there were a 1 per cent or 2 per cent annual adjustment. This kind of compromise would allow for gradual changes to take place. None would be so drastic that they could not be offset by changes in interest rates, which would prevent the flow of funds out of one country. If exchange rates varied, say, one twelfth of one per cent per month or 1 per cent per year, speculators would probably decide that currency raids were not worth the trouble. It would cost exporters and importers a little more to protect forward commitments if currencies were allowed to 
fluctuate by wider margins, but many major balance of payments disturbances could be avoided by permitting wider spreads in currency values. If speculative incentives were removed, Canada would not be so compelled to change its interest levels, regardless of the effect upon its domestic policies, in order to meet situations created by the demands of foreign creditors.
United strength has kept the free world strong and productive. The important question now is whether we can make some necessary changes. If we fail to rise to the challenge we shall only ensure that our problems will grow, and it will become more difficult later to find a way forward. I see little evidence in the bill before us of the new look necessary to ensure progress and stability.


Mr. Gray:: Mr. Speaker, I see it is only a minute or so before one o'clock. I wonder whether I might call it one o'clock?


Mr. Speaker:: I am advised that the Parliamentary Secretary has already spoken in this debate and unless there is unanimous consent he cannot speak a second time.


Stanley Howard Knowles: On
a point of order, I believe Your Honour ruled that the previous intervention by the Parliamentary Secretary was on a point of order and was not a speech.


Mr. Speaker:: As I mentioned a moment ago, I am speaking on the basis of information received. Of course, I do not have before me what was said earlier. The hon. member for Winnipeg North Centre (Mr. Knowles) reminds me of an occasion some days ago when the Parliamentary Secretary was speaking on a point of order and I had to make it clear he was not really participating in the debate. If that was the same debate, the ruling I made at that time stands, of course, and the Parliamentary Secretary will be entitled to speak after two o'clock.


Mr. Latulippe:: Mr. Speaker-


Mr. Speaker:: Does the hon. member for Compton wish to take part in the debate?


Henry P. Latulippe: Yes, Mr. Speaker.


Mr. Speaker:: There is a further complicating factor. I understand that the hon. member for Compton wishes to contribute to the
March 7, 1969

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debate, and there may be other hon. members who also wish to do so.


Herbert Eser (Herb) Gray: I gladly yield to them, Mr. Speaker.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2 p.m.
Henry P. Latulippe: Mr. Speaker, I am pleased to participate in the discussion on Bill C-138 providing for amendments to the Bretton Woods Agreements and other legislation.
Many things could be said on this subject. We had even contemplated introducing amendments but due to the international nature of this legislation which has been prepared in advance by experts in international finance, it is rather difficult for any one in a government such as ours to propose amendments. However, we should be benefiting from these agreements as we are participating in them. However, the main features have been established by the world's higher financial authorities and it is rather difficult to propose an amendment intended to reconcile the requirements of human beings and those of industry.
Therefore, such being the case, we will have to be satisfied in commenting on the general aspects of the bill and analyzing its impact on Canadians. What are the advantages to be gained by these improvements, by changes brought about by the large financial institutions?
Mr. Speaker, it is our opinion that the suggested improvements are nothing but haphazard solutions. This legislation will not cure the ills. It could delay their aggravation or diminish their effects temporarily, but the consequences are nevertheless unavoidable, until some day the situation becomes worse than ever.
[DOT] (2:10 p.m.)
In respect of debt repudiation, we have not seen the last of that. The results of these economic ills will be delayed by this sugar-coated pill prepared for us by high international finance, which we will have to swallow in spite of ail our objections. Canada could surely get out of these agreements if its economy and financial status were sound. In fact, some countries do not need them to
finance their operations, and they live just the same and even trade with other countries. We are a member of that organization, and should any difficulties arise in this country, we could get a sugar-coated pill to delay the progress of the disease. That will not remove the effects of the disease. Indeed, we shall have to put up with them later and it is just a question of time.
Mr.. Speaker, the world is always on the move, going through the failures and successes of the great international wars which are, as it were, serious surgical operations that are none the less the strong evidence of a surprising vitality and even of a better recovery.
In 1944, at the end of the war, when one could expect that it would wind up successfully for the allied powers, financial experts from all parts of the world met in Bretton Woods, in New Hampshire and laid the groundwork for postwar international operations. After long discussions, it was decided to establish the International Bank for Reconstruction and Development and the International Monetary Fund. This was considered as an economic and not a political system. Russia sent non-participating observers, because she did not want to be considered a capitalist country. She wished to retain her Communist or socialist philosophy, which of course differs from capitalism or economic liberalism.
Mr. Speaker, we are in 1969, 25 years after the Breton Woods Agreements. A quarter of a century has elapsed since those famous meetings where the great bankers of the capitalist countries laid the foundations of an international monetary system. We must reflect on the happy or unhappy results of the structures of those organizations, on their qualities which must be preserved and their weaknesses must be eliminated.
Mr. Speaker, in short, those institutions were useful and even necessary. The experience of 25 years can be very instructive and reassuring for all countries. I think the International Bank and the International Monetary Fund are necessary and must be maintained. We must study closely their mechanism with a view to improving it and making it more effective as well as more accessible to the countries which cannot benefit from it, even though they are members.
Whatever the differences, Mr. Speaker, which seem to exist between the various currencies, as well as between various methods of administration and various economic philosophies, political economy is based upon

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the same needs, the same requirements and the same imperatives.
Everywhere, Mr. Speaker, the production oi goods and services is made by adults, for the whole population. That production has two purposes: consumption of those goods and services by the whole population, and capitalization of surpluses to ensure future production as well as the development of production, producing instruments and constant productivity for a progressive national and international population.
Everywhere, Mr. Speaker, we find that production equals consumption and capitalization. Whether in a capitalist, socialist or Communist country, everywhere the production of goods and services is made for consumption and capitalization by adults and by the whole population.
Thus, a distinction should be made between monetary, economic and political systems. This new distinction, at least for persons who are not aware of the great international principles, can be very useful to understand what appears to be so complicated when money is mentioned in our economic and political discussion's.
Everyone knows that production is achieved through capital and labour, and that capital deserves a wage, an interest, if it is reasonable. The resulting buying power is then used to purchase a share of the output. All that is part and parcel of an economic system, of an international banking system or of the Bretton Woods Agreements, if you want. That is one aspect of the present economy. A distinction has to be made between the monetary system and economics.
In July 1942, the end of the war was felt to be near. The larger countries had an eye on the post-war period and were planning whatever orientation might be given to the international economy, by means of super-national agencies. In Bretton Woods, in 1944, the question was not to create the United Nations Organization but to organize the financial affairs of the capitalist nations. The point was not international policies but international finance. The two subjects are always treated separately even though financiers and statesmen of national or international standing are often the same people.
It must be understood and recognized that all those organizations are a far cry from the small enterprise and oblivious to the needs of the individuals and their families. Financial delegates or members of this great institution are only concerned with big problems.

At such a high level, that of the large undertakings, only capital and capital gains are protected and promoted. The individual, the family, the farm and the small industry are completely disregarded at the meetings of that institution. At that stage, only the mil-lionnaires in countries belonging to international institutions take part in the discussions.
[DOT] (2:20 p.m.)
One has to realize that the delegates to such great exhibitions of international financial know-how get quickly into the habit of talking in millions of dollars and easily forget the problems of cents, dollars, work, family budget, purchasing power, unemployment, social or family allowances.
Even if Mr. Deutsch resumed his post from 1963 to 1968 as president of the Economic Council of Canada, he is already used to great financial ways, to financial and international theories and principles. Even if Mr. Rasminsky became later Governor of the Bank of Canada he is already more concerned with millions and billions rather than with the needs of small institutions, families and small industries in Canada, because large businesses seem able to draw his attention. Those big shots are managing the economy of the country with a mind opened to the consideration of large projects rather than the needs of the individuals and the family. This is why I say that Mr. Rasminsky has no qualms about increasing the rates of the Bank of Canada when it suits him or the great powers, even if it is prejudicial to the nation. As Governor of the Bank of Canada, he has the power to do it and no economist or official of the present government can intervene, not even the Minister of Finance (Mr. Benson).
We must understand them and leave them to their elaborate explanations, but we must develop another argumentation from the bottom, to get to the needs of families, small family businesses, farms, stores, still the most important part of the population, without which there would be no country to sign the Bretton Woods Agreements.
If the large institutions handle millions and billions of dollars accumulated through profits, and reserve capital, it must be borne in mind that their importance is due precisely to the great many small employees, the millions of salaried workers who administer family budgets.
Among the great Canadians present at Bretton Woods were the right hon. Louis St-Laurent, then Minister of Justice and later Prime Minister of Canada, the hon. Lio-
March 7, 1969

nel Chevrier, Parliamentary Assistant to the Minister of Munitions and Supply and later Chairman of the St. Lawrence Seaway Authority, Mr. G. F. Towers, then Governor of the Bank of Canada, who remained in that office until 1955, Mr. J. J. Deutsch, Assistant to the Secretary of State for External Affairs, who was to become later the Chairman of the Economic Council of Canada in 1963, Mr. Louis Rasminsky, deputy chairman of the Central Council of the Foreign Exchange Board, who became governor of the Bank of Canada. It will be noted that all these great Canadians, like all the great financiers and politicians of other countries who were present when the Bretton Woods Agreements were signed, stood aloof from individual and family problems and were deeply interested in matters of millions and billions of dollars with which important national and international institutions are able to deal.
When they founded the International Bank and the International Monetary Fund at Bretton Woods in 1944, the least of their concerns was the protection of the individual and of the family within which the individual can grow.
It must therefore be understood, Mr. Speaker, that on that solemn occasion when the Bretton Woods Agreements were negotiated, the participants were thinking big, they were thinking in terms of millions and billions and not in terms of the cents and dollars of the citizens of Canada and other countries.
In 1944, when soldiers fell every day by the thousands on the battlefields, the importance of the individual was certainly the least worry of politicians and bankers, whether national or international.
Capital and its relevant institutions claimed all the efforts of the learned men assembled at Bretton Woods.
The idea was to place international organizations above even the most powerful and prosperous national organizations belonging to the 44 countries represented there.
Such was the spirit pervading the minds of politicians and financial leaders of the greatest countries in the world. So they set up an International Monetary Fund, and an International Bank which, in fact, are hardly anything else but extensions of national, financial and banking organizations. Such are the broad lines; details are irrelevant.
There is no use asking those huge organizations to save the individual human being, who is bom and raised only too often unfortunately in slums.
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You will notice that politicians, businessmen and bankers of high national and international standing are all university graduates so they cannot help doing what they were taught to do at the university. When they realize that their great distinction leaves behind them and their mighty organizations such dismal failures as unbalanced economies or wide gaps between the rich who go on growing richer and the poor who sink ever deeper in poverty and destitution, here is their excuse: We have to act according to what we learned at the university.
From the political, financial, economic and banking points of view, the basic training is dispensed by the same central universities, English, European or American; they teach the same political philosophy, the same techniques and the same doctrines.
The universities of Oxford, Paris, Louvain, Rome, Harvard, M.I.T., which our Canadian, European and American economists attended, teach, discuss and dialogue in the same way on all financial and economic matters.
Mr. Speaker, it is almost unbelievable. In the smallest parish, where there is a credit union, or the branch office of a bank, you will find, even if it is on a small scale, the monetary, economic and political mechanisms found on an international scale in Bretton Woods, the International Monetary Fund and the International Bank.
Whether we study the infinitely small or the infinitely large, our world is so well made, so well adjusted that we find the same phenomena, the same problems, the same solutions, the same difficulties, the same research and the same conclusions.
Everywhere money is a means of exchange controlled by the financial and economic powers that be, the great world bankers. They control the economic blood of the nation.


Edward Richard Schreyer: Mr. Speaker, may I put a question to the hon. member?


Henry P. Latulippe: Please do.


Edward Richard Schreyer: Mr. Speaker, the speech of the hon. member is most interesting.
Would he not admit that the international capitalistic system cannot exist without agreements such as those of Bretton Woods?


Henry P. Latulippe: Mr. Speaker, if I understood correctly, I am asked whether an international capitalistic system can exist without the Bretton Woods agreements?

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I shall say yes. We could denounce those agreements. All we would have to do then is to restore the balance in our national economy.
[DOT] (2:30 p.m.)
But we participate in them, because it is some kind of assurance taken for fear of future events. Since we are afraid to find ourselves in a bad position, we are participants in the Bretton Woods Agreements. We realize this is not a proper solution, but it is our belief that we can thus be assured of some protection and that we will be in a position to assist other countries which are in a similar situation. Through co-operation, those countries which are better off economically and which have signed those agreements will be able to help other countries whose economy is less well balanced.
In my opinion, those are so many reasons which explain our participation in the Bretton Woods Agreements.
Mr. Speaker, everything is on the move, production, consumption and capitalization. However, some balance and harmony should also be found everywhere. It is no more difficult to achieve this balance both on the national and the international levels than on the personal, family, municipal, provincial or federal levels. Those three national, international or world levels really exist, in a quite different way, indeed, but always according to the same laws and principles. It is a matter of economic and political administration through money, capital and credit where there is trust among fellow-men. Man is the basic element of this problem. Man is always the origin of financial transactions involving millions and billions of dollars on the national, international or world levels.
In short, considering the world history and the history of money, I heartily rejoice in the present world situation of 1969.
Some twenty five years after the Bretton Woods Agreements and the end of World War II, we can see much progress in the world. I think it is proper to say again that even though we did not have at our disposal the economic tools capable of being most helpful for high financial institutions which were more or less accessible to the people, who could not derive full benefit from them, our capitalistic system is still the best in the world. It is up to us to maintain it because as compared to the socialist or communist systems, we see

that our capitalism has a right to exist, providing we correct the abuses it allows sometimes.
When the United States succeed in sending three cosmonauts around the moon, and when Russia succeeds in coupling two Soyouz and cosmonauts in outer space, such accomplishments show the kind of progress, evolution and development achieved by the human race. And this is only the beginning of the fantastic developments expected before long. But let us come back to our monetary, economical and political problems. Man is the source of all activities, national as well as international. Instead of criticizing our monetary, economic, political and university systems, let us be happy about these marvelous accomplishments, and let us work with confidence towards the improvement of some simple details overlooked by higher authorities, overconcerned with the establishment of international organizations.
One should not blame the monetary, economic and political systems. They must be criticized if they do not operate with the greatest efficiency expected. However, all organizations are operating better and better and with more and more efficiency. Now, we must make them operate fully, with the utmost efficiency in the smallest detail as far as individual and family needs are concerned. There is abundance for all. The individual and the universal are one and the same thing. Millions and billions should not make us overlook cents and dollars. In my opinion, that is how we should first consider the Bretton Woods Agreements.
Even if, at the present time, we have not been able to improve that very complicated legislation already prepared by the great international financial organizations, yet we have something to say to influence our representatives and the leaders of the country. We must ask them to consider not only the great problems but also the lesser ones. There are minor urgent problems that must be settled. However, only great problems are dealt with, for the benefit of great institutions. Smaller institutions must also be helped. In my opinion, we are responsible for trying to influence our representatives who are negotiating the Bretton Woods Agreements.
Mr. Speaker, it is in that way that we will be able to achieve something. It is not by getting rid of everything good, because what is good should remain. It is not by destroying that we will build. We must build, but it is forbidden to destroy.
March 7, 1969

Established in 1944 through the Bretton Woods Agreements, the International Monetary Fund and the International Bank are now 25 years old. Both institutions have had significant effects. They did much more through their activities and the central leadership given to member States in the postwar period than if every country had been left on its own, without any guidelines.
The Monetary Fund and the International Bank have at least created a climate of confidence between small and great nations, between the war-torn countries which had to rebuild everything, and the countries which were spared massive destruction and we were able to co-operate, according to a definite plan, to the reconstruction and the development of devastated countries.
That those institutions have been beneficial to the most powerful of the member countries, and that others benefited less, that remains to be ascertained. Some improvements could be brought about if necessary but on the whole, the existence of those institutions has been greatly justified and much appreciated by all.
The unrest which persists in some countries can be corrected in the long run, and the weaknesses of those institutions may be remedied to ensure an even greater efficiency and benefit to all countries concerned, and even to the whole world.
The uneasiness at the heart of certain international financial organizations is similar in nature to the deficiencies which appear in the monetary, political or economic systems of countries, provinces, cities and villages. The powerful help the less fortunate, but demand to profit from it, which is normal and profitable for all concerned, large and small alike. Profit is necessary to all, but the essential thing is to bring about a certain balance between the participants. Proportion, balance, and harmony, all are needed. One must live and give to each according to his talents and his needs. We, who are strong, must help those who are not as yet. Let us help each other, for we are all friends and brothers, and we all have the same Father.
That is what we must strive to achieve, at the level of international institutions, as well as at the national, federal, provincial, regional, community, family, social, personal, and individual level.
All individuals and all nations are interdependent. The entire world is made up of human beings living on earth. Unrest between countries or citizens of the same country are
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always due to a lack of proportion, balance and harmony. All those qualities are within the scope of the human mind, according to the capacity of human beings managing different institutions.
Normally, it should not be more difficult for the Minister of Finance to balance his revenues, expenditures and profits in his national budget than for the president of the Royal Bank of Canada to balance the balance-sheet of his bank or the head of a family to balance the family budget, always according to the same sound formula: administration, revenues, expenditures and profits.
[DOT] (2:40 p.m.)
When there is abundance and over abundance for all, but some make excessive profits compelling others to show deficits prejudicial to good administration and understanding, the proportion, balance and harmony are destroyed. Whether at the individual, municipal, family or international level, those imbalances must be eliminated.
To maintain the balance of international economy the economic flow between those nations must be abundant and sufficient, because if the economic pressure exerted by institutions is too great, societies will be in a bad way and unbalanced.
On the other hand, if the economy of a country is too weak, new blood must be injected to bring about economic stability, in much the same way it is done to improve the circulation in a human body. The person who suffers from high blood pressure must get a treatment likely to lower the blood pressure. But in cases of low blood pressure, tonics must be prescribed in order to restore normal conditions, and enable the person to be active and enjoy life again.
Mr. Speaker, the same holds true in respect of national or international finance. Our economy lacks stability. In fact, some people get too much profit at the expense of others. Some people are poor because others make excessive profits. That is what is happening at both the international and national levels.
Mr. Speaker, we should try to get those things through to our distinguished university people who can improve and stabilize the world or our national economy. I have not enough connections to contact them but government members are powerful enough; they can bring forth the necessary arguments and they should think about the country. The national economy must be stabilized so that

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we can finally enjoy a perfect system which will develop to help the people and do away with the dissatisfaction and the disasters we experience today.
We must all assume our responsibilities in this respect. As far as I am concerned, I am prepared to assume my responsibility. If I were influential enough to wind my way among the participants in the negotiations on the Bretton Woods Agreements and try to make them understand my ideas, I would do it. However, I am only a member of the opposition, but common sense tells me that in spite of a lack of balance, the existing system is good. Therefore it must be retained. Capitalism is the best system in the world, it is its abuses which must be corrected. It is those abuses which are putting our economies out of balance and this explains why damage is done. We do not know the cause for the present financial uneasiness. To put an end to that uneasiness, we must remove the cause. There is always one. As long as we do not endeavour to remove the causes, we will not have settled the problem.
As to international drawing rights they are new credits which banks will be able to issue at will; the banks will issue international credits exactly as national banks are now issuing credits within their own countries. This was not done previously. It is somewhat an improvement inasmuch as it is better than nothing. However, then again, it will not solve the problem because if we are going to issue credit bearing interest, the latter will not be created at the same time. Reimbursement of credits which have been issued, plus reimbursement of interest which has not been issued will be required. This may lead, later, to a national unbalance. There still will be repudiation of debts, because we have not found the real solution to the problem.
If debt free credits had been issued, a solution to the problem would have been found, but since these new credits will run every country into debt, they will enable international bankers to take over the assets of a country. Then, one day, that country will be unable to make its payments because it will not be able to give back more than it has received, and its economy will lose its balance. From an international point of view, it is simply a time bomb given to the nations.
Again, these new credits do not constitute the real solution to the problem we should correct, but if one does not have any bread, one eats something else. This legislation is put to us all prepared in advance by these great institutions, and there is nothing we can say.
[Mr. Latulippe.l
We want to bring forward some changes, but we know that nothing will be changed. We have discussed that in committee where the bill was considered clause by clause. I asked some questions and big financiers answered that the unbalanced economic situ-aion that we know at this time, as well as the repudiations of debts we have already known, will not be eliminated. There will be more repudiations of debts. That was recognized in committee. We discussed and scrutinized this problem. I am convinced there is not much that can be changed. However, we should remain firm in our convictions.


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


Henry P. Latulippe: Merci, M. le President.


Robert Norman Thompson: Mr. Speaker, my remarks will be short and very much to the point. If hon. members have not realized it already, it is high time we came to the conclusion that just patching the crutches of present international monetary policy is not good enough. All Bill C-138 does is further extend the Bretton Woods Agreement as it applies to international financing. The needs of the international monetary situation in relation to both the developed and underdeveloped countries deserve something far more lasting and permanent than this.
It seems to me that we have no alternative at this time but to support Bill C-138. Again I say it is impossible to continue patching up the old system while at the same time thinking it is going to serve us very much longer. We can have no better example of this than the situation involving the French franc at this very moment. France is in difficulty in this regard and every nation in the free world is concerned, because no nation can stand alone on monetary policy in this time of freer trade when trade is so desperately important.
e (2:50 p.m.)
A few months ago Canada was in difficulties. At the present time our dollar is reasonably stable and our international credits are not in too bad a condition. But in view of what is happening on the world monetary scene, this condition is temporary. The American dollar is in difficulty; the British pound is in difficulty. As long as we countenance this situation we are hastening the -day of reckoning. The situation will then be all
March 7, 1969

the more difficult because a more realistic *approach was not taken to this problem.
I think Canada should be doing something to improve the situation. We are in a very favourable position to take the lead in this matter. In the Committee of Ten, which is conducting a continuing study of international monetary policies, Canada should take the lead and bring forward forthright and realistic reforms that will cause the entire monetary picture to be effective so far as the needs of the world are concerned.
Not too long ago, when studying the economic problems of some of the developing nations, I realized that the chronic deficit in the balance of international payments situation of the underdeveloped countries is such that it is increasingly difficult for these countries to even repay their obligations to the World Bank. Therefore this problem affects the underdeveloped nations as well.
One of the great needs in the international monetary area is greater liquidity. Only if we have this liquidity can we effect the transfer of those things that enter into the over-all aspect of international trade and international settlements. There is today very little support for replacing the existing system and beginning a new arrangement; therefore we continue as we have in the past, trying to fill the gaps and plug the holes in the World Bank and in the arrangements that came out of the international agreement at Bretton Woods. Therefore, the problem is forever with us.
It seems to me that one of the great needs on the international scene today is for a bank of international settlements where the problem of gold, its value and repricing could be set aside, because even as the gold standard was inadequate for us 30 years ago the gold standard on the international scene is just as inadequate today. If a bank of international settlements were set up, there could be a much freer settlement of international accounts, which would encourage trade. This would not only make the situation easier for the developing countries but would ease the pressures on the main currencies on the international scene.
My comments are aimed at that single point, Mr. Speaker. While we lend our support to Bill C-138, this is done with full acknowledgement of the fact that all we are doing is further extending a system that has already proven to be inadequate. I hope the government will take advantage of this opportunity to give leadership in the committee of which we are a major member in
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order that a completely new approach may be taken to this whole problem.
The seriousness of the situation is emphasized to us in Canada by reason of the increasing cost of living and the fact that inflation is taking a death grip on our entire economic picture as it is related to other countries of the world with whom we must compete in international trade. The agricultural industry is basically concerned with this problem. Other primary industries are concerned with it. If it were not for the tremendous imbalance of trade that we have with our neighbours across the border, the United States, perhaps we would be forced into a position where we would understand that even Canada, in its favoured position, cannot continue as we are. These few words emphasize the point I am trying to make, Mr. Speaker. I draw to the attention of the house the necessity of a completely new approach in this regard, and I urge the government to take some leadership in the matter.


Edward Richard Schreyer: Mr. Speaker, I hesitate to follow immediately the free-flowing expertise of the two previous speakers on the subject of international monetary arrangements. However, I should like to address a few words to the subject matter of Bill C-138. Some outspoken members this afternoon have referred to the Bretton Woods Agreement as being nothing but a negative force or institution in the world scene. I take this opportunity to express the conviction that it would be a sad day for the free world, the western world, if we were to lose whatever orderliness we have achieved in the postwar period through international monetary arrangements. I think the communist block would be more than happy to see some kind of departure from international monetary arrangements in the western world, because they hope that sufficient chaos would result to bring about that breakdown in the western capitalist and social democratic systems for which they have long waited. I agree that there are deficiencies in the present arrangements under the Bretton Woods Agreement. Nevertheless, the essence of the agreement is such that we must take the position that it must be reformed gradually and from time to time over the years.
In so far as the specific content of this bill is concerned, having to do with the establishment of special drawing rights, this is a welcome move. My colleague, the late hon. member for Nanaimo-Cowichan-The Islands, over

March 7, 1969
Finance
the last three or four years that I recall consistently urged successive ministers of finance to urge on the international monetary negotiators on behalf of Canada just this kind of move, namely, the establishment of special drawing rights. I see the Parliamentary Secretary to the Minister of Finance (Mr. Gray) nodding his head in agreement. I am happy that this much is established. Therefore this move, in so far as it goes, is welcomed.
However, I express disappointment that more fundamental reforms have not been suggested. Perhaps I overestimate the importance of it, but it seems to me that in the course of the last three years we have witnessed enough disequilibrium, enough shake-ups in the currencies of various countries which are party to this agreement, that we can say a malaise exists in the international monetary system.
Something more ought to be done than what is involved in Bill C-138. The creation of special drawing rights is fine. It will add to international liquidity. As has been suggested by previous speakers, the hon. member for Red Deer (Mr. Thompson) in particular, I think it is generally agreed that as world trade has increased in the past decade there has not been a proportionate increase in the means of settling the accounts involved in international trade. Therefore we welcome the move to increase liquidity by means of special drawing rights.
The question should be asked: Why was not this done sooner? I think the answer lies in the simple fact that there exists in some countries a certain basic, primitive kind of selfishness. Those countries which had a healthy balance of payments situation in previous years were often the ones that opposed any concrete move toward the establishment of special drawing rights. The same countries that opposed it when their balance of payments situation was healthy later supported the establishment of special drawing rights when their balance of payments situation turned negative.
[DOT] (3:00 p.m.)
When the situation became really bad they were the ones to become most active in advocating these special drawing rights. Perhaps it is not important to question motives, but both the United States and France created the most difficulties when special drawing rights were discussed. One of them has certainly come around full face in favour of them and, although I have not had time to

check lately, I suspect that even France has now come around to a rather lukewarm support of S.D.R.
There is another point I wish to express. It seems obvious to me that if national governments are expected to surrender some of their sovereignty in financial and economic affairs for the sake of international orderliness, this is fine. But if national governments are expected to do that, then I suggest that citizens of these nations should likewise be expected to do so. It has always surprised me that some of the countries which are parties to the Bretton Woods Agreements, and to other international monetary arrangements, have never required as a matter of law that their nationals be prohibited from holding gold in private stock.
I believe that some of the bad effects of international monetary speculations have been due in large part to the speculation carried on by private persons with large funds and economic power at their disposal. These people have used their position and privilege to speculate to the detriment of their own country, and of the free world as a whole, because if one country in the free world falls into financial chaos, it follows logically there would be a chain reaction. I do not know why the international monetary authorities have not yet recommended or requested that member national governments take legislative action to prevent or prohibit the holding of gold stocks in private hands.
I was a member of the delegation visiting France last December, and at that time the President of the French Republic took the opportunity to make a lengthy speech on the subject of international monetary arrangements, and of the French currency situation in particular. He certainly did not spare anyone's feelings in condemning the action of private speculators and the detrimental effect they have on their country and on their fellow citizens.
Although I feel that in Bill C-138 we are finally taking the desirable action hoped for in the past five years or more, namely to increase international liquidity by setting up special drawing rights, there are still other even more fundamental things to move toward in international monetary arrangements.
Finally, I should like to refer to something which the hon. member for Edmonton West (Mr. Lambert) mentioned, as reported at page 5896 of Hansard for February 24. He was joined by other hon. members, including my colleague, the hon. member for Waterloo (Mr. March 7, 1969

Finance
Saltsman). He spoke about the extent to which a member country of the Bretton Woods Agreement can choose between various kinds of foreign exchange rates. I am not sufficiently expert in the field to be able to make a judgment as to whether free floating exchange rates are preferable as compared to fixed, but it seems to me that when an international monetary arrangement impinges so much on a country's financial affairs that it cannot choose between two different kinds of exchange rates, then perhaps that international agreement is too restrictive. For slightly more than five years, we in Canada have been so rigidly committed to a fixed exchange rate that at times it put us in a nonsensical position, and this has been allowed to continue for too long.
I believe the hon. member for Edmonton West may well have had a point when he suggested that between a rigidly fixed exchange rate on the one hand and, on the other hand, a free floating exchange rate there may well be a common sense, flexible arrangement, namely an exchange rate fluctuating between an upward and a lower limit. This may well be the most sensible course for Canada to adopt. I tend to agree with him and hope that the minister, his parliamentary secretary and those with whom they are associated in the parliamentary committee, will give this suggestion very close consideration.
Mr. H. E. Gray (Parliamentary Secretary to
Minister of Finance):	Mr. Speaker, hon.
members have made many interesting comments, and expecting this to be the case I rose at the opening of this debate on third reading on a point of order to indicate that it was my intention to speak after others had spoken so that I would be able to attempt to respond to at least some of these comments.

I think it would be proper to recall that the object of this bill is to ratify certain amendments to the Bretton Woods Agreements. Those amendments resulted from negotiations during which the representatives of the Canadian people played a most active role. They provide for the creation of special drawing rights.
I must point out to the hon. member for Compton (Mr. Latulippe) that this bill is designed to allow Canada to take part in that program of special drawing rights.

The hon. member for Edmonton West (Mr. Lambert) made some interesting comments about the continuing need for conditional liquidity. I think it should be noted that even with the creation of these special drawing rights, which are a form of unconditional liquidity, there continues to be a place for conditional liquidity. The ability to have increases in this latter sort of liquidity continues to exist through the mechanisms in the International Monetary Fund agreement which makes possible increases in the existing quotas of the members of the I.M.F. In this way, the fund will be able to meet the needs of its members for both types of liquidity.
I was most interested to learn that the hon. member for Selkirk (Mr. Schreyer) seems to have a greater degree of sympathy for the workings of the Bretton Woods Agreement and the International Monetary Fund than does his colleague, the hon. member for Waterloo (Mr. Saltsman). I think it was very useful for the hon. member for Selkirk to remind the house of the views of the late Colin Cameron, the former member for Nanaimo-Cowichan-The Islands, who over the years spoke very strongly in favour of the creation of a form of managed currency in the international field which would be somewhat analogous to the managed currencies which have been created in modern countries of the west.
[DOT] (3:10 p.m.)
Certainly, I was concerned to hear what seemed to be an indication from the hon. member for Waterloo of less support for this concept than the late Colin Cameron exhibited. But I was pleased to note the support for it put forward by the hon. member for Selkirk. We should recall that Canada is particularly dependent on the existence of a smoothly operating system of international trade. The hon. member for Waterloo appeared to cast some doubt upon the wisdom of Canada's participation in such a system, but I suggest we cannot expect to enjoy its benefits if we are not prepared to take part in the processes of international negotiation and discussion for its improvement as we have been doing over the years, one result of which is the bill we are now considering. I sincerely hope the hon. member for Waterloo is not seeking a return to the conditions which persisted before the first world war, conditions of autarchy, with

March 7, 1969
Finance
declining world trade and resultant depression and unemployment.
I would point out to the hon. member for Waterloo that contrary to what he appeared to suggest in his remarks, the rules of the fund do not provide for a veto to be held by any one country. Though the size of the quota of the United States gives it a certain weight in voting, the same could be said for the common market countries acting together as they would be able to do under one of the amendments to the fund agreement which we are considering. We should recall that the International Monetary Fund exists not in the interest of any one country but in the interests of its members as a whole.
I should also point out with respect to the ability of member countries to draw what is known as the first tranche that no special conditions have been laid down in advance for so doing, contrary to what was suggested by the hon. member for Waterloo.
The special drawing rights scheme provides a way of supplementing present stocks of international reserves including those which are held in the form of gold at their existing prices. Again, therefore, contrary to what appears to have been suggested by the hon. member for Waterloo, the scheme will not have the effect of doubling the price of gold.
The hon. member for Dauphin (Mr. Ritchie) made some interesting comments about the possible uses of the new special drawing rights. It should be remembered that the purpose of creating these rights is to add to the supply of international reserves a form of unconditional liquidity. Once the scheme is in operation participating countries will be able to use these rights without accepting conditions of the type which could be imposed on them in connection with the use of the present rights, the only conditions being the repurchase obligation which I described at an earlier stage of this debate and a further obligation through which participants in the special drawing rights scheme are expected to use those rights basically for balance of payments purposes and not solely to change the condition of the reserves. I should also like to thank the hon. member for Etobicoke (Mr. Gillespie) for his useful and stimulating comments.
The participation of the Leader of the Opposition (Mr. Stanfield) in this debate demonstrates how an understanding of the importance to Canada of a smoothly operating monetary system can cut across party lines. I can assure him I shall bring his remarks to

the attention of the Minister of Finance (Mr. Benson). As he perhaps knows, I am here on behalf of the minister and on his behalf I have had carriage of this piece of legislation from the outset.
I wish to assure the hon. gentleman that the Minister of Finance and the government are following developments on the international monetary scene very closely. The active participation of Canadian representatives in negotiations leading up to the formulation of the special drawing rights scheme, and the present efforts of the government to obtain parliamentary approval for Canada's participation in it show, in my opinion at least, the importance which the government attaches to such matters.
As I pointed out during earlier stages of this bill, the special drawing rights scheme is an important step forward in the development of the international monetary system. As I have said before, and in this I agree with some of the remarks made by other hon. members, it should not be considered to be a panacea or a cure-all for the problems of the international monetary system; there will continue to be problems to be dealt with within the context of that system. Nevertheless, the existence of this scheme will help ensure that the future growth of world trade and payments will not be impeded by a lack of reserves in the system. This is very important to Canada, as the hon. member for Etobicoke pointed out, since we are a major trading nation. Our prosperity-the prosperity of our workers and farmers-depends on world trade to a degree equalled by only a very small number of other countries.
This is why I ask the house for approval of the amendments before us. They represent a package arising from negotiations in which Canadian representatives played a very active part. The passage of this bill will mean that Canada is giving formal agreement to the creation of this special drawing rights scheme as well as an indication that it will be taking part in it.
For the program to come into effect, the amendments to the International Monetary Fund agreement must be accepted by at least three-fifths of the membership of the International Monetary Fund holding at least 80 per cent of the total votes. As of December 31, 1968, 27 countries representing 42.2 per cent of the total votes had given their approval. As of February 13, 1969, 34 members representing 50.51 per cent of the total voting power had accepted the amendment. The minimum number of countries whose support is
March 7, 1969

required for the agreement to come into effect is 67 and Canada's acceptance will add a further 3.2 per cent to the votes. This will not only bring the scheme nearer to adoption but it will, it is hoped, encourage other countries to approve of the scheme coming into existence.
Once the scheme has been accepted by the required majorities it will be possible for the first time for international monetary reserves to be created by deliberate and joint action of the nations belonging to the International Monetary Fund to meet the requirements of the whole international monetary system.
I think most hon. members who participated in the work of the Standing Committee on Finance will agree with me when I say that contrary to what was suggested by the hon. member for Waterloo this bill did receive detailed study there. Serious attention was given to it by members of the committee representing all parties in this house. At the time we seemed to be completing our work, no member of the committee thought it necessary to rise to propose that the study be continued, that witnesses be recalled or that further witnesses be heard. The committee held seven meetings on the bill, earh extending over several hours, and during those meetings it heard evidence from senior officials of the Department of Finance and the Bank of Canada, the men who have represented our country in the negotiations leading to the development of this special drawing rights scheme.
The committee heard the views of economists linked with banks and investment houses on the question of exchange rates and other related aspects of the international monetary system. Members were able to question the witnesses directly on the subject of the bill and related matters in a way which would not have been possible had the bill remained in the committee of the whole house under the old rules in force before the Christmas recess. Therefore, it is my feeling that the opportunities members of the committee had there certainly brought about a broadening of understanding on the part of all who participated in the hearings on the issues and problems connected with international monetary policy.
[DOT] (3:20 p.m.)
In conclusion, let me thank the hon. members who have participated in the discussion of this bill both in the house and in the finance committee. I again ask the house for its
Control of Pesticide Use approval and support of this bill so that we can participate in this special drawing rights scheme which is a step forward in the development of a system of international payments and world trade, something very important for both the present and future prosperity of Canada.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


[Stage Direction]
The house resumed, from Friday, February 21, consideration of the motion of Mr. Olson that Bill C-157, to regulate products used for the control of pests and the organic functions of plants and animals be read the third time and passed.
John (Jack) Henry Horner: Mr. Speaker, I am not going to be too long in debating this bill which was gone into at length in committee, but there are one or two matters that I believe should once again be raised, not for the advice of Your Honour, not necessarily for the knowledge of the Minister of Agriculture (Mr. Olson), but specifically for the information of the members of this chamber and the people of Canada in general. It has been stated both in the press and on the radio that there is a growing fear that a police state is developing in this country. The minister shakes his head indicating a negative answer.


Horace Andrew (Bud) Olson: Exactly the opposite.


John (Jack) Henry Horner: The minister says from his seat "exactly the opposite". I am pleased to hear him make that comment, because this is the second piece of agricultural legislation that has granted huge powers to an individual of the minister's choosing. Under clause 6 of this bill, the minister may designate any qualified person to be an inspector under the act.
An inspector under this act is given license to open the door and enter any premises. An ordinary policeman must have a search warrant to enter a house to see whether or not drugs, for example, are on the premises; but an inspector under this act can walk into any premises without notice and carry out an inspection in any way he wishes.
Although the minister says that we are moving in the opposite direction, I have already told the house that this is the second piece of legislation connected with agriculture that grants huge powers to an individual of

March 7, 1969
Control of Pesticide Use the minister's choosing. Other pieces of legislation similar to this are continually being brought before the house to grant wide powers to individuals who, in a policeman-like manner are permitted to control use of products, or the marketing or manufacture of such products.
Therefore, I must caution the country at this time, through you, Mr. Speaker, that unless we are prepared to honour these civil liberties that we often speak of in this chamber, some day we may find ourselves severely restrained and policed. This would mean that new ideas and products, or new uses of existing products, would be restricted.
That is the point I wanted to raise on third reading of this bill, particularly so far as clauses 6 and 7 are concerned. Clause 6 gives the minister the power to choose inspectors, and clause 7 outlines the duties of such inspectors. According to this bill, inspectors may enter any place or premises for the purpose of carrying out the provisions of the act.
As a result of this provision, wide powers are conferred. The acts deals with many situations and products, including pesticides which, in a sense, are lethal drugs. Inspectors are given the power to control the normal and beneficial use of drugs and insecticides. These inspectors are given more power than we give our own police to control the spread of drugs in society.
As I say, this is the second piece of agricultural legislation that has conferred such powers, and we have seen similar powers conferred in other legislation since this government has taken office. I, therefore, raise that warning and hope it will be heard, particularly by the backbenchers of the Liberal party. I trust that this trend, or what appears to be a trend, into which the country is drifting will be stopped.


Alfred Pullen Gleave: Mr. Speaker, I have a few observations to make with regard to this bill. We have dealt with other bills in similar form that control people's actions, shall we say, because we are living in this modem age of technology. When we take this step, I think the law should have some special application to this end. My main complaint against this particular bill is that it contains provisions to enable individuals who fall afoul of the regulations made pursuant to the act to be prosecuted.
I do not think we should adopt the standard criminal procedures and apply them to actions that are taken under regulations of 
this kind. I cannot see any need for a provision in this bill to enable an individual who has violated the terms of the act to be indicted and made liable to imprisonment for two years. I do not think this situation should be permitted. The emphasis and the provision should be civil, and if I misuse the term I am sorry, but the approach should be the imposition of a fine. If a retailer or someone who operates a factory persists in violating the act, some move could be made against his operation for a period of time. An individual who has violated this act should not be classed as a criminal. It is outdated for an inspector to go to a justice of the peace, who may or may not be knowledgeable in the law, in respect of someone who in his opinion has violated this act. The inspector should go to a proper magistrate. I would assume that if there were a miscarriage of justice in this initial stage and the individual were charged, there would be a right of appeal. However, this litigation will cost him time and money.
[DOT] (3:30 p.m.)
Legislation of this type should not put the individual to any more trouble or inconvenience than is necessary to control dangerous pesticides. These can be very dangerous if used in the wrong time and place by people not aware of the possible consequences. People who act in this manner are not necessarily criminals. This is what concerns me, Mr. Speaker. The individual must not bear any more burden than is absolutely necessary. These measures may not appear important to urban dwellers.
There are five counties in the province of Ontario which have regulations concerning the movement of farm material, and these affect many farmers. I do not expect the government will change this bill at the third reading stage, but I would urge them in future to tailor the provisions of the law so that they will specifically achieve the objective which is desired.


Marcel Joseph Aimé Lambert: This bill, Mr. Speaker, seeks to control quality and distribution of pest control products. It can be deemed an honourable objective to improve the quality and method of production of these products which, as a result of experience, have shown deleterious effects when improperly manufactured or applied. Beyond that this bill is the most bureaucratic nonsense I have yet come across.
March 7, 1969

I spoke on Bills C-154, C-156 and now C-157. The minister has come up with a scissors and paste job on various sections of acts completely wiping out the rights of the individual vis-a-vis the bureaucracy that would enforce this act. I know this is quite immaterial to the minister who likes to let the juggernaut of the big government employee or representative roll over the rights of the individual.
Regulations can be made under this act, none of which require to be published. When speaking recently on one of the other acts the minister protested and said they will be published, but there is no guarantee that any regulation must be published. There is still provision in the Regulations Act that the Governor in Council can deem it necessary or expedient that the regulations shall not be published.


Horace Andrew (Bud) Olson: But we will publish them, as I told you.


Marcel Joseph Aimé Lambert: As I said the other day, Mr. Speaker, the road to Hades is paved with good intentions. These are only pious intentions. The minister's statements are not worth one iota in determining legal rights in the interpretation of this act. When it comes to a court of law, if one is able to do so, the minister's words or those of anyone else are meaningless. I ask the minister to get advice from the judicial offices of the Crown as to what is binding upon a court. We are interested in the precise letter of the law, nothing more, nothing less, rather than the minister's interpretations. The court must reach its own conclusions.
I now turn to the question of detention of products. It is the inspector who determines the seizure and detention of products. He decides how long they are to be detained or if they are to be destroyed at the owner's expense. He ensures that the provisions of the act and the regulations have been complied with, "or at the expiration of six months from the day of seizure, or such longer period as may be prescribed with respect to any control product"-
There is no statutory guarantee as to the length of time products may be detained. My colleague, the hon. member for Crowfoot (Mr. Horner) mentioned the powers of an inspector under Clause 7. As I indicated when speaking on the other bills, any qualified person acting as an inspector for the purposes of this act can move into any premises at a reasonable time. What is a reasonable time? Is it any 29180-4031
Control oj Pesticide Use time between six in the morning and ten at night or even midnight? The inspector may examine any product, search the premises and may require the production of books and bills.
[DOT] (3:40 p.m.)
There is no appeal from this provision. The man is given a certificate indentifying him as an inspector of the Minister of Agriculture for the purposes of this statute. Then he has complete right to do what he sees fit within the ambit of the regulations set by the minister. As I pointed out, police officials in search of drugs or of stolen property must have search warrants, but there is no necessity for a search warrant under this legislation.
This is bureaucracy run rampant, yet members on the government side of the house sit silent. They are the ones who are making a great show about a just society and the protection of individual liberties. It is hypocrisy on their part for them to remain silent in this case.
It is not so much the agricultural aspect of this bill that bothers me as it is the question of legal rights. Hon. members opposite laugh. I hope some day they will laugh on the other side of their faces. I hope some of them will run into circumstances where one of their constituents is caught by this provision. Then, we will see them bleating to the minister that one of their constituents has been ill treated. If that happens it will be because they have allowed the minister to ride rough shod over the rights of the individual by allowing this provision to remain in the bill.
Let us look again at clause 9, dealing with seizure and detention, and with the regulations to be made under this clause. As I said we have taken scissors and paste, taken provisions from the acts and put them altogether in this statute embracing all these offences.
The other day in committee we were dealing with Bill S-4 concerning the marking of articles made of precious metals. I argued with respect to a clause dealing with offences that the word "knowingly" had to be inserted. The minister agreed to consult the law officers of the Crown and later the government itself brought forward an amendment to insert the word. Precisely the same clause is in this bill as originally was in bill S-4.

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Control of Pesticide Use
I shall read clause 10 which states:
Every person who, or whose employee or agent, violates any provision of this act or the regulations is guilty of
(a)	an indictable offence and is liable to imprisonment for two years, or
(b)	an offence punishable on summary conviction.
In other words, a person does not even have to know he has violated the provisions of the act to be subject to a penalty of up to two years imprisonment for an indictable offence. The minister's colleague says that an offence must be committed knowingly, but the Department of Agriculture says a person is absolutely liable. Do we accept that? Is that the proper standard for justice?


Horace Andrew (Bud) Olson: May I ask the hon. member one question?


Marcel Joseph Aimé Lambert: Yes.


Horace Andrew (Bud) Olson: The person is dealing with lethal products. Shouldn't he know what he is doing?


Marcel Joseph Aimé Lambert: But there are so many ways of violating any provision in this statute, and of violating regulations that are not even published.


Horace Andrew (Bud) Olson: They will be.


Marcel Joseph Aimé Lambert: The minister says they will be. He is talking hot air, and he knows it, when he says they will necessarily be published. There is another point that the minister has failed to mention, that the burden of proof under this statute is placed upon the person himself. Clause 10(2) reads:
In any prosecution for an offence under this act, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the accused whether or not the employee or agent is identified or has been prosecuted for the offence, unless the accused establishes that the offence was committed without his knowledge or consent and that he exercised all due diligence to prevent its commission.
The burden of proof is on the accused to show that he did not know his employee was doing something in strict contravention of the act.
The minister says that these are dangerous products. I ask what about narcotics? Yet the minister arms his inspectors with far greater powers than the police have when dealing with narcotic cases.
I agree there has to be some control over pest control products, but do we need this type of control when the minister proposes to

trample over the rights of individuals in every possible way merely to satisfy a bureaucratic desire to have simple administration? It can be the rights of an individual, of a manufacturer, of a large corporation or of a small corporation. It does not matter which because this legislation will ride rough shod over their rights.
The minister has the support of hon. members sitting behind him who say nothing. As I said previously, I hope to goodness that one of these days they will laugh on the other side of their faces when one of their constituents comes to them because of action taken by the minister's officials under this legislation. I dare say most of the hon. members opposite have not read clause 5 outlining the powers given to the Governor in Council to make regulations. As so aptly pointed out by the hon. member for Peace River (Mr. Baldwin), they are prohibited from raising these points in committee.
[DOT] (3:50 p.m.)
An hon. member opposite laughs. I would just like to tell him that when we were dealing with Bill S-4 in the standing committee and I was arguing that the word "knowingly" had to be inserted in order for a person to commit an offence, Liberal members of the committee, lawyers included, started to argue that I was all wrong and that it was not necessary to insert the word. However, the Minister of Consumer and Corporate Affairs (Mr. Basford) had the good sense not to argue the case then, and simply said he would consult with the law officers of the Crown. It took him only 24 hours to let me know that he thought I was right on that point. Under the powers given to the Governor in Council by clause 5, regulations can be made that will tie up anyone and deliver him impotent for trial as the bureaucracy wishes. We are quite supine in this house when we give the cabinet all this power. We wash our hands of the thing like Pilate; that is what we think of the rights of individual citizens when we pass bills of this kind. I for one will vote against this bill not because I disagree with the fact of pest control but because I disagree with the method proposed by the government in doing this.


Cliff Downey: I, too, Mr. Speaker, am very concerned about this legislation. Under clause 7 of this bill powers are granted to an inspector who is not the choice of a group of people and who has not been elected. The inspector is to be appointed by
March 7, 1969

one man and is to be given far more power than are the police or any other official body in this nation. In all other fields of law, we are very concerned about civil rights. Even murderers, thieves and extortionists are given rights. Sometimes they are given rights that make conviction seem impossible. Yet, here we are putting into effect regulations which virtually make farmers the slaves of bureaucratic whim and which make private property rights in the agricultural segment virtually non-existent. Farmers have no guarantee of their rights in this regard. We all know that when laws are made they seldom are retracted. In the aggregate, we end up in a morass of regulations and controls which stifle personal initiative.
As my colleague the hon. member for Edmonton West (Mr. Lambert) has stated already the burden of proof in areas relating to ordinary crime is such that the individual is considered to be innocent until proven guilty. Are the farmers of this nation such terrible citizens that they must be guilty until they can prove themselves innocent? The Minister of Agriculture (Mr. Olson) has always seemed to me to be a reasonable man and therefore I ask him, for heaven's sake, and for the sake of the people in agriculture to please reconsider this clause.


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


Some hon. Members:: On division.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


Horace Andrew (Bud) Olson: that Bill C-112, to amend the Farm Machinery Syndicates Credit Act, as reported (with an amendment) from the Standing Committee on Agriculture on Friday, February 21, 1969, be concurred in.
Motion (for concurrence) agreed to.


The Acting Speaker (Mr. Bechard):: When shall the said bill be read a third time? By leave now?


Some hon. Members:: Agreed.


Horace Andrew (Bud) Olson: that the bill be read the third time and passed.
Farm Machinery Syndicates Credit Act
He said: Mr. Speaker, I should like to take a few minutes at this stage because there is a major amendment of which the members of the committee are well aware but which might not be known to all members of the house who are here this afternoon.
It is an amendment to include in the Farm Machinery Syndicates Credit Act, through passage of Bill C-112, provisions so that farmers who are Indians on reserves may have the same right and access to provisions of this act as those included in the amendment to the Farm Credit Corporation Act. In this way these farmers would have equal rights with any other citizens under the provisions of this act.


Mr. W. M. Howe (Wellingion-Grey):: Mr. Speaker, I should like to take this opportunity to say a few words on this particular piece of legislation. Before I speak specifically about it, I should like to draw the minister's attention to something which has to do with a piece of legislation that passed this house on October 15. I am referring to Bill C-lll in respect of the Farm Improvement Loans Act. The other day I was surprised to receive a report from a constituent to the effect that the regulations in respect of the part of that legislation having to do with the buying of land have not been approved. This is a rather serious matter for farmers who wish to buy additional land this year, because they find that the money they expected would be available through the medium of this act is not available. Therefore, I would ask the minister to see that these long overdue regulations in respect of loans to farmers are brought in immediately so that farmers who are planning their spring work may be able to buy the additional piece of land they wish to buy.
Now, I should like to speak about the Farm Machinery Syndicates Credit Act. I notice from the Grey County Federation of Agriculture report that the practice of going to England to buy farm tractors is still going forward. This report is in the form of a bulletin issued at the time of a "Meet the members meeting" of last week. This bulletin states in part:
The Federation of Agriculture and farm people in general are still waiting for the Barber Commission Report on Farm Machinery to he handed down. We are confident that this report will bear out the fact that Canadian farmers are being grossly overcharged for their machinery compared to their English counterparts.
Then, it goes on to say:
We are presently bringing in several tractors for our farmers to further expose this price discrepancy and with the hope that machinery com-
March 7, 1969
6368	COMMONS
Farm, Machinery Syndicates Credit Act panies will lower their prices of main-line equipment.
It is rather interesting to note that quite recently the Federation of Agriculture became interested not only in bringing in tractors but also in bringing in a great many other items of farm machinery which they suggest can be purchased in England for a good deal less than in Canada. The result is the farmers feel there is a discrepancy and that they are not being treated fairly. No tractors are being manufactured in Canada. Tractors should be available to all the farmers in Canada at the reduced prices and not just to those who, because they have some money of their own, are able to go to England to arrange for these purchases.
On a previous occasion I asked the Minister of Agriculture whether he had referred this matter to the Minister of Justice (Mr. Turner). I feel there are some great savings being made through buying this equipment in England and that there must be something wrong in the farm machinery industry in Canada in respect of profits.
[DOT] (4:00 p.m.)


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


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. With respect to private bills for today, I believe there is an understanding among those who are interested that the first bill on the list, Bill S-16, can be carried on second reading and sent to the appropriate standing committee. That will not take long and could perhaps be done in 15 or 20 minutes. I was wondering whether we could stay on government business for the next half hour or 40 minutes, proceeding a little further with the bill now before us, and then at 20 minutes or quarter to five go to private bills to deal with that bill in respect of which there is an understanding.


Gerald William Baldwin: Mr. Speaker, we would be prepared to do this following what I understand will be an interesting intervention by one of the members on this side. We would be prepared to carry on with this bill in the hope that it could be completed.


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


Some hon. Members:: Agreed.



PRIVILEGE


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I should like to rise on a question of privilege, and I beg your indulgence in permitting me to elaborate in some detail. Everybody in the house is aware of the controversy which surrounds the Canadian seal fishing industry and also that earlier in the week the minister announced his intention to visit the Atlantic area and the Gulf of St. Lawrence to personally view this operation. I think most hon. members are aware that I was personally invited to go on this trip by our caucus chairman, the hon. member for South Shore (Mr. Crouse), as a member of the fisheries committee.
As a result, the radio, television and newspaper media, were notified that this visit was to be made. From the comments received it was apparent that many Canadians were happy there would be somebody present who understood something about the other side of the story.
This trip was scheduled for 2.30 p.m. today. Despite very stringent commitments on my part and on the part of other members of our party in respect of party work, we were ready and arrangements were made so that I could personally make the visit. I was informed this morning at 9.30 that the time of departure was advanced to one o'clock, or an hour and a half earlier, the excuse being that weather conditions would not be suitable for tomorrow's activities.
I accepted this fact and, after, a great deal of confusion amongst members, it was conveniently arranged that I make the trip at one o'clock or a few minutes after in order that I might be with the minister and other members of the committee on this visit to the Atlantic region. Having made a tremendous effort with, as I suggest, a great deal of confusion, I arrived at the airport a few minutes after one o'clock only to find that the plane had departed, even though the planners of the trip-the minister's people-had been informed over an hour earlier that I would be there, and after an announcement had been made at a quarter to one that I was on my way but would be a very few minutes late. The trip began without me.
I hope these remarks will not indicate any childishness on my part in not being able to attend, but I can only draw the conclusion that this was an attempt to prevent any representative of the people who had any
March 7, 1969	COMMONS
knowledge of these fisheries problems from taking part in the visit.
My question of privilege is that when public facilities are being used for this purpose an opportunity should be given for representation of a cross-section of the Canadian public. Representatives of all the various views should be allowed to be present during such an investigation. This trip has started without any representation from this party and without, I would say, representation, of perhaps 95 per cent of the people who have a realistic outlook in respect of the problem in question.
We will now have a Davis tour of the region with no representation from our party or from those members from the Atlantic region who understand this problem. I consider this to be an unfair deal to members of the fisheries committee and the members of our party. Aside from my own personal disappointment about this trip, I feel there are a good number of people in the Atlantic region who will be disappointed that they will not be represented by anyone from the Atlantic region with an awareness of the significance of the problem and perhaps a little more realistic outlook.


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I should just like to speak to the question of privilege raised by the hon. member for Gander-Twillingate (Mr. Lundri-gan). In doing so let me say it is a matter of great regret that the minister would undertake this trip to the ice fields on this opening day of the seal hunt, neglecting to invite those of us who are interested, and who have raised this matter on numerous occasions in the house. I am thinking of the hon. member for St. John's West (Mr. Carter), myself, and the hon. member for Gander-Twillingate. We cannot all be members of the fisheries committee but, notwithstanding that, there are those of us who have a tremendous interest in this matter because of the existence of this industry in our constituencies and province. We are very concerned about the statement the minister made regarding the future of the sealing fishery and we are very much afraid the minister has only taken those people with him who share his views on the sealing industry. Regrettably none of those who are aware of the real situation and represent the people in this area will be in attendance during this visit.


The Acting Speaker (Mr. Bechard):: Is it
agreed that the house now revert to the con-
DEBATES	6369
Farm Machinery Syndicates Credit Act sideration of Bill C-112, in the hope that it may be disposed of in a half hour?


Some hon. Members:: Agreed.



FARM MACHINERY SYNDICATES CREDIT ACT


[Stage Direction]
The house resumed consideration of the Motion of Mr. Olson that Bill C-112, to amend the Farm Machinery Sydicates Credit Act, be read the third time.
William Marvin Howe: Mr. Speaker, I was discussing this bill in respect of an argument I have made several times in this house to the effect that farmers can band together, go to England and buy farm tractors and save a great deal of money. The first instance of this was brought to my attention by the Secretary of the Ontario Federation of Agriculture who maintained that on seven tractors the group saved $20,000. That is a great saving on the purchase of seven tractors. If this saving is available to a few farmers, it should be available to all farmers in Canada. I sincerely hope that the minister has brought this matter to the attention of the commission, so that we will have a complete and thorough investigation of this profit factor in connection with farm machinery.
If what I have been led to believe is true, the farmers in Canada have not been treated fairly in respect of the price of farm machinery. I said a few minutes ago that this is a field in which the Minister of Justice (Mr. Turner) should have some interest. He should make an examination of whether excessive profits are being made by farm machinery companies in this country to the detriment of the agricultural industry.
To sum up, I should like to once again draw the attention of the minister to the fact that the bill in respect of the Farm Improvement Loans Act, which was passed on October 15, 1968, many months ago, was debated in the house at some length and with some vigour by members of the opposition in an attempt to improve the legislation. As a result, we were accused of holding up loans to farmers. It is now March 7, several months later, and we find that one part of that particular bill is not yet operative because the regulations to be issued by the Department of Finance have not yet been published.
March 7. 1969
6370	COMMONS DEBATES
Farm Machinery Syndicates Credit Act
I should like to ask the minister to look into this matter and make sure that these regulations are brought into force. The farmers are in the process of planning their year's work and many of them want to buy extra land which has been made available to them through the provisions of this legislation. Because the regulations have not been approved, they cannot take advantage of this act. I sincerely hope the minister will look into this matter which I have brought to his attention.
[DOT] (4:10 p.m.)


John (Jack) Henry Horner: Mr. Speaker, I rise to speak on this bill, another piece of legislation dealing with farm credit, which is a subject of concern to the whole agricultural industry today. I very much wonder whether this bill will meet the purposes that it was once designed to meet. I remember about three years ago the former minister of agriculture, who is now in the other place, outlined his hopes and aspirations for this piece of legislation. At that time he said this measure would cure all the ills with which farmers were confronted. He said it would allow them to buy machinery jointly, which would lower their costs of production and thereby reduce the cost-price squeeze. About that time, the minister paid a glowing tribute to the legislation at a meeting in Lethbridge with the farmers of Alberta. This was about three years ago.
The legislation was presented to parliament and debated at length in this House of Commons. I said at that time that the legislation would have to do more, it would have to go further, if it were to be applicable to farming conditions and in any way fulfil a small portion of the minister's hopes and aspirations.
It does me some good to see some of the suggestions for which I argued three years ago now included in the bill. At that time farm machinery was covered. I said this was not good enough; the bill should also cover the purchase of land on which buildings could be placed. I said at that time that a building could very well be a component part of a machine or could in a sense be the entire machine. At that time I gave a lengthy definition of what was an agricultural implement and what was an agricultural machine. I asked: Did it have to have moving parts, or not? In any case, Mr. Speaker, I could not at that time convince the minister, after lengthy debate. I am sure the minister recalls the debate.

I argued for the inclusion of buildings and land on which buildings could be placed, but they were not included in the bill. I also argued for two or three other things that should be included in the bill. I should like to bring to the attention of the house those things which I argued should be included in the bill about three years ago, because perhaps three years from now the same minister or a different one will recognize that the application of the act is not nearly as broad as he thought it might be and will look for ways in which it can have broader application.
I say this, Mr. Speaker, because this act has not had very broad application. It has in fact, been very restricted in its application. It has application to family corporations or groups of farmers, sons, daughters, cousins or uncles, who are farming and can conceivably use a machine if they join forces. They can then borrow money under the act. This is the purpose for which the act has primarily been used. I do not hesitate to say that something like 66 per cent of the loans made under the act to date have been made to what one might call family clans comprising of perhaps uncles, sons, daughters, and so on, farming separately. They have banded together to buy machinery under the act.


Horace Andrew (Bud) Olson: You mean family farmers.


John (Jack) Henry Horner: I mean families farming
entirely for themselves, but the relationship existing for a family farm. The minister is mumbling away to himself, but he does not deny the 66 per cent figure which I mentioned. I think this is very close to being the fact. But if you accept that figure, you must ask yourselves why the application of the act has been narrowed and confined to groups of farmers related by blood, brothers-in-law, uncles, sisters, or what have you.
The minister has done this for one reason. That reason can only be that loans under the act must be jointly and severally held. In other words, the act provides that a maximum amount of $100,000 may be borrowed if seven farmers participate. The act suggests that they do not all have to be farmers, but the majority of them have to be farmers. The old act suggested that they all had to be farmers.
However, Mr. Speaker, that is not the point I am now trying to make. The point is that each person can borrow $15,000, and that is all he can borrow. But seven or more farmers can borrow up to a maximum of $100,000. In
March 7, 1969

this event, each person who joins the syndicate has to sign a promissory note making himself liable for $100,000. In other words, while his credit is good for only $15,000 as one-seventh of the syndicate, he has to sign a promissory note accepting liability for the total amount of $100,000. So instead of the government getting security for the $100,000, if there are seven people in the syndicate the government gets security for $700,000. Aren't they big, brave, bold lenders? I cannot accept that they are. What is the situation here? A member joining a syndicate, signing up for $100,000 and receiving the benefit of only $15,000 does so only on those occasions when he benefits the clan generally. I use the word "clan" quite generally.
When this bill was first introduced in the house about three years ago I said this was the wrong principle. I said that if the government wanted a wide application of the bill it should allow a person to sign a promissory note for that portion of the money which he was prepared to accept from the syndicate, whether it be one-fifth, one-seventh or one-hundredth. He should have to sign a promissory note for that portion only.
The minister, and the chairman of the Farm Credit Corporation, a man who I know is doing his best to have the act applied in a wide manner, have continually told me that all this is not really necessary, that the real security under the act is the machine itself for which the syndicate borrowed money. Although the machine might deteriorate, they can always pick it up. If there is a default in any way, the machine can always be picked up. Then, the government would have the machine, and I suppose in that case the syndicate would go broke or would in any event forfeit its use of the machine.
We were told that there was really nothing to worry about; farmers could just sign a promissory note for $100,000, and there would never be a foreclosure because the machine itself was part of the security. This is all the more reason for the government accepting the fact that a promissory note held jointly and severally under this act is not necessary. In fact, any wise, prudent financial operator would not sign a note for $100,000. It just is not good business sense to sign a note for $100,000 and receive the benefit of only $15,000. If the minister wants a wide application of this act, I urge him to consider this point.
When the bill was studied in committee it was pointed out that there was one syndicate that had 87 members. Under the bill the 87
DEBATES	6371
Farm Machinery Syndicates Credit Act members could borrow only $100,000, but each member signed a promissory note for $100,000 without batting an eye. When you have 87 members in a syndicate, you can bet your bottom dollar that even if five or six of them go broke and are unable to meet their liability in respect of the promissory notes, 81 or 82 members will still pick up the tab.
[DOT] (4:20 p.m.)
But if you have only seven in a syndicate, and three of them found all of a sudden they had to pay income tax on a lot of money, had to sell their holdings to do so and they did not have much security, you would be left with four people to pick up the $100,000. Then, the trouble would begin. Stringent measures may have to be taken in the years ahead in view of the present government's attitude toward collecting money. However, this is another subject with which I should like to deal at some other time. I do not believe the provisions under this act will be of great use to farmers if the government repeatedly insists that loans must be jointly and severally held. There is no reason for it. If the government really believes that the agricultural industry needs financial assistance and that loans should be made for farm machinery, it is the government's duty to make that money available to everybody, whether or not they are members of a large clan and can make use of it because of the security of the clan.
The minister must be well aware of the fact, because I have repeated it in the house several times, that the Economic Council of Canada stated in its report last fall that the agricultural industry in this country was in severe need of financing and that it was 20 years behind the agricultural industry in the United States. Surely after having read this pointed recommendation on the one way in which our industry can catch up and compete with the United States industry, the minister should make every effort to have this act apply in the widest possible way. He should make it available on an equal basis to every farmer in Canada, not just a few members of a clan or family who are farming close together and who can avail themselves of the security of the family to obtain money advanced under this act.
I would like the minister to study the question seriously. If 66 per cent of the loans under this act are in fact made to family clans, then there is a reason for it. The minister should consider this fact seriously. If
March 7, 1969
6372	COMMONS
Farm Machinery Syndicates Credit Act these are the facts, how can this legislation be changed to rectify the situation?
The second point I want to make concerns the Farm Machinery Syndicates Credit Act and farm implements. In the act we see that additional land and buildings have been added. I ask the minister: Why not cattle? Surely, in this highly technological age we have reached a sufficient degree of refinement of definitions in the field of agriculture to realize that cattle are machines which change crude proteins to refined and digestible proteins. This is, in effect, what they do. We have heard that the former minister of agriculture who is now a member of the other place came up with a new breed of cattle which he called the Hays' converter. Why does he call cattle that? Because he suggests in his advertisement that they will convert eight pounds of roughage to four pounds of beef. I would hate to eat the beef, but that has nothing to do with the point I am making.
I do not believe his advertisement. It would have to be a highly developed converter to be able to convert eight pounds of roughage to four pounds of beef.


Gerald William Baldwin: It would be pretty rough beef.


John (Jack) Henry Horner: I agree with my colleague, the hon. member for Peace River (Mr. Baldwin), that it would be pretty rough beef, and I would hate to eat it.
I see the Minister of Industry, Trade and Commerce (Mr. Pepin) is back in his seat and I should like to deal with his attitude to the problem. The Hays' converter is an example I gave to prove to the minister that he and his department should give serious consideration to adding to clause 3 paragraph (d) "to purchase feeder cattle". I am not referring to the purchase of grass cattle but rather to the final stage of the livestock industry. I am not saying we should get into the cow-calf operation and raise livestock. I am referring to the final stage of the industry which would consist of buying feeder cattle and converting them to digestible proteins and beef.
If the Minister of Industry, Trade and Commerce had ventured into western Canada lately and watched some of the cattle sales that took place last month and this month, he would realize that this converter factor is related to the fact the cattle are being fed grain. Let him try and buy some of these cattle. Who is buying them? Farmers with surplus grain and damp grain which the Minister of Industry, Trade and Commerce has not sold. Why are they paying such high


prices for them? Because they want to convert the damp grain, wheat and feed grains from an unsaleable product, from a crude protein, to a digestible protein. They are using the cattle as machines or as converters, as the minister suggests. I say that in the past ten years it has never been proven, in the highly technological age to which we have advanced that cattle are in fact machines. I am sure that the Minister of Agriculture (Mr. Olson) knows very well what I am speaking about when I refer to conversion. If he wants me to go further into the subject as to whether or not they are machines, let us look at what is ahead.
Animals are now being developed in test tubes in laboratories so that the whole gestation period in the animal's body may become unnecessary. Experiments of this kind are being carried out in scientific laboratories all over the world. Whether we like it or not, this may well happen in the future.
While I do not want to belabour the point, I hope the minister will seriously consider whether the farm machinery syndicates credit legislation can be made applicable on as wide a basis as possible. I know the minister can say there are other ways of providing money to the cattle and livestock industry, and that money can be borrowed under the farm improvement loans legislation. That is the weakest argument I have ever heard, because the Minister of Agriculture knows and the Minister of Industry, Trade and Commerce should know how many cattle it takes to move a thousand bushels of grain and what kind of machinery it takes to move that amount of grain. The initial, capital cost of that machine is not the cheapest thing in the world.
Under the farm improvement loans legislation around $15,000 can be borrowed for the purchase of feeder cattle. This is hardly enough. I believe that if this legislation made $100,000 available it would do some good. The minister says the opposition never offers constructive suggestions. Well, I have put forward two extremely important constructive suggestions as to ways in which this act could be improved and I should like him to give them serious consideration.
[DOT] (4:30 p.m.)
The third point I want to mention is of a different nature. I shall not belabour it. It has been discussed before in connection with the Farm Credit Act. I refer to the amendment dealing with loans to Indians. I should have
March 7. 1969



liked to speak last night in the debate on the problems of our Indian population. However, the amendment in this bill says that the total of outstanding loans which may be made to any one band shall not exceed $100,000. That is what we find printed on the lefthand side of the page; these are words which in essence summarize the paragraph. They are not hard to understand. They are simple and clear. Any grade eight student could interpret them. But the minister tells us it does not mean that at all. He says this applies only if the band is considered to be one syndicate, or one entity. He says there may be several entities within one band.
It appears there may be several syndicates formed in a band, each of which could borrow up to $100,000. But why, then, does the bill refer to the total amount in this way?


Horace Andrew (Bud) Olson: That is a complete misinterpretation of the act.


John (Jack) Henry Horner: The minister says it is complete misinterpretation, and I shall not belabour the point. I shall simply say he is not bringing forward very clear legislation. I am willing to bet that if he took that provision to any chief or administrator of an Indian band and asked for an interpretation he would invariably get a reply to the effect that the maximum loan to a band was to be $100,000.


Horace Andrew (Bud) Olson: That is wrong.


John (Jack) Henry Horner: The minister is continuing the stubborn attitude he adopted when the Farm Credit Act was passed. He does not want to change this, because if he changed it now he would be admitting he was wrong in the first place. The result is that every time this act goes out to an Indian administrator or supervisor or Indian chief, we shall have to send out an interpretation of this particular clause as well.
There is another point I should like to make. The Minister of Indian Affairs and Northern Development (Mr. Chretien) told the house last night that he felt ashamed every time he was called upon to give permission to an Indian to borrow something like $4,000 from the Central Mortgage and Housing Corporation. He had to sign before an Indian could borrow this money. I know the minister responsible for Indian affairs is doing his level best. He is concerned about this problem and my heart and hand go out to help him in every way I can.
What is the situation in this legislation? The same minister has to give approval
29180-404J
Private Bills
before an Indian band can borrow under these provisions. It can only be done with the approval of the Minister of Indian Affairs and Northern Development. So we have not really gone all that far; we could go a good deal further for the benefit of the Indians.
I am not particularly satisfied with what the minister has told us. I know the minister's explanation by heart. I could probably recite it as well as he could. But it will not be interpreted in the way the minister thinks it ought to be interpreted unless he is there to make his explanation.


Horace Andrew (Bud) Olson: The officers of the department will be there.


John (Jack) Henry Horner: Well, that is a wise suggestion. For a few years, perhaps, the officials of the Department of Agriculture will be there, but in later years they may not be present and the intent of the hon. gentleman might not be carried out. Other things could happen. He might be elevated to a more senior post in this government and someone else might have a different interpretation of the amendment.


Gerald William Baldwin: What about what is likely to happen at the next election?


John (Jack) Henry Horner: I do not want to think of such awful possibilities. It is interesting to consider that those who told us last night they were trying to do their best to remove these discriminations were not able to do better in this particular respect.
May I say a word on the subject of farm machinery? Why bring in legislation dealing with farm machinery when we have not yet obtained the results of the Barber Commission inquiry? The reason for making this a one man study was to speed up the process of obtaining a report.


The Acting Speaker (Mr. Richard):: Order. The time for consideration of government business has now expired and the house will revert to private members' business, namely, private bills.



PRIVATE BILLS


Mr. D. Gordon Blair (Grenville-Carlelon) moved: the second reading and reference to the Standing Committee on Finance, Trade and Economic Affairs of Bill S-16, to incorporate Transcoastal Life Insurance Company.

March 7, 1969
Private Bills
He said: The purpose of this bill is to incorporate a Canadian life insurance company to take over the existing business in Canada of the Union Mutual Life Insurance Company of Portland, Maine. This company has carried on business in Canada since 1868. In recent years its Canadian business has grown very extensively and it is a corporate decision of the directors and officers of the company that, having regard to the growth of its business, Canadian residents who now hold its policies would be better served by a company domiciled in Canada and governed by a board of directors the majority of whom would be Canadian citizens.
This bill is in the form of a model bill prescribed in the insurance company legislation with one important addition. There is included in it a provision similar to that which was included in a bill enacted by this parliament in 1967 providing for the orderly transfer of ownership in this country from United States owners to Canadian citizens. This clause provides that in the first five years after incorporation at least 25 per cent of the shares of the stock of the company would be made available to Canadian residents and that in the succeeding five years another 24 per cent would be made available, and if the general legislation made it easy I am informed that the company would willingly provide for the transfer of majority control.
It has been the custom in this chamber to provide merely a general introduction to such legislation as this on second reading, it being well understood that when the bill is referred to committee the members of that committee will have an opportunity to examine the officers and promoters of the legislation in detail.


John Gilbert: The sponsor of the bill has indicated that this is an application by a United States corporation to Incorporate a Canadian insurance company. As he pointed out, the principal shareholder will be the Union Mutual Company which has operated a branch office in Canada for the last hundred years.
[DOT] (4:40 p.m.)
The most significant breakthrough is clause 8 of the bill which, as the sponsor said, will give an opportunity for Canadians in the first five years of the incorporation to acquire a 25 per cent interest and within a ten year period a 49 per cent interest. He also indicated that it may be the desire of the company to have a majority Canadian interest in the future.

This is a real breakthrough with regard to the problem of foreign ownership in Canada. As the house knows, many members of our party, particularly the hon. member for Skeena (Mr. Howard) and the hon. member for Timiskaming (Mr. Peters), have led a campaign in regard to insurance companies and loan and trust companies the purpose of which was to make sure that there is a Canadian content in such companies. Thus far they had succeeded only with one company. We now have a second company that incorporates in its bill the provision to provide for Canadian ownership.
We would like to congratulate the sponsor of the bill on the acceptance of this principle. Looking across and seeing the Minister of Industry, Trade and Commerce (Mr. Pepin) recalls to my mind the opinions he expressed on the problem of economic nationalism and continentalism. I think he summed them up during a debate on estimates in this way, continentalism if necessary but not necessarily continentalism.


Jean-Luc Pepin: May I correct that. I said that I could be a continentalist if it were in the national interest.


John Gilbert: I am prepared to accept the minister's interpretation. Since he is a most fair and generous minister I should not like to place an interpretation upon his statement that he would think unfair. This underlines the fact that the voice in the wilderness of the past in point of time becomes the accepted opinion of most Canadians. We in the New Democratic party are rather proud that we have advanced the proposition that where there is United States participation in the Canadian economy it should be on a partnership basis, and that Canadian shareholders should be given the opportunity to participate in the activities and ownership of such companies.
I am going to read portions of a letter that was sent to me and to other members of my party regarding the attitude of this particular company. The letter was sent by the vicepresident and counsel for the applicant, a gentleman named Douglas Thornsjo, and reads:
You may recall that our sincere feeling is that all of our Canadian business belongs in a Canadian company, with a Canadian board of directors, and within a reasonable time with widespread Canadian ownership. It is our further feeling that, not only is this the fair or equitable manner by which to do business in Canada, but that in the long run, we will do better with one half or even less
March 7, 1989

of a Canadian company than we would be able to do as a United States company.
In return, what does the Canadian nation receive through this process? We believe the "bargain" clearly favours Canada because:
1)	it establishes the precedent that U.S. citizens are willing to do business in Canada as partners with Canadians and not as financial owners of Canada:
2)	it causes an existing U.S. company to withdraw from Canada because, at the end of the first calendar year of Transcoastal's licensed existence, Union Mutual by agreement will withdraw from doing any new business in Canada. In addition, all existing Union Mutual, Canadian business will be serviced (premiums paid through, questions answered by, beneficiary changes effected by, and claims paid by) the new Canadian company;
3)	investment dollars now flowing to the United States will be retained in Canada. Indeed, if the Canadian company were entered into the United States, a current probability, U.S. dollars would flow into Canada;
4)	Canadian payroll will be substantially increased;
5)	the Transcoastal bill helps to establish a precedent of safeguards pertinent to any effort which the government might take to present a bill removing from parliament the burden of handling private member, business oriented bills. In other words, some sentiment exists to the effect that private member bills such as S-16 should not take the time of parliament. The government might well be sympathetic to such sentiment. But
Private Bills
it should be made clear, in advance, that any generalized authority to charter companies outside of parliament must contain safeguards for the concept of Canadian ownership. No better technique exists than that of precedent; the precedent of failure of private bills without provision for Canadian ownership and the corelevant precedent of success for at least an occasional bill that does provide for Canadian ownership.
The vice-president set forth our views regarding this very serious problem. We are proud to permit the bill to pass and to be sent to the Standing Committee on Finance, Trade and Economic Affairs for further study.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Stanley Howard Knowles: Five o'clock.


The Acting Speaker (Mr. Richard):: Order. The hour provided for the consideration of private members' business has now expired. It being five o'clock p.m. this house stands adjourned until Monday next at 2 p.m.


[Stage Direction]
At five o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, March 10, 1969


[Stage Direction]
Seventh report of the standing committee on agriculture in French and English-Mr. Marcel Lessard (Lac-Saint-Jean).
[Editor's Note; Text of foregoing report appears in today's Votes and Proceedings.]