1969-12-19

ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I reported to the House several days ago the pleasure of the government that Her Majesty the Queen had graciously accepted an invitation to visit Canada next year, as part of the centennial celebrations of the province of Manitoba and the Northwest Territories.
I am now very pleased to be able to confirm that the Royal Party will include, in addition to Her Majesty and His Royal Highness the Duke of Edinburgh, Their Royal Highnesses the Prince of Wales and Princess Anne.

I am sure, Mr. Speaker, that all hon. members will be glad to hear this and that they will extend a warm welcome to our distinguished guests.



NATIONAL DEFENCE


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, under Standing Order 41, I am tabling in both official languages various papers on the restructuration of reserve forces.



ADJOURNMENT FOR CHRISTMAS RECESS UNTIL JANUARY 12

[Stage Direction]
On the order: Motions:
December 17, 1969-The President of the Privy Council: That when the House adjourns at the conclusion of the sitting on Friday, December 19, 1969, it shall stand adjourned until Monday, January 12, 1970, at 2.00 o'clock p.m., provided always that if it appears to the satisfaction of Mr. Speaker, after
21545-66}
consultation with Her Majesty's Government, that the public interest requires that the House should meet at an earlier time during the adjournment, Mr. Speaker may give notice that he is so satisfied, and thereupon the House shall meet at the time stated in such notice, and shall transact its business as if it had been duly adjourned to that time; and
That, in the event of Mr. Speaker being unable to act owing to illness or other cause, the Deputy Speaker or the Deputy Chairman of Committees shall act in his stead for the purpose of this order.
Mr. Macdonald (Rosedale):: Stand.


Mr. Stanfield:: Mr. Speaker, are we not to have some statement from the Government House Leader, or somebody on behalf of the government, indicating what arrangements are to be proposed to ensure that the House is in readiness to respond to any situation that may arise with regard to the air traffic difficulties? It would certainly be the wish of members on this side of the House to discharge their responsibilities and to be here either tonight or tomorrow, or as long as we may need to sit, in order to carry out our responsibilities.


Donald Stovel Macdonald: Mr. Speaker, it seems to me that the course of wisdom would be that the difficulties should be clearly identified before the House makes any decision as to its course of action.
[DOT] (11:10 a.m.)



CANADIAN SALTFISH CORPORATION


Hon. Jack Davis (Minister of Fisheries and Forestry) moved: for leave to introduce Bill C-175, to establish the Canadian Saltfish Corporation and regulate interprovincial and export trade in saltfish.


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


Donald Stovel Macdonald: for leave to introduce
2166	COMMONS DEBATES	December 19. 1969
Housing and Urban Renewal
Bill C-176, to amend the Company of Young circumstances I would think the House should Canadians Act.	not be adjourned for the purpose proposed by


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

[Stage Direction]
AGRICULTURE

[Stage Direction]
On the order: Government Notices of Motions:
December 17, 1969-The Minister without Portfolio (Wheat Board): That the Standing Committee on Agriculture be empowered to examine and inquire into the problem of distress or unreasonably low prices for non-quota feed grain being marketed in the designated area as defined by the Canadian Wheat Board Act and to report to the House observation and proposals thereon.
Mr. Speaker:: Pursuant to Section 2 of Standing Order 21 this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.



MOTION TO ADJOURN UNDER S.O. 26 HOUSING EFFECT OF ANNOUNCEMENT RESPECTING URBAN RENEWAL

Mr. John Gilbert (Broadview):: Mr. Speaker, I ask leave, seconded by the hon. member for Greenwood (Mr. Brewin), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the government's announcement of yesterday which has torpedoed urban renewal and destroyed any hope of coping with the critical problems facing our cities, making it urgent that Parliament deal immediately with the situation that has now been created before the government completely abrogates its responsibilities to Canada's urban people.


Mr. Speaker:: The hon. member has given the required notice to the Chair of his intention to move this motion under the terms of Standing Order 26. I have studied the motion carefully. I suggest to the hon. member and to the House that in the weeks ahead there will be a number of opportunities for the House to debate the policy statement made by the minister yesterday. All things considered, in the



AIR TRANSPORT


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the President of the Treasury Board whether he is in a position to inform the House if there is any indication that the agreement between the government of Canada, the Department of Transport and the air traffic controllers is to be ratified?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I think the House is aware that an agreement between the negotiating teams on both sides was entered into and is subject to ratification by the membership of the Air Traffic Controllers Association. This ratification is by means of balloting carried out at the various places of employment of the controllers across Canada, and the balloting is now in progress. It is not expected that all the results will reach Ottawa prior to either late tonight or early tomorrow. Until such time as these results come to the headquarters of the association, it will not be possible to ascertain whether the agreement has been ratified.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. May I ask the President of the Treasury Board whether the government has any plans to put before the House in the event that the vote should prove to be unfavourable? We hope it will not be unfavourable.


Charles Mills (Bud) Drury: Mr. Speaker, I do not think one would be justified in assuming that the vote will be unfavourable. There have been some newspaper stories to the effect that there has been adverse balloting. Until we know the results I think it would be unwise as well as unsafe for us to assume that it will be adverse.


Robert Lorne Stanfield: May I ask a further supplementary question, Mr. Speaker. Is the Government House Leader prepared to consult with the other House Leaders, with a view to reaching an understanding as to the mechanics that may be followed to enable the House to sit tomorrow, for example, if that should become necessary?
December 19, 1969


Donald Stovel Macdonald: Mr. Speaker, I shall be glad to consult them if there are any procedural
difficulties.



PRESENCE IN SPEAKER'S GALLERY OF MEMBERS OF NATIONAL BALLET

Donald Stovel Macdonald: Mr. Speaker, may I be permitted to call to the attention of the House the presence in Mr. Speaker's gallery of Miss Celia Franca and members of the National Ballet, including the daughter of the hon. member for London East (Mr. Turner).


Some hon. Members:: Hear, hear.


Mr. Baldwin:: There is a ballet going on over on the government side.


Mr. Diefenbaker:: The House Leader should join the ballet.



COMBINES


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I go from the sublime to the ridiculous and direct a question to the Minister of Finance.


Some hon. Members:: Oh, oh!


Mr. Greene:: This is the ridiculous now.


Thomas Clement (Tommy) Douglas: I will get to you in a moment.
May I ask the minister a question about information given to the House by his colleague, the Minister of Consumer and Corporate Affairs, to the effect that since 1963 some 606 firms under federal jurisdiction have been taken over by foreign corporations. Has the minister or his department any measures under consideration to stop this continuing process of takeover? Also, is he considering implementing a takeover tax or other measures which would help to preserve Canada's economic independence?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, if the matter were not so serious I would have said that the question is ridiculous. But it is a very serious question. The matter has come under review in my department with the assistance of my colleague, the Minister without Portfolio (Mr. Gray).
Inquiries of the Ministry


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. A few months ago, when Royal Securities Corporation Limited was taken over by Merrill Lynch and Associates, the minister informed the House that his department was making a special study of the takeover of our financial institutions. Is he now prepared to report on that investigation? If not, how soon will it be possible for him to do so?


Edgar John Benson: Mr. Speaker, I think I mentioned before that the various exchanges in the country, the stock exchanges at Toronto, Montreal and so on, were also carrying out a concurrent study. I have had some consultations with them. The study being carried out by my department and the bank is progressing well and I hope to be able to report to the House soon after the recess.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Is the minister now prepared to withdraw from his white paper proposals the five year depreciation tax on shares in widely held corporations? I think the minister himself now agrees that this tax will be a strong force in encouraging the loss of control of Canadian corporations.


Edgar John Benson: Mr. Speaker-


Mr. Speaker:: Order, please. I doubt whether the question is in order. I am sure the minister and the Leader of the Opposition realize that that is precisely the matter we are to discuss later today. Perhaps on that ground the question ought not to be allowed.



LABOUR CONDITIONS


Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I direct a question to the Minister of National Defence. I respectfully request a direct answer because the matter is of interest to several thousand people concerned and involved. Is the minister in a position to assure the House on the basis of the discussions he may have had with his United States counterpart that there will be no U.S. military bases closed in Canada in 1970?


Mr. Speaker:: Order, please. I am not sure whether this question has already been asked. In any event the minister may wish to reply in view of the importance of the matter.

December 19, 1969
Inquiries of the Ministry


Léo Alphonse Joseph Cadieux: Mr. Speaker, I do not think that a Canadian minister of defence would have any influence on the decisions taken in Washington in relation to operations in Canada. We have had discussions and we have occasionally exchanged information on the possibility of restructuring here in Canada, but we have not tried to influence the decision of the United States.


James Aloysius McGrath: A supplementary question, Mr. Speaker. Is the minister aware of the persistent rumours to the effect that the U.S. naval station at Argentia, Newfoundland, will be closing in June of next year? If so, will he ascertain as soon as possible from the United States authorities whether or not there is any truth in these rumours and make a statement to this effect?


Léo Alphonse Joseph Cadieux: Mr. Speaker, I am aware that there is a planned reduction for the base at Argentia, but I am not aware that it is going to close.



WHEAT-PROVISION OF STORAGE FACILITIES

John George Diefenbaker: Mr. Speaker, I wish to direct a question to the Minister without Portfolio responsible for the Wheat Board. In view of the restoration of the sale to the U.S.S.R. and the estimate of prospective sales for the next year which has already been made, which means that a billion bushels of wheat will be on hand in Canada, will the government give consideration to providing storage facilities throughout western Canada through the use of bins, without advertising a particular company, of the type being used in the United States to the end that the congestion in the pipeline for wheat in the elevators and also on the farms will be removed?


Hon. Otto E. Lang (Minister without Portfolio):: Mr. Speaker, we certainly consider it a very important objective indeed to avoid having the pipeline congested, which would make the handling of grain in the proper fashion at the proper times difficult. The question of the supply of grain which it is desirable to have on hand and also the question in which place that supply ought to be stored are indeed receiving consideration at the present time.


John George Diefenbaker: I thank the minister for his reply and also for conveying the idea that 
the government is now about to spend several tens of millions of dollars to provide storage for wheat to the end that the farmers will get the wheat off the farms and out of the elevators.


Mr. Speaker:: The Saskatoon-Biggar.	hon.	member	for


John George Diefenbaker: I	did	not hear	any
answer. Silence is golden.


Mr. A. P. Gleave (Saskaloon-Biggar):: supplementary question, Mr. Speaker. In light of the answer the Minister without Portfolio gave a moment ago, do his department and the Wheat Board have under consideration a program to pay storage on farms and to help farmers store grain on the farms instead of clogging the elevators?


Otto Emil Lang: Mr. Speaker, a great number of ideas are under consideration in connection with this question.



WHEAT-APPROVAL OF BARTER DEAL WITH JAPAN

Mr. S. J. Korchinski (Mackenzie):: I have a related question for the Minister without Portfolio. Now that the Wheat Board has given approval to the Saskatchewan wheat barter deal with Japan, does the federal government approve of this action or does it intend to discourage such deals in the future?


Otto Emil Lang: I should like to make it clear that the Wheat Board did not approve of this transaction but simply supplied grain on order when a purchaser was available for that grain. The position of the government remains the same with regard to these transactions. There are real trade difficulties connected with individual barter transactions which do not assure any additional sales of grain and which indeed have the problem attached to them that they may endanger price stability in the world.


Stanley James Korchinski: In view of the interest expressed by three Russian delegates attached to a visiting trade mission in investigating the possibility of exchanging Russian electrical machinery for wheat, may I ask whether the government intends to investigate the prospect of operating an exchange system on a nationwide scale instead of confining it within one province?


Otto Emil Lang: I believe the facts of recent weeks speak for themselves: our trading rela-
December 19, 1969	COMMONS
tionship with the U.S.S.R. with regard to the sale of wheat is now in a very strong position indeed.



WHEAT-PAYMENT FOR STORAGE ON FARMS

Gerald William Baldwin: I should like to ask the minister whether, in order to assist the government in the consideration of the many possibilities before it, he would give consideration to amending the notice of motion which appears in his name on the Order Paper so that the committee might have the opportunity to recommend to the government its views in connection with paying storage on farm stored grain.


Otto Emil Lang: Hon. members will recognize, I believe, that this is a distinct question unrelated to the motion on the order paper. But I shall certainly consider whether it would be useful to have that subject referred to the committee.



WHEAT-EXTENSION OF ONE-BUSHEL QUOTA TO ALL SHIPPING POINTS

Mr. Les Benjamin (Regina-Lake Centre):: In
view of the fact that the present crop year is now five months old and that only 176 shipping points in the whole area under the jurisdiction of the Wheat Board have received a one-bushel quota, can the minister advise the House whether the board has any projected date by which the remaining shipping points will be on a one-bushel quota?


Otto Emil Lang: The board has no specific target date for arriving at a one-bushel quota or, indeed, at any specific quota across the whole region in a uniform way. Uniformity is, of course, a desirable objective along with other objectives. There is a program in effect to move grain as quickly as is reasonable in the course of the winter months out of the region to the east and, as fast as is required, to the west. This should bring about a fairly rapid advance in quotas during that period.


Stanley James Korchinski: I believe the minister referred to the so-called block system which is apparently not producing the desired results, as was just indicated a few moments ago, in that only 176 points are on a one-bushel quota at this time. Will the minister at some future date after the Christmas recess make a statement on motions so as to make it clear what is really happening in connection with this whole system?
DEBATES	2169
Inquiries of the Ministry


Otto Emil Lang: I shall certainly be very glad at least to meet with the hon. member and explain to him how well, in fact, the block system is working. It was never expected that the block system would move more wheat out of the country than any other system. The whole point of the block system is to make the most efficient use of available equipment in moving wheat within the country.



PENSIONS


Mr. Stanley Knowles (Winnipeg North Centre):: May I direct a question to the President of the Treasury Board, Mr. Speaker? In view of the action of the government of Ontario in granting substantial increases in the pensions of its retired civil servants, and in view of the concern for federal superannuates felt by members of all parties in this House, will the government now consider taking action to increase the pensions of federal superannuates?


Charles Mills (Bud) Drury: As the hon. member is, I think, aware, intensive discussions and consultations are now taking place on this very subject.



AGRICULTURE


Mr. H. W. Danforth (Kent-Essex):: I should like to direct a question to the Minister of Agriculture, Mr. Speaker. It deals with published reports showing a continuing and alarming drop in farm income, which in fact amounted to 3 per cent last year. Can the minister say whether the government has any new plans to check this serious trend?


Mr. Speaker:: Order. I suggest to the hon. member and to the minister that the information now being sought is of the type which would normally be given to the House by way of a statement on motions.


Harold Warren Danforth: May I rephrase my question and simply ask the minister whether the government is aware of this trend?


Mr. Speaker:: Order.



SOCIAL SECURITY


Hon. Theogene Ricard (Sainl-Hyacinihe):: Mr. Speaker, I would like to put a question
December 19, 1969

Inquiries of the Ministry
to the Minister of Finance. Could he tell us whether the Minister of Finance has seriously considered the request made last week by the Finance Minister of Quebec who claimed from the federal government the $200 million collected in the province of Quebec through the so-called social development tax?


Edgar John Benson: Mr. Speaker, without agreeing to the figure may I say that the matter has been discussed several times and that the position of the government of Canada has been made clear.


J.-H.-Théogène Ricard: A supplementary question, Mr. Speaker. Are we to understand that the government is refusing to consider this question, as requested by the provincial government?


EXTERNAL AFFAIRS
Mr. J. Edward Broadbenl (Oshawa-Whif-by):: Mr. Speaker, I have a question for the Prime Minister. Following the appearance in a Toronto newspaper yesterday of a letter by Mr. Escott Reid which contained the assertion that the non-military clauses in the NATO treaty, including a commitment to democracy, individual liberty and the rule of law, are as important as the military clauses and have been so regarded by Canadian governments in the past, would the Prime Minister make clear to the House whether the Canadian government today regards the treaty in the same way?


Mr. Speaker:: Order. The question, in my view, is not the type of question which can be asked at this time. The hon. member is inviting the Prime Minister to make a very general statement of policy, and I would not think that could be done at this time.


John Edward Broadbent: Then may I rephrase my question. Would the Prime Minister consider making a statement on motions on this question early in the new year?



AGRICULTURE


Mr. Roch La Salle (Joliette):: Mr. Speaker,
I want to put a question to the Minister of Agriculture.
[Mr. Ricard.l
In view of the report of the Committee on Health, Welfare and Social Affairs regarding tobacco and in view also of the concern of tobacco growers, Mr. Speaker, I should like to ask the Minister of Agriculture whether he intends to cancel all the subsidies now granted to improve tobacco soils and to enlarge tobacco farms.


Hon. H. A. Olson (Minister of Agriculture):: No, Mr. Speaker; the research program that we are carrying on with the tobacco industry will be carried on at about the same level.


Roch La Salle: Mr. Speaker, I should like to ask a supplementary question.
Would the Minister of Agriculture tell us if he approves without reservations the report made by the Minister of National Health and Welfare?


Mr. Speaker:: The hon. member may ask the question, but I cannot allow the minister to answer it.



BILINGUALISM AND BICULTURALISM


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is directed to the Prime Minister. Was the Secretary of State expressing government policy in the House yesterday when he said that French language units within the Public Service are a normal continuation of government policy on bilingualism within the Public Service?


Mr. Speaker:: Order. The question might perhaps be asked in different terms, but I doubt whether according to the rules the minister can be asked if he is stating government policy when he makes a statement in the House. In asking this question I think the hon. member is alluding to the fact that such questions are allowed when statements are made outside the House. The hon. member may wish to rephrase his question.


John Patrick (Pat) Nowlan: Thank you, Mr. Speaker. Is it government policy, as stated by the Secretary of State in the House yesterday that French language units within the Public Service are a normal continuation of government policy on bilingualism in the Public Service?
December 19, 1969


Pierre Elliott Trudeau: Mr. Speaker, the government's policy on bilingualism has been stated at various times, and it would take a statement on motions to make a long review of what we are doing in this regard.


John Patrick (Pat) Nowlan: A supplementary question. I appreciate that it might take a statement on motions, but would the Prime Minister be prepared to make a statement on motions as soon as the House reconvenes, in view of the third report of the B and B commission and the statement made by the Secretary of State?


Pierre Elliott Trudeau: Mr. Speaker, as I said two days ago, the policy may have to be reviewed in the light of this report. However, it will take the government some time to read and consider this lengthy report and I should not like to make a statement until this study has been made.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, may I address my question to the Prime Minister. For how long does the government propose to wait for agreement by Nigerian and Biafran authorities to the Canadian proposal for air drops of relief supplies before giving a definite answer to Canairelief's request for support of its operations to relieve threatened starvation?


Pierre Elliott Trudeau: Mr. Speaker, I believe I indicated that we had told Dr. Johnson a period of three weeks would be the deadline at which we were aiming. The three weeks have not yet expired.



THE CANADIAN ECONOMY


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Finance whether the prediction of the OECD that there will be 4 per cent inflation in Canada in 1970 was based on information given to OECD by the Minister of Finance?


Edgar John Benson: No, Mr. Speaker.

Inquiries of the Ministry


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. In view of this prediction by OECD, has the Minister of Finance or the government any new initiatives in mind which they could take to reduce the rate of inflation in Canada to an acceptable level?


Edgar John Benson: Mr. Speaker, we are continually reviewing this subject.


Mr. Speaker:: Order, please.



ADMINISTRATION OF JUSTICE


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I have a question for the Solicitor General. I wonder whether the Solicitor General and his colleague the Minister of Justice are considering having discussions with their provincial counterparts to deal with the astounding increase in violent crimes in Canada, as exemplified by the statement of the director of police in Montreal yesterday?


Hon. G. J. Mcllrailh (Solicitor General):: Mr. Speaker, discussions are going on at the working level from time to time in regard to this problem. However, I noted the statement that was made yesterday and I will be discussing it with my colleague.


Marcel Joseph Aimé Lambert: A supplementary question. Would the hon. gentleman please take into account the proliferation of hand guns and small automatic weapons which seem to be at the root of much of this problem?


George James McIlraith: We are very much concerned with that aspect of the problem, Mr. Speaker.



HOUSING


John Gilbert: Mr. Speaker, my question is for the hard-working Minister without Portfolio in charge of housing. Would the minister refer the important and urgent question of urban renewal to the appropriate standing committee for study so that he and others may appear to air their views?


Hon. Robert K. Andras (Minister without Portfolio):: Mr. Speaker, as you yourself have indicated, there will be many opportunities for all hon. members to put forward their views as to what should be done to deal with
December 19, 1969

Inquiries of the Ministry this very important problem. I will entertain those views from any source and on any occasion.


John Gilbert: A supplementary question. When does the minister expect to be in a position to make a statement in regard to guidelines for public housing?


Robert Knight Andras: Mr. Speaker, as I indicated earlier this month, there has been delay in this matter by virtue of the fact that we have not heard from all of the provinces regarding the recommendations they wish to make. When we have we shall digest those recommendations and produce a composite proposal. Then I believe we shall have to go back to the provinces with that composite proposal in order to get some kind of consensus, and at that time I will be glad to make a statement.


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a supplementary question for the minister. Would the minister be prepared to disclose to the House today the 12 urban renewal projects, approval of which is being considered and which were not disclosed in the minister's statement yesterday?


Robert Knight Andras: Mr. Speaker, if hon. members insist then I would, of course, feel that they were entitled to that information. However, may I prevail upon them to be patient in view of the fact that we are discussing the matter with the provincial ministers concerned. They have indicated that they would prefer to have a few days in order to look the situation over and then they will communicate with me. As I say, if hon. members insist I will make such disclosure, but I think it will be in the interests of all to wait a few more days.


Lincoln MacCauley Alexander: A further supplementary question. I accept the minister's explanation in part, but may I ask him when he will be in a position to advise the House how much money is involved in these 12 projects that are being considered? In addition, would the minister advise whether those cities which received grants the last time will be assured that they will receive grants this time?


Robert Knight Andras: Mr. Speaker, the total amount of money involved in these schemes is approximately $48 million. The cities or communities that received limited participation approval in August are not included in the 12 schemes, or the $48 million to which I am referring insofar as additional funds for them are concerned.



ASSISTANCE RESPECTING FACTORY-BUILT HOMES

Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I have a related question. I appreciate that the minister is concerned about those people in Canada at the lower end of the income scale who find it difficult to get housing. Has the minister any information to give us regarding government financial assistance to factory-built homes, which he indicated earlier he was considering?


Robert Knight Andras: Mr. Speaker, we are assisting with that in the form of research. I had occasion about a month ago to see a very interesting prototype in Kenora, Ontario. I told the entrepreneur at the time that with one or two minor modifications we would be glad to endorse it. Suggestions of this sort are coming to us from time to time and we are receiving them enthusiastically. We are trying to act whenever they are valid.


Mark Willson Rose: Mr. Speaker, since the task force report also mentioned this, will the minister indicate whether his department is considering direct loans for the purchase of such factory-built homes?


Robert Knight Andras: We are not considering such direct loans, if the hon. member is talking about speculative loans under Section 40. We decided some time ago this year that we would not go ahead with this because we wanted to make direct loans under Sections 16 and 35 for low income housing units which would get on the ground as quickly as possible. We are glad to assist financially in the development of these factory-built and systems building programs in the form of research.



BUILDING SOCIETIES-REQUEST FOR FAVOURABLE TAX TREATMENT

Lincoln MacCauley Alexander: Mr. Speaker, I should like to direct a related question to the Minister of Finance. Is he in a position to advise the House whether the government looks favourably on the suggestion of assistance to building societies in view of the fact that we are suffering from a dearth of mortgage money?


Mr. Speaker:: Order, please. I do not think the question is in order.
December 19, 1969	COMMONS



THE CANADIAN ECONOMY


Mr. Henry Lalulippe (Compton):: Mr. Speaker, I would like to direct a question to the Minister of Finance.
Would he tell us if he intends to change the policy designed to fight inflation without further increasing recession in Canada?


Mr. Speaker:: The hon. member for Compton will admit, I think, that he is now asking the Minister of Finance to make a statement which would be more appropriate on motions.


EXTERNAL AFFAIRS
John George Diefenbaker: Mr. Speaker, in the absence of the Secretary of State for External Affairs I should like to ask the Prime Minister whether there is any foundation for the radio report to the effect that negotiations in respect of the recognition of Communist China have arrived at the point where it may be expected that within ten days recognition will be announced by the government, during a time when the House will not be in session?


Mr. Speaker:: Order, please. Before the right hon. Prime Minister replies to the question I might say that the right hon. gentleman realizes hon. members cannot ask the government to confirm or deny statements. We will assume that the question has been asked directly of the Prime Minister.


Pierre Elliott Trudeau: Mr. Speaker, I have not heard this rumour. This is news to me. Perhaps the hon. gentleman has some information from Russia that I do not have.


John George Diefenbaker: I have not been in touch with Dr. Lin so I have not the latest information. The Prime Minister must have that information. In regard to the question of recognition, is the Prime Minister refusing to answer the question whether or not the present long extended negotiations are about to achieve results?


Pierre Elliott Trudeau: Mr. Speaker, I repeat that I have had no information to this effect by way of rumour or otherwise. The department will be answering questions on Monday. Perhaps the hon. gentleman might ask the minister then.
DEBATES	2173
Inquiries of the Ministry Mr. Diefenbaker:	Questions will be
answered on Monday? Does that mean we are going to sit in order to deal with the railway problem?


Some hon. Members:: Oh, oh!


An hon. Member:: Are you going to railroad
the air strike?


John George Diefenbaker: Mr. Speaker, as a result of a lapsus linguae-I think that is the proper term-I said "railway problem" when I meant air transport problem.



INDIAN AFFAIRS


Mr. Frank Howard (Skeena):: Mr. Speaker, having in mind the generosity I know the Minister of Indian Affairs and Northern Development wants to display at this time of the year, I am sure he is just waiting to answer the question I posed the other day regarding the Stanbury-Fields report. Is he now in a position to make that report available?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, we have said that we could not publish the report. However, some months ago, in reply to a question asked by another hon. member, we supplied a good amount of information that I shall be pleased to pass on to the hon. member for Skeena.



EFFECT OF CONSULTATIONS RESPECTING MINIMUM WAGES

Stanley James Korchinski: Mr. Speaker, I should like to ask the Minister of Indian Affairs and Northern Development whether his department is actively engaged in consultations with the Minister of National Health and Welfare regarding minimum wages for Indians, and whether this will change any plans the department now has for programming projects to encourage Indian initiative in certain areas?
ITranslationf


Joseph Jacques Jean Chrétien: Mr. Speaker, we are keeping in touch with the other departments in order to formulate a policy that would allow the Indian people to
2174	COMMONS DEBATES	December 19, 1969
Inquiries of the Ministry hold a more adequate position in our society. I believe that we should try to establish new programs so that the Indian people can find employment instead of receiving welfare allowances.



SCIENCE SERVICES


Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, in view of the question I asked yesterday I should like to address this question to the President of the Treasury Board. Will the minister make an announcement in the House early in the new year on whether it is government policy to rationalize our medical research council as recommended by the United Nations Organization for Economic Co-operation and Development?


Charles Mills (Bud) Drury: Mr. Speaker, as has been pointed out, the OECD committee has made some recommendations, as have other bodies. These are now being studied with a view to co-ordination. I hope it will be possible to make an announcement some time in the new year.



REQUEST FOR STATEMENT ON INVESTMENT IN PANARCTIC OILS LIMITED

Mr. Rod Thomson (Ballleford-Kindersley):: Mr. Speaker, will the Minister of Energy, Mines and Resources assure the House that he will make a statement on motions regarding further government investment in Panarctic Oil and, if so, when?


John James Greene: Mr. Speaker, Panarctic Oil comes within the jurisdiction of my colleague, the Minister of Indian Affairs and Northern Development.


Joseph Jacques Jean Chrétien: Mr. Speaker, we are presently considering the matter and, if any announcement is to be made, it will be made at the proper time.



AGRICULTURE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I have a question for the Minister of Agriculture.

Could he tell us whether there was more or less butter in storage at the end of November 1969 than at the end of the same month in 1968?


Mr. Speaker:: The hon. member is asking for statistical information and, in my view, the minister cannot answer such a question now.



INQUIRY OF THE MINISTRY

Mr. Thomas M. Bell (Saint John-Lancasier):: Mr. Speaker, over the Christmas recess will the Minister of Finance, and I appreciate he probably needs a holiday more than any of us, ascertain whether anybody who is living on $30 a week can operate five television sets as he says he is?


Mr. Speaker:: Order, please.


Edgar John Benson: was misquoted, Mr. Speaker.



POTASH-REPRESENTATIONS RESPECTING DUMPING IN UNITED STATES

Mr. John Burton (Regina East):: Mr. Speaker, in view of the United States Treasury Board's determination that there has been dumping of potash in the United States, will the Minister of Industry, Trade and Commerce indicate what representations were made by Canada on this matter and whether any agreement or conclusion was reached following consultation with the United States government?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Many representations were made by my department to the government of the United States in this regard. I was just explaining to my neighbour some of the concessions obtained in the last days from the United States. There has been an improvement in the way the dumping is being assessed and an improvement also with regard to the period of time the anti-dumping measures will be applicable. Canadian shipments will now be examined by the U.S. customs to determine whether anti-dumping duties are applicable since June 18, 1968, which is a shorter period of time than at first anticipated. Dumping duties will be assessed against future imports of potash from Canada only if they are sold at less than Canadian prices. So I think that this should give some satisfaction to the Canadian industry.
December 19, 1969


John Stratford Burton: I have a supplementary question, Mr. Speaker. I am sure all members will be happy to hear that at least some results have been obtained-


Mr. Speaker:: Order, please.



HIGHWAYS


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, yesterday the question period expired before I had a chance to ask an important question of the Minister of Regional Economic Expansion. Therefore may I direct it to the Prime Minister and ask the right hon. gentleman if he will ask his colleague to indicate by a statement on motions as early in the new year as possible, or perhaps even next week because we are all "a-Freud" of what the Prime Minister said earlier, the position of the government with regard to cost-sharing on highways formerly carried out by the Atlantic Development Board?


James Aloysius McGrath: Mr. Speaker, I rise on a point of order. Yesterday I also had an important question which I wished to direct to the Minister of Regional Economic Expansion. I rose in my place 22 times, which must be something of a record.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: My persistence was prompted by the knowledge that according to the roster system the minister would not be in the House today and that, to all intents and purposes, the House would be adjourning today for the Christmas recess.


Gerald William Baldwin: It is not so certain now.


James Aloysius McGrath: I realize the difficulties Your Honour has in this regard and I sympathize with Your Honour, but my point of order, which I leave for your Honour's consideration over the Christmas recess, is that either the roster system, which many of us believe to be illegal, has to go or the question period has to be extended; otherwise we will be destroying this institution.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: Perhaps hon. members might give consideration to planning their approach to Parliament in general and to the question period in particular in a more organized way. As to the number of
Inquiries of the Ministry points on which the hon. member rose, he might like to join the National Ballet Company.


Mr. McCutcheon:: May I rise on a point of order, Mr. Speaker?


Mr. Speaker:: Order, please. I will recognize the hon. member on a point of order in a moment, but may I point out first that we have just about run out of time.


Maclyn (Mac) Thomas McCutcheon: My point of order concerns the remarks of the Government House leader concerning good planning. He must be thrilled to have organized yesterday meetings of two standing committees of the House, the Committee on Agriculture and the Committee on Public Accounts, even though the House first met last October.


James Aloysius McGrath: Mr. Speaker, I rise on a question of personal privilege. It is precisely the type of frivolous attitude manifested by the Government House leader today that is destroying this institution.


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: That is your swan song.


Mr. Speaker:: I have been asked to give an opportunity to the hon. member for Victoria-Haliburton to rise.


Mark Willson Rose: Mr. Speaker, I have a question of privilege.


Mr. Speaker:: Order, please. Is the hon. member rising on a new question of privilege?


Mark Willson Rose: No, Mr. Speaker. Following the remarks of the hon. member for St. John's East I should like to inform the House that he does not hold the record for jumping up and down in the question period. I believe I do. As a matter of fact, I hold the record to such an extent that I have given up my membership at Vic Tanny's.


Mr. Speaker:: Order, please. Hon. members will appreciate that the Chair is also a contender for that record.


Some hon. Members:: Hear, hear.



NATIONAL DEFENCE


Mr. W. C. Scott (Victoria-Haliburlon):: My
question is for the Minister of National Defence. In view of his department's recent

December 19, 1969
Inquiries of the Ministry decision, will the minister say whether the department is planning to dispose of those armouries which have been classified as surplus to requirements?


Léo Alphonse Joseph Cadieux: Generally speaking this is the case, but I should point out that some of the armouries to which we are referring are rented. So in this particular case we can stop renting them.


William C. Scott: I have a supplementary question, Mr. Speaker. Will the minister consider giving the communities in which the armouries owned by the Department of National Defence are situated the first opportunity to procure these buildings?


Léo Alphonse Joseph Cadieux: These buildings would be transferred to the Crown Assets Corporation for disposal, and I think the regulations give the right of first refusal to the municipalities after the federal and provincial governments have first exercised that right.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that a communication has been recieved which is as follows:
Government House Ottawa
December 19, 1969
Sir,
I have the honour to inform you that the Right Hon. J. R. Cartwright, P.C., M.C., Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate Chamber today, the 19th day of December, at 12.45 p.m. for the purpose of giving Royal Assent to certain Bills.
I have the honour to be,
Sir,
Your obedient servant,
Louis-Fremont Trudeau,
Brigadier General,
Assistant Secretary to the Governor General.
Orders of the day.


Gerald William Baldwin: I rise on a point of order, Mr. Speaker. I believe the Minister of Finance is anxious to revert to motions in order to make a statement denying the tacit admission by the Minister without Portfolio, which appears at page 2143 of Hansard, that the Minister of Finance will have a budget surplus of $850 million.


Edgar John Benson: Mr. Speaker, I rise on the point of order. The Minister without Portfolio did not say that.


Mr. Speaker:: Order, please.
[Mr. Scott.:



FISHERIES


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I have a question for the Minister of Fisheries relating to the introduction today of the legislation to establish the Canadian Saltfish Corporation.


Mr. Speaker:: Perhaps the hon. member may be allowed to ask that question.


John Howard Lundrigan: Thank you, Mr. Speaker. I should like the minister's answer to be on the record. In view of the fact that the minister did not produce until today the legislation on the saltfish marketing corporation and in view of the fact that the people who engage in this type of fishing had a complete failure this year and will not be able to take advantage of this legislation in 1970, can the minister say whether any form of assistance is planned to ensure that these people can continue to fish in 1970?


John (Jack) Davis: am not as pessimistic as the hon. member. I am convinced that those people who have traditionally been occupied in the saltfish industry in the years past will be able to take advantage of this new corporation and indeed, they are the ones who will benefit most from it in future years.


John Howard Lundrigan: Do I understand from the minister's answer that no form of special assistance is being planned other than the normal benefits which may accrue from this corporation?


John (Jack) Davis: We are looking at interim measures in a few cases.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, December 18, consideration of the motion of Mr. Benson (for Mr. Macdonald, Rosedale):
That the white paper entitled Proposals for Tax Reform tabled in the House on November 7, 1969, be referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, hon. members have alluded to what
December 19, 1969

is alleged to be public reaction to this paper. I have no hesitation in saying that the overwhelming reaction from the people I have the honour to represent in this House has been most favourable. The broad basis of extending exemptions so that a number of people at the lower end of the income scale would find their taxes either eliminated or reduced is highly commendable. In particular, the proposals for expense deduction for working mothers have been warmly received by many families where the mother has been unduly penalized through not being given tax exemption for the most legitimate type of expense, that of looking after young children.
[DOT] (12 noon)
We all know that there is no magic way by which tax money can be produced. When tax relief is granted to a large number of lower income groups, then there certainly will be increased tax loads carried by others. Tax increases are never pleasant and invariably cause some disturbances and dissatisfaction. As the white paper points out, it is important that people who have heavy tax loads should be able to anticipate the impact of these burdens and make their plans accordingly. Uncertainty about future tax measures is particularly disturbing and in many cases inequitable.
I have two suggestions that I hope the special committee will consider. The first relates to a method of establishing evaluation procedures for "V-Day" for purposes of subsequent assessment of capital gains. Briefly, I propose that any taxpayer should be able to file with the Department of National Revenue an evaluation of his or her holdings on V-Day. This should include, of course, valuation on a house or any other important asset. Should the valuation not be challenged by the Department of National Revenue within a fixed period of time, say, for example, one year, then such valuation should be accepted without further question.
The advantages of such a procedure should be quite obvious. It would then be impossible for the Department of National Revenue to go back after a number of years and question valuations that it had failed to screen out in the first instance. Unless some such device is employed V-Day will be a mad period of extensive employment for professional evaluators. Furthermore, the fear that the valuations could be challenged would introduce a complication that in my view would
Taxation Reform
be unnecessary, unless there is some sort of administrative device to bring certainty into the situation.
As the Minister of Finance (Mr. Benson) himself has remarked, there are built in safeguards to prevent wilful errors by the average person. If his possessions have been valued too highly, then the succession duties will be higher than otherwise. If, on the other hand, his possessions are undervalued then capital gains realized on disposal will be greater accordingly. In general, I believe that most taxpayers would adopt a reasonable approach to evaluating their own assets, and should not be forced to engage unnecessary outside experts to do this work for them.
The second suggestion that I would like to make for the government's attention concerns the administration of the capital gains tax. If the tax is truly to apply on capital gains and not on capital, then some adjustment for inflationary changes must be allowed. My proposal is simply this. Each year at the end of the year the government should declare an official index of inflation for purposes of capital gains tax administration. This figure would be based on consumer price index changes and would be rounded off to the nearest percentage or half per cent. For example, if it had been necessary to adopt such a proposal in 1969, the government might have declared a 4 or 5 per cent inflation index based on this year's experience.
There is already a precedent for this, in fact, in the proposal to allow an exemption of $1,000 per year while a house is occupied by its owner. This presumably is based on some kind of average formula. For the year 1969, a 4 per cent inflation index on a house valued at $25,000 would produce the same estimate of $1,000 as that proposed in the white paper for averaging purposes.
It does seem unfair that a house alone, of a taxpayer's possessions, should be given an annual exemption which bears some relation to an inflation allowance but such exemption is not applied to any other asset. In order to avoid discrimination, I do not see why a widow, for example, who has savings which consist of common stocks and a life-time pension or a variable annuity should be denied an inflation adjustment, and another widow whose assets consist of a house would be given what is in fact an inflation allowance of $1,000 per year. The restriction of such an allowance to an owner-occupied house, in my view, would introduce a distortion which would have the effect of practically obliging a

December 19, 1969
Taxation Reform
widow to transform her savings into the form of a house under circumstances in which another form of asset might be more advisable.
I know, Mr. Speaker, that the committee will listen to many suggestions dealing with the tremendous range of subjects contained in the white paper. I hope members of the committee will look more closely at the provisions in the United States law which permit a husband and wife to pool their incomes and average them. No doubt the business community will have a series of suggestions involving the application of capital gains at five-year intervals, a proposal which it seems to me will be difficult to administer.
However, these are minor and isolated instances in relation to the over-all proposals in the white paper. Certainly, the initial acceptance of the overwhelming majority of these by the taxpayers whom I have the honour to represent, and with whom I have discussed them, has been overwhelmingly favourable. It represents a good omen for the work of the committee, and I look forward to the early referral by the House of the white paper to a special committee.


Robert Jardine McCleave: Mr. Speaker, I would like to make a few comments on the white paper on taxation, not covering the waterfront because it is a rather awe inspiring waterfront, but on points with which I warmly agree as well as points with which I warmly disagree. First, there are two points which particularly strike my fancy. One is the increase in exemptions, and I hope that when the committee is studying this particular matter some formula will be drawn up so that taxpayers in Canada will always have one exemption, namely, the accepted poverty line, the amount of dollars that is regarded by those who make a special study of these things as the poverty line below which people, if they have less than that income, find themselves in great difficulties.
The second point with which I warmly agree, but on which I think some refinement must be made in the minister's proposal, involves the deductions for working class mothers, and the money they have to spend for the care of children while they themselves are out working. A ceiling has been suggested in the white paper. For most people that ceiling may be quite adequate, but I suggest that in the cities of Canada, where costs are higher, it may not be a realistic figure. I hope the committee will turn its attention to this point.

I now wish to deal with matters in the white paper with which I disagree. It seems to me the government is adopting an attitude that every time a dollar moves about and comes into public view, a board of tax collectors is entitled to rush forth and take their bite of that dollar bill. As I shall illustrate later, the difficulty that the government is going to get itself into will relate to the frustrations of large numbers of Canadians who will have to take up bookkeeping as a side vocation. There will also be the administrative difficulties that have been proven elsewhere where certain types of capital gains were imposed, and which I suggest are on their way into Canada unless the white paper proposals are very drastically reformed.
[DOT] (12:10 p.m.)
To me a capital gains tax on one's own house is iniquitous and the formula that is suggested by the government does not take into consideration the restrictions placed on the ability of Canadians to move about, not so much from one part of Canada to another because this is recognized in the formula, but to move about in their own area. I suggest, Sir, that many young married people have large homes so that they can bring up their families in good space, and that when the children have grown up and moved out, they might very well want to sell the large house in their own city, but not move to another city. Why should they when their stake is in that neighbourhood? They want to move into a smaller house or apartment. This is more likely to be the rule when people reach retirement age than is the likelihood that they will pull up stakes and move to some other part of Canada. As we all know, when one reaches the age of 40 or 45 one loses mobility on the labour market. When the committee studies the proposals, I hope it will take a long look at the suggestion that the rollover principle will only apply where a person moves from one area of Canada to another. For that matter, a home owner may wish to sell his house and move to a warmer part of the world. The older one gets, the less one likes to respond to the challenges of the great Canadian winter.
Then, there is the nuisance of the bookkeeping involved in trying to determine how much one should be entitled to accept. Every plumbing bill, every carpentry bill, every painting bill, every bill for repair and replacement ever received has to be stored
December 19, 1969


Mr. Murray McBride (Lanark and Renfrew):: Mr. Speaker, I shall not take too much of the time of the House. Having heard the hon. member for Ottawa West (Mr. Francis), it seems that it might be very useful if some of us who are in favour of the white paper on tax reform were to put our remarks on the record. I must confess that this issue, more than any other since I have been a member of this House, has been instrumental in bringing large numbers of letters to me. Most have been very much in favour of the white paper. I note sadly that many of these communica-

December 19, 1969
Taxation Reform
tions conclude by expressing alarm that because of vested interests some Canadians may create sizeable obstacles to the implementation of the proposals of the white paper. I, therefore, wish to say clearly that I am in favour of most of the proposals contained in the white paper.
Recently I received a letter which was rather vehement on the subject. It was not written by one of my constituents. It concluded by saying that its author was completely opposed to the white paper. It seems to me that since the white paper is structured on the thesis that the tax burden should be distributed on the basis of ability to pay, if you are completely opposed to the white paper you obviously think that the tax burden ought to be distributed on the basis of inability to pay-which is utter nonsense. I, therefore, took time to write to this person, even though he was not a constituent of mine, and explain some of my views.
Of course, merely because something is essentially good in its broad sweep does not mean that it will be good in every detail. So far as I am concerned, there are at least two issues which ought to be carefully reconsidered. We are told that the tax reforms will affect small businesses. Some people say, and they assume they are correct, that if the proposals are accepted they will penalize small businesses. That is not true. From my reading of the white paper it seems that some special privileges small businesses have enjoyed hitherto will be removed. To that extent, small businesses will lose the privileged position in our society that they have held. This only means that small businessmen will be treated as all other citizens of Canada are treated. That concept on the surface is laudable, and we ought to support it. Of course, there is a counter-argument to the effect that our small businessmen should not be considered in the same light as ordinary citizens because small businessmen tend to create employment. They take capital risks personally, and by taking those capital risks create employment for people who do not have to take similar capital risks. There may be merit to that argument and perhaps small businessmen should be given special consideration. Yet, certainly, they should not be treated as a species of humanity completely above other Canadians.
There is another issue that I think ought to be considered. I do not think it has been mentioned in the House so far in this

debate. It concerns capital gains. It is worth noting that if a Canadian citizen owns a home, he is to be allowed an exemption of $1,000 a year to cover the increasing value of his property plus a further basic exemption of $150 to cover repairs. His basic exemption, therefore, is $1,150 a year. If his house increases in value to a greater extent in any one year, the homeowner may become liable to capital gains tax. In other words, the residence must increase in value at a rate exceeding $1,150 a year before the homeowner may be said to realize a capital gain. I do not wish to consider how this provision affects those people who live in our towns or villages. I wonder very seriously, though, if we ought to have a rule like this applied to farmers.
For instance, if a farmer in Ontario owns a 100-acre farm, it would hve to increase in value at a rate exceeding $1,150 a year before he would realize a capital gain. This applies of course to the farmer who resides on his farm. But if that farmer who lives in Ontario-and my illustration applies especially to eastern Ontario- wishes to expand his enterprise and purchase three or four additional farms, what is his position then? Let us assume the farmer continues living in his residence, since he must live somewhere. If he adds to his basic unit two or three other farm units of 100 acres, he may own upwards of 500 or 1,000 acres of land and still come under the provisions of the original rule. That is, he will be said to realize a capital gain if his extended farm unit rises in value at a rate exceeding $1,150 a year. That is not right, and that aspect I submit deserves further study in committee. Of course, if my understanding of the subject is not accurate, then the entire issue ought to be clarified for the benefit of the Canadian people. I ask, should the large farm entrepreneur be treated on exactly the same basis as the fellow who lives in the village and earns his living by working somewhere else?
My main purpose in rising is to say that the reaction of my constituents has been overwhelmingly in favour of these proposals. Most of my constituents are very much in favour of seeing these kinds of reforms implemented. Most of them are very enthusiastic about those proposals which many hon. members on all sides of the House have alluded to very frequently. These proposals have my general support.
December 19, 1969


John Stratford Burton: Mr. Speaker, I think it is very useful to have a debate on the important subject of the white paper on taxation prior to its referral to the Standing Committee on Finance, Trade and Economic Affairs. I think one of the first points that should be discussed is the framework in which this white paper is being considered and presented to the House of Commons. It is obvious that the government attaches a great deal of importance to the white paper and its taxation proposals, within the context of the over-all program that it will be presenting whenever the government next chooses to go to the Canadian people. In that regard, I think the comments of the hon. member for York South (Mr. Lewis) earlier in this debate were very relevant, because he noted the possible timetable that may be involved in the white paper. He noted that the white paper was not presented until early November of this year, despite promises given for well over one year by the Minister of Finance (Mr. Benson) that its production in the House was imminent. Finally, the Minister of Finance presented the white paper on November 7, and subsequently the motion was introduced to refer it to the standing committee.
After the white paper is referred to the committee, it will of course take the committee some time to consider all the ramifications and implications of that white paper. This will take us well into 1970. I am not sure when the government will consider introducing legislation pertaining to taxation changes. Possibly it will do so in the fall of 1970 or in the early months of 1971. In any case, it seems clear that whatever changes the government may make, they will not take effect until the taxation year 1971. The effect of any apparent benefits to some people in Canada will be shown when our people file their taxation returns for the year 1971, in the early months of 1972.
[DOT] (12:30 p.m.)
Just coincidentally this happens to be about four years after the last federal election of June 25, 1968. It would be very convenient timing for the federal government to use this as one of its major weapons in the next election. They may hope to gain some benefit from following this tactic. I am not at all sure it will be as great a benefit to the government politically as they hope for at the present time. In that regard, I think the debate that concluded yesterday, if I might make brief reference to it, was very relevant.
Taxation Reform
In the debate concluded yesterday, the government finally obtained the approval of this House for the extension of the 3 per cent surtax on income tax into the calendar year 1970. This means that the government can present a more favourable picture than would otherwise be the case of the effect of tax changes from the present system to the new system when it comes into effect in 1971. I suggest that is one of the major reasons the government chose to retain the 3 per cent surtax on income.
I suggest that the government gave a good deal of thought to its timing and strategy in this regard. One small piece of evidence came in the form of some answers to questions which I posed when the estimates of the Department of Finance were before the Standing Committee on Finance, Trade and Economic Affairs last May. At that time, I asked the Deputy Minister of Finance with respect to the forthcoming production of the white paper whether any background papers and studies had been completed by the department for the consideration of the government when deciding on its policies. At that time Mr. Bryce informed me the government had completed all of its studies and the department had prepared all the information necessary for the government to make a decision on its proposed taxation policy.
It appears that not only did it take a long time for the government to consider the matter, an unduly long time I suggest, but some of the decisions in fact were taken some time ago. The white paper could have been produced at an earlier date if the government had chosen to place it before the House. I think the framework of discussion on the white paper must take into account the fact that it arose in large part out of the mammoth study completed several years ago and which is commonly known as the Carter Commission Report on Taxation. The Carter Commission report has been the subject of a great deal of discussion, both favourable and unfavourable. A number of organized pressure groups in Canada objected very strenuously to the recommendations of the Carter Commission.
It must be noted that basically, the Carter Commission report consists of a set of recommendations for a taxation system within the framework of a capitalistic economic system. I think that is quite fundamental and important. There is no doubt that the Carter Commission did make many recommendations for improvements in our taxation system and for

December 19, 1969
Taxation Reform
a rationalization of our taxation system. However, all this was done within the framework of retaining our basic economic system, as it has evolved and exists at the present time.
One of the merits of the Carter report that should be noted is its consistency. For the most part, its recommendations were consistent and did not contradict each other or come into basic conflict. I am afraid when the white paper on taxation was presented not only did it go along with the one undesirable feature of the Carter report, namely that it looks to continuation of our economic system, but it also lost the one very desirable characteristic of the Carter Report, that of consistency. The white paper no longer presents a completely consistent set of recommendations which can form the basis for Canada's future taxation system.
One other weakness of the white paper as it was presented to the people of Canada and this House, is the fact that it failed to give adequate consideration to the relationship between income taxation, as one component of the total tax system, and other areas of taxation in Canada which must be related when it comes to establishing an equitable form of taxation.
Last year the government introduced revisions and amendments to estate tax legislation. They did two things at that time. They ignored and rejected the Carter Commission recommendation for integration of estate taxation and our present income tax system. They completely rejected this recommendation. Then, the government went on to do something else which in my view is very important and fundamental. They rejected any notion of reducing the taxation system to bring about any redistribution of wealth and power in Canada. It became clear at that point, when the estate tax amendments were before the House last summer, that the government was not going to introduce any basic changes in our taxation system or in the economic system within which the taxation system has to operate.
I suggest at that point the die was cast. We could see what was coming with respect to other taxation proposals which the government would be bringing forward in the coming months. We saw the government fail to accept the recommendation of the Carter Commission to integrate estate taxation and income taxation.

I might note as well that the Carter report also dealt with the pattern of sales taxes throughout Canada. It made a number of recommendations in that regard. We have not yet heard what the recommendations of the government will be with respect to sales taxes, but I understand the government will be dealing with this once the matter of income tax changes has been dealt with by this House.
I suggest that we cannot deal with tax revisions in a piecemeal fashion. It is necessary to have an over-all view of the whole situation. We must know not only what the government is now going to do with regard to income tax, but we must also know what the government is going to do in other fields of taxation, such as sales tax. We already know what they are doing with estate taxes, but we should also know what they are doing in other fields upon which the government depends for a substantial amount of its revenues. When we consider the equity of the tax system, we must not only consider one individual form of taxation. If we are to determine whether in fact we have an equitable system of taxation, we must consider the entire tax system.
The field of sales tax is another very important aspect of political and economic affairs in Canada. Sales taxation brings in the subject of federal-provincial relations because every province in Canada except one depends to a very large extent on sales taxes as a source of revenue. When we consider the future of sales taxes not only in relation to income and estate taxes, but also in respect of federal-provincial relations, we have to give very close consideration to the needs of the provinces. The needs of the provinces come into consideration when we are discussing income taxation as well.
[DOT] (12:40 p.m.)
In this connection, the effect of property taxation must also be considered. When a Canadian taxpayer looks at his total tax bill he must have regard not only to income tax and sales tax but to property tax as well, and, as we know, property taxation as presently constructed is one of the most regressive areas in taxation in Canada. To the extent that we fail to introduce greater equity in our income tax, estate tax and sales tax legislation, more of the tax burden is shifted to property taxation. I believe this must be taken into account when we discuss the white paper proposals.
December 19, 19G9

Last night my hon. friend from Waterloo (Mr. Saltsman) referred to one of the matters which has not been dealt with in the white paper, that is to say, the tax free allowance granted to Members of Pai'liament. I agree wholeheartedly with him that the government should have had the courage to make clear its intention to do away with tax-free allowances. There is no doubt that all of us, as Members of Parliament, incur heavy expenses in connection with carrying out our duties. Nevertheless, we as Members of Parliament should not enjoy a privileged status in this regard; we should not be able to claim expense money without being called upon to provide supporting information or documents.
The White paper on taxation dealt also with the subject of co-operatives and credit unions. This is a matter in which I am very much interested and which I believe should be considered carefully by the standing committee when the white paper is before it. I feel the government has not paid sufficient attention to the unique role played by the co-operative movement in Canada. It is clear that people in the government did not really understand the situation of the co-operatives when they drew up the proposals affecting this particular area of economic organization and activity. The government should carefully review its proposals regarding co-operatives before any legislation is introduced. Cooperatives represent an alternative form of economic activity and organization, and their activities should be encouraged. In my view, the government has not given them a proper break in its white paper proposals. We note that the government appears anxious to push through the House of Commons bills dealing with trust companies, loan companies and insurance companies to make sure that they get additional privileges. At the same time, inadequate attention is given to the situation of the co-operative movement. At this point, I might comment briefly on the position of credit unions.
Credit unions in Canada play an important role in enabling people to deal with their own financial problems, in encouraging self help and making it possible for them to organize their own activities. In my opinion, more attention should be paid to the proposals of the white paper as they affect credit unions. We need to make certain there is no discrimination against them in the legislation as finally introduced.
Taxation Reform
I understand, Mr. Speaker, the House is to interrupt its proceedings at 12.45 in connection with another function. I should like to move on to another area of discussion. Accordingly, perhaps I might call it 12.45 at this point, and then continue my remarks after the House returns.


Mr. Dinsdale:: Let us sing Christmas carols while we are waiting.


Some hon. Members:: Continue.


The Acting Speaker (Mr. Bechard):: I suggest to the hon. member that he should continue.


John Stratford Burton: The white paper envisages that the present economic system will be retained. The fact is that power in our present economic system is vested in the corporations. The power of the corporations is growing. In this context I was interested to note an article which appeared in the Globe and Mail yesterday. It dealt with a lecture delivered by Professor Leslie T. Wilkins, head of the School of Criminal Justice at New York University, and made some reference to the growing influence of corporations in our society. I should like to place on record some of the remarks made by Professor Wilkins on this subject. The article reads, in part, as follows:
Professor Wilkins sees the growth of the power of private corporations and financial conglomerates as one of the main dangers to be faced and legislated for.
Information is power, and as government spending on research is reduced more information is concentrated in the hands of the private firms who can afford to pay for it, he said.
Private corporations can also exercise power in other ways such as in running private police forces to intervene against demonstrators or in other situations where the normal police force does not think action is called for.
"The trend toward more and more power over the individual being in the hands of non-elected organizations will continue". Professor Wilkins said.
In fairness, I should state also that Professor Wilkins noted that in all circumstances this might not be undesirable. Nevertheless, he emphasized that more power is being vested in corporations today than in the past. The implications contained in the white paper are that this system will continue-that the growth of corporate power in our economy will be encouraged.
Another important subject which is treated in the white paper concerns concessions to the oil and gas industries. This is a matter which interests me greatly, of course, as a

December 19, 1969
Taxation Reform
member from the Province of Saskatchewan where the oil industry is of some importance. In my view, there can be no doubt that the proposition put forward in the white paper whereby oil and mining companies would be allowed to write off their exploration and development costs, together with interest on the same, prior to being taxed on any revenues obtained as a result of their investment and development expenditures, is a correct one. But I can see no cause for granting concessions in terms of capital depletion allowances, even on the reduced scale envisaged in the white paper. I believe adequate provision has been made-


The Acting Speaker (Mr. Bechard):: I regret to interrupt the hon. member but his time has now expired.



MESSAGE FROM THE SENATE

The Acting Speaker (Mr. Bechard):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bills without amendment:
Bill C-171, an Act to amend the Company of Young Canadians Act;
Bill C-139, and Act to amend an Act to amend the Income Tax Act.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson (for Mr. Macdonald, Rosedale):
That the white paper entitled Proposals for Tax Reform tabled in the House on November 7, 1969, be referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Bechard):: Is the
House ready for the question?


Stanley Howard Knowles: Mr. Speaker, there are one or two other hon. members who were hoping to speak in this debate. They assumed that by a quarter to one we would have gone to the other place, of all places to go. I wonder whether it could not be agreed that we suspend until we hear the knock at the door.

e (12:50 p.m.)


Donald Stovel Macdonald: Mr. Speaker, I am prepared to suspend the sitting if the hon. member gives an undertaking that the House will make an order that the debate conclude today, and that the question be put.


Stanley Howard Knowles: Mr. Speaker, we are quite prepared to agree that the question on this motion be put not later than four o'clock today.


J.-H.-Théogène Ricard: We are not prepared to agree to that, Mr. Speaker.


The Acting Speaker (Mr. Bechard):: Then, it is agreed that the House suspend its sitting?


Donald Stovel Macdonald: Do I understand that an order of the House has been made?


The Acting Speaker (Mr. Bechard):: Does the House agree to the suggestion of the hon. member for Winnipeg North Centre?


J.-H.-Théogène Ricard: No, it is not agreed, Mr. Speaker.


The Acting Speaker (Mr. Bechard):: It is not
agreed.


Donald Stovel Macdonald: Then, would you put the question, Mr. Speaker.


Stanley Howard Knowles: It
has already been agreed that the sitting be suspended until we hear the knock on the door.


Donald Stovel Macdonald: Mr. Speaker, it was agreed that we would suspend if an order of the House were made. The order was not made, so perhaps we could go on with the question.


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


Some hon. Members:: Question.


J.-H.-Théogène Ricard: Mr. Speaker, I should like to make a few remarks.
In the same way I opposed yesterday the 3 per cent surtax, I feel it is my duty to state my opposition again today. I should like to tell the government that the proposals in the white paper have provoked many unfavourable comments in my riding, as well as elsewhere in Canada. The white paper reflects the determination of the government to continue to starve the municipalities and the
December 19, 1969

provinces. There is nothing favourable or interesting for the provinces in the white paper. The latter have as well as the municipalities tried to give to understand to the government that their obligations were increasing from year to year and that they had to make do with constantly decreasing budgets.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the Royal Assent to the following bills:
An Act to amend the Customs Tariff and to make a consequential amendment to the Excise Tax Act
An Act to amend the Judges Act
An Act to amend the Excise Tax Act
An Act to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways System and Air Canada for the period from the 1st day of January, 1969, to the 30th day of June, 1970, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and certain debentures to be issued by Air Canada
An Act to authorize provisional payments for the 1969-70 crop year in respect of unthreshed grain in the prairie provinces
An Act to amend the Children of War Dead (Education Assistance) Act
An Act to amend the Company of Young Canadians Act
An Act to amend An Act to amend the Income Tax Act
An Act to amend Schedule A of the Bank Act
An Act for granting to Her Majesty certain sums of money for the public service for the financial year ending 31st March, 1970.
Mr. Speaker:: It being one o'clock I do now leave the chair.
At 1.09 p.m. the House took recess.
Taxation Reform AFTER RECESS
The House resumed at 2 p.m.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, before we proceed with the debate may I ask the permission of the House to revert to motions.


Mr. Deputy Speaker:: Does the House give unanimous agreement to reverting to motions?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: I should like to put the following motion:
That the report of the Canadian Radio-Television Commission for the fiscal year ended March 31, 1969, tabled in the House on October 22, 1969, be referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts.
This matter has been discussed among the representatives of the parties.


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson (for Mr. Macdonald, Rosedale):
That the white paper entitled Proposals for Tax Reform tabled in the House on November 7, 1969, be referred to the Standing Committee on Finance, Trade and Economic Affairs.
J.-H.-Théogène Ricard: Mr. Speaker, at the time of adjournment I was saying that provinces and municipalities are more than ever hard pressed to meet their obligations and discharge their responsibilities. One would have thought that a study of the fiscal situation would have led

December 19. 1969
Taxation Reform
the Minister of Finance (Mr. Benson) to jump on the occasion to discuss frankly and clearly this issue with provincial authorities.
It seems that the problem of tax-sharing cannot be settled at the present time. Full co-operation of those directly affected by and involved in this problem would be needed to help remove the difficulties. The minister should not take advantage of the situation and tell the people how he will go about it. We have come in fact to realize that he was some sort of a dictator. He presented the provincial authorities with a fait accompli, and told them something like this: I am not very concerned about what you think, things will be done my way.
It happened again when he decided to extend the 3 per cent surtax. He did not worry whether the people liked or disliked this measure. He gave no thought to the injustice he was perpetrating, going to the taxpayers' pockets for $20,000,000 whereas he was collecting only $5,000,000 from corporations or from people who were well able to face their commitments.
In these circumstances, needless to say that the proposals contained in the white paper add up to a source of injustice for the population as a whole. They provide the Canadian people with an opportunity to vent their frustration.
Canadians in general were expecting more understanding from the federal authorities in connection with the action the present government had promised in order to promote a just society.
If the proposals in the white paper were to be adopted, the department would increase its revenues by taxing a particular group, that is those taxpayers earning between $10,000 and $25,000 a year. Yet, although the revenue of those citizens is very heavily saddled, the minister nevertheless proposes to reduce from 80 per cent to 50 per cent the income tax share that will be payable by big companies with a revenue of over $300,000 a year.
I had the opportunity, last week, to meet one of my constituent, a prosperous merchant, as there are several in our province, especially in my riding. His business, which started from nothing, has become very prosperous. That merchant, who now employs some twenty persons, was telling me that if the proposals of the white paper are implemented, he foresees that he will be forced to close down his business.

In his opinion, that would spell the end of medium- and small-sized businesses, for the bureaucracy would pose as master of the common people.
He also believes that if the present minister puts these proposals through, it would mean the end of the Liberal administration for many years to come, and I agree. In fact, we have seen for some time a number of instances where the population would benefit from seeing the end of the present administration, since it could then shake off the yoke put on it.
Mr. Speaker, I would not like to delay any longer the business of the House. In order to make these few comments, I drew inspiration from the remarks that people in my riding have made and continue to make to me. I thought it was my duty to point out to the minister that, should he insist that the white paper proposals be adopted unchanged, he is not acting in the best interest of the Canadian population. He will certainly contribute to sow the seeds of discord among the people. We should like to convince him how well advised he would be to modify his position.
[DOT] (2:10 p.m.)


Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, there has been a good deal of variety in the discussion which has taken place so far on the proposal to refer this white paper to a committee, a white paper which I have heard many members erroneously label, white paper proposals for tax reform. I would be prepared to admit that the white paper does indicate some changes in taxation, but whether they are reforms or not is a matter that will be debated at greater length than in this preliminary discussion.
Some of my colleagues in the New Democratic Party have discussed the general range of the proposals. I do not intend to repeat what they said. I intend to confine my remarks to one particular proposal in the white paper. It happens to be related to a change in the income tax about which I have been arguing ever since I first came to this House following the 1953 general election. I am referring to the question of the deductibility of expenses incurred in the course of earning a living by those whose income is derived from salaries or wages.
So far, Mr. Speaker, with very minor exceptions there has been no provision made in our income tax law for anyone whose income does come from salary or wages to deduct any of the expenses necessarily
December 19, 1969

Taxation Reform
incurred in earning his living. The white paper contains a proposal which purports to move in that direction. On the night that the white paper was tabled I made some comment on that particular proposal, and at once labelled it a snare and a delusion. Nothing that has come to light since, as a result of further study of the white paper, has changed my mind on this point.
You will recall, Mr. Speaker, that the white paper proposes that wage and salary earners be allowed to make a deduction from then-taxable income of 3 per cent up to a maximum of $150. The white paper suggests that this is to be an allowance for expenses incurred in earning a living. In my view it is nothing of the sort. Really, all it does is provide an additional basic exemption for all people whose incomes are derived from wages and salaries, whether or not they have any expenses. That is why I label it a snare and a delusion.
Even if one were to regard it within the context in which the white paper places it, it is in itself an inequitable proposal because it provides a flat rate of exemption based upon income. It has no relationship to the actual expenses incurred. In other words, a low salaried worker, no matter what his expenses may be, will not be able to deduct as much as a higher salaried worker.
A person at the $3,000 level would be allowed to deduct only $90. At the $4,000 level he would be allowed to deduct $120. It is only when one reaches the level of $5,000 or more that the maximum of $150 is allowed. This is an internal discrimination within the proposal. It underlines the point I am trying to make, that this proposal has nothing to do with the expenses incurred by wage earners in the course of earning a living.
Indeed, I find it quite incomprehensible that the Minister of Finance (Mr. Benson), who has been referred to with a variety of adjectives in recent days and weeks, and for a variety of reasons, would even consider bringing in a proposal which is so obviously absurd. I have great personal liking for the Minister of Finance, but I find it difficult to label this proposal as anything other than a cheap political gimmick to meet what has become a demand for equity in taxation between those whose income comes from salaries and wages and those whose income comes from other sources.
[DOT] (2:20 p.m.)
Therefore, Mr. Speaker, once again I should like to emphasize to this House, and to the working people of Canada, that this proposal is a snare and a delusion and should be vehemently rejected. Indeed, to underline the absurdity of it I should like to point out that at a convention in, I believe, 1955, the then Canadian Congress of Labour rejected a resolution which brought forward a proposal virtually on all fours with the proposal that the Minister of Finance has put forward in his white paper. I was present at that convention and listened to the debate. As a matter of fact, I was there as a delegate and took some part in the debate. The convention rejected the proposal because the delegates did not want to become the laughing stock of Canada. I mention this to show what, more than ten years ago, a large segment of the working force whose income is derived from salaries and wages thought of this idea.
Having said that, Mr. Speaker, I think it would be approriate to point out some of the ideas that have been brought forward in this House from time to time which in my view might appropriately be labelled attempts at elimination of the inequity existing in the Income Tax Act. I consider it to have been one of the red letter days in my experience as a member of this House when in 1956, the then minister of finance, the Honourable Walter Harris, admitted to me that section 5 of the Income Tax Act discriminated against those whose income was derived from salary and wages. This was the first time, Mr. Speaker, that a spokesman for the government of Canada had publicly made that admission although I had raised the matter in debate, as had other members, in previous years. The Minister of Finance had always sat mum and refused any comment. But in 1956 Mr. Harris did admit discrimination existed and said that the government was considering doing something about it. In view of subsequent political events, I cannot hold the Honourable Walter Harris responsible for the fact that the government did not do too much about it.
However, not too long afterwards the Department of National Revenue introduced a change in policy in what it called an "Information Bulletin". I can remember that this was Information Bulletin No. 10 and was a direction to employers in the construction industry that they were not to continue the practice which had been widespread until then of excluding from the taxable income of
2188

December 19, 1969
Taxation Reform
employees amounts paid on their behalf for travel, board and lodging when they were away from their homes on construction projects. The direction was that this amount should be credited to the employee as taxable income. Well, there was a hue and cry from every construction union in this country.
Members of Parliament were deluged with protests. I remember that a number of leading spokesmen in the then opposition-people like the Honourable Donald Fleming and the Honourable Howard Green-made vigorous speeches protesting information Bulletin No. 10 and the action of the Liberal government in sending it out. When, somewhat to their own surprise, after the 1957 election they found themselves sitting over on the other side of the aisle, there was an amendment made to the Income Tax Act which still stands. The amendment made a provision, for construction workers only, for deduction of expenses necessarily incurred in earning a living. The amendment provided that construction workers, whether the payments were made by them or their employers, could claim costs of travel to and from a job which took them away from their normal place of residence as well as the cost of room and board whilst away from home. That particular proposal was on all fours with the suggestions a few of us had been advancing in the House prior to that. We are not talking about street car fares as part of the cost of earning a living, or even buying a suit of clothes or an ordinary pair of overalls. These are the kinds of things that might be included as a basis in some plan of tax credits and I think they could be discussed before the debate on tax reform proposals is concluded.
I remember telling the Honourable Donald Fleming in this House that the proposal was sound as far as it went but why should there be discrimination against miners, loggers, or anyone else who had to travel away from their ordinary place of residence. Why should only one particular group benefit, just because there had been a hue and cry about it.
I know arguments were advanced, as they have been and probably will be again, that some proposals to achieve equity in taxation are too difficult to administer. I suggest that tax laws should not be framed to meet the convenience of the civil servants who have to administer them.


Some hon. Members:: Hear, hear.


Thomas Speakman Barnett: In other words, Mr. Speaker, I should like to see a minister of finance who would stand up in this House and say, "We want tax equity." It is not beyond the ingenuity of trained and competent people, particularly now with the facilities we have such as computers, to carry out a proposal that in all essentials is equitable and applies across the board. This proposal in the white paper, if it does anything, will tend to tip the scale of inequity in the opposite direction. If this proposal becomes part of our law there will be written into the Income Tax Act a basic discrimination against those whose income is not from wages or salaries, a basic discrimination against farmers and professional people classified as self-employed for the purposes of the Income Tax Act.
I suggest, Mr. Speaker, that the government is labelling as tax reform something that is not going to eliminate an existing inequity in any realistic way but which is going to create a new inequity in our tax system. This can hardly be called reform. So I felt that I should like to make quite clear on behalf of myself and, I believe, my colleagues in the New Democratic Party that we do not buy this cheap little gimmick, this sop to the wage and salary earners. I suppose it is meant to create in their minds some mirage that a tax reform is being proposed by this government which will be to their advantage.
[DOT] (2:30 p.m.)
I do not think the working people of Canada are going to buy this gimmick. I certainly am not going to buy it, and will do what I can to persuade the government to change this proposal so that it will provide for equity in this particular area. For instance, we could introduce changes to the basic pattern already evident in the Income Tax Act. Certain provisions, with minor modifications, could be made to apply to all workers who are in the position of, say, construction workers. That provision could be made to cover the depreciation of workmen's tools and equipment.
If that were done those people whose source of income is wages or salaries would be put in the position occupied by those who are self employed. While that would not completely reform our tax system, such a move would be a realistic one. In my view it would be a very necessary step towards equity and fairness in taxation. I hope that when this subject matter is being considered by the committee, the members of the committee
December 19, 1969



will take a good, hard look at this particular aspect of the taxation proposals in the white paper and will, in the interests of fairness, point out to the government that this proposal will not really reform Canada's tax system.


Mr. Maurice Foster (Algoma):: Mr. Speaker, may I make a few comments about the white paper on taxation.


An hon. Member:: Make them brief.


Maurice Brydon Foster: My colleague has asked me to be brief. I will be, because I am sure we are all anxious to get away for our Christmas recess. The initial response of Canadians generally has been very favourable to this white paper on taxation. The initial bloom, however, will fade as time goes on because those who will have benefited by the proposals will say, "Aha, I have benefited," and promptly forget about them, whereas those who will have to pay higher taxes will continue pleading their case. Certainly, the majority of Canadians will benefit, because under these proposals some 750,000 Canadians in our lowest income tax categories will not have to pay any income tax. Another 3 million Canadians will be paying less tax than now, and 800,000 more will be paying roughly what they are now paying. All these people, obviously, will be pleased with the proposals. Some 3 million Canadians, however, will pay more tax than now, and I am sure that we shall be hearing more from them in the future.
I support the entire philosophy of the white paper on tax reform, because it says that taxation must be according to ability to pay. In this respect the proposals are progressive. Certainly, people in low income brackets welcome higher exemptions. The deductions of $500 per year, provided for working mothers for expenses, up to a total of $2,000 for four children, are a welcome part of the reform. There are also to be deductions for workers who move. These constitute an important reform. In my area, especially, many people are coming in to take up employment or moving to other towns to better jobs. If they move at least ten miles to take up a new job they will be able to claim their moving expenses.
Another important deduction will be that pertaining to expenses incidental to employment. Many workers in my area must travel up to 50 miles to their jobs. While they may feel that they should have been permitted in the past to claim their travelling expenses, they will feel no doubt that, although the 21545-68*
Taxation Reform
present proposal will not enable them to recover completely the costs of transporting themselves to and from work, it is taking a long step in the right direction.
A letter I received makes the bland statement that this bill will kill all small businesses. I should like to examine that statement. First of all, it is not a bill but a white paper, and I congratulate the Minister of Finance for bringing forward these reforms in a manner that will enable all Canadians to participate in developing a new tax system for our country. So, we have here a white paper, and when it goes to the standing committee all Canadians who wish to will have an opportunity of presenting their views. Ultimately, many of these recommendations will be incorporated in our tax laws.
The second part of this statement indicates that all small businesses will be affected. This is a little hard to believe because only about 40,000 or 50,000 of some 450,000 small businessmen in Canada are incorporated. Nevertheless, throughout the country the idea is common that all small businesses will be affected, and I think this ought to be clarified. It is also incorrect to say that the corporation tax rates applicable to small incorporated businesses will be automatically increased from 21 per cent to 50 per cent under these proposals. The rate of 21 per cent now applies to small companies, but hereafter taxes, would be assessed on the first $35,000 of profits at the same rates as apply to the personal income of the company owners.
When one considers the situation of the businessman who is expanding his business and developing more sources of business and who, by his activities in the community is developing more job opportunities for those living in this community, it will become apparent that present proposals, especially in the light of high interest rates are not quite fair. This is so because that businessman will encounter difficulty in raising capital for expansion. I, therefore, feel that the proposals relating to taxes on small incorporated businesses need to be studied by the committee. Amendments may have to be made, because I do not think the proposals are complete in their present form.
Another matter which needs further study, and a number of businessmen have asked me about it, is that pertaining to deductions for expenses incurred while entertaining or while attending conventions. A man in the lumber business asked me about this aspect. He sells most of his products abroad, and does much

December 19, 1969
Taxation Rejorm
business at conventions and meetings in the United States. He says that his main competition comes from people in the lumber business in other countries. I do not think it is quite fair to disallow entertainment expenses, especially since those are quite legitimate expenses. Export sales from Canada may result from them and I do not think we are being quite fair to Canada when we do not allow a businessman to deduct his entertainment expenses. I say that, Mr. Speaker, because we certainly want to increase our export sales.
[DOT] (2:40 p.m.)
The special concessions which have been allowed to the Canadian mining industry are to be changed, according to the white paper's proposals. It is proposed to eliminate the three year tax holiday. The Minister of Finance said it is far too costly to the revenues of the government. This may well be, but I would like to see the figures. It is all right to say it is too costly and not necessary, but I would like to see the figures. In the most important uranium mining industry in my district of Algoma, I tried to secure the amount of tax paid by the uranium mining companies of this country. It was impossible to obtain these figures. In this regard I am from Missouri, Mr. Speaker-I want to be shown these figures.


An hon. Member:: You are from where? What's wrong with Algoma?


Maurice Brydon Foster: I would like to see the figures and, on the basis of the figures, make my decision. Northern Ontario depends on the mining industry and this industry is certainly not favoured by the provisions of the Regional Development Incentives Act passed last year. We want to study very closely any changes which may affect this industry before they are made. They may well be justified. If they are, I am sure the minister will be able to provide the figures to prove that fact.
Another item which has received a lot of criticism in my riding is the capital gains tax as it applies to widely held Canadian corporations, especially on unrealized capital gains. I would like to see the standing committee study this proposal to ensure that we are not harming development and growth more than we are gaining by increasing the taxes. The Standing Committee on Finance, Trade and Economic Affairs will have an opportunity to study these matters as will the Canadian

people, because I am sure during 1970 these tax proposals will be the most widely discussed topic in Canada.
Perhaps this would be a good time for the Standing Committee on Finance, Trade and Economic Affairs to experiment with television so that Canadians can see how the committee is dealing with this problem of tax reform. People would be able to participate by passing along their suggestions, so that during the next year the committee could bring forward the most equitable Income Tax Act for Canada.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I am sure the remarks that have been made in this particular debate will be of use in the over-all consideration of the white paper, although I believe the real weight of the consideration that this white paper must have will come in a parliamentary committee or in the discussions of the joint committee which is proposed. Not only will this be the responsibility of the committee insofar as we in the House are concerned in passing legislation which may arise from the white paper, but it will be a very special responsibility to the people of Canada. The Minister of Finance (Mr. Benson) told the provincial treasurers last week, "We'll change anything in the white paper if we can be convinced it should be changed". This is a very broad statement.
From the reactions that I have heard and read about, there will have to be many changes before the white paper can ever be developed into legislation. It will be the responsibility of the special committee to hear these criticisms and convince the government that there are many changes that must be made to the white paper.


Mr. Blair:: Will the hon. member permit a question? Will the hon. member say if he and his colleagues are prepared to let the white paper go to committee so the people can indeed present their views?


Some hon. Members:: What a stupid
question!


Robert Norman Thompson: That question is completely redundant, Mr. Speaker, and is certainly not in keeping with the spirit of this House. This party has no intention of preventing this white paper from going to the committee. That is the purpose of the committee. This is what I have been trying to say. I do not quite get the import of the question.
December 19, 1969

I want to make a suggestion because the members of the committee are going to require a lot of assistance when dealing with the voluminous submissions which will come from various parts of the country. I refer particularly to research assistance. As I listened to hon. members on the government side speaking today, for the most part supporting the recommendations of the white paper, I realized it would be a tragedy if the research available to the committee came only through the normal channels and if this were more or less government oriented.
It would be a very wise move if research assistance could be provided for each party delegation that constitutes the special committee in order that there may be a well rounded consideration. This certainly would assist the various members of the committee who represent the various positions which have already been expressed in this House. I hope the government will take this into consideration and provide the extra research facilities for this extremely vital and important work which this committee will have to do.


Mr. Deachman:: We provided nearly $200,000 for this. What did you do with it?


Robert Norman Thompson: I remind the hon. member who mentioned the $200,000 research fund that this applies to the entire opposition and does not in any way compare to the amount available for research facilities to members of the government side. This applies to every cabinet minister and every department. In this special instance, this committee needs extra research assistance and I believe it should be made available to every group or party that forms this committee.


Some hon. Members:: Hear, hear.


Robert Norman Thompson: I believe the greatest result that can come from this white paper is the inevitable discussion that it is going to generate and, in fact, has already generated. This white paper is an elementary and by no means complete statement of taxation reform in Canada, which is so very much needed. I must say this is a positive aspect of the white paper. My feelings centre around the fact that the minister, in spite of stating he is not going to be rigid in his attitude toward the white paper, will favorably consider many of the proposals. I am concerned, from the remarks being made in the House by the Minister of Finance, that the white paper actually is government policy.
Taxation Reform
I hope, Mr. Speaker, that some broadened aspects will be the result of this study. It seems that only part of the over-all tax reform that is needed in Canada has been presented. The white paper states that reform of the sales tax is less urgent, and can be accomplished after action on the proposals of this white paper. Why should it be piecemeal in that way? Why does the white paper not deal with the over-all aspect of taxation reform? Many new aspects of the sales tax structure are badly in need of reform. Without the government's proposal, in this regard it is going to be difficult to assess the total proposed tax structure. No mention is made of plans to reform the administrative aspect of the taxation system. The tax jungle remains with us unless the need for extensive administrative changes is recognized and the taxpayer is given an opportunity to know where he stands. As far as the Ottawa taxation authority is concerned, taxation procedures will continue to be enshrouded in red tape.
[DOT] (2:50 p.m.)
I do not believe there is any real recognition, either, of the tremendous need which exists in Canada today in connection with the financing of vital social services such as education, health and certain aspects of municipal work. Some people would say that this falls within the jurisdictional field of the provinces, but I am sure all the provincial treasurers have made it plain that this is the area in which the greatest discrepancies exist as far as taxation is concerned. The provinces will certainly need greater access to revenues if they are to carry out their responsibilities adequately in the directions I have indicated.
Another criticism of the white paper concerns its neutral attitude toward inflation. I think this criticism is justified. The federal treasury extracts higher revenues each year as inflation continues and the proposed capital gains tax will give it a further vested interest in inflation. Unfortunately, the proposals contained in the white paper do not go as far as they should if we are to consider at this time the over-all picture of tax reform.
Another criticism which concerns me relates to the relief which is proposed for those in low-income groups. What is proposed here will really be of no assistance whatever to those who make too little to be liable for tax. The minimum wage at the federal level-and the minimum provincial rates do not vary much-is $1.25 an hour. This amounts to' approximately $2,600 in a working year.

December 19. 1969
Taxation Reform
According to the recommendation of the white paper, a married man without children earning the minimum wage, that is, $2,600, would benefit to the extent of $1.42 a week. Mr. Speaker, for such a person the white paper might just as well not have been written.


Some hon. Members:: Hear, hear.


Robert Norman Thompson: The needs of this large section of the Canadian people cannot forever be ignored. It seems to me more regard should have been paid to them in the white paper.
I am concerned, too, about the impact of these recommendations on incentive and resource development. Do we really want to raise money in increased amounts for federal expenditure and federal government services, or should we not be acting to increase the productivity of this country?


An hon. Member:: Both.


Robert Norman Thompson: Someone says "both". I maintain that until we increase the productivity of this country we cannot adequately do the other.


Mr. Saltsman:: You cannot increase productivity until you do the other.


Robert Norman Thompson: Members to my left have got the cart before the horse, as far as I am concerned.


Some hon. Members:: Hear, hear.


Robert Norman Thompson: We must ensure that
productivity increases at a rate which enables us to afford the social services we need.
I was most impressed by the remarks of a man who commented on this white paper the week end after it was made public. The day after he had made this speech to which I intend to refer he was killed in an unfortunate plane crash in Labrador. I am referring to Donald McParland. The day before that accident, he said this:
"On first perusal, there does not appear to be a single proposal In any of the suggested tax reforms which would make Canada a more attractive place for foreign Investment. The entire focus seems to be inwards and not outwards. It suggests we are contemplating our navel and ignoring the world."


Mr. Mahoney:: That is a good one. I wish I had said that.


Robert Norman Thompson: He went on to express the thought:

"I feel the white paper has somehow missed the boat. At best it reslices the pie. The challenge facing Canada is to increase the size of the pie."
He stated further:
The government appears to feel that Canada's stability is attractive enough in itself to draw outside investment capital without the need for special incentives.
This has not been the case in the past, with the incentives available. We have never been able to attract enough money to do all the things in this country that we really need to do.
How can the situation possibly improve when we lower tax incentives and levy a capital gains tax?
The report continues:
He said provision of new jobs requires industrial growth which "is retarded by any negative impact on capital investment."
"Have we not the right to expect from our government some positive leadership in this respect?"
That is a very real question. The report then goes on to state:
The government shows a certain arrogance in its white paper statement that the government's need for money is so great that it cannot afford to reduce over-all revenues. "Has the time not come when the taxpayers of Canada should demand an effective answer as to why governments continue to require the annual amounts which are demanded from the taxpayers with such pious proclamations?"
Commenting on the proposed capital gains tax, Mr. McParland said:
In a mature or saturated economy certain arguments for such a tax are supportable. However, Canada is a growing, vigorous country and needs capital expansion.
I cannot but agree with those opinions. While I do not deny the justice in certain areas of a capital gains tax, the fact remains that our greatest need in Canada as far as increased productivity is concerned is the availability of sufficient capital.
Another criticism to which I shall refer briefly relates to the adverse impact the policies proposed in this white paper would have on incentives. The incentive to save which has been so characteristic of the Canadian people would be destroyed. Expedience will take over instead of thrift in personal management. Again, I wish to refer to an article which came to my attention today. It is the annual report of the Canadian Imperial Bank of Commerce. In the course of his address to the 103rd annual meeting of bank shareholders, Mr. Neil J. McKinnon, the chairman, made a statement which I propose to quote in part. He said:
The bulk of savings in Canada has been accumulated by the population in the middle income groups. The proposed requirement of payment of capital gains tax on equity securities every five years, combined with the estate taxes and onerous
December 19, 1969

gift taxes adopted by the Ottawa government a year ago, will negate their efforts.
Canadians will soon come to the conclusion that their efforts to save and accumulate an estate are pointless, because the head of each family after providing for his wife is bound eventually to say to himself "What's the use? If I leave money to my daughters and sons, the Ottawa government takes half-to say nothing of the additional heavy provincial succession duties in, for example, Ontario and Quebec."
,, ^ *.s a short step from there to say to himself,
I might as well spend what I have because, in effect, Ottawa pays half through the estate tax it doesn t get."
Saving has been defined as deferred consumption, perhaps long deferred within one generation and longer deferred when left to the next. The taxation measures proposed in the white paper obviously will diminish saving and put almost a compulsion on spending and immediate consumption.
It is obvious that in order to discourage prices from rising there must be incentives to save rather than to spend. The white paper scheme is in direct opposition to all the recent fiscal and monetary measures designed to discourage the sharply rising prices of the past several years.
In this sense, it seems to be that many of the recommendations in the white paper encourage inflation instead of seeking to control it. Mr. McKinnon continued:
The authors of the white paper seem to have overlooked that new investment capital is fluid and is extremely sensitive to the environment provided by the host country. Raw materials are being found in all parts of the world, and capital will go to the most attractive environment.
The principal reason Canada has been an attractive place to invest has been its system of taxation which, though far from perfect, has created the incentives and the consistencies of treatment to induce both domestic and external capital to invest in this country.
[DOT] (3:00 p.m.)
Unquestionably, there will be profound changes in the attitude of foreign capital to investment in Canada as a result not only of the immediate taxation measures proposed in the white paper but in their longer range implications for the development of the economy and the capacity to service foreign investment.
If the white paper is accepted it will convert the savers of the nation into spenders, and consumption will increase over the years.
Under these circumstances, interest rates will not fall but will likely continue to rise to levels much higher than they would otherwise be.
Failure to increase production and exports, combined with the emphasis on domestic consumption instead of on saving, will have an adverse effect on the Canadian balance of payments and on Canada's ability to service foreign investment. Over a period of time, this could lead to a further devaluation of the Canadian dollar.
Taxation Reform
Another point which Mr. McKinnon makes, and which I think is very well taken, is this:
These conditions will encourage an exodus of the better educated, more able and more mobile young Canadians to other countries with greater promise for them. As the vitality of the nation in every field of endeavour depends on the quailty of the people within it, there could develop a debility of the entire economy.
This is why I am convinced that while many of the recommendations in the white paper will stimulate discussion, they have not really been thought through when it comes to meeting basic needs in Canada today. I am sure that similar criticism will be expressed before the standing committee which considers the white paper.
The committee is being given the very important responsibility of making recommendations to the government on future policy and legislation dealing with tax reform. We can only hope that the government will pay more attention to the recommendations that will come from the committee than it has to some of the recommendations made by other committees during the last month. In this respect the defence committee is an outstanding example. It seems to me that although the committee did good work and its reports reflected the overwhelming opinion of its members, the government nevertheless saw fit to ignore its recommendations.
The last point I want to make is this. It is, of course, impossible in the space of a few minutes to cover all the aspects of the white paper, nor do I intend to try. I would like to refer to the effect the white paper will have on small businesses. The white paper will not only affect adversely small businesses, but it will have a very discriminatory effect on some of our vital, bigger businesses. For example, is it fair to tax the Ford Motor Company of Canada, which is a widely-held Canadian corporation, but not General Motors of Canada, which is a closely-held Canadian corporation? Many aspects of the white paper relate to both small and big businesses, and in my opinion some of the proposals have not been thought through sufficiently. Certainly I do not think they meet our taxation requirements.


John Edward Broadbent: Mr. Speaker, it is always a pleasure to follow the hon. member for Red Deer (Mr. Thompson). During the course of his remarks I found myself in agreement with him on the question of taxing the poor of Canada. He

December 19, 1969
Taxation Reform
adopted a position that has been generally held by our party, and I was somewhat afraid that he would go on to give his general support for our philosophy-something that would, of course, have caused us to reconsider our position. However, I trust I stand reassured that there is still a clear distinction in view between the hon. member and the New Democratic Party.


Robert Norman Thompson: There is, thank heavens.


John Edward Broadbent: Thank heavens is right. I notice the hon. member did not suggest how the philosophy of the Social Credit might be brought to bear in dealing with this subject, though perhaps he will take the opportunity to do so at a later stage.
My remarks will be brief, Mr. Speaker, since it is late in the afternoon. I want to talk on one issue, namely, the relative priority that we attach in society to the provision of private consumer goods as opposed to collective goods. It seems to me clear that the white paper reveals a bias in favour of the production of consumer goods in our society. Democratic Socialists in this and other countries have for many years emphasized the importance of collective goods, and have done so, I think, for three general reasons. First of all, the provision of collective goods is the most practical way to solve many of society's problems. Other parties have also accepted the practicality argument; certainly we have no monopoly on it. When railways, hydro stations, hospitals and so on are required, other political parties historically have accepted the practicality of providing collective goods and services; and many of these practical arguments remain today when similar services are required.
The second argument that we favour, one which is not so enthusiastically greeted by our political opponents, is that collective goods are provided on the basis of equality, which to me is very important. When modern economies during the last 30 to 40 years began to shift their emphasis away from exclusive preoccupation with consumer goods, what they were really moving toward was the provision of goods and services to the people in our society on the basis of equality. Whether one is rich or poor, one uses public facilities such as a summer park, a hospital, a medical plan, free university education, or benefits from medical research. The point that I regard from the social philosophical point of view as of supreme importance is that people in society be treated equally; this is what

public goods do. This in turn has a very important spin-off effect, if you like, in terms of developing the attitudes of people in society. This is our third reason for supporting this motion, and it is one of the philosophical principles of democratic Socialism.
By providing more goods and services through the collective expenditure of public money we are laying the foundation for a non-competitive society; we are laying the foundation for people to be free to pursue the life of their choosing, instead of being driven to compete in the economic substructure of society for goods and services. This is the classic goal of Socialism. Whether we will see it in our lifetime is, I suggest, an unlikely possibility, but it remains something to which we should be seriously committed as a society.
Only in the kind of environment where our children are permitted to grow up, taking for granted that they will get the kind of goods and services that they require, providing they make an individual effort, can we make substantial inroads into the competitive aspects of human nature, aspects that I contend are undesirable. Only by this means can we make inroads into the acquisitive aspects of human nature and emphasize the more desirable characteristics of human beings, so they may, to use a current cliche, do their own thing.
[DOT] (3:10 p.m.)
So much for the general framework. What kind of bearing does the white paper have on this kind of question? It seems to me there is a bias in favour of those who produce privately-consumed goods. The federal, provincial and municipal governments, in order to finance the much needed public, collective goods through bonds or debentures need all the encouragement they can get. Governments at all levels are today experiencing very serious problems in obtaining the capital they need for public investment.
The white paper, however, proposes substantial dividend taxes on holders of equity to the detriment of holders of bonds. The tax exemption on dividend income is proposed for one-half of the Canadian corporation tax paid by the corporation on the profits from which the dividend is paid. That helps the man who wants to invest in the consumer goods industry. No such exemption is proposed for bondholders. No such benefit, therefore, is provided for much needed public investment whether it be urban renewal, medical
December 19, 1969

research, public parks or anything else we as human beings in society decide we need on a collective basis.
At a time when the people of Canada are very sensibly increasing their demand for these public goods, we have a government making proposals which, far from encouraging the movement in this direction, discourage it. Far from increasing the development toward a more co-operative kind of society, we are providing tax incentives which will serve to increase the production of the consumer goods section.


Cyril Lloyd Francis: Mr. Speaker, I have been trying to understand the hon. member's argument. Is he arguing that he prefers measures which would encourage Canadian citizens to own bonds rather than to own Canada through the form of equity stocks?


John Edward Broadbent: The argument is that we need incentives in the public sector. We also need incentives in the private sector. I am not arguing that we should have a completely publicly-owned economy or a completely privately-owned consumer oriented economy; I am suggesting that there is a very serious imbalance at this time, greater than ever before in Canadian history, between privately and publicly-oriented investment. The tax should be weighted marginally at this time in favour of public investment as opposed to private investment.


An hon. Member:: At least it should not be discriminatory.


John Edward Broadbent: The taxation proposals
should not be discriminatory in that they perpetually encourage investment in one sector more than the other. I suggest this reflects a very significant difference in the political philosophy in terms of methods.
It is true in inflationary periods that the private sector can give investors private stock or other forms of equity as a means of protecting their investors. More than that, when corporations borrow their interest costs are cut by 50 per cent, making a 9 per cent rate only 4| per cent net on borrowed money. Government action, in contrast, has no such protection.
At this time, when we are experiencing one of our most serious and prolonged inflationary periods, we have in the white paper a proposal that is not in any way designed to help public investment or to encourage people
Taxation Reform
to put funds into the public sector whether at the municipal, provincial or federal level.
On the contrary, whatever incentives are provided encourage the private production of consumer goods. This seems to me to be the inevitable tendency of the white paper. This approach will discourage expansion by public development efforts, whether it be in the field of urban renewal, public housing, hospitals, medical services or a whole host of other fields upon which we depend for a civilized life. For these reasons, and there are many others, I think the white paper should be thoroughly discussed and seriously amended.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I wish to comment very briefly on the white paper now before us. The first point I want to make is that the highlights in the white paper give no recognition of modern social needs. We have noted the basic exemptions for what they are as proposed in the white paper. Certainly they are a far cry from a serious recognition of modern needs.
I was very surprised that the government, in recognition of our social needs, would allow basic exemptions along the lines proposed. I am sure all members of this House would agree that a single person with an income of $2,000 per year, or a married individual with $4,000 per year, is living at a level which is less than the basic requirement. The white paper does not even recognize this fact. It does not recognize that in our taxation system there should be exemption on a scale basis to cover the increasing basic needs of people.
Let me deal specifically with the proposal in the white paper for a general deduction in respect of employment expenses. It is suggested that this be 3 per cent of wages or a maximum of $150 in taxable income. In my opinion this should be recognized as a basic exemption. Unfortunately, when we look at the allowable deductions for the two classes in our society we find they are of two types. The people who have made representations to Parliament throughout the year are those who have received greater recognition in regard to income return. There should be a difference in the treatment of these people compared with those who are on lower incomes or who are unemployed.
In 1967 a letter was written to the taxation office asking for consideration for employees who were forced to move from one city to another. No consideration was given in respect of the income tax regulation covering

December 19, 1969
Taxation Reform
these moving expenses. Since then many such letters have been written. The only answer received was that no consideration could be given under the provisions of the act. On May 3, 1967, when the present Minister of Finance (Mr. Benson) was minister of national revenue, he said:
In the particular situation you have outlined, I can readily understand the reluctance of these employees to move their homes-
He said this in acknowledging a letter written by the former member for Moose Jaw-Lake Centre. He then stated:
[DOT] (3:20 p.m.)
However, the expenses of travelling between a taxpayer's home and his place of employment are personal living expenses. The Income Tax Act specifically precludes personal living expenses being allowed as a deduction in computing the income of the taxpayer. This same position would prevail with respect to any living expenses incurred by such employees in Regina.
We realize that today, because of the rapid methods of transportation which are in existence in most places, often people live in one city and commute to another for the simple reason that they cannot obtain comparable living conditions and facilities at their place of employment.
The same minister of national revenue wrote on November 1 to the hon. member for Moose Jaw-Lake Centre suggesting the following:
Any recommendation for a revision of the present legislation would be a matter for the consideration of my colleague the Minister of Finance, as he is responsible for bringing such changes before Parliament.
I would like to bring to the attention of the House the fact that the then minister of national revenue and the present Minister of Finance (Mr. Benson) are one and the same person. Surely, in view of the consideration which he gave back in 1967 to this type of change, which was made necessary as a result of the movement of people from one area to another, the present Minister of Finance could have done much better than propose a maximum deduction of $150 for moving employees to their place of occupation. If the Minister of Finance were as sincere as he appears to be in his television broadcasts and in the films in which he appears once in a while, he would understand the plight of these people and consider allowing further deductions for personal expenses above maximum of $150.
When letters were written to the minister of national revenue in 1968 dealing with the

same subject, replies were received from the then minister of finance in which he said:
The Royal Commission on Taxation made some recommendations regarding the treatment ol certain expenses incurred by taxpayers as a result of their employment which the government is presently examining. You may be assured that your comments and views on this matter will be kept in mind during this study.
So a number of ministers have suggested that they are concerned about this matter, but the best they have been able to do is to come up with a 3 per cent deduction in wages and salaries, while admitting at the same time that employment income and business income are not the same type of deductible items. Surely this government accepts the principle that they should be treated as one and the same, and it should allow the same deductions to be made in respect of employment and business income.
As late as October 1968, December, 1968, and March 1969, all letters addressed to the department have indicated that the government should be primarily concerned with the subject which I have raised this afternoon. If any concern had been felt for the people to whom I have referred, the government would have done something about this matter.
The same situation exists with regard to people whose jobs necessitate travelling on the highway. They have to be out on the road and must pay their travel expenses when they are away from home for long periods of time. These people, also, have not been given any consideration.
I should like to refer to another representation which has been made by the elevator construction people of the Saskatchewan Wheat Pool Employees' Association. On August 25, 1969, they wrote to the Minister of Finance. It would appear that the minister has failed to recognize the representation these people made to the department. They point out in their letter:
This ruling although welcome created an even more obvious discrimination in that workers employed by the same company and often engaged in work of similar nature at the same site, are in some cases allowed to deduct the value of their expense allowance from their taxable income and others are not. The criterion for determining their eligibility to deduct the expense allowance being based solely upon the definition of what work is considered to be new construction or only the repair of an existing facility.
Once again we have the situation of the haves and the have-nots. Surely if this government is sincere in bringing about tax reform-that is a strange word for the government to use at this time-it should take
December 19, 1969

into consideration the problem facing these people and rectify the situation in which they have found themselves for many years.
Another point that should be made is that many people are allowed exemptions on away-from-home expenses. I should like to receive an assurance from the minister that the $150 maximum will be considered distinct from exemptions for away-from-home expenses. It was my understanding that this was so, but I should like the assurance to appear in Hansard that this is the intention of the government. The most important thing to recognize is that we are all very concerned about the needs of people who are on fixed incomes and low pensions. We should make sure they are given the $4,000 basic exemption.
There are too many cases of people in our society who make contributions to various political groups for which allowance is made when they come to pay their taxes. A good example of this occurred yesterday when a question was put to one of the witnesses from Montreal who appeared before us. He was asked whether he had in fact made any contributions to a political fund. Unfortunately, the witness was not allowed to answer the question because the chairman of the committee did not consider the question came within our terms of reference, even though the gentleman concerned was willing to answer it. The same thing applied then. Too many political donations are being made and considered as tax deductible. If we do not want people to look upon each other with suspicion, we must have tax reform which will bring about the necessary changes and which will benefit all those in our society who need help. Taxation should not be applied in such a way that it benefits some and not others.
I urge that the government give serious consideration to a general deduction for employment expenses, and to an increase in basic exemption so that the people in our society who are not able to live in dignity will be able to stand up, look at their neighbours and say "I am proud to be a Canadian and to participate in our Canadian society".


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


Gerald William Baldwin: Mr. Speaker, I am glad to participate in this debate for a variety of reasons. I note the unusually large number of government members who in a spirit of devotion have come here, I hope to hear me speak. I was delighted
Taxation Reform
to hear the speeches of my friends to my left. I find they have come back to the pure gold of their party philosophy. After listening and seeing what took place in Winnipeg, I wondered for a while. The tremendous speech of the hon. member for York South (Mr. Lewis) when he defeated the waffling Watkinites and so stoutly defended the status quo gave me some foresight into a situation which might occur if, God forbid, some day my friends to my left were to hold the reins of government. I could picture the hon. member for York South as minister of finance, defending an austerity program.
[DOT] (3:30 p.m.)


Some hon. Members:: Oh, oh.


Gerald William Baldwin: First, Mr. Speaker, I want to discuss some of the procedures which might well be followed when-I hope it will be shortly this afternoon-having given this matter cursory examination the House sees fit to send the white paper to committee. Let me make it quite plain that I think we should examine very closely some of the procedures which have been followed in the past with regard to a committee engaging the staff which it requires to facilitate the thorough and careful examination of issues.
I think it is fallacious nonsense to suggest that in all cases, or even in most cases, experts and staff hired by a committee function for the benefit of the committee and all the committee members. This is just not the case. I am not faulting anyone, but these are the facts of life. What happens in most cases is that the experts become an extension of the chairman and his supporting government members on the committee. I do not believe that should be the case. We are operating under an adversary system. I do not say that in an unkind way; that is the way it should be in order to have the most thorough and careful examination of any problem. That is what Parliament is for. When matters are sent to a committee, where by reason of the physical establishment of the committee it is possible to develop a line of cross-examination, to call witnesses and examine and crossexamine them, I think we should bear in mind that the adversary system still prevails, although not in as partisan a way as it does in the House of Commons. I think committees can be mellow in that regard.
I suggest that in a matter obviously as complex and as difficult as this, one which has been regarded all through the country with a

December 19, 1969
Taxation Reform
great degree of interest, it should be possible to ensure that all members of the House will have an opportunity to secure the expert assistance they may need in order that they may properly discharge their responsibilities.
I have heard various figures bandied around. Somebody this afternoon said $200,000. I do not know what figure the Minister of Finance (Mr. Benson) has in mind. I am not advocating that by any means, but it seems to me that my hon. friends to my left have a right to put their case. It is the wrong case, but they have the right to put it forward. My hon. friends opposite have an even greater wrong in their case, although perhaps I may digress for a few moments to say that there are a few shreds of virtue and value in the white paper, largely embedded in a dark mass of economic foolishness. But my hon. friends have a right to try and make that case with such reasonable assistance as may be determined.
As may be determined from the speeches made by my leader and by the hon. member for Edmonton West (Mr. Lambert), we have dealt with this matter thoroughly, carefully and intelligently. We have gone into it closely and made our case. We, who have the best case, might not need as many experts as others, but we are going to ask for them just the same. I hope the government House leader is paying heed to what I am saying because that will be our position officially, not only on this but on other matters, when it becomes the responsibility of a committee to make a careful, studied and searching examination of any issue, particularly one as important and as difficult as this. The virtues of the adversary system must be maintained by permitting there to be engaged on behalf of the respective groups such experts, help and counsel as may reasonably be expected.
I am not suggesting that we go as far as the system in the United States where in every committee there is staff to assist the chairman, staff for the majority group on the committee and staff for the minority group. There are many committees where this is not necessary. But I would go so far as to say that members of the government side, sitting as a group, oftentimes have a position divergent to that of the government. The trouble is that they do not have it often enough. But they have a right to maintain such a position, especially in committee, and it may be that government backbenchers who sit on committees should also be entitled to some form of assistance. I make that plea now. This will be 
our position. I am not on the committee, but I want to make it quite plain that we will take this position in the committee.
Many things I could say about this white paper have already been said, so I will limit myself to dealing with one or two specific aspects of it. It seems to me that the Minister of Finance is attempting, in the form of the organized hypocrisy which is being put forward in support of the white paper, to destroy the initiative of that large middle class which forms the backbone of any society with an incentive system. I have no doubt about that. The minister may not think so. He may well say, "We are now establishing norms of taxation rates which will not have that effect." I suggest to you, Mr. Speaker, and to all members of the House, that an examination of the income tax system from the time it was first imposed as a temporary measure during the First World War more than 50 years ago, indicates what happens. Measures which are brought forward on a temporary, tentative basis never stay that way. They become permanent; they become imbedded in our economic and tax structure, and the taxation levies and returns consistently increase.
I suggest to members of this House that in a country like Canada, where we have so much to do, where we have a frontier and so much lies beyond the frontier, it would be criminal folly to take, to adopt, to support measures which would have the inevitable result of destroying the group which generates the capital that provides for the development of these areas.
In an older civilization, an older society which has not the advantages we have of being able to develop, to find new wealth, to exploit it for the benefit of the people, these schemes and these systems may become essential, although in this connection I would refer to a study by Professor A. R. Ilersic, commissioned by the Vancouver Board of Trade, which deals with examples of capital gains tax in the United Kingdom and with new measures of taxation introduced there. At page 7 of his study I read this:
Only someone who has had to assimilate, simultaneously, the two new taxes introduced by the 1965 Finance Act, i.e. the Corporation Tax and the Capital Gains Tax, can comprehend the burden laid upon the tax machine and its operators. In the Travers Lecture given in London on November 1st, 1966, Mr. E. Kenneth Wright, M.A., F.C.A., a member of the Council of the Institute of Chartered Accountants in England and Wales, observed that "the first consequence of the fiscal revolution of April 6th, 1965, has been to introduce confusion into our tax system*' . . .
December 19. 1969

Those words "fiscal revolution" can well be applied to this white paper.
In particular, there was insufficient study of the practical application of the new taxes-of their administration and of the work involved. They stand up much better-whether we approve of them or not-as theoretical or academic concepts than as practical blueprints.
In a letter to the Times . . . Mr. C. N. Beattie, Q.C., a member of the Tax Bar and an author of a standard work on income tax wrote: "It is scarcely an exaggeration to say that our present system of income taxation has been smashed to pieces by the Labour Government under the pretence of making it modern, simple and purposive. It is none of these things: it is now archaic, confused and destructive. The task of understanding it is beyond the capacity of the taxpayer, his advisers and the officials of the inland revenue; indeed it is beyond anyone's capacity because it does not make sense.
[DOT] (3:40 p.m.)
I hope, Mr. Speaker, that someone will bring this to the attention of the Minister of Finance in his peregrinations around this country trying to sell the unsaleable. I have mentioned the capital gains tax. On a general basis I think our position in this regard has been put forward by our leader and other members of our party. However, I have a personal view that there is a form of capital gains tax which might well be considered; that is tax in the form of unearned increment upon land alone-not improvements upon land, but upon land alone. This principle goes back to the last century, to the writings of the great economist, Henry George. I think it has certain virtues with regard to taxation, and it would also be of great collective value with regard to the problem of the cost of houses.
Mr. Speaker, no single factor has done more to bring ordinary housing out of the range of the average Canadian than the speculative value of land in the vicinity of large cities. I made this plea in the House seven or eight years ago and again three or four years ago, but nobody listened. That may be my fault, I think a tax of this kind, easily, mechanically arranged, with the value of improvements upon land properly adjusted to meet the inflated values of today and with mechanisms for exemption, could be devised to provide that only the speculative increase, the unearned increment, would be taxed. When society builds bridges, roads, schools and other facilities which increase the value of raw land, whereas the individual owner does nothing to merit that increase, I think it is proper and just that a percentage of the increase should be taxed.
Taxation Reform
This is a direct tax to which the federal government has a constitutional right, but because it has an impact upon what has traditionally been regarded as the preserve of provincial governments and municipalities, the Minister of Finance and his advisers might give some thought to discussing the matter in close consultation with the provincial governments. If such a tax were imposed, it would seem to me to be the type where a good proportion could go back to the municipalities.
Yesterday we heard the Minister without Portfolio (Mr. Gray) paint a grim and dismal picture of the future of the large metropolitan areas. He mentioned a limit of $25 million a year for urban renewal. It seems to me, Mr. Speaker, that here is a source of revenue which could be derived from an interim method of capital gains tax whereby the federal government would collect the tax and pay back to the municipalities large sums of money which would be generated, for improvement or urban renewal which is now so badly needed.
There has been some mention of the virtue of the white paper in so far as it would bear upon the poor. Much has been said about the hundreds of thousands of people who will be taken off the tax rolls. That may be so, but I reject categorically the suggestion that in the final analysis the poor will benefit. They will not. It has been our experience that any form of tax increase such as is contemplated here, in the end bears upon the poor people at the bottom of the economic-social ladder-those who have not the means to resist or apply any pressure, the poor and dispossessed, those who have no pressure groups to go to the government and seek a remedy.
We all know what happens. The small entrepreneur and businessman impose the tax as an increased cost of services, goods or commodities. Everybody who pays a tax attempts to pass it on, but unfortunately those at the bottom of the ladder cannot pass it on. I suggest, Mr. Speaker, that if this pernicious proposal contained within the four corners of the white paper is implemented, within three or four years the alleged benefit to these poor people will not only be destroyed but the cost of commodities and services essential to their preservation will be greatly increased.
If the Minister of Finance and his advisers would listen-and I doubt it because he is not the kind of man who listens-I suggest that they should take this paper, jack up the title

December 19, 1969
Taxation Reform
and run a new document under it. In this way we may have some hope of reasonable tax reform.


Stanley Howard Knowles: Mr. Speaker, I suspect we are getting fairly close to the passing of the motion for the reference of this white paper to the standing committee. Before we reach that stage there is one point which was made earlier in the debate which I should like to emphasize. In another context I suppose I would have a text-it is that old precept, justice delayed is justice denied. If there is anything in this white paper that is good- and despite the remarks just made by my hon. friend I suggest that there is-it is the admission that there are at least 750,000 Canadian taxpayers who should not be paying income tax.
The Minister of Finance (Mr. Benson) has been running around the country boasting of this fact, saying that one of the things his reform will do is take 750,000 taxpayers in the lower income brackets off the tax rolls. Mr. Speaker, this claim is, I assert, an admission that these people ought not to be paying income tax now. If the government insists on putting these measures off until 1971, it means that for another year-not to mention the year 1969 for which income tax has yet to be paid-750,000 people should not be paying tax are, in fact, required to pay it. This includes not only those in the lower income brackets who get caught with the $1,000 and $2,000 exemption levels. It includes many old age pensioners, particularly those between the ages of 65 and 70. Indeed, hon. members no doubt know that if pensioners in that age group are drawing the guaranteed income supplement, they must pay back part of that so-called guarantee in income tax.
[DOT] (3:50 p.m.)
The minister tells us he will correct that situation when he raises the exemption levels to $1,400 for single people and $2,800 for married people. I think the exemption level ought to go much higher, but at least that much will be done. Unfortunately, it will not be done until 1971. So here we have a clear admission that an injustice has been perpetrated against many people. But that injustice is to continue for another year. I say that justice delayed is justice denied.
Since the government has finally admitted that it ought not to tax people whose incomes are below $1,400 when single and $2,800 when
[Mr. Baldwin.)
married, it ought to put that part of its proposals into effect right away. That has been suggested in this debate more than once. The government has had a chance to answer us. Its answer is that it cannot put this program into effect piecemeal; that it is a package and that it must be put into effect all at once. It tells us that it could not raise these exemption levels without imposing all the other taxes on all those who are in the higher tax brackets. It cannot raise the exemption levels now, it says, because the balance of ways and means would be destroyed and the government would have a deficit.
I will not go into the economics of that argument, although I should be glad to do so. But may I make this point as clearly and with as much force as I can: That is a way of saying that the finances of this country must be carried on for another year by taxing the poor, by taxing old age pensioners who are on the guaranteed income supplement and by taxing people who have an income of less than $1,400 when single and $2,800 when married. I submit that the finances of this country are not worth maintaining if we have to dip into the pockets of people at that income level to keep the country going. Surely we have the wit to do something better and to be more just.


An hon. Member:: Not over there.


Stanley Howard Knowles: Someone behind me has just said, "Not over there." Surely there are people over there with wit enough, even half a wit, to see that action is taken on this issue. That is the main point I wished to bring forward.
The white paper has been examined thoroughly by all who have taken part in the debate. I say that one good thing to have come out of these proposals is the government's admission that at least 750,000 people are now paying income taxes who ought not to be paying them. If that assumption is true for 1971, it ought to be true for 1970 and for 1969. Unless the government brings into effect that provision right away it will be, by delaying justice, denying justice to many thousands of our Canadian people.


Mr. Arnold Peiers (Timiskaming):: Mr. Speaker, my remarks will be brief, something which no doubt will please the hon. member for Lanark and Renfrew (Mr. McBride). Not only the old people of the country are interested in our tax reforms, but our young
December 19, 1969

people are also interested. A young chap said to me, "When the government decides to tax us, it will not wait for its money; but when it proposes to make a concession, we must wait a couple of years for it." A number of our young people pay taxes even before entering the labour force. These young people in particular are disillusioned with the government and with its endless discussions. These tax proposals will go to a standing committee and be discussed there at great length. I was very surprised to hear the Minister without Portfolio (Mr. Gray) say to hon. members that the government has not enough information to know exactly what will be the effect of certain proposals, especially in view of some multiplier effects.
The taxes some of our young people pay have reached an oppressive level. They are impatient with stupid regulations under which they must pay income tax on money earned during summer holidays and then apply for a refund of that tax. Sometimes when they borrow money from the government they are told that money constitutes income and that they must pay tax on it. Since many young people who are now 16, 17 or 18 years old will participate in the next general election, I think it makes sense from the government's point of view to implement very soon certain of its proposals respecting income tax. It should not wait until the committee has made its report, but should implement some proposals at once. Our young people are not interested in hearing that these proposals have gone to a committee where they are to receive detailed, serious consideration. They are impatient, and for that reason I submit that the government ought to consider putting some of these proposals into effect at once.


Donald Stovel Macdonald: Mr. Speaker, there have been certain discussions about the business planned for the balance of the afternoon, and I think there will be found to be agreement for our suspending private members' hour for today so we may complete the matter now being debated. If we complete it before five o'clock, the House might rise, to the call of the Chair, so that I may have an opportunity later of reporting to the House the current status of industrial relations respecting air traffic controllers.


William Arnold Peters: Would that be before six o'clock?
Taxation Reform


Donald Stovel Macdonald: It would be before five o'clock. I think the House would be agreeable to an order suspending private members' hour so that we might conclude the matter under discussion. If we conclude it before five o'clock, the House might agree to rise until approximately 4.50, so that I may have an opportunity of coming back to the House and making a statement.


Mr. Speaker:: Is this agreed?


Stanley Howard Knowles: Mr. Speaker, I wish to be clear about the matter. If, for example, the debate were to be over at this point, would we now suspend the sitting?


Donald Stovel Macdonald: That is correct.


Stanley Howard Knowles: take it we would be recalled by the ringing of the bells. I assume that could not be later than five o'clock because of our hours of sitting today.


Donald Stovel Macdonald: I do not know whether that is necessarily the case. We could ring the bells just before five o'clock so that we could ask the House if it is prepared to sit beyond five, in case there is news of value to be announced later. We could do that instead of insisting that the debate not go on any longer. I should hate to deprive the House of the pleasure of listening to the hon. member for Timiskaming (Mr. Peters).


Gerald William Baldwin: Mr. Speaker, I understand that the President of the Privy Council (Mr. Macdonald) is delighted with the rapid progress being made and anticipates we shall finish before five o'clock. I do not think we shall need more time to discuss this matter.


Donald Stovel Macdonald: I was looking forward with great pleasure to hearing the speeches of hon. gentlemen, but I shall have to forgo that pleasure.


Mr. Speaker:: Hon. members have heard the suggestion put forward by the President of the Privy Council (Mr. Macdonald). Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Is the House ready for the question?


Some hon. Members:: Question.
December 19, 1969
2202	COMMONS
Science Council Report on Astronomy
[DOT]	(4:00 p.m.)


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


Some hon. Members:: Agreed.


Some hon. Members:: On division.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: My understanding of the order adopted a moment ago is that we shall now suspend the sitting until the call of the bells at approximately 4.50 p.m. I therefore do now leave the chair.



SITTING SUSPENDED

[Stage Direction]
At 4.03 p.m. the sitting was suspended.
[DOT]	(4:50 p.m.)

[Stage Direction]
The House resumed at 4.54 p.m.


Donald Stovel Macdonald: Mr. Speaker, there have been further reports on the air traffic controllers' ratification vote. While I can be optimistic about the result, I am advised that it is not final at the moment and that it is not possible to speak with certainty. I believe that around seven o'clock this evening it will be possible to do so. I would therefore suggest that the House make an order suspending the Standing Order with respect to the adjournment at five o'clock-


An hon. Member:: Suspend the government, too.


Donald Stovel Macdonald: Perhaps we should suspend these wisecracks until I have finished my remarks. I thought we might be able to go out and do something more useful, but if we are to have these interventions, I suppose we shall continue to sit.
I suggest we make an order to suspend the sitting until some time after seven o'clock to suit the convenience of the hon. members. I believe 7.15 or 7.30 might be convenient to the Leader of the Opposition (Mr. Stanfield). We could then return for the purpose of making a final disposition of our plans for the day's sitting.



ROUTINE PROCEEDINGS


[Stage Direction]
TABLING OF REPORT ON ASTRONOMY Hon. Donald S. Macdonald (President of the Privy Council): Mr. Speaker, may I take this 
[Stage Direction]
opportunity, pursuant to Standing Order 41(2), to table in both official languages a report by the Science Council of Canada on astronomy.
An hon. Member:: What do the stars tell you?


Donald Stovel Macdonald: I have consulted the government's astrologer, and he is predicting a good Christmas.
I believe my colleague the President of the Treasury Board (Mr. Drury) would like permission of the House to revert to motions for the purpose of making a statement with regard to pensions.


Gerald William Baldwin: Mr. Speaker, may I say that we in this party are agreeable to the proposal made by the President of the Privy Council (Mr. Macdonald) with regard to the resumption of the sitting. I would hope, however, that a definite hour, say 7.30, might be fixed. We are all very hopeful about the outcome of the vote. We believe that the further the negotiations move away from the two presidents, the President of the Privy Council and the President of Treasury Board (Mr. Drury), the more likely they are to succeed.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: Mr. Speaker, I would suggest to the government's favourite stargazer that he should set a specific time, rather than some unspecified time after seven o'clock. If the government is expecting some information, he might well set the time at eight o'clock. I would have no objection to being here at 7.30, but I do not want to attend at that time and then be told we have to sit around for another half hour until the information is available.


Donald Stovel Macdonald: If hon. members insist on eight o'clock, I am sure we can all find something to do in the extra hour.


Gerald William Baldwin: Are the results coming by mail? If so, we may have to wait a little longer.


Mr. Speaker:: Is it agreed that the relevant standing order be suspended and that the House should reconvene at eight o'clock this evening?


Some hon. Members:: Agreed.


An hon. Member:: Half past seven.
December 19, 1969



PENSIONS


Charles Mills (Bud) Drury: Mr. Speaker, I am pleased to be able to inform hon. members that the government will be introducing legislation, following the Christmas recess, to provide for increases in the pensions of retired public servants and their surviving dependants.


Some hon. Members:: Hear, hear.


Charles Mills (Bud) Drury: As I have indicated to the House in recent months, this matter has been the subject of intensive study. The proposals which the government will be placing before Parliament are based on a report which has been submitted to me by my Advisory Committee on the Public Service Superannuation Act. This committee examined proposals which had been made to the government for a special contributory plan, financed by contributions of the government and employees. The committee concluded that such a plan, financed by equal contributions from the government and employees, is feasible as a continuing method for up-dating pensions payable in respect of retired public service employees under the Public Service Superannuation Act.
The plan will contain the following features:
(a)	Commencing April 1, 1970, pensions in pay will be increased by the application of percentages ranging from 2 per cent for those who retired in 1969 to 42 per cent for those who retired in 1952 and earlier. These percentages will be applied to the basic pension plus any increase being paid under the Public Service Pension Adjustment Act of 1959.
(b)	Commencing in 1971, pensions would be increased each January 1 in accordance with the percentage change in the Canada Pension Plan pension index provided the maximum increase under that plan remained at 2 per cent.
(c)	There will be no dollar ceiling on the amount of the increase in applying the percentage increases.
(d)	The contribution rate will be one half of one per cent each, by the government and the employees.
[DOT] (5:00 p.m.)
I should mention at this point that while half of the membership of the advisory committee consists of members of employee
DEBATES	2203
Retired Civil Servants' Pension Increase organizations, the government had discussions with and obtained the support of representatives of all the bargaining agents for these proposals.
In the case of persons retired from the Canadian Forces or RCMP, the situation is somewhat different because of the earlier ages at which members of those forces can retire on full pension. It will be proposed that the commencement of escalation in their cases should take place at the age of 60, or immediately if the member is invalided from the service. This would be comparable with the treatment to be accorded the majority of public service pensioners who can retire on an immediate annuity at age 60. The additional contributions required from members of the forces and the government would be at the same rate, as in the case of public service employees.
The legislation which is proposed will also deal with increases in the pensions of retired Members of Parliament and with other pension plans, such as the Governor General's Retiring Annuity Act, certain pensions authorized by Appropriation Acts and the pension plans for locally engaged employees abroad.
With proper reservations respecting the special position of the judiciary, the same principles will be proposed for the adjustment of pensions payable under the Judges Act.
It is intended that the effective date of the pension increases and the new contributions will be April 1, 1970.


Robert Lorne Stanfield: Mr. Speaker, some people will really believe that there is a Santa Claus now-of a sort, anyway. This is not a time for controversy. Generally speaking, I know that the announcement of the President of the Treasury Board (Mr. Drury) will be welcomed. However, even though it is not a time for controversy I feel there are one or two things that need to be said.
First of all, I do not know why there was the unconscionable delay in this matter. I do not know what provoked this action at this time, whether it was the action that was taken by the government of Ontario.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: If my hon. friends opposite really want me to be critical, then I will, but I feel I should say one or two things. If hon. members opposite will pipe down I will not take too long. This whole plan is figured on
2204	COMMONS DEBATES	December 19, 1969
Retired Civil Servants' Pension Increase
the basis of a 4 per cent interest rate for the Government of Canada.


Mr, Drury:: There is no basis for that statement. That is sheer mythology.


Robert Lorne Stanfield: It is computed on a 4 per cent basis.


Charles Mills (Bud) Drury: No, it is not.


Robert Lorne Stanfield: I may be wrong, but I do not think I am seriously wrong. I think the government is profiting substantially from the superannuation fund, though it is not a funded plan. I must say I cannot go along with the 2 per cent ceiling. The 2 per cent ceiling on adjustments related to the cost of living, on the basis of performance within recent years, is completely unrealistic. I think this question should be looked into further, that the ceiling should be removed so that annual adjustments can be reasonably related to the change in the cost of living. As a result, in future pensioners will not find themselves in the very difficult position in which they found themselves in recent years, with their pensions not being adjusted in accordance with increases in the cost of living.


Stanley Howard Knowles: Mr. Speaker, I have waited for about 25 years to be able to make the statement I am now very happy to make. Like the Leader of the Official Opposition (Mr. Stanfield) I could find areas for criticism, but the first word I want to say is that there are 35,000 retired civil servants and 17,000 widows of retired civil servants plus many thousands of pensioners from the RCMP and the Armed Forces who will say tonight, "Well, this is a Merry Christmas after all."


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: Like the Leader of the Opposition, I feel this should have happened long ago. The point is that now it is happening and I rejoice for those who will get the benefit of this announcement made by the President of the Treasury Board (Mr. Drury).
Let me comment on one or two things about this plan which I think are good. It is true that through most of the years I have been dealing with this issue I have been primarily concerned with those who are already retired. But I have made it clear that it is also necessary to make provision for those who are
[Mr. Stanfield.)
still working in order that they will not be in the same boat that the retired civil servants have found themselves in for many years.
One thing that is good about this plan is that it covers both groups. It makes an arrangement whereby people who are now retired may receive in April, 1970, an increase in their pensions ranging from 2 per cent-they will not think that their Christmas is all that merry-to those in other categories who will get as high as 42 per cent. They will realize that this is a useful and most welcome piece of legislation.
Not only does the plan increase the pensions of those already retired-and I have read carefully the notes the President of the Treasury was good enough to give me a few minutes ago-but it says to those who are now in the service that when they retire the same accelerating formula will apply to them during their years of retirement.
For all the critical things I might want to say, it is a very significant moment when this announcement is made in the House of Commons. I must say I regret the ceiling of 2 per cent in the amounts to be added in later years, and this is the same regret we have about the ceiling that is in the Old Age Security Act and the Canada Pension Plan. I hope in due course we can get that ceiling revised in respect of all these plans. The significant thing about this announcement is that we are making a start on doing something for those who are now retired and in need of this pension increase, and that we are also making provision for those people who will retire in the future.
It strikes me that what the minister has announced regarding the slightly different arrangement for those in the Canadian armed forces and those in the RCMP is quite justified. I am also glad to note that the legislation will provide a similar increase in the pension of retired Members of Parliament. As hon. members will have noted, this will not affect those of us who are now in this House, and I am glad that that issue has not been raised at this time. I think it is clear, however, that this will do something for those who have been away from the House for a number of years, many of whom are living on pensions which have an unrealistic ceiling. They will be able to benefit from an increase in their pensions that will be most welcome.
Let me say, Mr. Speaker, that I hope the fact that these arrangements are being made for retired civil servants, retired members of the armed forces, retired RCMP personnel,
December 19. 1969

retired Members of Parliament, retired Governors General and retired judges, will result in the other groups being remembered as well. I mention particularly, because they come under the aegis of the government, the retired employees of Canadian National Railways.
[DOT] (5:10 p.m.)
I welcome the fact that a few days ago a motion of reference was made so that the Committee on Transport and Communications will have the CNR pension plan under its consideration. I hope that as a result of that study, a parallel plan can be produced soon enough so that the same date of April 1, 1970, will apply to retired employees of the CNR. There are others, particularly those in private industry, who deserve this increase as much, but bearing in mind that many provincial governments, jurisdictions, and private employers have taken the step, I hope that what the federal government is now doing will lay it down as a rule which all employers should follow, and that includes the CPR and all other private employers.
It just does not make sense in any kind of civilized society to say that once people have retired their pensions should stay at the same level for the rest of their lives. I am concerned, not just about the rise in the cost of living with which retired people have to cope, but about the fact that they should be entitled to share in the increased standard of living. What we are agreeing to by this arrangement is that people who are retired have their right to share in an on-going society. I am glad the government is taking this step with respect to those who come under its purview, and I hope others will do likewise.
I have one further word, and that is to express the hope that now that we are taking this step, I hope the government will do the same thing with respect to the old age security pension. Apparently we did not have to wait for the white paper to do this. I urge that old age pensions be increased in the same way, without further delay.
However, I see Your Honour is becoming anxious, and I do not blame you. But I have battled for a quarter of a century for the day when I could welcome the announcement that has now been made. I do so, and in the name of many superannuates and their widows who will be grateful tonight, I say to the government, "The same to you; a very Merry Christmas".
Air Transport Dispute TRANSPORT



TUGBOATS-TABLING OF SAFETY REGULATIONS

Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, earlier today, for reasons that were outlined to the House leaders, it became necessary for me, in order to accommodate a group of tugboat employees who were in Ottawa, to make a statement with regard to safety regulations in the form of a press release. Normally I would have done this in the House, but as was outlined at the time it was necessary because of the timing to do it in this fashion. I am now taking advantage of the first opportunity to table copies of this release in the House.


Mr. Speaker:: Pursuant to an order made earlier this afternoon, it is understood that the House will reconvene at 8 p.m. today. I would like to suggest to hon. members that if they are wondering how the intervening hours might be employed, I will be in attendance in Room 16 and I would be very grateful if hon. members accepted my invitation to spend a few moments with me. This invitation is extended, of course, to members of the press and to our staff.



SITTING SUSPENDED

[Stage Direction]
At 5.15 p.m. the sitting of the House was suspended.

[Stage Direction]
The House resumed at 8 p.m.


Charles Mills (Bud) Drury: Mr. Speaker, I am pleased to be able to inform the House that the government has received official advice from the Canadian Air Traffic Controllers Association that their membership has ratified the terms of settlement as outlined in the memorandum of agreement between the government and the association which was signed last Wednesday, and that they are prepared to execute the collective agreement as soon as practicable.


Some hon. Members:: Hear, hear.


Charles Mills (Bud) Drury: I expect that this will take place late Monday afternoon, December 22. I am also pleased to be able to say that a
2206	COMMONS
Air Transport Dispute
collective agreement with the International Brotherhood of Electrical Workers, representing electronic technicians, will be signed on the same afternoon. Happy Christmas!


Robert Lorne Stanfield: Mr. Speaker, I am getting tired of applauding the settlement of this strike, but I am glad to do it a second time.


Pierre Elliott Trudeau: Mr. Speaker, I rise on a question of privilege affecting all hon. members of this chamber. I should like, on behalf of all hon. members, to wish you a very happy Christmas and to extend our very best wishes for a New Year which at least in your working surroundings may be peaceful and orderly.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: That is up to you.


Pierre Elliott Trudeau: It may be up to us, but we do
not want to deprive Your Honour on every occasion of your right to compete in the physical fitness Derby which was talked about earlier this afternoon. We hope Your Honour will find other ways of keeping fit.

Mr. Speaker, while I have the floor I should like, on behalf of all my colleagues in the government, to wish all hon. members and the staff who work tirelessly for the House a Merry Christmas and a Happy New Year. I also hope that during the recess all will have such a good rest that they will not long for one another.


Donald Stovel Macdonald: Mr. Speaker, I would ask for the unanimous consent of the House to put the motion appearing in my name on the order paper.


Some hon. Members:: No.


Leslie Gordon Benjamin: On a question of privilege, Mr. Speaker. In spite of the statements by the Prime Minister (Mr. Trudeau) and the President of the Treasury Board (Mr. Drury) as well as the leaders of opposition parties, I wish to protest the settlement of this strike because now my mother-in-law will arrive.


Some hon. Members:: Oh, oh!

DEBATES	December 19. 1969
[DOT] (8:10 p.m.)



ADJOURNMENT FOR CHRISTMAS RECESS UNTIL JANUARY 12

Donald Stovel Macdonald: Mr. Speaker, I move:
That when the House adjourns at the conclusion of the sitting on Friday, December 19, 1969, it shall stand adjourned until Monday, January 12, 1970, at 2.00 o'clock p.m. provided always that if it appears to the satisfaction of Mr. Speaker, after consultation with Her Majesty's Government, that the public interest requires that the House should meet at an earlier time during the adjournment, Mr. Speaker may give notice that he is so satisfied, and thereupon the House shall meet at the time stated in such notice, and shall transact its business as if it had been duly adjourned to that time; and
That, in the event of Mr. Speaker being unable to act owing to illness or other cause, the Deputy Speaker or the Deputy Chairman of Committees shall act in his stead for the purpose of this order.


Mr. Winch:: Mr. Speaker, may I direct a question to the Minister of National Defence (Mr. Cadieux). Do we now have his assurance that the "Yukon" will be flying tomorrow, because half an hour ago I told my wife that it would.


Léo Alphonse Joseph Cadieux: Mr. Speaker, I understand that all the arrangements are coordinated by the President of the Privy Council (Mr. Macdonald), so if the hon. member is on good terms with him as of ten o'clock tomorrow morning, I believe the plane will fly.


John Patrick (Pat) Nowlan: Mr. Speaker, my friend might worry about the west, but I lived there for seven years and finally saw the light and came east. Will the transport plane to the east also be on time for nine o'clock tomorrow morning?


Donald Campbell Jamieson: Mr. Speaker, anything that will get my friend from Annapolis Valley (Mr. Nowlan) out of Ottawa, east or west-


Donald Stovel Macdonald: Mr. Speaker, in answer to the question, I would suggest that perhaps if the hon. member for Vancouver East (Mr. Winch) could meet his mother-inlaw, the hon. member for Regina-Lake Centre (Mr. Benjamin) will confirm the fact that the plane will leave tomorrow. I would like to move, seconded by Mr. Olson, that this House be now adjourned.
December 19, 1969


Mr. Speaker:: Order, please. The original motion has not been put. Is the motion carried?


Some hon. Members:: Carried.


Donald Stovel Macdonald: Mr. Speaker, I move that the House do now adjourn.


Mr. Speaker:: May I take one moment to thank the right hon. Prime Minister (Mr. Trudeau) for the very generous wishes he has
Business of the House just extended to the Speaker, and thank all hon. members who during the last few days were kind enough to extend similar wishes to me. I am happy to reciprocate and wish my colleagues a very pleasant Christmas and New Year that will bring them in abundant measure health, happiness and success in their work on behalf of the Canadian people.
Motion agreed to and the House adjourned at 8.15 p.m.



END OF VOLUME II