1970-01-13

Mr. John Burton (Regina East):: Mr. Speaker, I rise on a question of privilege concerning answers to questions placed on the Order Paper. On October 23 I placed on the Order Paper a series of questions, Nos. 256 and 259 to 264 inclusive, asking for information about the designation of areas under the Regional Development Incentives Act. My questions concerned all provinces except the three maritime provinces which were completely included in designated areas. My first question with respect to each province was: "What criteria were used by the Department of Regional Economic Expansion in the selection of designated areas for the province... ". The answer provided to each question was: "Weighted measures of rates of economic growth (employment, income and population) and of potential for secondary industry"-a clear case of bureaucratic gobbledegook.
I then placed a motion for papers on the Order Paper asking for a copy of all correspondence between the government of Canada and each of the provinces regarding the selection of designated regions under the new Regional Development Incentives Act. The answer I received was that correspondence was exchanged only with the province of Alberta. This correspondence was subsequently tabled in the House of Commons and provided information on the views of both the government of Canada and the government of Alberta with respect to the designation of areas in that province. This was then followed by a series of questions in which I asked for information about the specific proposals placed before the government of each province by the government of Canada and the views of the provinces concerning these proposals. The standard answer submitted to each of these questions was that "the details of such consultations are confidential matters."
My question of privilege is that there has been a systematic attempt to evade the provision of information to which this House is entitled. Legislation passed by this House provided for consultations to take place with the provinces and now members are denied access to information on these consultations. We are told we have no right to know.
Furthermore, I submit that there is a conflict between the answer provided to questions 577 to 583 inclusive, and 596 to 598 inclusive, which indicated that the details of such consultations are confidential matters while the government had already provided full information on consultations with one province in response to motion for papers No. 140 concerning correspondence exchanged between the government of Canada and the government of Alberta. If it is possible to provide information on one province, how can the government hide behind confidentiality with respect to other provinces?
If Your Honour thinks there is a question of privilege I am prepared to move a motion to refer this matter to the Standing Committee on Privileges and Elections for further consideration.


Mr. Speaker:: I thank the hon. member for having given the Chair the notice required under the Standing Orders. It has given me an opportunity to look into the complaint which has been made by the hon. member for Regina East. I have reached the conclusion, after giving the matter serious thought, that although there might be a grievance on the part of the hon. member, in the circumstances to which he has alluded I cannot find that there is a question of privilege. I think I should refer the hon. member to citation 181 of Beauchesne's fourth edition, among other citations, which provides that in circumstances such as those mentioned by the hon. member for Regina East there cannot be a ruling that there is a legitimate question of privilege requiring the referral of the matter to a committee. In the circumstances I cannot put to the House the motion to which the hon. member referred a moment ago.

January 13, 1970
The Canadian Economy



ROUTINE PROCEEDINGS


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, as part of the national effort to curb inflation the Prices and Incomes Commission is working to secure the support of the business community and professional groups for a program aimed at limiting price increases and charges for services. If meaningful progress can be made in this direction, this initial step will be followed by efforts to restrain increases in wages, salaries and other cost elements that affect prices. This will help to restore a balance between total money incomes and the total quantity of goods and services produced in the economy.
[DOT] (2:10 p.m.)
It is important that major discretionary price changes in the Canadian market should be avoided while these discussions are taking place. Such price increases, even if planned well in advance, could easily be interpreted as being made in order to avoid the scrutiny which would follow the adoption of a program of price restraint.
With this in mind, the government has requested the copper producers and the railways to suspend the price changes announced around the turn of the year and they have agreed to do so. On behalf of the government, I have also had discussions with representatives of the two banks which had announced increases in their interest rates on instalment loans for consumers; they also have agreed to meet the government's request to suspend these increases.
I want to make it very clear that the government will adopt the same attitude toward any similar proposals to raise prices between now and March 1.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I think it is very obvious that if the Prices and Incomes Commission is to have any real chance of persuading the country to adopt a program of voluntary restraints, this kind of holding operation is essential. The mystery has been why the government did not realize this long ago.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The Prices and Incomes Commission would have had a better chance to succeed if some of the other increases in prices of important commodities that were allowed to take place had been put off at least temporarily. The fact that they were not has made the task of the commission that much more difficult. I think the reason is that the government did not in its heart really believe in the importance of a program of restraints. The Minister of Finance, in his interim budgetary statement, was very quick to dismiss them at that time as having already failed. I hope the government now realizes that if this program is to succeed it must give the program its active support. I hope the government realizes the importance of this program succeeding at this time.
While a program of fiscal restraint and tight money may be perfectly satisfactory to the government and while the Prime Minister and the Minister of Finance may be prepared to tighten the screws further, the rate of unemployment contemplated by the Prime Minister is not acceptable to the country.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I hope this statement by the minister indicates that the government has finally stopped pooh-poohing such efforts and intends to support them. The government must recognize that any program of restraint must be phrased in specific terms. It must be comprehensive and not just related to part of the economy. This should not be too difficult since the Prices and Incomes Commission is talking about something temporary of about a year's duration.
It is late in the day for the government to be acting, but I am glad to see that those approached have co-operated. I think other industries would also have co-operated and thereby have made the task much simpler. The policy of the government to date has been one of deliberately creating unemployment in order to control inflation. It has not worked. It is not acceptable. I hope the minister's announcement today means that the government is finally getting down to a serious, effective and acceptable anti-inflationary program.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, on December 10 last, as recorded at page 1814 of Hansard, I asked the Minister of Finance what the government intended to do about the proposal of the copper industry to implement a further
January 13, 1970


Some hon. Members:: Hear, hear.


Thomas Clement (Tommy) Douglas: The minister has done something. He has managed to forestall two price increases-one in copper and one in interest rates. But what about the increase in the price of steel which will lead to increases in prices of almost every other commodity used in Canada? What about the increase in the price of oil, the increases in the price of automobiles? The Minister of Consumer Affairs pleaded with the auto industry not to implement them, but they were implemented despite his pleas and protests. Surely the public ought to know whether the financial position of these companies makes it necessary for them to increase their prices or whether they are merely taking advantage of an inflationary psychology to pick the pockets of the public.
What the minister has done here is not to roll back prices. He has allowed price increases both for the copper industry and other industries and he has permitted the banks to make increased profits. He has done so without lifting a finger. All he is doing now is to say: Boys, you are pushing things too far. It is like catching somebody who has picked your pocket, taken $100, and then he gives you back 25 cents for carfare to get home.


Mr. Speaker:: Order, please.
[DOT] (2:20 p.m.)


Mr. Real Caoueile (Temiscamingue):: Mr. Speaker, the Minister of Finance will no doubt again hit the headlines in the papers. He has actually stated today in the House his intention to fight inflation with outdated, inefficient methods, i.e. by useless statements and programs. As a matter of fact, the minister knows perfectly well, as we also do, that after the Christmas and New Year holiday season prices are more liable to drop than to

January 13, 1970
The Canadian Economy rise. If the minister wants to see this for himself, let him come with me along the commercial streets of Ottawa, Hull or any other Canadian city and see the special sales now on in every line of business, with some stores offering 40 or even 50 per cent oft their regular prices.
But the minister says that in order to stop inflation it is necessary to ask the Prices and Incomes Commission to get the support of the business world. Indeed the businessmen did not wait for the recommendations of the Minister of Finance or of the Prices and Incomes Commission to put goods on sale at reduced prices.
Mr. Speaker, it is not by saying that the minister has asked two banks not to raise their interest rates, as they wanted to do, that we shall manage to curb inflation or restore the economic balance or, as the minister said in his statement, that his intervention or that of the Prices and Incomes Commission will help to restore a balance between total money incomes and the total quantity of goods and services produced in the economy.
Mr. Speaker, the minister is deliberately misleading the entire Canadian population. He must think that hon. members are ignoramuses because never in the history of Canada have total money incomes been sufficient to buy the total quantity of goods and services produced in the economy. That is why consumers are forced to mortgage their income for three or four years ahead of time in order to buy products which are already one, two or even- ten years old. And the minister states that, on the whole, balance between the purchasing power and available goods will be restored. What a misleading statement!
Mr. Speaker, why do the minister and the government tolerate, for example, that a province such as Quebec to finance Quebec Hydro should have to go and borrow $50 million in the United States at an interest rate of 10 per cent for a period of 25 years? As a matter of fact, in 25 years the province of Quebec will have paid $125 million in interests on a $50 million loan, which is in fact a net loan of only $45 million since the brokers will get a $5 million commission on the transaction.
Mr. Speaker, that is the cause of inflation in Canada. It is the entire system which must be revamped. I understand that the minister's statement will get the headlines, but truth nonetheless has its rights. We must admit that our system is obsolete even if tolerated by an irresponsible government.



ADJUSTMENT ASSISTANCE BOARD


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, could we revert to motions for a few seconds?


Mr. Speaker:: Does the house agree to revert to motions?


Some hon. Members:: Agreed.


Jean-Luc Pepin: Mr. Speaker. I should like to table in both official languages the annual report of the Adjustment Assistance Board.



MOTION TO ADJOURN UNDER S.O. 26 GRAIN ALLEGED INADEQUATE PLAN TO UTILIZE THUNDER BAY TERMINAL SPACE

Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I ask leave, seconded by the hon. member for Regina East (Mr. Burton), 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 inexcusable situation involving some 70 million bushels of space in the grain terminals at Thunder Bay, and the wholly inadequate plan for filling this space by mid-April, when such terminal capacity can and must be utilized before the end of February to allow a two-bushel quota to be provided at affected shipping points many weeks sooner than will be the case under present plans; and the urgent need for the government to require the railways to begin immediately to deliver up to 1,000 carloads per day to these terminals to alleviate the worsening farm income crisis in the prairie provinces and the very serious repercussions this crisis is having on the economy and on the employment situation in all of Canada.


Mr. Speaker:: As the hon. member knows, in determining whether the House should be adjourned under the provisions of Standing Order 26 as suggested by the hon. member, the Chair must have regard to a number of factors, including the probability of the matter being brought before the House within a reasonable time by other means. It would appear that there will be such opportunities for
January 13, 1970

debate in the days and weeks ahead. With this in mind I must rule that the hon. member's motion cannot be put to the House at this time.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, in the absence of the Secretary of State for External Affairs I should like to direct my question to the Prime Minister. In view of the importance of the time factor in connection with starvation difficulties in Nigeria I should like to ask whether the government of Nigeria at Lagos has given the go-ahead on programs to provide relief from outside the country to the starving and whether the government of Nigeria has as yet given any indication whether or not it is prepared to allow an increase in the number of international observers in the country?


Right Hon. P. E. Trudeau (Prime Minister):: I do not know, Mr. Speaker.


Robert Lorne Stanfield: Mr. Speaker, I suggest it is of the greatest importance to the House that members be fully informed as to progress in these matters. Would it be possible for the Secretary of State for External Affairs or his Parliamentary Secretary to appear before the House to give us this information in view of the grave importance of each day that passes?


Pierre Elliott Trudeau: It is always possible, Mr. Speaker, but yesterday the House set up a parliamentary committee in order to exercise this kind of discretion.


Mr. J. M. Forrestall (Darimouih-Halifax East):: Mr. Speaker, I should like to ask the Minister of National Defence to indicate to the House and to the Canadian people in general whether he would be prepared to authorize the diversion of HMCS Bonaventure from exercises to the relief of Nigeria by utilizing its capacity to carry food, drugs, medical supplies and portable hospitals and, if necessary, for the purpose of evacuation?


Hon. Leo Cadieux (Minister of National Defence):: As indicated by the Prime Minister,
Inquiries of the Ministry Mr. Speaker, this afternoon at three o'clock there is to be a meeting of the Committee on External Affairs and National Defence at which time I believe some suggestions will be forthcoming. I can say that the Department of National Defence has all sorts of contingency plans. If there is a suggestion to divert the Bonaventure and it is accepted by the government, the minister would, of course, divert the Bonaventure and put it into service.


Robert Lorne Stanfield: Mr. Speaker, I have a supplementary which I should like to direct to the Minister of Manpower and Immigration. Is the government of Canada prepared to adopt an open-door attitude towards Biafrans who might wish to come to this country which would give them treatment comparable with that previously offered to Czechoslovakians?


Hon. Allan J. MacEachen (Minister of Manpower and Immigration):: Mr. Speaker, as my hon. friend knows, Canada in the past has adopted in the case of Czechoslovakia and Hungary a very generous attitude. The situation has not developed in Biafra to the point where we can develop the same attitude. The matter is under very careful scrutiny at the moment.


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a supplementary to the minister. Can he assure the House and the people of Canada that in the event there is a mass exodus the government will look with sympathy upon all applications?


Mr. Speaker:: Order, please. I respectfully suggest to the hon. member that the question has hypothetical overtones and asked in this way perhaps it should not be received.


Mr. David MacDonald (Egmonl):: Mr. Speaker, I have a supplementary for the Prime Minister with regard to earlier questions. In view of the continuing difficulties in terms of resuming some form of relief operation in the area formerly known as Biafra, has the Prime Minister taken any step directly or through his personal representative to see if the difficulties can be overcome quickly so that some form of arrangement may be set up in order that relief supplies may be distributed in the areas where they are drastically needed at the moment?


Pierre Elliott Trudeau: I repeat that this afternoon the committee will be dealing with this question. The Secretary of State for External Affairs will be appearing before that commit-

January 13, 1970
Inquiries of the Ministry tee at 3.30 and can be questioned in detail. But our information is that at present there are no particular difficulties about which we are in a position to do anything. The roads are open and the supplies are there. It is a matter of finding enough available trucks to transport supplies into the more remote areas. The Canadian government has offered money to the Lagos government to be used for the purchase of such trucks. We have observers there on the front. We have two military observers who are in a position to report to the Canadian government when they find themselves able to do so. At this stage we are doing everything we can.


Lincoln MacCauley Alexander: On a point of order-


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


Mr. John Gilbert (Broadview):: Mr. Speaker, I have a supplementary for the Prime Minister. In view of the need for an experienced man on the Canadian observer team in Biafra, would he consider the appointment of Mr. Stanley Burke to the Canadian observer team?


Pierre Elliott Trudeau: We have already appointed a team of people who are leaving tonight or tomorrow as soon as commercial flights are available to get over there.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We have asked General Wrinch-


Mr. Speaker:: The hon. member for Hamilton West.


Lincoln MacCauley Alexander: Mr. Speaker, the question I asked earlier of the Minister of Manpower and Immigration may have been hypothetical but because of the importance of the matter I hope the minister will be allowed to reply. I was seeking information about whether the government would give equal treatment to Biafrans who may seek refuge in Canada to that accorded to people from several European nations under similar situations of duress.


Allan Joseph MacEachen: Mr. Speaker, I want to say to my hon. friend that the situation is not exactly on all fours with the other countries he has in mind and to which I earlier referred. Obviously we are concerned about the situation. I am in very close consultation with the Department of External Affairs on this matter. But the situation has not devel-

oped to the point where it is possible for the government to reach a decision. Until the situation has developed to that point I think it would be unwise to make a decision based on conjecture.


Hon. George Hees (Prince Edward-Has-iings):: Mr. Speaker, I have a supplementary question. The Prime Minister just mentioned that the very necessary observer team is waiting for commercial aircraft to become available. Would he consider sending the Jet-star if it is available?


Pierre Elliott Trudeau: It would have to refuel in the middle of the Atlantic Ocean.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


George Harris Hees: Mr. Speaker-


Mr. Speaker:: I suggest to the hon.
member-


George Harris Hees: On a point of order, Mr. Speaker, I bought the plane for the government and I know it can make the flight with the proper stops on the way.


Mr. Speaker:: The hon. member for Nanai-mo-Cowichan-The Islands.


Pierre Elliott Trudeau: I do not think it would have to stop if the hon. member went along and breathed into the tank.


Some hon. Members:: Hear, hear!



THE CANADIAN ECONOMY


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask a question of the Minister of Finance arising out of the statement he made on motions. Is the agreement by the copper producers to forgo until March 1 the further increase in the prices which they had proposed contingent on any agreement by the government to abate the directives which it issued requiring the companies to increase the amounts of copper available for use in Canada this year?


Edgar John Benson: Mr. Speaker, in respect of the allocation of copper to the Canadian market, as my friend knows the Canadian market is supplied at a much lower price than the world price of
January 13, 1970

copper. As a matter of fact, the 57-cent price that the copper companies have agreed to continue compares with the London metals exchange price of last week, that is the world price of 82 cents a pound, and is also substantially higher than the United States domestic price.
The matter of the quantities required for Canadian consumption comes under the Minister of Trade and Commerce. I would ask him to refer to this matter although I believe the understanding was that there would be adequate copper available. However, I leave it to the Minister of Trade and Commerce.


Jean-Luc Pepin: Mr. Speaker, the policy of the government has been and is still to satisfy the normal legitimate requirements of Canadian users. Even in normal times what is legitimate is a relative concept. The concept is even more relative now in view of the fact that we now have three prices, the Canadian price, frozen for the next two months, the United States price and the London Metals Exchange price. At a lower price a copper user can develop new requirements. So in normal times it is difficult to assess what is legitimate and it will be even more difficult now.
A few weeks ago, after my previous announcement on copper, my department assessed the legitimate demand of Canadian user manufacturers and has now re-assessed it. There is a difference between the two assessments. I shall not deny that. Quantities will be provided to copper users on the basis of historical levels.
It seems to us at the moment that everybody must make a sacrifice. Producers are making one and the users must make one too.


Thomas Clement (Tommy) Douglas: Mr. Speaker, do I understand that the directives which were issued to the various copper producers setting forth the higher amount of copper which they must retain for domestic consumption have now been revised downward and that this is part of the price the government is paying for getting a two-month moratorium on the proposed price increase? Do I take it that the minister's answer is yes?


Jean-Luc Pepin: Mr. Speaker, you might look at it that way; you might look at it another way too. The users who might have been expected to pay 66 cents or more, will now get their copper at 57 cents for a period of time. We
Inquiries of the Ministry have here a difficult distribution of advantages and disadvantages, and it is being done in the fairest way.


Hon. Marcel Lambert (Edmonton West):: have a supplementary question for the Minister of Finance. Would he advise the House whether there is any significance or any quid pro quo with regard to the date of March 1? Is the roll-back, or the maintenance of present prices by the copper companies, tied in with a promise of the release from these quota restrictions as of March 1, and does the same thing apply to the banks in question?


Edgar John Benson: What we have asked these people to do is to suspend any increases until we have a chance to see the results of the meeting which the Prices and Incomes Commission is trying to arrange. We expect it to be held in February, as will the meeting of first ministers at which inflation will be discussed. We are hopeful that out of the conference which the Prices and Incomes Commission is trying to arrange a formula will be developed which will be applied with respect to any proposed changes in prices.


David Réal Caouette: Mr. Speaker-


Mr. Speaker:: Does the hon. member for Temiscamingue wish to put a supplementary question?


David Réal Caouette: Yes, Mr. Speaker. I wish to put a supplementary question to the Minister of Finance.
The Noranda Company announced, two weeks ago, a 9 cent increase in the price of copper, from 57 cents to 66 cents a pound. Now, under the steps taken by the minister, will Noranda mine be selling copper at 57 cents a pound or has the company been authorized to increase its price to 66 cents?


Edgar John Benson: The agreement is that there will be a suspension of the price increase and that prices will not be increased in the period from January 1 to March 1. I might say that this does involve a roll-back in price because the price was increased on January 1. The matter is to be reconsidered in March. There is no authorization to increase the price at that time, but this matter will be considered

January 13, 1970
Inquiries of the Ministry in view of the results of the conference of the Prices and Incomes Commission and that of the first ministers.


Hon. D. S. Harkness (Calgary Centre):: have a further supplementary question for the Minister of Industry, Trade and Commerce. What action has the minister decided to take on the request for a further embargo on the shipment of scrap copper, which would be an extension of the present embargo on shipments of this commodity?


Jean-Luc Pepin: Scrap is on the control list. There is to be a meeting with these people tomorrow in the department on a number of issues. But I might add that the administration of these measures will be difficult, of course, because producers will quite legitimately want to maximize their advantage and so will users. There will be administrative difficulties, but my department is equipped to do the best possible job in trying circumstances-


Douglas Scott Harkness: I have a further supplementary question.


Mr. Speaker:: Order, please. I should like to suggest to hon. members that we should soon move on to another subject. I hope there will not be too many further supplementary questions. I will allow the hon. member for Calgary Centre to put his question, followed by the hon. member for Edmonton West.


Douglas Scott Harkness: So I take it from what the minister said that we can expect some information tomorrow or the next day on the decision taken. My further supplementary question is: what is the reason for excluding British Columbia copper producers from the government's request not to increase the price of copper for two months?


Jean-Luc Pepin: This again is part of the complexity.


Some hon. Members:: Oh, oh!


Jean-Luc Pepin: Part of the complexity is that we only have control over certain forms of copper and not over unrefined copper such as the concentrates in British Columbia. Some people in the copper industry make the point that some companies are asked to make greater sacrifices than others and that is not an unfair comment.


Marcel Joseph Aimé Lambert: My further supplementary question is directed to the Minister of Finance. It arises out of the last

paragraph in his statement. Can it be taken from that paragraph that anyone who dares raise his price between now and March 1 will be expected to roll it back or to maintain his present price if he is tempted to raise it?


Edgar John Benson: What is meant is that the government urges people in the interim, before the conference which we hope will take place and the meeting of the first ministers, that is, before March 1, not to make major price changes. Of course we do not have the power to order people to roll back prices, but we urge them not to increase prices in the hope that the conference will be successful and that guidelines will be developed.


EXTERNAL AFFAIRS
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I wish to put a question to the Prime Minister.
Could he tell us whether it is true that he intends to visit Communist China next spring, and more specifically in May, following an invitation that he reportedly has received from Peking?


Mr. Craig Stewart (Marquette):: I should like to direct my question to the Minister Without Portfolio in charge of the Wheat Board. In view of the fact that close to two-thirds of all delivery points were unable to accept a five-bushel quota in the last crop year ending July 31, can the minister advise the House when these points can expect acceptance of their deferred delivery permits?


Hon. Otto E. Lang (Minister without Portfolio):: The simple answer is, of course, as soon as space is available since deferred delivery permits are in the hands of the farmers and therefore, along with unit quotas, are a first entitlement when space opens up. Of course the objective of the Wheat Board has been generally to allow space to be opened for unit quotas as well as deferred delivery points before opening bushel quotas, but the Wheat Board decided to open bushel
January 13, 1970

quotas where space is clearly available and still attempt to assure space where unit quotas and deterred deliveries remain to be made.


Donald Craig Stewart: I have a supplementary question for the minister. Could he tell the House why in Manitoba there were twice as many CPR as CNR delivery points that were unable to accept a five-bushel quota in the last crop year?


Mr. Speaker:: Order, please. The supplementary question is clearly argumentative.


Leslie Gordon Benjamin: have a supplementary question, Mr. Speaker, which I should like to direct to the minister in charge of the Wheat Board. In view of his statements in recent days concerning the schedule of unloading at Lakehead terminals, will the minister say whether or not the government will consider requesting the Wheat Board and the Canadian railways to increase their unloading capacity up to 1,000 carloads a day in order to fill that space earlier than was originally planned?


Otto Emil Lang: No, Mr. Speaker. The plan which has been drawn up with regard to the shipping of grain to the Lakehead has been carefully arranged to ensure that the Lakehead space will in fact be full before the opening of navigation. It is important not only to have a fairly steady flow to the Lakehead from the point of view of the best use of facilities but also to ensure a fairly steady flow toward the end of the period as we fill the space because immediately after navigation opens we will be expecting the railroads and terminals to unload well over 1,000 cars per day.


Mr. A. B. Douglas (Assiniboia):: I have a supplementary question for the minister in charge of the Wheat Board. In view of the fact that the minister has recently arranged for the appointment of a co-ordinator for the handling of grain at the west coast terminals, is he now prepared to appoint a similar coordinator to expedite the movement of grain at the Lakehead?


Otto Emil Lang: We are giving consideration to the Lakehead terminals' operation, and of course 21611-7
Inquiries of the Ministry the logic which led to the appointment of a co-ordinator at the terminals in Vancouver is even stronger in the case of the Lakehead. We are working toward the objective of appointing such a co-ordinator prior to the opening of navigation.


Right Hon. J. G. Diefenbaker (Prince Albert):: In view of the fact that for months members of the opposition have been suggesting the appointment of a freight car controller, a suggestion which has always been resisted by the government, when did the minister finally come to the sensible conclusion, in so far as British Columbia is concerned, that it should have a controller?


Otto Emil Lang: I was curious to find out whether the right hon. gentleman would react to the appointment by saying it is a good thing which he had suggested or by saying it is a bad thing and insufficient. I am glad to see that he welcomes it.


John George Diefenbaker: That is the type of nonsense that has placed the western farmers in the position in which they find themselves today.


Mr. Speaker:: Order, please. Has the right hon. gentleman a supplementary question?


John George Diefenbaker: Yes, Mr. Speaker. I have been trying to get an answer from the minister. I ask the minister: when was it that his mental operations finally brought him to the conclusion that action should be taken which should have been taken six months ago?


Mr. Speaker:: Order, please.


Mr. Baldwin:: After he picked up Thatcher's permit book.


[Stage Direction]
1970 CONSTRUCTION TARGET FOR HOMES FOR
Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question for the minister in charge of housing. In view of the fact that last year the federal government gave direct assistance under the National Housing Act for the construction of some
20,000	dwellings for elderly and low income people with families, could the minister say what the target is for 1970?


Hon. Robert K. Andras (Minister without Portfolio):: An increase over that figure-

January 13, 1970
Inquiries of the Ministry Mr. Speaker: Order, please. I think the information sought by the hon. member should normally be given by way of a general statement on motions.



NATIONAL PARKS


Mr.   Georges-C. Lachance@Lafontaine: Mr. Speaker, I wish to direct a question to the Minister of Indian Affairs and Northern Development.
Have the Quebec provincial authorities informed the minister or the federal government that prospection rights had been granted to private enterprise a few days before the signature of the agreement between both governments on the creation of the Forillon park?


Hon. Jean Chretien (Minister of Indians Affairs and Northern Development):: No, Mr. Speaker.



TAXATION


Hon. J. W. Monleith (Perth):: Mr. Speaker, I was going to direct this question of the Minister of Finance so he could relay it to the chairman of the Finance, Trade and Economic Affairs Committee, but as the chairman is here maybe I can put my question directly to him. Would he consider suggesting to the committee on Finance, Trade and Economic Affairs that the date of January 19, 1970, for notification of intention to present briefs on the white paper on taxation, and the date of March 1, 1970, for actual presentation of such briefs, might be delayed somewhat to enable many important organizations to prepare their briefs properly for presentation?


Mr. Speaker:: Order, please. The hon.
member has made a submission which he has to assume will be taken into account.


EXTERNAL AFFAIRS
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to put a question to the Prime Minister.
Could he indicate whether on behalf of the Canadian government he extended an official invitation to the President of France, Mr. Pompidou, to visit Ottawa at the time of his coming trip to Washington?


Pierre Elliott Trudeau: No, Mr. Speaker.


Gérard Laprise: Mr. Speaker, I have a supplementary question.
Does the Prime Minister intend to extend such an invitation on the occasion of this trip or at any other time?


Pierre Elliott Trudeau: At this very moment, Mr. Speaker, I have no such intention.



BILINGUALISM AND BICULTURALISM


George Harris Hees: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. Would the Prime Minister take the first opportunity on motions to outline to the House what action the government intends to take, either legislative or otherwise, on the recommendations contained in the third volume of recommendations issued by the Bilingualism and Biculturalism Commission?


Pierre Elliott Trudeau: Perhaps in due course, Mr. Speaker.


George Harris Hees: A supplementary question. Is it not a fact that the government has simply poured $9 million down the drain for propaganda purposes inasmuch as the government obviously intends to take no action on this report whatsoever?



PUBLIC SERVICE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to address a question either to the President of the Treasury Board or to the Minister of Supply and Services. Can we be informed what the present situation is with respect to the retroactive pay cheques for federal public servants?


Hon. James Richardson (Minister of Supply and Services):: Mr. Speaker, I spent an hour and a half at the Central Pay Office this morning-

January 13, 1970

Inquiries of the Ministry


Gerald William Baldwin: Did you get it?	Mr. Hees: Or any other.


James Armstrong Richardson: I did not write any
cheques myself but I am pleased to say that the Central Pay Office is current with respect to collective agreements and that the backlog with respect to other pay changes is being reduced substantially each day.


Stanley Howard Knowles: have a supplementary question, Mr. Speaker. In view of the fact that we had the same answer some weeks ago about the situation being current, would the minister tell us why it is that so many federal civil servants have not received their cheques and are even going as far as taking their cases to court?


James Armstrong Richardson: Mr. Speaker, I am referring to the Central Pay Office. As the Central Pay Office is at the end of the pipeline it can only process the cheques and issue them after it has received the documentation or necessary information from other sources.


Gerald William Baldwin: Okay, Bud, it is your turn now. You ducked the first one.


Stanley Howard Knowles: Mr. Speaker, I now have a supplementary question for the President of the Treasury Board. Since he must be farther ahead in the pipeline, can he tell us when this matter is going to be cleared up?


Hon. C. M. Drury (President of the Treasury Boaid):: Mr. Speaker, it is hard to say when no delays in the pay service will ever be encountered. We hope this will be the case but it is unlikely it will ever come about, perhaps in the next millenium. In the meantime, as the minister has indicated a very large effort is being put forth and substantial progress is being made in clearing up what was a great backlog.


John George Diefenbaker: Mr. Speaker, I have a supplementary question for the minister. In view of the uncertainty arising from the two statements that have been made, why is it that there are so many civil servants entitled to retroactive pay who have not received it and in fact, have been denied it? I ask him also if, with regard to the actions that have been taken in the Exchequer Court, the government intends to settle those in a manner favourable to the plaintiffs?


Charles Mills (Bud) Drury: Mr. Speaker, I am sure the right hon. gentleman, as a famous lawyer, would not expect me to answer that question.


Charles Mills (Bud) Drury: I have had some training as a lawyer, though rather brief-


An hon. Member:: Very brief.


Charles Mills (Bud) Drury: -but he can understand, perhaps better than I, why I should not answer that question.


Mr. Speaker:: Order, please. I appreciate that the right hon. gentleman has a supplementary question but I have to appeal to hon. members again to give an opportunity to other hon. members who are waiting anxiously for a chance to ask questions.


John George Diefenbaker: Since when did it become difficult or impossible for a government to say whether it was going to do justice to its employees?


Some hon. Members:: Hear, hear.


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


Mr. David Orlikow (Winnipeg Norih):: Mr. Speaker, I should like to ask the President of the Treasury Board if he can tell the House how many civil servants are waiting for back pay? Several dozen, several hundred or several thousand?


Charles Mills (Bud) Drury: Mr. Speaker, we have been engaged in a series of rounds of collective bargaining. The first round is virtually complete and some 72 separate agreements have been concluded. We are in the process of negotiating another 23. This is going on and agreements are being signed almost every week. In the course of each signing a new pay situation arises so that although, as the minister has indicated, we have been successful in meeting the adjustments in pay respecting agreements concluded some time ago, a new set of pay adjustments arises virtually every week.


David Orlikow: Mr. Speaker, on a question of privilege, months ago the Minister of Supply and Services told the House that things were current and people were being paid. We now find out through representations from the Professional Institute and the Public Service Alliance that there are suits against the government and that there are hundreds of people waiting as long as six months for the back pay granted to them-


Mr. Speaker:: Order, please.

January 13, 1970
Inquiries of the Ministry


David Orlikow: My question of privilege is that I submit the minister misrepresented the facts to me and to other members of the House.


An hon. Member:: Discrimination.
Another hon. Member: You should have gone skin-diving too.



STATUS OF NEGOTIATIONS INVOLVING AIRPORT FIREMEN

Mr. C. Terrence Murphy (Sault Ste. Marie):: Mr. Speaker, my question is also directed to the President of the Treasury Board. In view of the fact that some 1,500 or more firemen employed at federal airports across the country have been working without a collective agreement for more than 14 months and are now considering wildcat strike action, can the minister assure the House-


An hon. Member:: Good for them.


Charles Terrence Murphy: -that everything possible is being done by representatives of the Treasury Board to finalize the negotiations with representatives of the Public Service Alliance or to have the matter in dispute submitted to arbitration?


Charles Mills (Bud) Drury: Mr. Speaker, I can give the assurance that the Treasury Board is making every effort to bring these negotiations to a conclusion. The choice of proceeding to arbitration is, of course, an option open to the employees. It is an option which at any time they are free to exercise. It is exercised at their option. This is not, indeed, an indication of impatience and frustration on the part of the government.


Charles Terrence Murphy: A supplementary question, Mr. Speaker. Will the minister advise the House whether it is open to the representatives of Treasury Board, as well as of the Public Service Alliance, to have the matter in dispute submitted to arbitration so that a decision may be arrived at more quickly?


Mr. Speaker:: Order, please. I do not think that question is in order.



CAPE BRETON DEVELOPMENT CORPORATION


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a question for the Prime Minister.


Some hon. Members:: Oh, oh!


An hon. Member:: Ask him, anyway.


Donald MacInnis: Is the government going to take any action to stop the discrimination carried on by the Crown corporation, Devco, which has been referred to by the Minister of Regional Economic Expansion?



CONSUMER AFFAIRS


George Harris Hees: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. Can he advise the House why it is that the Dominion Bureau of Statistics, which comes directly under his control, has suddenly changed the time of making available figures relating to the consumer price index from eight o'clock in the morning, as has been customary, to 2.30 p.m. in the afternoon, half an hour after the House begins sitting?


Mr. Speaker:: Order, please.


George Harris Hees: Has the government that little confidence in its programs?


Mr. Speaker:: I suggest to the hon. member that the question might be raised at ten o'clock.


George Harris Hees: Obviously very embarrassing figures are coming out. Is that how badly your programs are working, Ben?


Mr. Greene:: You are not even up at eight o'clock.


George Harris Hees: Yes, I am. I have half my day's work done by eight o'clock.


Pierre Elliott Trudeau: That's one hour.


Some hon. Members:: Oh, oh!



NATIONAL CAPITAL


Mr. Barry Mather (Surrey):: Mr. Speaker, may I direct a question to the Prime Minister. Having in mind the current controversy between the city of Ottawa and the National Capital Commission, would the Prime Minister give consideration to implementing the decision of the previous Parliament and
January 13, 1970

encourage the establishment of a committee of Parliament to deal with all matters pertaining to the national capital?


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, perhaps I might answer th'.s question. I would be prepared to take that matter into consideration again, bearing in mind the present heavy committee studies of many questions and the opportunity of studying other questions, including this one, on the estimates within a month's time.


Mr. John L. Skoberg (Moose Jaw):: A supplementary question to the Prime Minister, Mr. Speaker. In view of the unappreciative attitude of the city of Ottawa with regard to the importance of federal civil servants to the economy of Ottawa, will the Prime Minister give serious consideration to decentralizing federal civil servants by moving government departments to the west and to the maritime provinces in order to give those areas a shot in the arm, so to speak?



POST OFFICE


Mr. Rene Matte (Champlain):: Mr. Speaker, I want to direct a question to the Postmaster General.
Could he say whether the steps taken last year about postal rates have succeeded in putting his department on a profit-earning basis?



POLLUTION


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Minister of Fisheries and Forestry. Have his departmental officials yet pinpointed the source of the mercury contamination in the Saskatchewan River? If so, what action is the minister planning with regard to the guilty parties?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, we suspect that the source of the mercury pollution is among several plants in the Saskatoon area. Our engineers and biologists are already in these plants at the present time.
Inquiries of the Ministry POST OFFICE



REFERENCE TO PARLIAMENT OF ESTABLISHMENT OF CROWN CORPORATION

Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I wish to direct a question to the hon. and gracious Postmaster General. It is prompted by the announcement of the appointment of a general manager for the Ontario region of the Post Office Department whose job is declared to be the implementation of recommendations of the latest Kates, Peat and Marwick task force report. Can the minister advise if he contemplates even a fleeting reference to Parliament before he establishes his Crown corporation?


Hon. Eric W. Kierans (Postmasier General and Minister of Communications):: Yes, Mr. Speaker.



IMMIGRATION


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I want to put a question to the Minister of Manpower and Immigration.
Would the Minister say whether he has received further representations from large numbers of dissatisfied French immigrants, presently settled in Quebec and wishing to move to Alberta?


Allan Joseph MacEachen: Yes, Mr. Speaker. I have had representations from them.


Marcel Prud'homme: Mr. Speaker, I want to ask a supplementary question.
Could the Minister say whether he intends to convey to the House the written representations that he received?


Allan Joseph MacEachen: Mr. Speaker, I have
received a letter and an accompanying statement. I believe I replied to it yesterday. I have no objection to tabling the correspondence later if that is desired.


Mr. Eldon M. Woolliams (Calgary North):: May I ask a supplementary question, Mr. Speaker, and make a suggestion. Would the

January 13, 1970
Inquiries of the Ministry minister advise these people that the vacant land in Alberta that is being talked about is non-existent?


Donald MacInnis: A supplementary question, Mr. Speaker. When the minister is tabling that information would he also table information with respect to the amount paid to the displaced Cape Breton miners who went west to British Columbia or Alberta?



AGRICULTURE


Mr. R. E. McKinley (Huron):: Mr. Speaker, may I direct a question to the Minister of Agriculture. In view of the dairy producers' widespread dissatisfaction with the government's proposal to cut $10 million from the next dairy year's allotment and the dissatisfaction expressed by many hon. members, including government supporters-


Mr. Speaker:: Order, please. Will the hon. member kindly ask his question and not make a statement.


Robert Elgin McKinley: I am about to ask my question, Mr. Speaker. Is it the intention of the minister to review this decision with a view to allotting the same amount of money to the dairy program next year as was allotted to it this year?


Mr. Olson:: Mr. Speaker-


Mr. Speaker:: Order, please. I doubt whether the question as asked is in order. The hon. member has made a representation and a submission, and the matter must be considered in that light.



HOUSING


John Gilbert: Mr. Speaker, may I direct a question to the minister in charge of housing. In view of the considerable drop in housing starts in the Toronto region last year and in view of the announcement by the Minister of Trade and Development of Ontario that there is to be a freeze on public, student and senior citizens' housing, what steps does the government propose to take in order to meet its program?


Mr. Speaker:: Order, please. The answer to that question, I suggest to the hon. member, ought normally to be given to the House by way of a statement on motions.



INDUSTRY


J. Michael Forrestall: Mr. Speaker, may I direct a question to the Minister of Supply and Services. Could he indicate whether National Defence contracts awarded to Fairey of Canada have been taken away from the company and awarded to other contractors?


James Armstrong Richardson: Mr. Speaker, I do not have the information on these contracts immediately at hand but I will be glad to obtain it.
[DOT] (3:10 p.m.)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, November 10, consideration of the motion of Mr. Basford that Bill C-4 to amend the Canada Corporations Act and other statutory provisions related to the subject matter of certain of those amendments, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, this matter was before the House on November 10 of last year, at which time a number of hon. members participated in the debate. Since then hon. members have received many submissions concerning the ramifications of Bill C-4. I presume hon. members have had an opportunity of examining the various clauses of this bill. This is not, Mr. Speaker-


Mr. Depuiy Speaker:: Order, please. I
wonder if we could have some order in the chamber?


William Arnold Peters: This is not the first bill which has sought certain disclosures on the part of corporations. If hon. members will reflect, several years ago we passed a bill for the disclosure of certain information by companies and labour unions in Canada. Surprising-
January 13, 1970

ly enough, there was considerable objection at that time by the companies concerned to disclosing this information. When we review the situation, we find that very little use has been made of the information sought at that time and there has been very little comment about the information that was disclosed.
The unions were willing to participate, although some of the companies did so reluctantly. Not much use has been made by either the public or the corporations of the information obtained by the disclosures of the trade unions or the corporations.
This particular bill, Mr. Speaker, has great potential. It has a potential for re-establishing a much more modern and up-to-date Companies Act which would allow for the orderly operation of corporate business in Canada. It asks for considerable information. The hon. member for Calgary North (Mr. Woolliams) indicated this was a snooping bill. Unless the minister goes further than he has, that is exactly what this bill is going to be. It will snoop out a lot of information, but nothing will happen to that information.
The industrial sector in Canada is expanding very rapidly. Our corporate wealth has grown greatly. We in Canada have been able to develop industrially more rapidly than most countries, and possibly more uniformly. We have now reached the stage where we have a great corporate structure which almost supersedes government in the operation of our nation.
Several ministers were asked about the price of copper today. It was indicated that an arrangement had been made whereby a two-month stay on price increases would be retained. The decision was arrived at in spite of the great difficulty in deciding whether this applied to all the domestic producers in Canada, whether the copper consumers in Canada were all affected and how it would apply to the general public. This is an indication that our corporate structure in Canada has reached a level where it has more influence on the average person's life than has the federal government or the combination of the eleven governments which govern this country.
If the International Nickel Company decides it does not want to have a contract with its employees and pushes the situation until a strike develops, then the dispute between the mine workers in Sudbury, Falconbridge and the International Nickel Company of (Canada) is not necessarily related to labour relations.
Canada Corporations Act As history has shown, this dispute provides an opportunity for a large corporation with international monetary control over a total industry to decide whether to have a price increase. The labour relations situation was set up in such a way that the Corporation would have the support of the community and of the workers in that industry in helping it to obtain an increase.
I made a statement in this House that this was the reason for the International Nickel Company strike and that before there would be a settlement there would be a large international increase in the price of nickel. This has now taken place. What control did the government have over the nickel we could buy or the commodities we could purchase? they had absolutely no control. They could ask, beg or take action. The only action they could take was the implementation of legislation such as is before us today, legislation with some teeth in it.
The minister is asking for all kinds of disclosures. He is asking us to look into the intricate dealings of corporations and companies. He has said we should look into them to the extent of knowing whether a shareholder is getting a fair shake from his company. The other day I was looking at some figures. I noticed that a company with a multi-million dollar investment, and stock running between $50 and $60, was paying a 71 cent dividend. I strongly suggest that a person having stock in that company, knowing the volume of business that company was doing and the expansion it has experienced,-would wonder why he was receiving a 71 cent dividend on a $50 share. It just would not seem reasonable.
In my opinion, the shareholder would have absolutely no say in any investment that company might make. He may not even be told what other subsidiary industries were being purchased with money that would normally be used for participating share dividends. It is for this kind of protection the minister is asking, and I am glad the government is finally interested in it. I have said that we have developed a very sound and stable industrial structure. The corporate structure in our country has not caused great difficulty by over-expansion, bankruptcies and the other unfortunate events that occur in many countries. At the same time we really have not had any control over this development. It has been stable from the point of view of the companies. The minister is now saying it will have to be fair as far as the shareholders are concerned.

January 13, 1970
Canada Corporations Act
I have been interested in a number of the problems of shareholders such as proxy votes; how they are arrived at; the legitimacy of companies using proxy votes which are left over after everyone has indicated who will be attending the shareholders meeting. I am interested in the takeovers that have occurred and the inability of the average shareholder to decide whether a takeover is in his interest or what the financial purpose of the takeover is in terms of this interest. I am not speaking of the interest of the companies because that is well looked after. It has almost become a third dimension in the economic way of life of the Canadian people. The minister is to be congratulated for his interest in the shareholder. I feel, however, that he has missed the real role of government in demanding the disclosures, that is the role that the government itself will play not only on behalf of the shareholders but on behalf of the Canadian public.
[DOT] (3:20 p.m.)
One of the problems involves our inability, as shareholders in Canadian corporations to keep these corporations Canadian owned. When Canadian corporations are investing in trust companies, investment companies or making other forms of investment, we should be advised whether they are investing in Canada or investing in foreign owned corporations. It is interesting to note that Canadians have invested more money in the United States than United States investors have put into Canadian corporations in the last ten years. This would indicate there is some reluctance on the part of the investing public in Canada to share in the development of Canadian corporations or to acknowledge they have a role to play in that development.
It is 34 years since this act has been before us for major revision. Ten years ago, when four or five people were running the branch there was not much need for an 80-page act to enable them to deal with this operation, which was very small, inefficient, ineffectual. In Canada only a very small part of our corporate development has been brought about through use of the letters patent procedure. Most of the incorporation necessary has been done through special acts of Parliament. Over a period of years several members of this party-latterly, quite a number of us- have become interested in this incorporation procedure particularly as it affects finance companies, trust companies and insurance companies. The minister is now proposing to 
turn over to the companies branch authority to set up trust companies, finance companies and insurance companies by legislation.
Many of us are concerned about this policy. We are not opposed to companies being set up by letters patent. What we are opposed to is the absence of proper machinery to ensure a number of safeguards along lines already adopted in the banking field and in the insurance field generally. No agency has been established with power to determine whether a new finance company, for example, is needed, what role it would play and whether it would be Canadian owned. No account is being taken of the investment program or policies of such a company. What the government is saying amounts only to this: Because a fuss has been made in the House about foreign ownership by a limited number of hon. members, these matters will be taken out of parliamentary jurisdiction under the special acts and placed under general legislation. As I have said, we have no particular objection to that. Indeed, we have recommended such a course on a number of occasions. Surely, though, the government must provide some kind of machinery to satisfy some of the criticism which has been raised by the general public with relation to the finance companies, in particular.
Over the years it has been interesting to hear members of Parliament argue that it is necessary for Parliament to control the Canadian banking structure. For years members of the Social Credit party have contended that all banking should be in the hands of the Bank of Canada and that the Bank of Canada should be controlled by the government. Most of us agree that the Bank of Canada should play a dominant role in the banking structure and all of us, I believe, acknowledge that all banking in Canada should be Canadian-controlled-that only 10 per cent of any banking institution may be owned by foreign interests. Yet we have allowed the proliferation of loan companies, trust companies and insurance companies without any such reservations until thousands of these institutions are in operation in Canada today.
What has been done about these institutions? Over the years complaints have been made by members of Parliament on all sides that the loan and trust companies were charging exorbitant interest rates, up to 28 per cent a year. They pointed out what a terrible thing this was when the banks could only charge 6 per cent. What happened? Did
January 13, 1970

Parliament reduce the interest rate which could be charged by the trust and loan companies, bring them to the level of the banks at 6 per cent? No. The decision was made to remove the ceiling from the rate chargeable by the banks and allow the banks to catch up with the loan companies. We have not stopped that process yet.
It is my opinion that authority to incorporate a trust company or a loan company is as good as a licence to print money. We have seen representatives of such companies come back to Parliament after as little as three years and ask for amendments to their charters allowing for capital increases from $5 million to $20 million. As I say, incorporation amounts to a licence to print money. The capital expansion some of these companies have been able to achieve in a short period is fantastic.
The minister has indicated he is concerned about this. He is concerned, all right-concerned to the extent that these companies must report along with everybody else. But does he take into account the fact that they occupy a different position from other corporations inasmuch as they play a large role in setting the pattern of the daily lives of many of our citizens? These are the companies which have offices down the street identified by little signs offering immediate loans. A former member of Parliament called them friendly people to do business with. Many of the workers and farmers of this country drop in from time to time, and are charged exorbitant interest rates. Is the minister interested in this aspect? Is he interested in controlling the trust and loan companies? I am not sure. I would think he is not. There is no doubt the minister intends to accumulate information. But what use does he intend to make of it?
If there is any field in which the federal government can take credit for having done a good job over the years it is in the field of insurance. A number of inspectors of insurance have done excellent work in this area. The last two inspectors, in particular, have done an excellent job. I believe they would tell the minister they do not have the power to deal with the aspects of this problem to which I referred a few moments ago-indeed, that such power should only be exercised jointly by Parliament and the inspector of insurance. On a number of occasions the inspector has told the committee that he did not wish to take responsibility for deciding whether or not a particular type of insurance 21611-8
Canada Corporations Act company should be authorized to do business in a new field without Parliament having some say in the matter.
Today, without any provision having been made in the legislation to enable the inspector of insurance to take on the responsibility of others, it is proposed to turn over the insurance field to a branch of the minister's department. I would point out that this is not without interest to some who are outside the Canadian investment sphere, people who know that a licence to issue insurance in Canada is a valuable asset, one which has been eagerly sought by foreign-owned corporations.
The minister has admitted to some extent that there is a difference, in the need for disclosure of the operations of a large corporation as opposed to those of small industries. I think he would agree that when a company reaches the size of the Canadian Pacific Railway there is need for public disclosure very similar to that which arises in the case of large public corporations. Air Canada is required to make certain disclosures since it is a crown corporation. I am sure the minister would agree that since CP Air is in the same field of transportation any disclosures made by that corporation, even though it is privately owned, exercise the same kind of influence on the Canadian public as disclosures made by a public corporation.
[DOT] (3:30 p.m.)
So, I think there is this kind of class to which I have referred, a class to which I am becoming more and more sympathetic. I have talked to farmers who find themselves having to incorporate for various reasons under Canadian law, and the amount of work they have to do in supplying information to the government almost demands the services of a full time accountant. Although the total amount of money involved is very small, the same cannot be said for the number of government agencies that are demanding information from our farmers.
My brother tells me that every month he is asked to fill in a form for his two hired men for unemployment insurance purposes. Every month he has to send in his contribution for these two employees. He has told me that he would be quite happy to make a blanket payment either at the first of the year or at the end of the year and have the government do the bookkeeping, but he has been told this is not possible. He also thinks that the Canada Pension Plan contributions should be paid by

January 13, 1970
Canada Corporations Act way of a lump sum to the government, which would relieve him of monthly bookkeeping on behalf of the government.
It is these kind of inquiries that I think adversely affect some of the very small companies that incorporate for other reasons, companies whose influence upon the pricing of Canadian commodities is nil. Although this information might be of assistance to some, demands for information are becoming oppressive in number and people are becoming disillusioned because either they cannot understand the demands or meet the demands made upon them. Unless these demands do serve some purpose, surely we as legislators must give some consideration to the problems encountered by this particular class of people.
Over the past few years the New Democratic Party has been as concerned as anybody about the problem the minister is attempting to solve by the introduction of Bill C-4. We decided that any review of prices and profits must be a public review, and as a result of the review the general public must be placed in a position to take some action.
The other day we had a report from the minister's department on Imperial Oil, and this information has been made public to a certain extent. An investigation of Imperial Oil was made in Sudbury which revealed that Imperial Oil is not really a Canadian company, as many of us thought, but is owned by Standard Oil of New Jersey. This company owns oil wells, oil leases and oil exploration companies. It controls the largest oil pipe line in Canada, as well as a large number of oil refining facilities. It owns a large amount of real estate in such towns as Sudbury.
Instead of selling gasoline to the retailers at the wholesale price in the Sudbury area, this company sold them gasoline on a consignment basis and received payment on delivery to the retailers' tanks. So what it amounts to is that we have Imperial Oil-Standard Oil of New Jersey-supplying Canadian produced gasoline to consumers in Sudbury, charging them 4, 5 or 6 cents more than the price in other areas, and at the same time telling the small branch operators that unless they play ball they will be out of business in a few days since they are but consignees of the company.
What has the minister's department done about this situation? This information is available to the minister. We have stated that this information should be publicized; that this kind of hearing should be held in public so that the general public are made fully

aware of the facts. I think everyone in Sudbury should be made aware that by buying Imperial Oil products they are, in effect, cutting the throats of the small operators further down the road who are pseudo-entrepreneurs in the buying and selling of gasoline for automobiles.
I should like to know whether we have set up machinery that will make available to the public the fact that Imperial Oil treat their operators as hired hands that sell gasoline on a consignment basis. I think if we are going to influence prices and tackle the problem of price increases in Canada, we shall have to do much more than we have.
The article that I read did not indicate whether any fine had been imposed on Imperial Oil. I presume none was. If you really wanted to make Imperial Oil pay a fine that would hurt, you would have to levy a fine of $100 million, perhaps $500 million, I do not know. I often wonder why we do not levy a fine that is commensurate with the profit that has been made by what we would consider to be an unfair practice. All we do is charge something like $25,000, a sum that would not even pay the liquor bill of the officers of Standard Oil of New Jersey, let alone be a deterrent.
Although I am sure the type of disclosure for which we are asking will remedy some situations, we have not tackled the subject in which the general public is interested, namely the establishment of the sort of agency that has been set up in the United States to control mergers and monopolies. We have not passed such legislation in Canada, but people in the United States believe that to some extent they are now protected by legislation against monopolies. The Canadian people are not so protected. They are not even protected in cases where the monopolies are U.S. controlled and owned.
We have been fighting in private members' hour mainly against the proliferation of insurance companies and the broadening of their operations. We have been interested in how trust companies should develop their operations, what kind of policy an investment company should adopt, and so on. On several occasions when we dealt with these companies directly we were able to commit them to exercise a certain amount of Canadian preference; even though the parent company in the U.S. might put up all the money, they would sell at least 50 per cent control in the company to members of the Canadian public after a specified period of time.
January 13, 1970

This commitment was guaranteed by the legislation, which usually provided that the directors of the company would normally be resident in Canada; that their avowed purpose would be to establish a Canadian arm that was separate from the parent corporation in the United States. For example, we were able to do this in the case of United Accumulative Fund Distributors and two other companies. I would suggest that the amount of investment being made in Canada is indicative of the fact that Canada, as far as corporations are concerned, is a good place to do business.
[DOT] (3:40 p.m.)
If we put on some restrictions we may find we have not established a method of buying Canada back but we will slow down the rate of takeover of our economy by United States corporations. We will also establish incentives to Canadians to buy into industries which they know are Canadian and will expand in Canada. This will give them an opportunity to advance and progress.
It seems to me the minister has gone part way by this piece of legislation in correcting a number of faults that have existed in the company's branch legislation. Certainly, in my opinion this branch has not enjoyed a good history in Canada. It has not done any of the things being done in other countries by similar legislative bodies to protect national identity. It has done nothing to prohibit mergers and takeovers, and as a result the public interest has not been served. This branch has not been able to supervise companies which suffer financial difficulties. As a result, shareholders and those interested are not made aware of those problems which could have been solved had a Canadian securities commission been in existence. Such a commission might have done some of the work the minister I am sure considers will now be done by the company's branch.
Perhaps this will be the case when the minister brings forward the legislation on which he is now working. The minister has gone part way in rectifying some of the mistakes of the past. I only wish he would indicate that he is as concerned as some of us have been about the legislation he is now removing from our books, and that by doing so Canadian identity will be improved. Perhaps he will make an effort similar to that of the Minister of Finance (Mr. Benson) as indicated by his white paper. In this way, Canadians will not only be encouraged to buy 21611-81
Canada Corporations Act into Canadian corporations but into companies outside Canada. Foreign investors should be penalized if they do not establish structures that will eventually, under the terms of their letters patent, become totally Canadian owned. The trouble Canada has found itself in-


Mr. Deputy Speaker:: Order, please. I am sorry to interrupt the hon. member but his time has expired. Is there unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


William Arnold Peters: I was going to conclude by saying that the only difference between the legislation of other countries and Canadian legislation is that the main theme in other countries is the development of nationally owned corporations. In most cases they have legislation restricting the voting stock to nationals holding more than 50 per cent of the stock. In Canada we have not yet taken that step. Until we do we will not be happy when reading on the financial pages of our major newspapers about foreign takeovers of major industries. We will not be happy about figures published in respect of the control of major industries in Canada by foreign owners without any indication of an opportunity in the future for Canadians to control these companies.


Mr. Steven Otto (York East):: Mr. Speaker, this is an opportune time for the introduction of this bill. There are two things involved. First, we have reform of our taxation procedures as embodied in the white paper on taxation. This is very important to corporate structures as well as to the wide distribution of shares, profits and so on. If we have a faulty corporate structure, then the ideas expressed in the white paper on tax reform will not work. There is a great demand and need at the present time for reform of our laws regarding corporate structures. It seems that most of the people who want reform do not want change. This creates a great difficulty. We have thousands of experts who are knowledgeable in the old ways of doing things. No one is quite sure what the new way will be. Consequently, the old order has loyal friends and the new order has lukewarm friends at best.
It has been said that the minister has not gone far enough. I am sure he would like to go a lot further, but the minister has already gone further than his advisers have suggested. Like all presidents of corporations, I am

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Canada Corporations Act sure the ministers are advised by experts. They suggest the minister should not go too far because the business community is very powerful and it should not be encouraged to move to southern climates. The bill itself is an indication that the minister will go a lot further. I suggest he could have gone further now but I am pleased that he has gone as far as he has.
Let us review the corporate image. I agree with hon. gentlemen opposite, especially those in the N.D.P., that most people picture a corporation as an individual who is corpulent, wearing a top hat, tuxedo and bow tie, and having dollar signs instead of eyes and ears. It is surprising how many Canadians have given personalities to corporations.
The corporate structure is the only feasible or workable method of participating in enterprise as it has developed in the world up to this point. This is a continuation of the English business community which created a personality without personal characteristics for corporations. In this way, people can invest money with limited liability. A corporation is nothing more than a group of investors who have limited their liability and act as an individual. It is for this reason the United States has become extremely powerful. This corporate structure has made great nations in this world. The lack of a corporate structure has been the nemesis of many nations. I have in mind France, particularly. It has never adopted the corporate structure method. The United States, England, Canada and Germany, to a great extent, as well as Japan, have accepted this system. It is still a good system, and I dare anyone to suggest something different which would accomplish the same thing.
There is a presumption that a corporation has a conscience. The late hon. Mr. Winters said that a corporation was expected to act as a good Canadian citizen. Of course, it is impossible for a corporation to act at all. For this reason, the conduct of corporations must be regulated to a great extent. Because a corporation has no conscience, it will make the last dollar wherever it can and it does not care how it makes it. That is taken for granted because a corporation has no ethics, no morals or personality. We recognize that corporations must be controlled and regulated, yet allowed to function within these regulations. We cannot presume that corporations are going to behave in any one way. They

will behave in accord with their purpose, and that is to make money through a limited corporate structure.
[DOT] (3:50 p.m.)
I should like to deal with the item of information. There has been a great deal of repercussion from this provision. I am sure the minister has had a great kick-back on the question of information, the financial information. I agree with this bill entirely. Whether the company be private or public, I cannot see the reason that it should hold certain parts of its activities secret. It deals under a public licence. It limits its liability under public law. If the officers of the company want secrecy, they can work entirely as individuals and be liable for everything they are worth. If they do not take advantage of the corporate structure, then they do not have to inform anyone. But I do not think they should give us the argument that certain information is very valuable to them and that they do not want their competitors to know about it. This is nonsense. The telephone books are full of the names of espionage agencies which will tell anyone the real worth of a company or person despite the credit ratings that are published and despite the financial statements.
There are many worth-while industrial espionage agencies which will give the financial standing as well as information concerning the habits, good and bad, of the directors of a company. Any information which would possibly be of value is open to scrutiny. If, indeed, information were secret, we would not have all these successful agencies which supply this information and make a good deal of money doing so. I do not believe there is a good argument that companies and corporations, private and public, which depend upon the law for certain protection should try to take advantage of another phase of the law by saying they do not have to give certain information. I can see no justification for that. I believe it is an argument concerning secrecy, and the argument that secrecy must be maintained because of competition is nonsense.
The minister has attempted to deal with the second phase of corporation law, that having to do with insider trading. This, of course, is one of the faults in our corporate structure. If we intend that our tax reform measures are to be successful, if we intend that our corporations are to grow and if we intend that the Canadian public should invest in shares of
January 13, 1970



these corporate structures, we must make sure the shareholders are given an even break. They are not given an even break today under the Canadian corporate structure. As has been pointed out by Professor John Porter in one case, and Mrs. Marjorie Keller recently, about 85 per cent of all our large corporations are controlled by a limited number of people, indeed 180 families at the moment. We have the tightest establishment in the world. Mind you, there is an establishment in Germany which is a family establishment. The Germans have a consaguinal family system which includes uncles, aunts, cousins and so on. If Mr. Krupp wanted to pass the business on to a member of the family, he had 413 heirs whom he considered to be family. Out of the 413 there would probably be one who would be able. In Canada, however, we think of the family as a conjugal matter and therefore consisting of sons and daughters. This limits us very much.
I have no particular quarrel with the establishment, provided it has ability and is fluid; but it is not. Our establishment does not depend on ability or success. Indeed, many members of the so-called elite-not so-called because it is actual-have not been successful. But they have been pure. Purity is the most important part of our establishment. You may never have a divorce. Once you have had one you are finished in the establishment. You may fail in business. I know one who has been bankrupt three times and is back in business. You must have a family which goes back at least 400 years. I recall discussing this matter. E. P. Taylor was never quite a member of the establishment because his father was a brewer. That was not far enough. You must go back at least four generations, and that makes you acceptable.
There is also an establishment in the United States, but it is fluid. If you are successful, you are in; if you are not successful, you are out. This is not the case in Canada. There is no new blood flowing into the corporate structures. This is what we are dealing with in respect of insider trading. The minister has tried to regulate this. There is an assumption that all transactions take place on the stock exchange. For instance, it is assumed that if I were to buy shares I would buy them there. But, no, control of shares is decided in clubs. It is not even polite to own your own shares. You say to Joe, a friend of yours, "You take about 7,000 of these shares and hold them for me and I will do the same for you." This is done in Toronto in three
Canada Corporations Act clubs. There is the National Club and the York Club. Perhaps it is not done in the York Club because it is not polite to discuss business there.
Unless there is included in this bill, either directly or indirectly, a rule to restrict insider trading, even the friendly arrangement, we will not get very far. I think it is necessary to have some control, at least in the form of information, so that Canadians who are investing in Canadian companies will know that their investments are not going to go down the drain merely because the people at the top want to make a quick buck on a share transaction. I think the emphasis should be on a good, productive investment and not on a quick gain. The history of Canadians especially-and it is not their fault but that of our corporate structures-reveals that they would rather invest in penny mining stock, even though they know that 99 cents on the dollar will go into bridle path post roads and promotion rather than the development of the property. They should put their money in a good investment which would produce over a time. This is not the Canadian way because our Canadian structure does not guarantee this.
Then, we come to the question of proxies.


Marcel Joseph Aimé Lambert: Mr. Speaker, before the hon. gentleman leaves the point of insider trading I wonder whether he would answer a question.


Steven Otto: Yes.


Marcel Joseph Aimé Lambert: In view of the fact that all listing in respect of insider trading would have to be done in Ottawa, and in view of the hon. member's strictures concerning Toronto, would he contemplate that the scene of operations be transferred to the Rideau Club?


Steven Otto: No. The hon. gentleman did not quite understand what I said. I said that I agree with the purpose of the bill, but if it merely deals with the recorded transfer of shares it is of no value because there are the unrecorded transfers. It would be the gentleman's agreement made at the Rideau Club. That club is not that effective in this business. Let us say at the National Club. This is what we must control. This has been done in other legislation by the inclusion of the words "directly or indirectly". If the department has any evidence that a corporation is controlled by a certain individual, they can assume he has control and let him prove he has not.

January 13, 1970
Canada Corporations Act [DOT] (4:00 p.m.)
Getting back to proxies, I think the proxy vote is one of the bad elements of our corporate structure. Anyone who has had anything to do with corporations as a shareholder will know that he will receive a proxy from the directors and be asked to sign it. In this way, he will allow someone else who will attend the meeting to vote for a certain director. What is not prohibited by the act, and what we do not all know, is that the present directors of the company, the people who now control the corporation, can send out proxies at the cost of the corporation. First of all, they know who the shareholders are and they have their addresses. They send out proxies at the company's expense, and it is almost certain that they will be re-elected because if a stranger to the board of directors disagreed with the choice of directors and wanted a new board of directors, first he would have to get the list of shareholders. This bill certainly improves the situation by providing only 20 days during which directors may be elected, and any shareholder can get a list of shareholders. This is a new provision.
If I wanted a new and efficient board of directors to be appointed, I would have to obtain the list of shareholders and at my own expense send them the proxies. My chances of getting the directors I wanted elected would not be good, whereas the existing board of directors can send the proxies out at the company's expense and it is certain that they will be re-elected.
Then, we have this fatherly distribution of directorships. Not long ago, a late senator gave 12 directorships to his son as a wedding present. It is difficult to comprehend how this can be done, but this is what happened in all likelihood. The senator said to a friend: "Look, my friend, my son, Jim, is getting married and I would like to do something for him. How about putting him on the board of your company?" His friend said: "All right. I have known Jim since he was knee high to a grasshopper". Of course, Jim has never been in the business, and in fact he had hardly been through law school, but on his wedding day he receives 12 directorships. That was a nice present.
A director does not receive a large salary because he only gets $500 a year. One wonders at the eagerness of people to become directors of companies, but there is a side benefit in being one. A director decides the time when the next distribution of shares will take place and who is to subscribe to them.
EMr. Otto.]
Someone has to write: "I, John Doe, will take
100,000	shares at $10 a share". He does not even have to invest a nickel because the shares are not yet issued. So, he puts down his name and has the right to get a certain number of shares as a director. Then, he can sell the rights to those shares. When the directors meet they ask whether everyone has disposed of the rights to their shares, and everyone agrees. The shares are then issued. So, although they have not invested a nickel, they make a lot of money for themselves. That is the great plum in being a director.
There is a good reason behind the U.S. law which requires that 50 per cent of the directors come from wilhin the corporation, that is people who make their living from the company. These are production managers, advertising managers and distribution vice-presidents. They are the people who make their living from the company and who want to make sure that the company functions. In our case only one man, the president, makes his bread and butter from the company, and 90 per cent of the directors are not at all interested in the corporate structure. Therefore, when we talk about proxies it would be a good idea for the minister-and I urge it upon him-to add a provision to the act that if the present directors or any shareholders send out proxies, they will be paid for by themselves. In the alternative, anyone who puts up a list of directors can send out proxies at the cost of the corporation. But you cannot have it both ways because it will not work. You will have a succession of the same directors over and over again and you will continue to have the same problem which exists today, that of an inefficient corporate structure.
In conclusion, I would like to congratulate the minister for presenting this bill. I think it is long overdue. I am sure he is aware of the failings of our corporate establishment, and I trust he will be able to continue to amend this act as quickly as possible in order to make our corporations workable and profitable, thus putting an end to the constant belittling of our corporate image. There is no reason for it. In this modern world we can only act under a corporate system, and if we keep lashing at our corporations because of faulty regulations, which are not their fault, we will not be doing our country any good. But if we word our regulations in such a way as not to give leeway to corporations to do something which Canadians believe should not be done, then we will solve the problem raised by an hon. member who said that
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Canadians would rather put their money into U.S. investments than Canadian. I would do the same, and I would advise all hon. members to do so also because under the U.S. corporate structure shareholders are protected. They are assured that the best people direct the companies, that the Federal Securities Exchange Commission will protect their investment, and also that they do not have to depend on a limited number of self-perpetuating directors to run their companies.
If they invest in a Canadian company, they will be almost 100 per cent certain that it will be a family company using their money and that they will have absolutely no control over the conduct of that company.


Gerald William Baldwin: Mr. Speaker, after listening to the hon. member for Timiskaming (Mr. Peters) and the hon. member for York East (Mr. Otto) I think that the course which this debate has taken indicates that a much better method should have been adopted for dealing with this issue rather than the one that has been taken here. Obviously what the hon. member for York East and the hon. member for Timiskaming were saying, and to which there was agreement from at least one member, was that there were defects, that there had been irregularities, that there probably have been frauds and abuses of the corporate structure. It is essential, therefore, that there should be some means of dealing with this situation. But the divergence of opinion shows that in doing as he has done, the minister, together with his colleagues, the minor gods brooding on the top of Mount Olympus in the shadow of the major god, has handed down his divine judgment on just how we should deal with these problems. This way of acting has not made it possible for the House to discuss this matter thoroughly, and this is an essential condition for the passage of good legislation.
Surely, the legislative process might have been involved to bring about the appointment of a committee, with the fullest possible terms of reference, before the bill was actually introduced. Such a committee would have provided an opportunity for debate and discussion with people from all areas of our society who were involved and concerned in this matter, including the corporate people themselves and their representatives. So if it were established, as it should have been some time ago, this committee might have brought to the House and to the government its views, after a wide open discussion and national debate which I think is essential, and recom-
Canada Corporations Act mended the terms of a statute. I think this is a procedure which could be adopted far more often. We hear a lot of rumblings today about the parliamentary system, its value and benefit. In my humble opinion, we do not seek the opportunity to make the best use of this system, and I think this is a typical illustration.
[DOT] (4:10 p.m.)
It might well be that in such a committee we would find divergencies. I might find myself parting company with the hon. member for York East in certain of his views, although he seems to have an adequate knowledge of the corporate structure. I might find myself in distinct opposition to the hon. member for Timiskaming. However, the public would have had an opportunity to peer through the plate glass window-of Parliament and watch the formulation of proposals. The whole parliamentary system would have been involved.
The minister, anticipating objection to this particular measure in the form it has taken, has attempted, in the way that honourable and learned members who belong to the same profession as he and I, to rebut anticipated objections. At page 706 of Hansard, in the course of a lengthy preliminary statement, the minister is reported as follows:
I can hardly believe that in this day and age they-
And, here he means people who would object to the proposals
-want the government of the land to stand beyond the reach of the criticism of the citizens: that they want to allow the government of the land to take decisions that affect us all on the basis of information not available to the public.
The minister may correct me, but it seems to me he has the opportunity to have the last say, at least at this stage of the proceedings. He may assert that there are other statements in his speech which go beyond that but I think that here he is anticipating the objections which may be taken. I submit that this is a weak, insipid and illogical basis on which to rest legislation which gives such great authority to this government.
If the minister were to some extent honest about this he would admit that he is a young and ambitious minister. I have nothing against youth and ambition. I only wish I could have youth back without arrbition! The minister and his ambitious departmental establishment seek to add to their already substantial power. He is a member of a gov-

January 13, 1970
Canada Corporations Act ernment which has already obtained great authority and which seeks to make itself an even more powerful government. This bill, together with several companion measures dealing with financial institutions, indicate the power the government seeks. The Investment Companies Act, which is still to come forward, was taken to pieces in the other place the last time it was presented. According to my information, the government intends to bring it back, basically in its original form,-I cannot accept the minister shaking his head at this time-in the belief that having passed it through this House, the senate will be compelled to accept it as a bill which has been passed by this body.
In my opinion, these measures all form part of a rather devious scheme of the government which would potentially have the effect of intimidating corporations both large and small, compelling them to fall in line with whatever the government may wish from time to time.
Let me make it quite clear, Mr. Speaker, that there is no doubt, as I said before, that there is ample room, ample need and a requirement for the improvement of the corporations Act and many of the other statutes which govern the incorporation and operation of other corporate bodies under federal jurisdiction.
But the over-all effect of this bill is to place in the hands of a government of partisan politicians authoritarian rights which I am convinced can be and will be exercised from time to time for political purposes. Of course, there have been instances in the past of improprieties and wrongs committed which resulted in losses to individual shareholders and I suppose this will happen again. There has been fraud, inadequate information and failure to take action at the appropriate time to prevent such losses. But I submit that it would be possible to cure these instances of company iniquity by other means, and it was not essential for this government to seize to itself the powers they have sought to swell themselves up to the proportions of Big Brother, peering, poking or threatening to do the things I have mentioned.
The Minister of Justice (Mr. Turner) and others have talked solemnly about the right to privacy. What a farce this contention is now revealed to be in the light of the various corporate statutes which this government is seeking to have amended at this session. What we have is big government becoming

ever bigger, with more employees, more bureaucracy and the everswelling establishment.
As I sit back and watch the operations of this government I can only say, "God help the poor individual". There will be liitle place left for him in our society by the time the present administration is finished with its various proposals. In every session we find more and more of the rights and freedoms of individuals being circumscribed. It would be bad enough even if this were a government which was doing something to bring about the just society, what my friend from Calgary North (Mr. Woolliams) would probably call the red herring which was dangled before some of the electors of Canada. The situation would be bad enough, even if it were a government trying to do something about the ever-increasing problems of rapid urbanization and all its ancillary problems, a government really making some substantial effort to tackle the environmental problem of pollution and all the other problems and difficulties facing our society today. Even if it were trying to do something, making some effort, I would still be unhappy. But I am even more concerned about giving these powers to a government which is doing nothing. I say that we are in danger of giving a great deal more power to a government which obviously seeks to exercise that power for the sake of power alone.
In proof of this, Mr. Speaker, I could list some of the bills which are on the order paper. If they were relative I could quote the clauses in the bills which the government has cited as part of their legislative fare for this session. However, it would take too much time and in any event I would probably be out of order. I shall reserve that pleasure for another day, Mr. Speaker.
At page 709 of Hansard, in a speech dealing with a question of the investigative rights being taken by the government or at least by an emanation of the government, the minister says that since 1950 the department has received only 11 formal requests for inspection. In other words, there have been only 11 requests for inspection over a period of 20 years. The minister went on to say that there had been a number of informal complaints but he did not indicate whether these informal complaints had any substance to them and ended up by saying, "that the inspection was useful in showing that suspicions of irregularities or misconduct were groundless and baseless."
January 13, 1970

For some reason or other, Mr. Speaker, despite what the minister mentions in his own speech, there is obviously a very limited need for the kind of investigative opportunity he seeks to obtain. Nevertheless, the procedures must be altered to allow the minister and other government people almost unlimited opportunities for these fishing expeditions.
In my view there is no doubt that the proposals would give the government an opportunity to harass and destroy corporations which might have angered or annoyed the government, a government of partisan politicians. This is a situation we should be very careful about, particularly in the light of the record of this particular administration.
My hon. colleague from Edmonton West (Mr. Lambert) has dealt with a number of provisions of the legislation. I want to limit my specific discussion now to clause 11 which gives almost unlimited power and right of investigation.
[DOT] (4:20 p.m.)
The Financial Times is certainly not a periodical which can be said to be unfriendly to this government, but they have taken a look at this situation. In the editions of November 10, 17 and 24 there are statements and editorials which bear clearly and succinctly on the point I am making. My friends on the other side of the House and others may say that this particular publication speaks for business. Probably it does, but there is nothing wrong in having a publication which speaks for businessmen. Most of us are, or at some time have been, in business. Most people are in some form of business and many who are not would like to be in business-except if they have read the white paper on taxation. Merely because a man is a businessman that does not mean that he is free from the bad habits to which other individuals may be subject. There are defects in societies as well as in individuals, and corporations are composed of businessmen who are individuals. Those individuals are all subject to the frailties of human nature. When those individuals are combined together, their combined frailties can sometimes create more danger and havoc than would be possible for any ordinary individual.
I do not think we should assume that merely because a person is carrying on a business or merely because a corporation is carrying on a business, that that person or corporation is thereby to be condemned automatically and subjected to unwarranted
Canada Corporations Act and unjustified investigation and interference. That should not be permitted unless a prima facie case can be made.
May I now read from the editorial of the Financial Times of November 10, which reads in part:
The federal government's bill to revise The Canada Corporations Act has been lying around since last May and will soon be coming up for examination by a committee of the House of Commons. It needs a drastic overhaul. In its present form it is intolerable not only to business but to every Canadian with a concern for civil liberties....
Some of the most objectionable proposals are outlined in the report on page 3, and we hope they will be widely studied. Many of them can be met with quite simple amendments, but there are two fundamental flaws in the draft sponsored by Mr. Basford as Minister of Consumer and Corporate Affairs.
The first is the almost unrestricted power Mr. Basford wants for himself and the bureaucrats of the combines branch who report to him. Without any outside check beyond the approval of the government-appointed Restrictive Trade Practices Commission, Mr. Basford (or any ambitious politician who may succeed him) is authorized to 'investigate' any company whom he may choose to suspect of doing something wrong or damaging the interest of even one shareholder.
'To investigate' means to provide a team of bureaucrats with legal sanction to enter any premises, seize, examine and copy any documents it wants; examine any witnesses it likes under oath; search, prod and probe as long as it wishes for anything it may hope to discover______
To give such powers as this to a minister and his bureaucracy smacks of a totalitarian regime, not a democracy. In the hands of an unscrupulous government they could be used to threaten, harass or destroy any company which happened to incur a minister's displeasure. It is unthinkable that Parliament should accept them in their present form.
The second thing basically wrong with Mr. Bas-ford's bill is that it virtually invites any shareholder to harass and disrupt any company at the expense of all the other shareholders without risk to himself. It is a charter of irresponsibility for every nut and crank who enjoys making a nuisance of himself....
The federal bill seems to have been drafted on the assumption that every unhappy shareholder is being victimized and that every company director is a criminal. It ain't necessarily so. And the danger of the assumption is that honest men will be deterred from becoming directors rather than face so many almost impossible duties under the threat of going to jail.
The Corporations Act needs revising. The purpose behind the revision is right. But the end can never justify the means Mr. Basford is proposing.
A good case can be made for allowing a powerful investigative function to be exercised, not by government, but by the courts or a division of the courts with jurisdiction to

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Canada Corporations Act deal with problems of this kind. I know that the courts are also subject to the frailties of human nature. But the judicial process is still sound and there is a court of appeal. With the introduction of provisions involving a limitation on costs it may be possible for those who have legitimate grievances to have these matters examined. I do not think it is beyond the ingenuity of the minister and his officials to draft proposals which are acceptable, so that real and potential irregularities which may occur will be subject to examination. That examination should not be conducted under the provisions of this bill; neither should this government be given the powers it is seeking in the bill. My remarks would apply to any government, but particularly to this one.


Steven Otto: Will the hon. member permit a question. The editorial the hon. member read stated, I think, that civil liberties are being denied to corporations, or will be denied if this bill passes. Does the hon. member support the theory that a corporation is entitled to civil liberties, or does he say that individuals only are entitled to civil liberties?


Gerald William Baldwin: Mr. Speaker, clearly, in the first instance, the answer is that a corporation is composed of individuals. I meant to make that point clear. I do not deny that there is a right to investigate, but I object to the way the government is proposing to do it. We should not put so much power into the hands of government and government officials. That is my primary objection. There is a good case no doubt for relief and reform, but I object to the end result the passage of this bill will entail. Perhaps this government will be replaced by another, who knows. Who knows what the situation in this respect may be in the next year or the next decade. All too often we have seen the tragic example of governments saying to their people, "We are only adopting these powers in theory; we may never use them, and we will certainly never abuse them."
All too often we find that governments break their promises. At the same time I say that if more care and thought had been exercised, and proper attention paid to due processes of law, it would have been possible for the government to bring in appropriate amendments. I agree with hon. members who have spoken before; we could have had a completely new corporations act. That could have been the subject of examination by committee. The Committee could start ab initio, bring forward proposals for legislation based on needs, requirements, knowledge and

experiences of the past, and thereby introduce a bill which would deal with the problems which have been mentioned. In such new bill I think it might be possible to devise a simple and inexpensive procedure to bring these matters before the judiciary. It might be possible to have investigations conducted by independent bodies which would work completely outside the ambit of government interference. It could be a quasi-judicial body. In any event, I do not like the powers suggested in the bill to be in the hands of a minister or at the disposal of a government.
It has become apparent in the last year or two that a significant characteristic of this government is that it seeks to take unto itself powers which should be exercised by bodies such as the courts, which have an independence which is absolutely essential if we are to secure the free, independent and non-political evaluation of certain matters. Such an evaluation is required in order to preserve a proper balance in our society where we have the mixture of the executive, legislative and judicial functions.
If, on the other hand, it appears that the courts might not have the capacity, either because of lack of facilities or overloads of work, to make these inquiries and investigations, I think it would have been preferable if we had established tribunals which would have the same degree of independence as the courts. The members of these tribunals would have the same amount of freedom as is exercised by the judiciary-freedom resulting from the terms of their appointment and tenure of office.
[DOT] (4:30 p.m.)
In saying this, I am by no means downgrading the effectiveness and the usefulness of the Restrictive Trade Practices Commission. I think these people do a very fine job, particularly having in mind the limited nature of the terms of reference given to them under the constitutional limitation which, to some extent, plagues the federal administration.
I repeat that I am becoming more and more alarmed at the trend of the government of the right hon. gentleman and his friends to arrogate to themselves, to take into their own hands, the strength and the power to unduly dominate our society. The whole thing smacks too much of a star-chamber procedure. The bill provides that there can be an ex-parte power given to direct an investigation.
The inspectors are appointed ex-parte and the order for the examination of a person is
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made ex-parte. A person being examined is not, as of right, entitled to counsel, as I understand the bill. In any case, counsel would not be of much assistance since the powers granted to the Commission are so broad that a witness cannot refuse to answer any question, even if it might tend to incriminate him. This is a power which our courts are loathe to grant to the prosecution, even in criminal cases of the most serious nature. An inspector appointed by the commissioner is granted the widest conceivable powers of search. It is incredible that in a country where the rule of law is supposedly respected such an inquisition should be permitted. If such powers were granted to magistrates under the Criminal Code there would be an immediate outcry, even if such powers were used for the purpose of detecting the commission of extremely serious criminal offences.
I call attention to proposed section 112D which provides for the payment of the cost of investigation. It is surely against the principles of natural justice that in all circumstances a person should pay for the investigation of his own affairs in preparation for possible prosecution, whether or not he is convicted of an offence at a later date. What about the possibility of the power being used for improper purposes? Some individual or group might propose that an investigation be held. Having conducted the investigation it might then be found there was no need at all for the investigation and, as a matter of fact, it was brought about only for the purpose of harassment. Surely, under such circumstances, provision should be made and the cost of such an investigation should be paid by the instigator. This would include the Crown. This, of course, shows the one-sided nature of this type of investigation when such power is placed in the hands of this government.
In my view, it would have been much more practical to have appointed an all-party committee of this House with the widest possible terms of reference, with power to inquire fully into this problem and propose legislation after having given an opportunity for all interested persons to appear and make their point of view known.


Thomas Clement (Tommy) Douglas: Mr. Speaker, John Kenneth Galbraith in his book "The New Industrial State" points out that since the turn of the century North American business has moved steadily from being an accretion of small business enterprise to the development of large and
Canada Corporations Act powerful corporations. He points out that these corporations have now become multinational in scope and that they have developed what are commonly called conglomerates that have moved into different fields of industry. They have established vertical integration. They control a product from its raw state right through to the marketing and, in some cases, the retailing of the product.
He points out that many of these gigantic corporations have incomes which exceed the budgets of some smaller nations, that they control their source of supply, that they are able to generate their own capital; they are able to virtually set their own prices and by vast advertising campaigns to largely control the buying patterns of the public. In his book Galbraith establishes the fact that on the North American continent we have now developed what he calls a corporate oligopoly with a huge technostructure that has a life of its own and that is virtually a state within a state.
He quite properly points out that in spite of all the indignation that may be generated about this development, no one in their right senses thinks that we can ever go back to the small businessman and the free enterprise economy of the nineteenth century. With mass production techniques and industrial rationalization, with a large pool of trained manpower and the research which is essential for modern industry, these gigantic corporations will continue to operate and it is needless to talk about breaking them up, as was talked about many years ago in the United States when the Sherman anti-trust laws and other legislation was passed. We must now devote our attention to ensuring that these large corporate bodies are made responsible to the public interest in one form or another. That certainly ought to be the purpose of the legislation which is now before the House.
I understand it is some 34 years since this Corporations Act was amended to any great degree. I think it is a great pity that when it does come before the House it is not going to cover a wider scope than is envisaged in the bill. The bill does propose some steps which will certainly improve the situation.
The point I want to make this afternoon, Mr. Speaker, is that a Corporations Act ought to do more than concern itself with mere corporation housekeeping. It ought to be concerned with more than merely providing for increased information and increased protection for the investor. This legislation ought also to concern itself with protecting Canada's

January 13, 1970
Canada Corporations Act national sovereignty and with diminishing the increased takeover of the Canadian economy by foreign investors. It is serious enough when a country is controlled by a corporate elite, that is a negation of true democracy, but when a country is controlled by a corporate elite outside its own borders, its capacity to resolve the situation is tremendously reduced. No country is truly free when the development of its economy is controlled by foreign investment. Our political democracy is curtailed when a corporate elite controls the economy of our nation. But when a foreign corporate elite has a nation in its grip we have lost any chance of building genuine social democracy and even political democracy itself is in jeopardy.
[DOT] (4:40 p.m.)
We in the New Democratic Party believe that the issue of Canadian economic and political independence is now and will continue to be the central issue of this decade. We do not think this issue can be evaded much longer. The constant drift to continentalism of past and present Liberal governments threatens to paralyze our efforts to establish a distinctive national identity in Canada. The escalating foreign control and take-over of our economy has reached alarming proportions and continues virtually unimpeded. As a result, Canada's options for the future are being increasingly closed off.
The Liberal government itself recognized this growing menace to Canadian independence. This is why under the administration of the Right Hon. Lester B. Pearson they set up a royal commission which has come to be called the Watkins Commission. That commission, consisting of some of the ablest economists in Canada, brought in its report. I shall not take the time of the House by going over the various recommendations; some of my hon. friends may do so in the course of the debate. The interesting thing is that although this report has been in the hands of the government for several years, and though it has been discussed in the press all over the country, no statement has yet been made by the government as to what it proposes to do about the recommendations-which of them it considers impracticable and which of them it considers acceptable and deserving of implementation. No statement at all has been forthcoming.
In the meantime, the situation which caused the commission to be set up has grown immeasurably more serious. The Watkins [Mr. Douglas (Nanaimo-Cowichan-The Islands) .1
Commission pointed out that Canada was the only country in the world which allowed so much of its economy to be owned by investors outside its borders. It pointed out that some two-thirds of our economy was under foreign control. Since that time the rate of takeover has accelerated in an alarming way. The Minister of Consumer and Corporate Affairs (Mr. Basford) tabled an answer to a question by my hon. friend the hon. member for Waterloo (Mr. Saltsman) a short time ago showing that since 1963 some 606 corporations coming under federal jurisdiction had been bought out by foreign corporations. This is to say nothing, of course, of the hundreds of companies coming under provincial jurisdiction which have also been bought out. Many of them are major companies, long established firms which have done business in Canada and which have now been brought under the direct control of foreign corporations.
The Watkins Commission pointed out that no other industrialized nation in the world has permitted such blatant takeovers of its economy as did Canada. Nearly all the industrialized nations have imposed restrictions upon economic takeovers. Most of the countries of Europe, Great Britain and the United States itself, have imposed restrictions, in some cases severe in nature. Japan, a country which has received a great deal of United States investment since the end of the second world war, passed legislation two years ago restricting foreign investment in any industry to 49 per cent and in the case of certain key industries such as transportation and steel production, to 20 per cent. In banking, finance and the communications media no foreign investment at all is permitted.
I would point out to those who get nervous when we discuss this subject in case we might frighten off United States capital, that the Americans, who have tremendous investments in Japan, did not pack up their bags and go home. They accepted the situation, recognizing that the Japanese were justified in drawing the line and saying they could not allow their entire economy and the decisionmaking power of the nation to be vested in people from another country.
The Canadian government has taken no such action. We took action on the question of the banks only after one bank had been taken over. We took no action with respect to finance companies until Merrill, Lynch and Associates took over Royal Securities. We have taken no other action with respect to the
January 13, 1970

acquisition of Canadian corporations by foreign investors. The Canadian government has done nothing, either because it has been cowed into submission or because it is convinced that economic absorption is inevitable. Whether the reason is cowardice or indifference I suggest the result is the same; the result is that in Canada we shall lose not only the control of our economy but eventually even the control of our decision-making power unless we stop this steady erosion of our sovereignty, this diminution of our independence.
If history teaches us anything at all, Mr. Speaker, it is that political control always follows economic control. We had an example of this not many years ago. We know that legislation was introduced by a Liberal government to make two United States periodicals, Time and Reader's Digest, virtually and legally Canadian corporations in order that they might get the benefits of being Canadian publications. The Minister of Finance at that time, Mr. Walter Gordon, has since stated publicly that pressure was brought to bear upon him and upon the government by the government in Washington which had obligations to Mr. Henry Luce and to other powerful figures in the United States. Economic control always lays the basis for political control. Once a country loses its power to make economic decisions, increasingly it loses its power to make decisions with respect to an independent foreign policy, with respect to developing its own culture and with respect to establishing its own national identity.
[DOT] (4:50 p.m.)
One of the latest signs of this which gives us concern is the talk about integration of resources in North America. I should like to refer to a meeting held in Washington by the Minister of Energy, Mines and Resources (Mr. Greene) and Mr. Walter Hickel, Secretary of the Interior of the United States. At this meeting preliminary discussions were held with regard to an integrated energy policy for North America, and in this connection I should like to quote a report in the December 5 edition of the Globe and Mail of the press conference that the minister held in Washington:
Asked whether this approach would lead to a substantial economic integration of the two countries, Mr. Greene replied: "Yes, X think it would."
The minister went on to say:
If Canada had refused any economic integration with the United States for nationalist reasons, it would be no more than "a banana republic."
Canada Corporations Act
The minister must have got his facts back to front, because it is the banana republics that are the very ones that have succumbed to complete economic control and domination by outside investors. If we in this country succumb to the same kind of domination, although we may be a little more sophisticated and better off than some of the South America banana republics, the fact remains that we will become an economic colony of the United States.


John James Greene: But only if we have a weak government.


Eldon Mattison Woolliams: That is what we have now.


Thomas Clement (Tommy) Douglas: There is no argument about that, Mr. Speaker; it seems to be agreed on both sides of the House. This is why we are worried about the question.
Then the minister, according to the report, went on to say:
It Is "sufficient" for Canada to retain political control. It is not important who gets the dividends, Wall Street or Bay Street-


John James Greene: That is right.
Mr. Douglas (Nanaimo-Cowichan-The Islands: The minister says that is right. I want to point out that it makes a great deal of difference who gets the dividends. First of all, if the dividends are paid on Bay Street, they are taxable in Canada. The companies are subject to Canadian law and to Canadian control. They are subject to the policies of the government of Canada. On the other hand, foreign investors have taken the position that they are not subject to Canadian law but to the law of the United States or whatever country within which the parent company is located.
Much more important than that, the corporation that owns an operation in Canada has decision making power. For example, it has the power to decide whether certain materials will be developed now, or left in the ground for 25 or 50 years while the company uses up resources it owns in other parts of the world; whether our natural resources will be shipped out of the country in their raw state, providing Canada with minimal employment, or whether they will be processed here, thus developing the Canadian economy and providing employment for Canadian workers; whether the price charged the parent company will return a profit to Canada and pay taxes to Canada, or whether Canadian raw

January 13, 1970
Canada Corporations Act material will be sold to the parent company-in the United States at a price that realizes virtually no profit to Canada, thus depriving the Canadian government of revenue. That is the type of decision making power we are giving away as well as giving away control of our resources.
The fact of the matter is that the United States has been, and is, using our resources to expand its industry. From the point of view of the U.S. this is, of course, a perfectly proper thing to do. The United States has developed the greatest industrial complex in the world and requires more and more raw materials and more and more sources of energy. The closest source of those materials required to meet the needs of the expanding economy of the United States is Canada.
So, it is natural that the United States wants an integrated policy that will supply particularly those resources which are in short supply or almost entirely depleted. What this Parliament has to be concerned about, and particularly the minister who is piloting through this legislation, is whether or not our resources are going to be used first and foremost to develop and expand the Canadian economy, to provide jobs for Canadian workers and to raise the standard of living of the Canadian people, we being able to export the surplus commodities that we do not require. Such decision making power does not lie here in Ottawa on the treasury benches; more and more it is being delegated to the boardrooms of large corporations that are not located within the borders of Canada.


Mr. Deputy Speaker:: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hillsborough (Mr. Macquar-rie)-public service, Bilingualism-use of instant translation computers in classes; the hon. member for Calgary South (Mr. Mahoney)-broadcasting; effect of CRTC decision respecting cablevision; the hon. member for Winnipeg North (Mr. Orlikow)- combines; request for investigation of nickel price increases.

It being five o'clock, the House will now proceed to the consideration of private member's business as listed on today's order paper, namely public bills.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. R. N. Thompson (Red Deer) moved: that Bill C-13, to establish the office of parliamentary commissioner, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, Bill C-13 is one that I have had the privilege of presenting to the House for the last seven years. It would establish in this country at the federal level the office of ombudsman. Unfortunately, the Liberal party, which has been responsible for forming past governments, has not decided to institute such an office, in spite of the fact that four years ago a parliamentary committee that studied this bill in depth unanimously recommended to the House that a parliamentary commissioner be appointed.
In the Speech from the Throne in the 1965 session, it was stated that the government would establish an ombudsman during that session. Yet the government saw fit to take no action. Many times I asked the previous Prime Minister, Mr. Pearson, as well as the Prime Minister (Mr. Trudeau), when the government intended to go ahead and establish such an essential office. The most recent reply was that the Minister of Justice (Mr. Turner) could very well be the ombudsman for Canada. The Minister of Justice is a very fine gentleman. I think a great deal of him and know he is very efficient and able, but it just seems to me that he has not a hope in the world of ever serving the people of his country as ombudsman. I do not say that against him personally, but because the very nature of his office makes this impossible.
[DOT] (5:00 p.m.)
Let me cite an example of my experience during my years in this house. This concerns the Department of Veterans Affairs. During session after session I have had veterans of our armed forces bring legitimate gripes and complaints as they relate pension treatment to my attention. I had one just a few weeks ago which concerned a man who applied for his release, I believe in the month
January 13. 1970

of June, at which time there would be a separation or rehabilitation allowance provided him. The military forces had lost his medical file and finally located it at Kingston, although he was based at the Canadian Armed Forces base at Penhold in my constituency. It took a matter of weeks to get this medical file sent back to the place where the man was stationed and where he was to take his discharge.
In the meantime, a new regulation was passed which denied him the allowance which would normally have been his upon retiring from the force. This allowance was denied simply because his medical papers did not get back until two days after the decision had been announced that this was no longer going to be provided. Surely, this man is being discriminated against by bureaucratic regulation.
I had this reconfirmed by the Minister of Veterans Affairs (Mr. Dube) in a very definite and specific way. This man has no recourse.
I have heard some people speak critically of the office of ombudsman. I heard the Minister of Justice some time ago speak in this way. He said that we are 264 ombudsmen and we can look after the needs of people when they have complaints about the bureaucratic administration of various departments of government. This is something which is inherent in the very basic structure of government. I want to say to the Minister of Justice, who is listening at the present time, that I cannot be an ombudsman for this man because I cannot go any further. I am going to write a really tough letter to the Minister of National Defence (Mr. Cadieux) and the Minister of Veterans Affairs because I think this is something the government would never tolerate as far as the private sector is concerned.
Certainly, the injustice being done to this particular veteran, and I could name 20 of them from my files without any difficulty, should be looked at in light of the moral obligation of the government to this person. Because the government can hang its argument on some peg that relates to a legal definition in a piece of legislation or regulation passed by the department, this individual citizen, who has served his country faithfully and well, has absolutely no recourse and I can do nothing about it. I have nowhere to go to appeal except here, as I am appealing now in the hope that somehow I can convince the minister that he should overrule this decision.
I am not too critical of ministers because I know the load of administration they carry. Most of the replies that are written follow a
DEBATES	2323
Provision for Parliamentary Commissioner pattern. I can almost repeat by rote the phrases used by the various departmental heads. These replies are actually written by the departmental heads and signed by the ministers who probably do not even know what is in them. This is why we need an ombudsman. I do not think it is good enough to just continue passing the buck when the government formally committed itself to this course in a Speech from the Throne, and when the Committee on Justice and Legal Affairs which dealt with this bill five years ago, unanimously adopted it. It is high time the government took some action.
Surely, the government can take a lesson from some of the provincial governments. Alberta was the first province to establish such an office. Now, we have an ombudsman in Quebec, New Brunswick and Manitoba, and other provinces intend to establish such an office. In fact the report of the commission of inquiry conducted by Mr. Justice McRuer contains one of the most profound arguments in favour of this position. The fourth chapter of that report, which is a book in itself, made such a recommendation. The commission was in favour not only of provincial ombudsmen but even municipal ombudsmen. It is also very significant that Mr. Robarts, the premier of Ontario, has committed himself to the recommendations of Mr. Justice McRuer because of the very valid and forceful arguments he put forward.
It is very interesting also, and I bring this to the attention of the Minister of Justice, that just the other day Mr. Justice Milvain brought down a ruling relating to the office of ombudsman in Alberta. The Alberta government was of the opinion that the authority of the ombudsman did not extend to the investigation of commissions of inquiry or the recommendations of such commissions. The government said this was something that did not enter into the terms of reference of the ombudsman. The ombudsman for Alberta, Mr. McClellan, asked for a legal ruling on this because he felt his own authority and effectiveness was being hamstrung by not being able to pursue the legitimate complaints of the citizens of Alberta as they related to certain things that may come within the area of such commissions. Mr. Justice Milvain ruled in favour of the ombudsman. This ruling, given just a few days ago, is very significant.
The Minister of Justice knows very well what an ombudsman is and knows very well the need for such a position. He knows how well this has worked out in Alberta, Quebec
January 13, 1970
2324	COMMONS DEBATES
Provision for Parliamentary Commissioner and other provinces. He ought to take the initiative and move on it. He should go to the Prime Minister and say, I cannot be the ombudsman for Canada. I cannot serve the Canadian people adequately or effectively in this position. I know that members of Parliament, while they can do a great deal of work in relation to investigating and correcting the grievances citizens may have regarding the administration, cannot do certain things and we need an ombudsman.
I am reminiscent of the last election when so much was said about the just society. The Minister of Justice ought to say to the Prime Minister that one of the most effective ways of bringing about this just society would be by giving the Canadian people an ombudsman who could look after their grievances.
I know very well the ombudsman for New Zealand, Sir Guy Powles. He has often said to me that one of the greatest benefits of his office is derived not so much from the fact that he investigates and recommends to the government and its various departments, but from the fact that he is there. This has a salutary effect upon government officials who tend to forget about individual needs. They are dealing with rulings and regulations and tend to look at cases from a legal point of view rather than from moral responsibility. The fact that an ombudsman is present has a very wholesome effect on the attitude of senior civil servants. On the other hand, it has a very wholesome effect on the general population because people who feel the government is injust in its tax policies or various decisions that affect them know they have a man to whom they can appeal without spending $30,000 on an appeal to the Exchequer Court, for example, or without having to go to the courts when they feel they cannot afford to or when it would not really be worth the effort.
Sir Guy Powles has said publicly in his report, and I believe Mr. McClellan has reaffirmed this on several occasions, that one of the greatest advantages of the office of ombudsman or, as we call it in this bill, a parliamentary commissioner, is the fact that he is there. This is good for the populace and is good for senior civil servants. Incidentally, I think it is very helpful to the ministers of the crown. Perhaps the Minister of Justice would find himself free of many petty things he has to deal with which consume his time and perhaps prevent him from devoting his attention to things that would seem to be more important.

Thus, speaking now to the members of this House, I hope that tonight we can give second reading to this bill and refer it to the committee. Then, the Committee could hear the evidence that has been gathered since it last considered this bill favourably, evidence relating to the established practice and use of this office in the provinces.
[DOT] (5:10 p.m.)
In closing, I should like to say I believe it is very important that members of this House understand that a man who is doing a real service to the people of Canada in the area of decision making, even though not commissioned to do so and not paid for it, and even though it is not really included in his terms of reference, is the Auditor General. The Auditor General, of necessity, finds himself dealing with cases which ought to belong to the office of an ombudsman. I am grateful he is there and I am glad he does this.


An hon. Member:: And they cut his staff.


Robert Norman Thompson: I do not understand why they cut his staff. If the office of an ombudsman is not to be established, they ought to expand his staff so that at least in the areas of taxation and financial administration the people of Canada might have some recourse.
I would commend this bill to the members of this House and to the Minister of Justice. I hope the government will do something about it.


Hon. John N. Turner (Minisier of Jusiice):: Mr. Speaker, I am glad that the hon. member for Red Deer (Mr. Thompson), whom I have heard before on this very important subject, is again by the luck of the draw able at an early opportunity to bring this matter to the attention of the House.


Robert Norman Thompson: Lucky for whom?


John Napier Turner: For all of
us. This is an educational process. It gives me the opportunity to express some views on the concept of this avenue of remedy against administrative decisions in a modern complicated government. The hon. member did not go so far as to define what he meant by ombudsman.


Robert Norman Thompson: We have talked about it many times.


John Napier Turner: As I understand it, what he is talking about is an independent person, one independent of the
January 13, 1970

executive and independent of the legislature but one who reports to the legislature.


Robert Norman Thompson: Responsible to parliament.


John Napier Turner: Responsible to parliament and given authority and certain statutory powers to investigate matters of governmental administration, in this case federal administration, which give rise to individual grievances on the part of the citizens of this country. In other words, his terms of reference would be to review the administration or more particularly mal-administra-tion within the ranks of the federal public service.
At the outset I want to concede that one of the threats to individual well-being in Canada is the dwarfing of individual rights compared to the growing complexity and strength of government, whether it be at the federal or provincial level. One of the thrusts, as I have tried to state before, of the Department of Justice is to seek ways to balance the rights of the individual Canadian against his government. As the hon. member said, we are faced with a situation where government has become more remote from the average Canadian. Government has become larger, more complex, more bureaucratic and perhaps more arbitrary. Certainly, it has become less sensitive. I believe it is incumbent upon this House to review continually the avenues of appeal, of redress and of remedy against arbitrariness in the governmental structure.
I am personally very concerned about the motivation behind the hon. member's bill. I was in the United Kingdom last October where I had discussions with the law officers of the Crown, the members of the Law Reform Commission that they have in England and Wales and the members of the Scottish Law Reform Commission. I took the opportunity at that time to go to Sweden where I met the Swedish ombudsman, Alfred Bexelius, on October 2. I spent four hours with him that morning. I had lunch with him and was able to return his hospitality by inviting him to dinner. As a matter of fact, I told him he was one of the famous men of the world representing what had become a very celebrated institution. I told him that the word "ombudsman" had become as familiar to people outside Sweden as the word "smorgasbord" and that the institution which he fills and which dates back to 1809 when the new constitution of Sweden was first written was something all modern governments were looking to for guidance.
DEBATES	2325
Provision for Parliamentary Commissioner
As a matter of fact, there are now three ombudsmen with equal jurisdiction in Sweden because the work available for a single ombudsman has gone beyond what he was able to handle personally. When I returned to London I spent two hours with Sir Edmund Compton, the parliamentary commissioner who is responsible to the Parliament of the United Kingdom. His office has been established since 1967. I had the opportunity to discuss the institution and efficacy of the ombudsman with the attorney general of England, with the Lord Chancellor, the Solicitor General and a good many members of Parliament. I inquired of them what their views were of the institution and how it was working within a parliamentary system based upon the British tradition.
I am quite aware that the institution has become contagious. We have in Canada three provinces which now have their own ombudsman. The hon. member for Red Deer represents Alberta and he will know that Alberta is represented by Mr. McClellan, formerly the commissioner of the Royal Canadian Mounted Police. New Brunswick has an ombudsman and last year the province of Quebec established the office of Protecteur du Peuple, the citizens' protector. Now, we have three ombudsmen at the provincial level. There are ombudsmen not only in Sweden but also in the other Scandinavian countries, Denmark and Finland, as well as in New Zealand and now in Hawaii.


Robert Norman Thompson: Might I just remind the minister that the province of Manitoba passed legislation in this regard but the appointment has not yet been made.


John Napier Turner: I am half right and half wrong.
May I suggest in the comments I am going to make that there is some difficulty in accepting the precedents of other jurisdictions and that Parliament here in Ottawa ought to scrutinize the traditions under which these offices have been established in other jurisdictions to see whether they apply with equal force to Canada. In Sweden the ombudsman has almost complete jurisdiction to investigate administrative discretion. There are virtually no limits on his authority. He can review any aspect of governmental administration in the country, including military administration, ecclesiastical administration and the courts. But there are certain aspects of government in Sweden which differ substantially from our own. More importantly
2326	COMMONS
Provision for Parliamentary Commissioner there is no ministerial responsibility as we know it in Canada. The ministers of the Crown in Sweden are not responsible before the legislature for the acts or omissions of their departmental officials.
The public service in Sweden is not governed by a system of subordinate responsibility whereby a man in a lower position automatically is responsible to his superior and so on through the deputy minister to a minister, but is governed instead by statutes and laws and is responsible only to themselves on the basis of the interpretation of their powers as found in the statutes and regulations.
[DOT] (5:20 p.m.)
There being no ministerial responsibility, there is no way in which the people of Sweden can challenge maladministration on the floor of their parliament. Secondly, and this is a fundamental difference, the Swedish member of Parliament has no fundamental right to voice a grievance on behalf of his constituent or of any citizen of Sweden. He cannot challenge on the floor of his Parliament a factual situation relating to a particular grievance; he is limited to challenging the principles of the law governing that situation.
I might also suggest to the House that when we are talking about the Scandinavian countries, New Zealand and the other jurisdictions that have adopted the ombudsman idea, we are dealing with small, relatively homogenous populations. As a matter of fact, those members of the House who have had the opportunity to visit Sweden know that the Swedes are such a homegenous race that they need not speak to each other. They can sit silently over a meal, say nothing, and yet instinctively know what the other thinks.
The only country of any sizeable complexity and sizeable population that has adopted the idea-


Stanley Howard Knowles: We
should try not speaking to each other here.


John Napier Turner: I want to say to the hon. member that we on this side can usually predict with a fair deal of accuracy what is going to be said by members of the NDP.
In any event, the United Kingdom is the only country of substantial population and administrative complexity that has adopted the institution. I think it is important to note that in the statute setting up the parliamentary commissioner in the United Kingdom, his

DEBATES	January 13- 1970
jurisdiction is very limited indeed; in fact, far more limited than the jurisdiction which the hon. member for Red Deer gives his ombudsman in Bill C-13. The parliamentary commissioner in the United Kingdom has no jurisdiction whatever over the courts or over any governmental agency that is non-departmental. He has no jurisdiction over local government. As a matter of fact, there is an opinion among members of the House of Commons at Westminster to the effect that if the institution of Parliamentary Commissioner is to become properly effective, if he is to have any real effective power of redress, his jurisdiction must be extended over the municipalities. Finally, he can receive no complaint from any citizen of the United Kingdom unless it is referred to him first formally by the member of Parliament from that constituency.


Robert Norman Thompson: No one is suggesting that we follow Great Britain.


John Napier Turner: I am suggesting to you that in the only country with any sizeable population in which that institution has been adopted extreme limitations have been put on the jurisdiction of that commissioner.
Another difficulty-I am trying to point these out as best I can-is that we are living in a federal state with a divided jurisdiction and shared responsibilities among federal and provincial governments. I will not be the first to point out that a good many of the complaints that would inevitably reach the office of any federal ombudsman would involve matters not within the federal jurisdiction but falling under the authority of the provinces and the municipalities. My friend, the hon. member for Red Deer, knows as well as I do that most Canadians really do not know whether a matter is a local one to be dealt with by municipal or town authorities or a matter involving the province or the federal government.


Robert Norman Thompson: That is no argument at all.


John Napier Turner: I am suggesting also that in a large geographical and territorial area like Canada it would be difficult-and I think we have to anticipate this-for any federal ombudsman to be able to see the complainant personally, review the file and render his decision. I have had a chat with Mr. McClelland, Alberta's ombudsman, and he tells me that it is essential that the
January 13, 1970

volume of work never exceed what the ombudsman personally can review, that he should not operate with more than a small staff. That was echoed by the other gentlemen to whom I talked. The reason is that unless the ombudsman is personally able to review the file, and if necessary personally able to interview the complainant, then all he establishes is a second bureaucracy superimposed on the first. This is something that in a federal state, particularly a federal state with a large geographical area, we would have to be concerned with in Canada.
I also have some concern about what appeal there would be from an ombudsman's decision. The very concept of that office gives a lot of discretion, jurisdiction and omnipotence to a single man. There is no appeal from him. In the event that an ombudsman would render an adverse judgment against a citizen, to my mind any further avenue of redress would virtually be foreclosed. I remember that during the discussion of the powers of the official languages commissioner, whose powers are very similar to those of the ombudsman in Alberta, concern was expressed on the other side of the House about the powers given to the commissioner and about the fact that there was no right of appeal. Our reply was that this was not a judicial office or judicial proceeding-nor is the ombudsman-and that the commissioner's only power was the power of publicity and the power to bring the grievance to public notice and to the notice of parliament. I recall that at that time hon. members were concerned that there were no methods of appealing the commissioner's decision.
Let me look now at what the government is doing to try to remedy the situation for which the hon. member has suggested the institution of an ombudsman, what we are trying to do both by way of parliamentary redress and by way of judicial review to enhance the rights of the individual citizen against administrative decisions. First of all, we are committed to the establishment of a federal law reform commission, and I hope to be able to submit to the scrutiny of Parliament a draft of that bill in first reading within the next month. That reform commission will be charged with the review of the general terms of the criminal law and of the substantive administrative public law of this country. The throne speech also commits the government to a wide area of administrative law reform. We intend to set up a wider system of judicial review by the courts of all decisions of federal administrative boards and federal administrative
DEBATES	2327
Provision for Parliamentary Commissioner tribunals. Within parliament, we have tabled in the House the report of the Special Committee on Statutory Instruments, the committee on regulations under the able chairmanship of the hon. member for Windsor-Walker-ville (Mr. MacGuigan).
This committee examined the scope of delegated legislation, that is legislative power by regulation that has been delegated by Parliament to the Governor in Council or to individual ministers or departments. The committee report suggests ways whereby, first of all, Parliament should have more control over the nature of the enabling power in that statute which gives authority to make those regulations. I need only refer the House to the seventh recommendation of that special committee, where all enabling acts for regulation making authorities should be in accord with a number of principles. Those principles are set forth quite thoroughly on pages 90 and 91 of that report.
[DOT] (5:30 p.m.)
The committee suggests that the Minister of Justice should have the authority and should have the duty to review the scope of the enabling clauses to ensure that such clauses do not contain hidden privity provisions or do not contain a subjective element to allowing the department to avoid the review of the courts. The report speaks for itself, and I believe that if Parliament accepts and enacts the recommendations of the committee we will have gone a long way toward curing some of the ills of which my hon. friend complains.
The committee also recommends the establishment of a parliamentary scrutiny committee and that a new committee on regulations should be established. The recommendation is No. 19, which states that it should be a standing committee of the House of Commons; all regulations should stand permanently referred to it; it should strive to operate in an objective and non-partisan way; it should have a small membership to enable it to operate effectively; it should have adequate staff and should examine regulations on the basis of six criteria, four of which are as follows:
(a)	Whether they are authorized by the terms of the enabling statute.
(b)	Whether they appear to make some unusual or unexpected use of the powers conferred by the statute under which it is made.
(c)	Whether they trespass unduly on personal rights and liberties.
2328	COMMONS
Provision jor Parliamentary Commissioner
(d)	Whether they have complied with the provisions of the Regulations Act with respect to transmittal, certification, recording, numbering, publication or laying before Parliament.
The other two criteria are set forth. Hon. members who have had the opportunity of reading my testimony before that committee will know that I am committed to the principles of its report. I would hope that if we can achieve a more alert, more all-embracing system of parliamentary review-


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


Some hon. Members:: Carry on.


An hon. Member:: He is talking the bill out, so let him have more time.


John Napier Turner: I will not take too much time. I thank the House for its usual indulgence. I believe that if we are able to achieve a public scrutiny of the regulationmaking power and of the regulations as they are adopted in Parliament, if we are able to achieve by way of legislation a continual, non-episodic review of our laws in this country, if we are able to give the courts wider judicial review over the decisions of administrative boards and tribunals, if we are able to make legal counsel more accessible to the citizens of this country, then I believe that by way of parliamentary and judicial remedies we will have gone a good distance, or indeed the whole of the distance toward curing the ills that the hon. member is attempting to cure.
His argument is persuasive. I have had the advantage of conversations with Sir Edmund Compton and Mr. Alfred Bexelius. I admit that one of the advantages of an ombudsman is the very fact of his presence-the fact that he is there. In gaining a reputation as the people's protector, he becomes a psychological barrier to arbitrariness; he is a safety valve. People have the idea that there is someone to whom they can turn.
I believe we can succeed in improving the scrutiny of Parliament, in enhancing the role of the individual Member of Parliament in his ability to bring a grievance of the people before this chamber, in controlling the scope of the enabling power to make regulations and in widening the legal remedies of the citizen. If we find that those wider parliamentary powers of the legislature as against the executive, and thereby the administration- wider judicial powers of the citizen against 
DEBATES	January 13, 1970
administrative tribunals-fail to do that, I admit there is a case for an extralegal and extraparliamentary remedy along the lines of an ombudsman.
I want to warn the House that procedural safeguards-and this is a type of procedural safeguard from which there is no appeal, the only remedy being publicity and report to Parliament-cannot substitute for an improvement in the scrutiny of Parliament and an improvement in our public administrative law.
Chief Justice McRuer, in the fourth volume of the second report of his monumental study of civil rights in Ontario at page 1389, says that he is not convinced that the ombudsman is one of the most urgent needs in the process of democratic government in Ontario. He had a conversation with Sir Guy Powles, the New Zealand ombudsman, who says the ombudsman is not the complete answer to all the problems of the administration of justice.
This government is going to do its best to widen the scope of parliamentary and judicial review. We are going to do our best through a broadening of the committee system, through a broadening of the avenues of grievance available to the individual Member of Parliament-who, after all, is the fundamental protector of the people of Canada-to achieve what the hon. member wants achieved. That being so, Mr. Speaker, the mind of the government is not closed on the issue. I have tried to suggest what we are attempting to do. My file is still open.


Mr. Andre Fortin (Lolbiniere):: Mr. Speaker, my remarks will be brief, but I feel it is my duty to support Bill C-13, sponsored by the hon. member for Red Deer (Mr. Thompson), and entitled: "An Act to establish the Office of Parliamentary Commissioner".
Mr. Speaker, I am happy to have given my place to the Minister of Justice (Mr. Turner); this has enabled me to get to know his arguments concerning Bill C-13.
I am surprised to note that the Minister of Justice whom I have always regarded as the protector of public rights, as the defender of citizens' rights and as the promoter of justice and equity even on behalf of the most humble people has not given his opinion on this bill while using the time allotted to him. In fact, he has told us in details of his trip to England and to other countries, thus proving to us that the trips he is making are more serious than those of the Prime Minister (Mr. Trudeau).
January 13, 1970

However, that does not tell us whether the minister agrees with the principle of Bill C-13. His arguments seem to me very weak and this leads me to believe that the bill in itself is perhaps not so bad.
Among other things, I recall an argument put forth by the minister and that surprised me, coming from a man that I have always held in high esteem. He said that the function of parliamentary commissioner might not be as necessary and desirable as might be expected at the federal level, because we have, in Canada, a federal system. True, there are ten provinces, with different needs, concepts and objectives, and the federal goven-ment has its own jurisdiction, in accordance with the British North America Act.
The minister said that the office of parliamentary commissioner is not as necessary and desirable as it is claimed for the simple reason that the citizens do not know from whom they must seek information and that the role of this parliamentary commissioner would only be to tell them. Now, even if the parliamentary commissioner's only role were to tell the citizens where to apply to solve their problems it would be a marked and obvious improvement on the present situation.
Besides, without playing politics, I would like to tell the minister that whether they are on the government side or in the opposition all hon. members are now considered by the citizens as social workers. In fact, people come to us and ask that we help them and represent them not only in the House, which is part of our functions, but also with the civil servants of various departments.
[DOT] (5:40 p.m.)
Personally, I have kept a record of all such requests received since my election. I have compiled them and made statistical tables. However, a study of these requests reveals that more than 80 per cent of them pertain to fields of provincial jurisdiction. I do not necessarily conclude to the inefficiency of the member of the legislative assembly, but rather that people do not really know which government is involved in a given problem. They cannot be blamed for it. In fact, governments have never actually enlightened the population in this regard. Moreover, the governmental administration is constantly expanding. It has become a mammoth that can only be stirred with great difficulty in order to draw from it equity, justice and humanity.
DEBATES	2329
Provision for Parliamentary Commissioner
I remember a recent television interview with the Ombudsman of Quebec. This telecast was very instructive for me because it gave me the opportunity to realize the important role such a commissioner could play at a time where the administration of our governments gets more and more complicated.
Mr. Speaker, the argumentation of the minister is inconsistent and has nothing to do with the true situation in Canada. It is precisely because the jurisdictional fields of the various governments are increasingly overlapping that people no longer know where to go, even members of parliament. If we consider the problem of social security, economic expansion, agriculture, transportation or justice, we note that the departments are overlapping at all levels of government.
As for the citizen, he does not know where to go and when he receives a negative reply he has no resort, even if the minister denies it. He can appeal a criminal or civil case to a superior court, but he cannot appeal the decision of an official. Even if the minister told me that it can be done, he knows quite well that due to the complexity of the administration and to the fact that officials generally only perform bureaucratic work and very often unfortunately forget the human aspect, it would be difficult to obtain justice.
Since the average citizen, the poor, cannot afford to start proceedings or to appeal, we must establish the office of parliamentary commissioner and on that subject, I wish to draw the minister's attention to something that recently happened in the federal capital.
A University of Ottawa professor, Mr. Raoul P. Barbe, whom the minister probably knows, recently published a manual of administrative law which is the work of a team. An expert whose political neutrality is above any suspicion says clearly that federal and provincial administrations should tend increasingly to get closer to the people under their jurisdiction. It is also said that the relationships between those who govern and those who are governed should gain in justice and fairness.
Now, if an expert agrees that the gap is widening constantly between the administrators and the administered and, being well versed in administrative law, suggests that other solutions be tried and some imagination be shown to promote the rights of the citizens, I believe that Parliament should welcome the principle of Bill C-13, even though it might disagree with some aspects of it.
January 13, 1970
2330	COMMONS DEBATES
Provision for Parliamentary Commissioner
I had hoped that the minister would congratulate the hon. member for Red Deer (Mr. Thompson) for this private member's bill, recognize the principle of the proposal and admit that Canadian citizens, whatever their race, their language, their creed, their age or their resources, should be allowed to assert their rights before the federal administration.
I think that the minister could then have confirmed my previous opinion of him. It would be to his advantage to read the bill over again and think about it seriously because, the further away the federal government gets from the people, the further away the people will get from the government. The latter will then be the first loser.
In my opinion, the Canadian people and the government have a common interest in seeing to it that everyone is given justice.


Stanley Howard Knowles: Mr. Speaker, because I should like to see this bill referred to the Standing Committee on Justice and Legal Affairs, where it can be studied much more thoroughly, I shall speak for only a few minutes. In any case, I find it is not necessary to speak at greater length; the Minister of Justice (Mr. Turner) knows our thoughts, after his sojourn in Sweden, and it is good to know we are understood.
I think the Minister of Justice made an excellent case today, as he has on other occasions, for law reform, for strengthening our judiciary, for improving our parliamentary system and for all those other ways he has in mind to protect the rights of individual Canadians. I think I speak for all hon. members of the House when I say that we welcome his commitment to the kind of program on which he is working. We wish him well.
I suggest to him that although an ombudsman would certainly not be a good substitute for the kind of thing he is proposing, it strikes me that it would be a real comfort to our people if they were to know that apart from Parliament, apart from the government, the opposition, the bureaucracy and the courts, there was an ombudsman, an independent authority to whom reference could be made. I recognize that the responsibility of such a person, even if he has a staff to help him deal with cases that come up, is a frightening one. But we have solved other problems of that kind. I think the greatest value of an ombudsman would stem from the realization in the minds of the Canadian people that there was an independent

authority to which a person could go if he felt aggrieved and if he felt that the established institutions had not resolved that grievance for him.
I recognize that there are defects in this bill. As a matter of fact, even if passed the bill would not have much effect because there is no provision for an ombudsman's salary. The hon. member had to countenance that omission to get his bill accepted as a private member's bill. I noted that the minister did not object to that omission.


The Acting Speaker (Mr. Bechard):: Order, please. Is the hon. member for York-North (Mr. Danson) rising on a point of order?


Mr. Danson:: I rise on a point of order, Mr. Speaker. I did not mean to interrupt the hon. member for Winnipeg North Centre (Mr. Knowles), but on behalf of all members of the House may I officially welcome a member of the Conservative front benches who has been sitting here for a long time without saying a word. I am, of course, referring to the hon. member for Saint-Hyacinthe (Mr. Ricard).


Mr. Ricard:: I will make allowances for the hon. member's ignorance, Mr. Speaker.
[DOT] (5:50 p.m.)


Stanley Howard Knowles: Mr. Speaker, I am sure that helpful remark has contributed to the debate, although I have not quite figured out how. As I started to say, there are defects in the bill. I indicated one of them. I think we do have to sort out the question of how far the ombudsman can go. Is his authority to be like that of the Auditor General, who can make recommendations but cannot put them into effect? Is he to have further authority? These are details that can be sorted out.
As for the proposition that things are different here from what they are in Britain, Scandinavia and New Zealand, of course we always have to tailor our arrangements to our own situation. These are details that can be gone into. Surely what the idea of an ombudsman calls for is not opposed to the line that the Minister of Justice is taking, but rather is an expansion of it. I hope the government will be willing to let this bill have a formal second reading so that it can go to the committee and there be considered further.


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I regret that in the few minutes at
January 13, 1970

my disposal I shall not have time to discuss fully this important bill. Through the hon. member for Red Deer (Mr. Thompson) has left the House a good while ago, still I wanted to congratulate him for giving us the opportunity to study the question of establishing the office of parliamentary commissioner.
I believe that it is in 1964 only, when such a bill was introduced, that the House had the opportunity to discuss this matter and, as the hon. member who sponsored the present bill said, at that time it had been referred to the Committee on Privileges and Elections.
I believe the committee had recommended its adoption, with certain reserves. I believe that, for instance, the Canadian Bar Association and different political specialists such as Professor Rowat had also approved this project of appointing a Parliamentary Commissioner in Canada, as has been done in many other countries.
There is nothing new about this institution. I see that in the distant past they already had such a commissioner in China, a supervisor who checked the administrative decisions of the government and could have them altered. But after that, it is only in 1809 that the Scandinavian countries, Sweden particularly, tried out this institution which seems to have worked out well.
Recently, in some Canadian provinces, and in Quebec in particular, this office of ombudsman has been instituted, but we may have to wait for a little while to find out what will come out of it.
I am afraid that in spite of the impartiality of that ombudsman, his powers are not really very wide. He is merely an investigator who may draw the government's attention, or the people's attention, to certain situations, and make recommendations. But, really, he does not have any real power, except that of hearing grievances. I am wondering if this is not a weakness that might weaken the effectiveness of the measure, while there might be other means, such as administrative tribunals, as mentioned by the Minister of Justice (Mr. Turner), to protect citizens against bureaucracy.
The case of the Scandinavian countries was mentioned; these countries, however, cover a limited area and have a unitary system; moreover, their confederative constitution differs from ours. This is also the case of New Zealand, where the constitutional system, of British origin, is similar to that of Canada in some respects.
Canada Corporations Act
This bill should be considered in the light of our constitutional system and, particularly, of the size of the country.
However, I agree with the hon. member when he says that the huge development of our administrative services, giving very large powers to governmental administrations, as well as the constant increase in the number of courts and agencies holding powers over the person and the property of the ordinary citizen, increase the risk of the individual's freedom and civil rights being violated.
Today, since most scientific discoveries require to be understood specialized knowledge which the average man usually lacks, hon. members are satisfied.


The Acting Speaker (Mr. Bechard):: Order. The hour appointed for the consideration of private members' business having expired, I do now leave the chair to resume the same at eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Basford that Bill C-4, to amend the Canada Corporations Act and other statutory provisions related to the subject matter of certain of those amendments, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Thomas Clement (Tommy) Douglas: Mr. Speaker, when the debate was adjourned at five o'clock I was endeavouring to point out that our criticism of the bill which is before us arises from the fact that it fails to produce any measures which would protect our sovereignty and arrest the rapid drift toward foreign domination of our economy. I was seeking to make it clear that our objections were not based on any petty nationalism, as the Minister of Energy, Mines and Resources (Mr. Greene) has suggested.

January 13, 1970
Canada Corporations Act Rather, we say that ownership implies the power to make decisions and that the decision-making power affecting the welfare of the people of this country, their jobs, their standard of living and their future, ought to be vested increasingly in the hands of bodies and organizations accountable and responsible to the people of Canada.
Those who are content to allow this drift toward continentalism to continue try to explain their inertia and inaction by contending that Canada cannot secure sufficient capital unless it allows these takeovers. This is one of the myths which was successfully exploded by the Watkins Commission. As a matter of fact, over the past ten years Canada has been an exporter of capital. In recent years we have been providing over $500 million a year to purchase equities in the United States, because most of the subsidiaries in Canada are wholly-owned United States subsidiaries which do not offer their shares to the Canadian public. Consequently, those who manage the investment for pension funds, insurance, mutual funds and the like find it necessary to go to the United States market to buy equities in order to balance their portfolios.
Moreover, it should be remembered that the capital which is being used to buy out Canadian companies comes largely from Canadians. Over the past ten years, only 15 per cent of the capital which is being used to take over Canadian companies has been new United States capital; the other 85 per cent is an accumulation of dividends and interest earned in Canada on previous investments. In other words, the people of Canada have supplied the capital necessary to permit the foreclosure of their own economy.
Adequate capital could be found in this country to develop the economy of Canada. Should it be necessary at any time to secure additional funds to enlarge our infrastructure, this could be done by going into the markets of the world to secure loan capital in the form of bonds and debentures where no ownership is involved. Once we pay off the interest and the principle, ownership rests entirely in Canadian hands. Surely there are sufficient savings generated by Canadian people to enable us to provide the major part, if not all of the capital we require for equity in the development of our economy. After all, during the second world war the Canadian people, rising out of a great depression, equipped nearly 1 million men and women in the armed services, built ships, tanks, guns
[Mr. Douglas (Nanaimo-Cowichan-The Islands) .1
and planes, waged a war entirely out of Canadian resources and in addition gave very large sums of money to the United Kingdom to help that country in its hour of need.
Our problem would not be capital. The area in which we would really need foreign assistance would be that of technical knowhow, something which is much more difficult to secure. But this could be obtained, as Israel and other countries have done, by entering into partnership with foreign companies, allowing them to have a one-third equity, to supply the patents and in some cases to operate under management contracts. But we would retain control in Canada and keep the decision-making power in this country.
We in this party are disappointed that this legislation does not set out the steps the government intends to take to prevent a continuation of this growing takeover of the Canadian economy. We think there are steps which should be taken, some of them short term and immediate. For instance, we think there ought to be a takeover tax. A former Minister of Finance, Mr. Walter Gordon, did introduce legislation into this House providing for such a tax. Then, under pressure, he withdrew it. I am not in a position to say from whence the pressure came, but when Mr. Gordon writes his memoirs and we get another "Bird in a Gilded Cage", we shall know where it came from. Such a measure ought to be reintroduced. Many countries impose takeover taxes, and we need one in this country.
In the second place, there should be full disclosure of ownership so that we know the extent of foreign ownership of the various corporations in this country. Disclosure legislation will only be meaningful, however, if it is enforced. It will have to be better enforced than the legislation provided in the Corporations and Labour Unions Returns Act because in 1967, although 2,990 companies made no returns, no legal action was taken against them despite the fact that provision exists for taking such action.


Mr. Basford:: Most of them are out of
business.


Thomas Clement (Tommy) Douglas: If the minister wants to give us the facts, we shall be glad to hear him when he closes the debate. I doubt that 2,900 companies are out of business, but if it is true the minister should put that information on the record.
January 13, 1970

Third, we need legislation restricting foreign ownership particularly in key sectors of the economy. An agency ought to be set up, as was recommended in the Watkins report, to investigate these takeovers and to make sure that the subsidiaries in this country are acting as good corporate citizens. We need amendments to the Combines Investigation Act to provide that in cases where takeovers constitute mergers-which is what happens in most cases-it must be determined whether they are contrary to the public interest.
[DOT] (8:10 p.m.)
Fourth, we need a state trading corporation, as was recommended in the Watkins report. There has been a problem with U.S. subsidiaries in this country which have refused to trade with Communist countries because the parent company in the United States might be prosecuted under the U.S. Trading with the Enemy Act. These subsidiaries have taken the position that they are subject to United States law, not Canadian law. This difficulty can be obviated, in one way at least, either by establishing a state trading corporation or by giving such trading powers to the existing Canadian commercial agency.
The fifth suggestion, which we have made from time to time, is that we ought to use a floating exchange rate. At the present time we are taking hard-earned United States dollars which we have earned to help our balance of payments position, and selling them for Canadian dollars to prevent the Canadian dollar going above the pegged rate. I suggest it would be difficult to find a more asinine situation. We in this group have for a long time advocated that a floating exchange rate, even operated within certain limits, would give the government greater freedom of movement in conducting its monetary policies.
There are other long-term measures, of course, that ought to be initiated by the government. First is the establishment of the Canada Development Corporation that the Liberal government has included in the Speech from the Throne in every session since 1963. It was left out of this session's Speech from the Throne, probably because the government felt there was a limit on how long it could kid the public. In spite of this, the Minister of Finance (Mr. Benson) keeps saying that the corporation is coming. Personally, I will believe it when I see the legislation on the order paper. We want a publicly 21611-9
Canada Corporations Act financed and publicly controlled Canada Development Corporation that will make possible the mobilization of the savings of the Canadian people to be used for the purpose of developing Canada's resources, processing Canada's raw materials and developing and expanding Canada's economy.
The second long-term requirement is balancing our trade with imports from the United States, as well as shifting some of our purchases to countries that are prepared to trade for Canadian goods. One of our difficulties is that we are so completely dependent upon the U.S. market. As the Right Hon. Lester B. Pearson said when asked whether the government would protest the United States presence in Viet Nam: When you depend on one country for 60 per cent of your trade, it is not easy to quarrel with them on a matter of this sort.
Because of our proximity to the United States and our long-standing relations with that country, the United States will always be our major customer. In all probability we will continue to be their major customer. But the steady imbalance in our payments position keeps us in a constantly inferior position in our dealings with that country.
My plea is that a young country like Canada must think in terms of centuries, not just in terms of decades. There is little value in rapid growth if the end result is economic dependency. Canada's future lies in developing secondary and tertiary industries that will provide jobs and more stable prices. For us to be a mere supplier of raw materials and energy resources is to relegate us permanently to an inferior level of economic performance. We can never have a society devoted to the greatest good for the greatest number if our economic decisions are made in a country other than Canada and in the interests of a country other than Canada. Even our political and cultural identity is being eroded. Certainly our economic sovereignty is already threatened.
We can hope some day to make corporate power responsible to the public interest of this country, but only if that power has its roots in Canada. When that corporate power is vested in another country and we have little or no control over it, increasingly we will become an economic colony of another nation. We may be better off, though even that is debatable; but we will not be a free and independent country.

January 13, 1970
Canada Corporations Act
We in the New Democratic Party are prepared to offer the Canadian people independence as an alternative to the paralytic continentalism which is followed by the government.


John James Greene: Then why didn't you support Watkins? You had your chance, but you voted him out as leader.


Thomas Clement (Tommy) Douglas: The minister of Energy, Mines and Resources is, as usual, talking about something he knows nothing about. We did not vote Watkins out; he became an executive member of the New Democratic Party in Canada.


John James Greene: I did not see you supporting him.


Thomas Clement (Tommy) Douglas: The minister should read the resolution passed by the convention. If I had time I would read it to him, but briefly it stated that the New Democratic Party believed that Canada must assert its economic sovereignty if it is ever to build social democracy and preserve the political democracy of this country.
The choice that faces the Canadian people is whether we will begin now the long process of building economic and, incidentally, political independence, or be prepared to trade away our future for a mess of pottage. I hope before this debate concludes the responsible ministers of the government will be prepared to tell us what the government intends to do about foreign domination of Canada's economy, what action the government proposes to take on the Watkins report and what it is going to do about the increasing number of takeovers in Canada.


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


Some hon. Members:: Continue.
[DOT] (8:20 p.m.)


Mr. Deputy Speaker:: Is there unanimous consent for the hon. member to continue?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: I have only a few sentences left, Mr. Speaker. I hope the government will tell us what it considers to be the point of no return. How far can foreign ownership go without

our having reached the point where we cannot recover economic control? About two-thirds of our economy is now in foreign hands. When we reach 75 per cent or 80 per cent, do we then lose control of the Canadian economy? At what point does the government consider that danger signals will go up and action must be taken? In my opinion we have only a short time left. I think this decision will be made in this decade, in the 1970s. Unless we act, Canadians will have lost the power to make economic decisions regarding their future. If we make that decision, the time will have come to stop talking about "the true north, strong and free."


John James Greene: Mr. Speaker, would the hon. member permit a question? The hon. member did me the honour of quoting me in a context which actually was in reference to the sale of greater quantities of oil in the United States market than has up to now been the case. Does his party believe that Canada should not expand her United States market for crude oil because it is not in Canada's interest?


Thomas Clement (Tommy) Douglas: The minister knows perfectly well that we are not opposed to expanding our market for oil in the United States, but I might point out the minister also knows two other things: first, he knows that we are a net importer of oil, in spite of the fact that we have oil wells operating at only 35 per cent capacity. We are bringing into Canada more oil than we are shipping out. We have been trying to get information and the results of studies on whether it would be economic to ship western oil to eastern Canada rather than stopping the shipment of western Canadian oil at the Ottawa River. There is a great market for oil in Montreal and the Maritimes. We want to know, and we feel we have the right to know, the economics involved in this question. There is no reason why Canada should be a net importer of oil.
The second thing the minister knows is that when he talked to Mr. Hickel, he talked about getting more oil. Mr. Hickel said, "You want to sell oil, but there are a lot of other things we need. We need gas and we are interested in water and hydroelectric power. If you want to sell more oil, we are prepared to give you a rabbit for a horse." I am afraid that in that kind of trading the minister will come home pretty badly plucked.


John James Greene: For the purpose of clarity, Mr. Speaker-and I am sure my hon. friend wants the record to be clear-let me say that I am
January 13, 1970

pleased he is so clairvoyant and knows what went on between myself and Mr. Hickel in a closed room. For the purpose of making the record very clear, I take it that the hon. gentleman's party would not deem it a dimunition of that Canadian sovereignty about which he preaches so loudly if we sold a greater quantity of oil to the United States than we have in the past. Am I correct in that assumption?


Thomas Clement (Tommy) Douglas: Since I have been asked a question, perhaps I might answer it. I have no objection to selling more oil to the United States, and certainly I have no objection to our selling more oil to those parts of Canada from which western Canadian oil has been excluded. I do not want to sell oil if that is to be used as an excuse for giving away the vast resources which we have, resources which the United States have depleted there and now want to ransack here.


John James Greene: But oil is not one of those.


Mr. Deputy Speaker:: Order, please. I think 1 have been extremely lenient in allowing this exchange, which I might point out, retrospectively, is quite irrelevant to the matter now before the House.


Mr. Hyl Chappell (Peel South):: Mr. Speaker, just recently I was shocked to read in the newspaper that trustees for two bankrupt estates in Montreal had to apply to the Quebec Superior Court for injunctions to prevent the liquidators of the Bank of Western Canada transferring over $3 million of the bank's money to the bankrupts through a company in Nassau controlled by one of the bankrupts. The machinations by which this might have been accomplished are many and involved. The saving action, of course, must now be under the bankruptcy laws, but the near defeat of Canadian creditors to the extent of over $3 million of the Bank of Western Canada's money gives some indication of the need to tighten corporate control.
The purpose of the proposed amendments to the Canada Corporations Act is to give Canadian shareholders in closely-held companies, and all shareholders in widely-held public companies greater protection in that the company and those who control it, commonly referred to as management, are required to provide investing shareholders with much more information on which to base their decisions whether to invest in it or, if they have invested, whether to continue their support of existing management.
Canada Corporations Act
Under this new legislation those who have a substantial interest in the company either by way of shares, 10 per cent or more, or as officers of the company, known as insiders, must disclose all dealings with their own shares by filing with the Department of Consumer and Corporate Affairs what are called insider reports. Management must prepare and send to shareholders before the annual meeting detailed statements called information circulars, which presumably will have to show the benefit that any member of management may have received from the company or any subsidiary company, and describe the company's activities during the year and management's grounds for seeking re-election. These new sections also provide for some control on the solicitation of proxies, including the necessity to identify in the information circular those proposed for re-election or election as directors.
In 1967, Ontario introduced much the same protective provisions into the Ontario Corporations Act, most of which followed the New York State Act. This bill, while adopting a great deal of the Ontario legislation, has changed and enlarged some of the sections. Obviously the bill is hoped to be a Bill of Rights for investors. Certainly, some abuses will be prevented if potential manipulators know that shareholders are in a position to exercise a reasonable scrutiny of the company's affairs during the year and are informed of management's share ownership and dealings with the company prior to the annual meeting. The new provisions have certainly opened the door for scrutiny, but I suggest we should go further and turn on some lights so that shareholders may always see and understand what has gone on and the significance of it to them.
The drafters have avoided some unnecessary confusion by following much of the format of the Ontario act as to arbitrary time periods for compulsory filing and description of documents, for example, insider reports, information circulars and proxy solicitation. But although many of the sections are intended to have the same meaning, they are not identical in words. Surely, when there is uniformity of intention there should be greater uniformity of language. I suggest that the federal authorities consult their opposite numbers in Ontario to establish greater uniformity in terminology so that a shareholder who masters one set of rules will understand the other. This type of legislation, with its supporting regulations, is perhaps the most complicated and sophisticated of any Canadian

January 13, 1970
Canada Corporations Act law. If we are to protect the investors we must see that they, as well as management and those who enforce the legislation, understand it.
[DOT] (8:30 p.m.)
Because the legislation is new there could be uncertainty until legal decisions have supplied interpretations. If there was greater uniformity between the federal and Ontario acts, at least where the sections are intended to accomplish the same purpose the jurisprudence under one act would be of assistance in interpreting the other, and both could gain from the New York legal decisions.
This bill, as does the Ontario act, provides that insider reports must be filed and thus be available for examination by shareholders who have the knowledge and facilities to go to the registration office to extract the information. However, there will be many shareholders who do not know the information is available, or who perhaps would find it difficult and expensive to go to the proper office to obtain it. In fact, if every shareholder did so, the burden on the registration office would be intolerable. A provision should be added to the new sections which would provide that there must be attached to or included in the information circular a summary of the insider reports that have been filed so that all shareholders are brought up to date in respect of the insider trading before the annual meeting.
Although there is provision for disclosure of actual trading by insiders, the control should reach further and provide for similar disclosure in respect of options, shares pledged to brokers or other trustees, and any other indirect interest in shares by insiders either in the main company or in any subsidiary or related company. So, also, should insiders be precluded from dealing in shares for some days before any takeover bid becomes public knowledge. Penalties and a right of civil action should be provided for any breach of these provisions.
In the large companies of today management's right to solicit proxy votes is a powerful weapon. Abuses must be guarded against or the protection which we seek to give may be circumvented. The bill may appear to be a complete legislative triumph, but it should go further. We should take advantage of the recent review, by the Supreme Court of Ontario, of the Ontario sections in respect of solicitation and voting of proxies by management and prevent what was there disclosed to be an abuse, before it happens again.

In a case in which I was personally involved as counsel, Charlebois v. British International Finance, the company then had control of the Bank of Western Canada, management solicited proxies and at the same time implied by the information circular that management as a whole proposed to support the old board of directors. However, although management voted the proxies which it collected in favour of the old board, one or two powerful members of management voted their own shares for, and elected directors whom they caused to be nominated at the meeting without any prior notice. This was obviously a deception on those who had given their proxies to management. It was necessary for us, in that case, to go to the courts, and after a long and expensive hearing the court found that this was constructive fraud and granted an injunction prohibiting the new board taking office.
This loophole should be plugged. It would be better if the section were enlarged to provide that if management puts forward a list of directors, they must vote for those directors or the meeting is void. If an individual member of management wishes to oppose the board which the majority of management has agreed upon, and vote his shares for another, he should be required to so inform the shareholders.
The new sections provide that if insiders or certain others associated with the company should use their special knowledge of the company's affairs for their own trading gain, they are accountable to the company in legal action which may be taken by the department. I suggest this provision would have a greater restraining effect on those who would seek to gain improperly at the expense of others if in addition a group of shareholders could commence and conduct an action either in their own names or in the name of the company for the benefit of the company and thus indirectly for themselves.
Mr. Speaker, if this appeals to the minister, the cases referred to in Charlebois v. British International Finance (Canada) Limited, which was reported in 1967, outlined how it can be done.


Mr. Cliff Downey (Battle River):: Mr. Speaker, many of the opinions and concerns that have been voiced here this afternoon and evening regarding the corporations bill, C-4, I think have been of great concern to many of us through the years. Certainly, we must acknowledge that in many areas greater control of corporate entities is necessary and desira-
January 13, 1970

ble. We heard a great deal, particularly from the leader of the New Democratic Party, about foreign ownership and the bogey of the corporate entities. There was basis, in many respects, for many of his remarks, but I hope his attitude toward foreign ownership will set a precedent when it comes to dealing with matters like international unions and labour relations which are based outside this country.
The corporations, of course, typically have been great whipping-boys in this and other countries. There is not too much sympathy for the politician who defends these companies. But we owe them a great deal in connection with our standard of living. There are in this bill a few clauses which I feel are worthy of comment and which have not been covered very extensively this afternoon and evening. The bill, of course, is a mixture of the Ontario Corporations Act, the Securities Act of 1966, the Combines Investigation Act and the U.S. Securities and Exchange Act of 1934. It is rather a conglomeration of all these statutes. Therefore, some portions of the bill can be defended on the basis of precedents.
I notice in one area of the bill, however, a tendency to bypass the directors as representatives of the shareholders and the substitution of direct intervention by the shareholders in the affairs of the company. This could lead to problems. As I believe any Member of Parliament is well aware, any large constituency contains a number of eccentric or disgruntled people who will take advantage of any opportunity afforded them to inject themselves into the affairs of an institution of which they are members. Therefore, I believe in this area we should be very careful to see there is at least some financial obligation placed upon shareholders who would initiate an investigation, so that it is done in a manner which does not warrant concern. The hon. member for York East (Mr. Otto) this afternoon suggested that the arguments in respect of secrecy in corporate affairs were invalid because we can go to any phone book and find the names of various companies through which we can employ the financial espionage system.
[DOT] (8:40 p.m.)
I believe his remarks to be very true. But at least the person who is investigating or spying for the so-called financial espionage outfits has to pay for his investigation and the company is not liable for the costs of the investigative procedures. In the past few years investors have lost large sums of money
Canada Corporations Act through the action of directors and officers of certain companies. Some of the regulations in the legislation before us are aimed at correcting this. The companies which I might name as examples are Windfall, Atlantic Acceptance and Prudential Finance.
The cases involving these companies have attracted a great deal of public attention. However, when we examine the events closely we find that in the case of Windfall some of the amendments proposed in the bill before us would have prevented the situation that occurred. This would not necessarily be the case with regard to Atlantic Acceptance and Prudential Finance, because no matter what legislation we enact, the losses occasioned in many instances to the investors are due to their own greed and foolishness, and we cannot legislate against this.
We have heard about insider trading and selling short by insiders. I think that sometimes we make more of these things than is warranted. Selling short is sometimes made into a bogey procedure, while in fact it is a transaction which saves the person the trouble and expense of borrowing funds to exercise an option.
It really surprises me that when so much is said about policing corporations there is no mention of philanthropic organizations and some of our charitable organizations.
The other day a pamphlet was received in my office with regard to an investigation which was conducted, through the office of the Minister of Consumer and Corporate Affairs (Mr. Basford) into several charitable and philanthropic organizations in this country. Investigations were made as to the right of the average citizen to scrutinize some of the purposes of the officers of organizations which are purporting to conduct charitable appeals. The Department of Consumer and Corporate Affairs looked into this matter, as did the Department of National Revenue. They found that the present legislation contains some loopholes, although not much has been said about that.
We are informed that information regarding the officers of such organizations and their purposes, fund raising costs, actual expenditures for charitable purposes, etc. is confidential; it is restricted to both departments and is not open to the public. In some instances the sums involved are as high as those involved in large corporation activities. Further, we find that a non-profit organization need not have a federal charter in order to obtain a charitable registration number

January 13, 1970
Canada Corporations Act which enables it to receive tax deductible gifts.
If one were to find that a group is using a charitable registration number to cover up a racket, one cannot seek a review or a revocation of the registration number. If one feels that a non-profit charter has been denied or granted unjustly, recourse can be sought only in the courts. I cannot understand why something is not also being done in this area.
A great deal is being said about corporate entities, which are the basis of our standard of living, and it is surprising that more attention is not paid to the internal workings of charitable organizations which deal in hundreds of thousands of dollars and which sometimes use up 80 per cent or 90 per cent of the funds received to cover their so-called administrative costs.
I think that something should be said about the requirement to submit a list of the shareholders of these corporations. This may be well and good, but it would also assist in takeovers by other firms, resulting in the establishment of larger conglomerates and foreign takeovers. Now it is up to the company to decide whether they wish to disclose the names of their shareholders, but if they were forced to do so, a corporation planning the takeover of a company would be able to approach the shareholders individually and make deals with them. This may have some undesirable effects.
I think a parallel could be drawn between Bill C-4, the omnibus bill on the Criminal Code and the white paper on taxation, which we were asked to accept as a package. In all three cases, in order to sell the product some attractive points were incorporated in them. I am very concerned about the purported infallibility of the department that is to administer and conduct the investigations and would legitimize any such investigations, because we are saying that one group is godlike while another group, in this case the company, is perhaps under suspicion. I think a parallel could be drawn between this bill and the white paper. We would be remiss in our duty were we to avoid comparing the corporate control that is envisaged in the bill with the control that will be possible when the white paper on taxation is implemented, because the white paper proposes to take away from small business a marked degree of control. In fact, small business may very well disappear, at least to the extent that now we know it.
[DOT] (8:50 p.m.)
The white paper proposes no control of the large corporations, but almost complete government control over the smaller ones. If this bill were implemented it would be possible for the government to control the large corporations. It would in fact give the government almost complete control over the economy at the expense of the private sector. We would have shifted into the type of state where the government and the bureaucracy is all-powerful. Mr. Speaker, that is all I have to say on the matter at this time. I repeat that I share these concerns with a great many hon. members.


Mr. Rod Thomson (Ballleford-Kindersley):: Mr. Speaker, this afternoon when the hon. member for York East (Mr. Otto) was speaking I was quite entertained and interested when he spoke of the family compact in Toronto. The only time I can tell an interesting story is when I talk about my relatives. The hon. member spoke about the one thing that did not exclude them from the family compact-that was failure in the business sense. It makes me think of Bob Hope who, when he spoke of the time he was attending Harvard, said that the university was so exclusive that those who failed to graduate were bums of distinction.
I suggest to the Minister of Corporate and Consumer Affairs (Mr. Basford) that he listen to the member of his own party who has some knowledge of and interest in this area. I would also suggest that the bills the minister is introducing should contain a clause insisting on better management, as United States bills in this area have done, particularly in regard to corporations. If he wants people to invest in Canadian corporations, he should make sure there is no one waiting to take them for all they are worth. This has been the case in the past, when there has been no return or a poor return-even embezzlement in some cases-because of lack of control.
As a farmer, I agree that a corporation has some advantages, such as the availability of more adequate research funds, management skills, better sales techniques, and so on. These benefits have come with this modern age and will benefit us all. It is agreed that there should be more adequate representation of the Canadian people and the Canadian investor to make sure that corporations work to the advantage of all. It has been suggested that a corporation has no heart, no soul and

January 13, 1970



no national identity in the sense of its responsibility. This has been shown to be true except when a country insists that the corporations recognize its national law. The best illustration I can think of is foreign subsidiaries of American companies operating in Canada, Canadian subsidiaries if you will, which feel more responsive to United States law than to Canadian law. I strongly suggest to the Minister of Consumer and Corporate Affairs that he take a firm stand in this regard. As it is, when Big Daddy speaks, all these companies say "Yes, sir", "Yes, pa", and so on.
What is our responsibility in Canada? I would suggest to the Minister of Consumer and Corporate Affairs that he should stand up, have some gumption and make sure that Canadian law applies to Canadian companies, whether or not they are subsidiaries of foreign companies. It is time we insisted on recognition of Canadian rights in this respect. If the United States government tells an American parent corporation not to trade with Cuba, China or the moon, Canadian subsidiaries will obey this direction. I suggest this is not right. If we in Canada decide this is the situation, fine; but if we do not, these companies should obey our laws and face a fine or penalty of some kind.
I am quite concerned about the large percentage of Canadian trade with the United States. I am not suggesting trade with that country is necessarily a bad thing, but we lock ourselves in. When we look south of the border and see some of their problems in connection with race riots, one wonders if they may not have a civil war in parts of that country. I hope they do not, and I am not suggesting that they might, but it is a possibility. If they withdraw from the Viet Nam war, they may have a depression, and a depression in the United States in these circumstances means a depression in Canada.
I suggest that we encourage trade with other countries; that we try to enlarge our trade with countries like Japan, China and the European common market in order to attain a greater degree of independence. It behooves us to establish markets elsewhere, and we should set up our corporation law accordingly.
I should like to give an illustration of what might be done to encourage Canadian ownership. A Saskatchewan power corporation was established by borrowing money in the form
Canada Corporations Act of bonds, with interest at 5 per cent. A sinking fund was set aside to pay for the corporation over a period of 33 years. They applied the full amount of depreciation and still had several million dollars left to pour into the treasury of the Saskatchewan government. This is an indication of what could be done if we encouraged this type of set-up in Canada.
Foreign companies tend to take mining resources and do with them what they will, perhaps refining them elsewhere. The Ontario government has passed legislation calling for an indication of intent. In effect they say: You may mine here if you wish, but it must be refined here if it is mined here. The Minister of Consumer and Corporate Affairs should look very closely at the Ontario legislation. It is legislation that might be initiated all over Canada. If secondary industry were encouraged, this in turn would increase jobs and encourage the growth of capital investment here. In the long term it would benefit everybody. To the Minister of Consumer and Corporate Affairs I would say, "Go thou and do likewise."
Recently there has been talk about Arctic sovereignty. This is just so much hot air unless we place emphasis upon who owns the Arctic. If we are going to sell it all to foreign corporations-and sometimes they act as if they own it already-what does it really matter which flag flies there? They may be glad that the Mounties keep the peace there and that the Canadian icebreakers keep the sea open for the movement of American and other foreign ships. They have the glory; they have the return on their capital investment; they have the ownership of the oil-so what is left for us except to fly the flag and break the ice? When the minister is setting up changes in the Corporations Act, I suggest that he look closely at some of these matters which affect Canadian citizens.
[DOT] (9:00 p.m.)


Eldon Mattison Woolliams: Mr. Speaker, I wish to make a few brief remarks about this bill. I want to comment on what the leader of the New Democratic Party has said. I trust that our differences will basically be philosophical, because I have always had the highest respect for him. At this time when the NDP has been making inroads in Saskatchewan, not only in the farm areas but in the cities, the people of western Canada are worried about becoming a colonial outpost, not of the United States but of central Canada.

January 13, 1970
Canada Corporations Act
I think we are all getting a little tired of hearing certain Canadians say that United States investment in this country is the greatest evil that could possibly befall this nation. I ask the members of the New Democratic Party and those union leaders in this nation who support them, what would happen to our standard of living if someone pulled the plug out of the sink and allowed foreign investment to drain out of Canada? How much unemployment would be created here overnight?
We have made mistakes in the past in trying to control our corporations; we may have made mistakes that the United States avoided when it began developing its resources. But let us not worry about what happened in past years. Let us see, first, just how much United States capital is invested in Canadian industry. Again, in this context, I ask the leader of the NDP and his union supporters, how much unemployment would we have in this country if someone pulled the plug out of the sink and allowed United States foreign investment to drain away?
I wish to refer to a survey of United States investment in Canada, This is taken from the Globe and Mail and has been confirmed by the Toronto Star. When those two newspapers quote the same figures, one may place some reliance on them. I have also checked them in the Canada Year Book. What does the survey show? It shows that in 1967 there were $371 million invested in this country in mining and smelting. In 1968 there was invested in the petroleum industry $645 million in the manufacturing industry, $854 million and in other industries $259 million.
Altogether, there was invested in the mining, smelting, petroleum, manufacturing and other industries, $2,129 million. Apart from amounts invested in the manufacturing sector, there was invested in the chemical industry $166 million; in the machinery industry $132 million; in the transport equipment industry $201 million and in other manufacturing industries $356 million. In these industries alone there is invested a total amount of $2,295 million.
Let us look at these industries and at unions in Canada which are financed by unions operating across international boundaries. My remarks are not meant to be critical. We are all working together; our unions and businesses are economically interlocked. It seems to me that we can make the economy of this country function smoothly only when we work with the United States. I sympathize

in part with the position the Minister of Energy, Mines and Resources (Mr. Greene) has adopted toward the petroleum industry, but let us look realistically at that industry. If the United States were to pull the plug from the sink tomorrow with respect to export of crude petroleum from western Canada, the tragedy that would hit the urban centres of the west would be even greater than the tragedy that has hit our wheat farmers. I do not think we in the west can stand two major collapses at the same time.


An hon. Member:: What about Montreal?


Eldon Mattison Woolliams: I am aware of what is happening in Montreal and would be prepared to speak about that. The United States and Canada must work together harmoniously; that is the idea underlying our national oil policy. When the leader of the New Democratic Party was Premier of Saskatchewan he realized how necessary our national oil policy was and approved it. But let us not talk about controlling corporations, because they are operated on a global scale. These are big conglomerates and operate only partly in Canada. Canada has only about 20 million people. While we must make sure that the rights of our people are not usurped, at the same time we must realize that we need the investment of these corporations. We must all work together.
I am sure that the minister and the leader of the NDP will forgive me if I speak for a moment about the Conservative Party. When the hon. member for Prince Edward-Hastings (Mr. Hees) was the minister responsible, he met with the United States authorities and worked out a national oil policy under which we all understood that because of transportation factors, western Canada would supply the western states with crude petroleum and our market would extend as far west as the Ottawa Valley; Venezuelan oil, financed by the United States companies, would go to the eastern market. In 1961 we hoped we could consume approximately 800,000 barrels per day as a result of export and our own domestic market.
Our idea was that we should work with the United States in evolving these oil policies. If we took the position that we would act in these matters without considering the interests of the United States, between 15 per cent and 20 per cent of the Canadian labour force would become unemployed overnight. That is why we must take a concrete look at the
January 13, 1970

existing situation before we say that foreign corporations have invested too much money in this country. It is very easy to say, "Let's take over these foreign corporations."
Mr. Speaker, when I was in Mexico in 1964 I noticed that the government there had taken over the petroleum industry. Yes, they had socialism-and what happened? The standard of living in Mexico is so low that every time you step out of a hotel at night little boys run up to you begging for pesos. I have yet to see that happening in Canada. It is true that we have problems; but no matter whether we are governed by Liberal, Conservative or even NDP governments, we must as Canadians develop Canada. I think and speak as a Canadian Member of Parliament and that is why I say we depend on foreign investment and cannot develop our resources without it. Anyone who says we can is talking sheer nonsense.
You are being an economic hypocrite if you say Canadian productivity can be maintained without the kind of foreign investment we have enjoyed, because it is obvious that it cannot. I do not know on which side of the fence the leader of the NDP stood at the convention-and all parties in this House have conventions-but I know that it was not the Canadian managers of the international conglomerates who came down against accepting the Watkins report. It was the union leaders in Canada, people like those who support me now and did before. I am talking about the United Mineworkers of America. I could name names. These people realize full well how dependant we are on foreign capital.
[DOT] (9:10 p.m.)
Let us look at what the oil industry means to Canada. I would like to be able to say to the people of Alberta that they should receive 100 per cent of the Canadian trade, but everyone knows that the cost of production in Canada, per unit, is a little more expensive than it is in the United States. We cannot even build pipelines and be in a position to compete with the foreign crude oil coming into Montreal. We have to be practical. Even if it was my lot to be Prime Minister or a cabinet minister, I still could not go into the city of Montreal and say to the people there that as of tonight they will pay 20 cents a gallon more for gasoline because it is produced in the province of Alberta. Concrete economic facts must be taken into consideration.
Canada Corporations Act
Canada is an anomaly in the world with regard to oil. We can currently produce 200 per cent of its consumption. We can also produce far more than our consumption of grain. Yet we have a net trade deficit in oil of over $200 million per year. The need for a new oil policy is apparent. This need has been pressed by myself and other members of my party. I am sympathetic to the fact that we cannot go into the United States with a big club and say we are 20 million people and we are going to enter their market. The United States would ignore us because they have great developments in the north.
I say to the members of the New Democratic Party that the United States can afford to send a man to the moon. They can afford to find and produce oil inshore and offshore. They can afford to do this at far more expense than buying it from Canada, and they can tell us to go to hell. These are the cold economic facts of life that must be faced. It is time we paid attention to them.
I see young people waving signs which read, "Take away American capital", "Down with American companies". These same young people will be at my desk this summer asking me as their Member of Parliament to assist them to obtain a summer job. If we close the companies and take away the investment, these Canadian students will not get summer jobs as roughnecks drilling for oil in Alberta. These are some of the facts which we have to face.
Everyone loves to wave a flag. Politicians have been waving the national flag on platforms ever since Confederation. When someone talks to me about something made in Canada, or Canadian sovereignty, because I was born in Canada and my people have been here for three generations I feel proud and can naturally become emotional. There is a time when you have to start ignoring your heart and using your head, because if we do not use our heads many Canadians will be unemployed.
I have knowledge of economics and political science. In my opinion we are facing a very serious period in North America. If the war in Viet Nam came to an end-and I hope it will-there would be a cooling-off of productivity, not only in the United States but also in Canada. No matter which government is in office, we will be faced with serious unemployment. I have stated that I do not agree with the policies of the government.

January 13, 1970
Canada Corporations Act
I think they are aggravating the situation. The white paper has had a serious reflection on the stock market of Canada as well as on investment needed to develop our resources and keep a high degree of employment.
The government talks about socialism. I think it is a great ideal. If we can encourage investment and keep reasonable control over the investment that comes into Canada, in order to develop our resources and increase our productivity, then jobs will be available for Canadians. There will be less taxes for the home-owners and the wage earners. Canada has changed. It is not what it was during the forties, fifties and sixties. The union man today is in the middle-income bracket. Union men are earning between $12,000 and $15,000 a year. The white paper will not help them or develop this country.
There are two points I want to make. We need foreign investment. Politicians in Canada should be very careful when they talk about foreign investment at this time. We are spending on importing crude petroleum $200 million more than we receive from exports. I agree that if this $200 million were spent in Canada for Canadian crude oil, it would have a total effect on the Canadian economy, through secondary and other industries, of approximately $700 million annually. But we must have the capital to develop the resources, the petroleum, the mines and the manufacturing industry so that we can turn them into manufactured goods. Unless we do this, we cannot have the standard of living I would like to see.
We will never have prosperity in this country by taxing the people to death and driving out foreign investment. These are two things I oppose, and I would say so from a platform in my constituency. This is the second constituency I have had the privilege to represent in the House of Commons. I think I can talk to the average man. I say to the leader of the New Democratic Party that I can go to the miners in East Coulee, where the houses are boarded-up and there are only one or two mines left, and point out the importance of foreign investment.
When the Kaiser Company came into Canada we had combined Japanese and United States investment. The coal industry took on a new life. I repeat that only through the development of our resources can the productivity of the nation increase. When this happens, the taxes can be cut for the wage

earners, small businessmen and everyone else. Surely that makes economic sense.
We must take a serious look at the situation. It is possible to win elections on what the leader of the New Democratic Party has said. I could get a crowd together and talk like he does. I think he was a good Premier. I did not agree with some of the things he did in Saskatchewan, and I told him so. I cannot believe that with his knowledge of economics, business experience and running the government of the province of Saskatchewan he believes we can chase out foreign investment and still help the labourers and unions of this country develop their resources so that we can cut taxes.
I say to members opposite, beware of the white paper. I oppose it. Don't dish it up in a capsule and tell the little man that he is going to save on taxes through the small exemption he is being offered. As soon as a Canadian tries to get out of poverty row and is earning $4,000, his taxes will be increased by an additional 9 per cent. This is no time to be playing ducks and drakes with the economy by using something like the white paper.
I told the members of the New Democratic Party who come from the farm belt that they should read to the farmers what the Carter Commission said. They should tell the farmers that the white paper will cause the ranchers and farmers to pay a capital gains tax. Every day the NDP and Progressive Conservatives question the government with reference to the grain problem. The farmers are desperate. They are ready for a change, but they should realize and appreciate that the NDP endorse not only the white paper but the driving out of foreign investment, which would give this country a depression greater than that of 1929.
[DOT] (9:20 p.m.)
I have made my point and emphasized it two or three times. It is high time some people were told the facts. I would rather be defeated in my constituency in the next election than not have made this speech, because I believe it is time the people of Canada were told some of the economic facts. A healthy oil industry means jobs not only in Alberta but throughout the manufacturing sector of the Great Lakes golden triangle; it means jobs in the manufacturing industries, jobs in the mining and smelting industries. It is only through trade that prosperity comes. Without trade, Canada will fade.
January 13, 1970

What do hon. members on my left want to see? Do they wish us to enter a period in which there is no development? Do they want us to live on the productivity we have achieved to date, despite a growing population? We lost the grain market because the United States moved into the vacuum when the International Wheat Agreement was not signed. They dumped their wheat throughout the world at fire sale prices.
Propagandists tried to tell us the present situation arose because of a world surplus. Let them look at the facts in the Canada Year Book. I say to the government: If it is due to a world surplus, why was Canada the fifth of the exporting nations in 1969, when it was the first three years ago? Get us back into first place, and the board can allocate six and seven-bushel quotas tomorrow and get the grain trade moving again. I am a Conservative who believes in development. I do not believe in laissez faire. Of course, we need some control. But when we have to listen to the economic nonsense we have listened this afternoon, I say it is time somebody stood in his place and put the record straight.


Some hon. Members:: Hear, hear.


John Leroy Skoberg: Mr. Speaker, let me say first of all, on rising to take part in the discussion on this bill, that I have just heard a speech by the hon. member for Calgary North (Mr. Woolliams) the logic of which seems to be that if everything in Canada were owned by the United States, everything would be fine and dandy.


Eldon Mattison Woolliams: I rise on a question of privilege. I respect the intellect of the hon. member, but at no time did I make such a statement. Maybe he did not understand what I said. My contention was that foreign investment is necessary for the development of our country. I said that, and nothing more. Of course, I do not want any foreign country to take over here, but I do not want 15 or 20 per cent of our workers unemployed, as the hon. member is recommending.


John Leroy Skoberg: I am proud that I was able to get the hon. member on his feet to clarify the record. If I understand him correctly, his point is that everything is good in Canada because of United States investment here. In that case I wonder why political experts, political scientists, sociologists and many others are telling us we should learn a little lesson. I shall read from Myers' Finance Review, which comes from Switzerland. I do 21611-10J
Canada Corporations Act not know the origin or the background. It reads in part as follows:
Canada faces the most trying monetary and economic days in its history. Canada is strong with natural resources, relatively strong in gold despite some foolish policies of 30 years. Canada can survive to become, in the next two decades, the richest country in the world. It will depend upon how the Members of Parliament handle the up-coming situation.
If I understand the hon. member for Calgary North correctly, the method he would adopt to handle this situation in Canada, and perhaps in the Calgary oilfields, would be to turn over control to United States interests. The article continues:
Canada can be saved only by every MP studying this monetary situation as he studies nothing else, and using his voice not for political popularity but for the salvation of the country.
Whether members of this House are really concerned about saving this country is something every one of them will have to go to bed and dream about. They will have to consult their consciences. I know many men engaged in the oil industry in the Calgary area and elsewhere. Does the hon. member realize that when the pipeline was put in in Alberta, United States interests were disposed to use an entirely United States labour force-Canadians were excluded from the construction of oil pipe-lines mainly because, it was said, they were not experienced. It was only through the vigilance and determination of the organized workers in Alberta and elsewhere that Canadian workers were given their rightful place. I do not agree at all with the philosophy which the hon. member foi Calgary North has expounded tonight.
I am not an economist, but I am convinced that when the people of this country fill in the questionnaires which are sent them asking what they think about various Canadian issues, one of their greatest concerns relates to our national origin, our national identity, whether or not we are being taken over by foreign interests. It amazes me we should hear philosophies of the kind expressed tonight by the hon. member for Calgary North. What would become of us, he asks, if it were not for foreign capital? Surely hon. members are aware of the existence of the Canadian Development Corporation? Do hon. members not realize that the people of Canada are quite prepared to invest in this corporation if they have confidence in the government to use the resources of our country to the best advantage. The idea that

January 13, 1970
Canada Corporations Act foreign capital is necessary to protect employment in Canada is a myth, and the hon. member for Calgary North is well aware of it.


Eldon Mattison Woolliams: I am not aware of it. You
are saying all this.


John Leroy Skoberg: The hon. member was entirely taken up with his picture of the United States, with its huge size, telling we poor 20 million people to go to hell if we do not adhere to their ideas of what we should do. I wonder whether he would be concerned if the Liberal government were to introduce regulations requiring all foreign corporations in Canada to return a fair share of their profits to the Canadian economy. I wonder whether he would say: We must not do that because the United States and other people much bigger than us will tell us to go to hell.
The philosophy embodied in his speech tonight amounts to saying to these corporations: You do not have to be good Canadians or good corporate citizens; just come in and take our resources, rape us, then go away gently because we shall not say a word. It amazes me that an hon. member should stand up and suggest Canada does not have the ability and the integrity to get along on its own but must depend almost entirely on foreign capital.
I have heard many statements on the subject of whether labour is getting more than its fair share, more than it is entitled to. I am sure the remarks the hon. member has made will indicate where he stands on many of the issues facing the Canadian worker today. Is he really concerned about employment in Canada?
To deal directly with the measure before us, Bill C-4, I suggest to the government that if it was really concerned about taking constructive action at this time, it would have added a few words to the title of the bill to make it read, "An Act to amend the Canada Corporations Act and other statutory provisions related to the subject matter of certain of those amendments and to provide for the supervision of foreign ownership and control of the Canadian economy." This is what the government should do if it is really concerned about the Canadian economy, instead of trying to lay the blame for present difficulties on areas which are not really responsible for the situation in which we now find ourselves.

[DOT] (9:30 p.m.)
For example, the government itself has suggested that labour is not prepared to discuss voluntary restraints. I suggest that if the government started at the top of the ladder and brought an end to increased prices of all commodities in Canada, labour would collectively sit down at the table and discuss the imposition of voluntary restraints.
While we are talking about imposing voluntary restraints at this time, we are telling those on very low incomes that although prices are going up their wages cannot be increased correspondingly, and they are not to rock the boat. I shall be very interested to see how successful the government is in its talks with the business community. I hope the talks will be successful. I hope they will be so successful that business in general will roll back prices, removing any justification for pay increases.
When the minister introduced this bill on November 10 I am sure many of us agreed with some of his comments. As reported at page 703 of Hansard, he stated that the maintenance and strengthening of investors' confidence and investors' protection is of real concern to the government. The New Democrats have never at any time said that people are not entitled to a fair return on then-investment. We have said that we must determine what constitutes a fair return on an investment. We say that people who invest money in this country are entitled to know how their money is being used. I unhesitatingly congratulate the minister for introducing Bill C-4, though many large corporations in this country have criticized the action he is taking, as set out in the terms of the bill.
One matter that causes me concern is that legislation passed by this Parliament means absolutely nothing unless regulations made pursuant thereto are enforced. Not long ago, namely on December 2, 1968, I filed a question, No. 932, which asked, among other things:
How many corporation have not filed returns under the Corporations and Labour Unions Returns Act?
It was answered as follows:
The number of corporations not filing returns under the Corporations and Labour Unions Returns Act is not available.
I asked another question:
What is the total number of corporations for which returns must be filed?
January 13. 1970

According to the answer, 2,990 firms failed to file returns in 1967 under the particular section of the act. I suggest that if we are not more vigilant in enforcing the requirement of Bill C-4 that returns be filed, this Parliament is wasting its time. Bills that pass this House mean very little unless the government has the fortitude to enforce their terms. I hope the minister in charge of this department will see that corporations do file returns in accordance with this bill.
The Toronto Daily Star of March 27, 1969, carried an article headed, "733 Companies Ignore Ottawa". The article said:
Hundreds of Canadian companies have failed to file annual reports to the government as required by law but the government imposes no penalties on defaulters, Auditor-General Maxwell Henderson says in his annual report.
Companies are required to report annually under two provisions of the Canada Corporations Act- first a copy of its financial statement and also a report about the company and its directors.
As of March 31, 1968, there were 733 companies in default of filing a financial statement, including 257 which had never filed since their incorporation. In some cases, defaulting has persisted for 50 years.
I hope the minister will take a close look at the whole question of filing returns under the legislation; otherwise, as I say, we are wasting out our time passing it.
The previous speaker seemed to be particularly concerned about where the New Democrats stand on this issue. I can think of no better piece of literature to read into Hansard than an article that was written in December, 1969, by Wilf Hudson. This was following the NDP convention, which the previous speaker suggested resulted in a split between the two factions, which is, of course, quite inaccurate. Mr. Hudson writes:
There was general agreement that in order for Canada to control her own destiny she must have economic control and in order to do this we must reverse the trend of foreign contr.ol. Presently our economy is determined mainly by the major investment decisions taken by large corporations.
May I digress to say we are all aware that many economists have prophesied that what happens economically in the United States will happen in Canada, too. I am sure in many cases this has been true. Mr. Hudson continues:
This has meant to a large extent, an inefficient branch plant manufacturing industry and natural resources largely serving the U.S. market, consequently a great deal of the investment and development decisions have little reflection on the priorities and needs of Canadians.
Canada Corporations Act
-Canadian independence and Canada's survival as a free nation have been and are the determined goals of the New Democratic Party.
I subscribe to that 100 per cent.
Old party spokesmen are fond of decrying concern for Canadian independence as anti-American. Nothing shows more clearly how little they understand the feelings of Canadians. Anti-Americanism is as barren and negative a concept as is antiFrench or anti-English or anti any other country or people. Canadians have always known this.
What New Democrats seek is to make and keep Canada free to realize her full potential and greatness.
As we all know, Mr. Speaker, Canada has large resources. Recently we obtained a large export order for the shipment of coal to Japan. How much better would it be to have industry on the west coast of British Columbia make use of our resources, instead of sending them out of the country to be manufactured in other countries and re-importing those products. This would be a great boost for employment in British Columbia, rather than providing employment in Japan.
Finally, Mr. Hudson said:
-New Democrats will use all the means available in a modern economy: expansion of public investment and public ownership, government planning, investment controls, a just tax system, purposeful monetary policies freed from the restraints of a fixed exchange rate, and necessary laws to limit and regulate foreign investment and subsidiaries in Canada.
May I repeat the stand of this party. If foreign corporations invest money in Canada, they should be controlled by regulations, as are Canadian corporations, to ensure this investment accrues to the betterment of all Canadians instead of to only a few individuals.
Before the supper adjournment one member on the other side of the House put on the record what he considered to be the meaning of the word "corporation". I should like to refer to the definition of that word in the Dictionary of Sociology and Related Sciences, which I think gives its true meaning:
[DOT] (9:40 p.m.)
A socio-economic organization composed of individuals and born of legal sanction for the purpose of manipulating property rights and other interests to the benefit of those who compose it.
It does not say, to the benefit of the people of Canada or to any other country. The definition continues:
If the function is primarily to create and distribute profits to a relatively limited membership it is a private corporation. On the other extreme if the dominant purpose relates to politically organized general welfare it is a public corporation.

January 13, 1970
Canada Corporations Act
Virtually all corporations in some degree partake of both functions.
There is little doubt that the most successful method to date of aggregating capital is the private or business corporation. But it is more than a mere method of holding property. The modern business corporation has become the prevailing method of organizing economic effort.
I suggest that the main reason for some of our problems is that the modern business corporation is an organized, economic effort for the benefit of the corporation and not for the benefit of pensioners, farmers and those people who have to purchase the produce that corporations provide at prices much above their cost. The definition continues as follows:
With all of its advantages over simpler organizations in increasing production many new social changes have occurred. The tremendous growth In size is one consideration. The assets of a few business corporations even exceed the assessed valuation of some states of the U.S. This concentration and control of capital has restricted the area of competition as it existed in the earlier stages of a free-pricing economy. A further factor is the growth of two classes: a managerial class to replace the old type of entrepreneur and an absentee-ownership class. Control is thus separated from ownership.
The old-time, private entrepreneur that we knew in the past is practically non-existent. Many people who tried to become private entrepreneurs in their communities failed because the corporate structure took over completely. I am sure these people are not the ones who are really concerned about the white paper. They are the people who really made the communities in bygone days. Now our whole community, our way of life and the social atmosphere in this society are impaired to the extent that the absentee owners make the decisions in Canada, and they are not really concerned about our economy. I am sure that with the passage of Bill C-4, this situation will not be changed. Hopefully, the reporting required will mean something to the people of Canada.
Let me refer to an article that appeared in the Toronto Star on November 11, 1969. It states:
A nationalism sigh of relief went up from many Canadians last spring when Rothmans of Pall Mall Canada beat U.S.-owned Philip Morris, another tobacco giant, for control of Canadian Breweries Ltd.
It was a good-guys-over-the-bad-guys feeling- a "hurrah for our side" cry. Canada had rallied and driven off the foreign invaders, many seemed to feel. They were dead wrong.
It was merely the victory of a South African based company over an America one. And it was symptomatic of a new trend in foreign ownership of Canada-a rise in the non-American share of our foreign-owned industries.
[Mr. Skoberg.l
To make the record very clear, once again let me say that this party has never deliberately campaigned to belittle our neighbours to the south. We have had to look to our neighbours to the south because of their tremendous input into our corporations and into the over-all control of our economy. We are now in a position where other countries are outdoing our neighbours to the south, and the same regulations must apply to them. I hope that any thought in anyone's mind that we are criticizing the United States will not persist. We want to know the source of this investment.
Let me quote from the bottom of page 705 of Hansard for November 10, 1969. The minister said:
Some people say that the government has the information it needs in its files, especially in the files of the Department of National Revenue, in the files of Calura and the Dominion Bureau of Statistics; that if it does not have the required information the government has the means of getting it. The claim is made, however, that there is no need to make public the information relative to the affairs of private companies; that to do so would amount to an unwarranted invasion of privacy.
I agree with the following sentence of the minister:
Those who speak that language surely do not appreciate all the implications of their position. I can hardly believe that in this day and age they want the government of the land to stand beyond the reach of the criticism of the citizens; that they want to allow the government of the land to take decisions that affect us all on the basis of information not available to the public. The public, even the otherwise well-informed public, the analysts, the academics and commentators, cannot appreciate, discuss or criticize policy as effectively as possible because of lack of access to the same information as is available to the policymakers or to the government.
If this government and the minister are sincere in respect of that statement, I hope the minister will stand in his place and provide answers or the information requested in many Notices of Motions for the Production of Papers. These motions really ask for the information which the minister recommends should be provided. He suggests the information will be made available as a result of this bill.
It has been suggested that the provisions of this measure will make this information public, through the press, and that in this way people requiring the information will obtain it. I have in mind the small investors who now receive no information. When the time comes, I feel that the minister will not be quick to jump to his feet to provide the
January 13, 1970

information to those people who want it. Before this debate is concluded I hope the minister will indicate that he agrees wholeheartedly that everything should be made public in order that everyone concerned may know what is going on.
Earlier I referred to the questionnaire that was sent out, in all sincerity, by many members. The answers contained in the majority of the 23,000 questionnaires sent out indicated a prime concern in respect of the control of our economy by foreign investors. When this bill goes to the committee I hope the minister will extend its term, in order that there may be real supervision of foreign investment. I am sure the Canadian people believe in Canada as a whole for Canadians. That is the position many people take in respect of this situation.
The primary method this government has of giving out information is undoubtedly through the Information Canada Service about which we have heard so much. I am wondering whether the minister's department will take advantage of this method in order to give the public the information required, or whether the public will have to pay for the information. Surely somewhere along the line this service should be made available to investors. This is one way in which we can make the general public more aware of what is taking place.
Some time ago the minister said there would be one change in the House regarding bills presented to us. At page 710 of Hansard for November 10 he referred to the method now used to handle the Canada Corporation Act and amendments, and said:
[DOT] (9:50 p.m.)
The pressure of other business does not always permit the setting aside of sufficient parliamentary time to consider and dispose of requests for special acts to incorporate new companies or amend the original incorporating statutes. As a result, great inconvenience can at times be caused to the companies involved because of the uncertainty of the procedure and lengthy delays which are sometimes involved. We therefore propose an alternative procedure to the special act machinery.
It has been said many times in the House that members of this party have held up bills deliberately, without any justification. I should like to put on the record a letter one of our special assistants wrote to the editor and publisher of the Financial Post, dated April 21, 1969. It reads as follows:
Members of the NDP Caucus have been disturbed by your front page editorial-"Where a fix is badly needed"-March 1, 1969.
Canada Corporations Act
The New Democrats participating in the debate during private bills hour, are pursuing motives other than simple 'harrassment' as you have stated.
I draw your attention to a release dated February 22, 1969. Messrs. Peters, Howard, Gilbert, Schreyer, Harding, and Saltsman point out:
In addition to opposing further U.S. encroachment into the insurance business in Canada, the NDP members object to the proliferation of insurance companies-there are already more than 1,000 of them in this country-and to the subsequent diversion of more and more savings capital into private investment rather than into the financing of social needs."
In fact, Mr. Speaker, my colleague the hon. member for Broadview (Mr. Gilbert) referred to the deep penetration of foreign ownership in Canada and suggested that the government halt the incorporation of U.S.-owned insurance companies until it had made a full examination of this takeover problem.
When the representatives of corporations appeared before a committee of this House and gave an indication that in time the majority of their shares would be owned in Canada, there was no hesitation on the part of members of our party to let the bills go through, because it meant these companies would be Canadian-owned in time and that the policy would be made in Canada by Canadians and hopefully we would have more control over our economy.
It has never been proved that the more than 1,000 insurance companies have reduced their premiums. It has always been said that supply and demand will dictate the cost to the user, but today in any industry it would seem that the more companies there are, the more the price increases. If insurance companies were really competitive, one would wonder why premiums would not be reduced. As I have said, no one has seen this happen and I am certain no one ever will in so far as these companies are concerned.
I am sure that if the regulations the minister intends to establish in respect of Bill C-4 are adhered to, the bill will be of some assistance. But I am doubtful about this because the government has so far not seen fit to enforce other acts. However, if all this bill does is set up another bureaucracy, involving duplication of services to the detriment of the people, I cannot see any purpose in it. If this bill means that the government is concerned about making sure that it will be a law of the land and will be enforced, I will vote for the bill when it returns from the committee, provided certain amendments are made.
I hope this measure is not merely windowdressing once again and an exercise in going
January 13, 1970
2348	COMMONS
External Affairs and National Defence to the people and saying, "We are protecting you, Mr. Small Investor". If it is, then it is merely an exercise in futility and a waste of the taxpayers' money. It would be merely a case of trying to tell the people of Canada that we are really not concerned about them, and that this legislation is window-dressing only. I wish the minister well in bringing forward this bill and hope he will live up to the proposals contained in it.


John Gilbert: Mr. Speaker, during the debate on the drug bill, in a friendly way I called the Minister of Consumer and Corporate Affairs (Mr. Basford) the shadow-boxing champion of Canada. He has fairly well lived up to that title. When I look at Bill C-4 I am convinced that he should retain that title. I could also say he is the tinpot dictator of big business in Canada. He makes a great deal of noise and gets very little action from big business. Nevertheless, he beats his chest and tells them he will put them in their place, and so on.
When I heard the hon. member for Calgary North (Mr. Woolliams) speak tonight I was prompted to suggest that he cross the floor and join the great right wing of the Liberal Party, because on most occasions he really out-rightwings the right-wingers of that party. When I heard him say he would rather be a colony of the United States than a colony of central Canada, I felt it indicated his lack of concern for Canadians.


Gordon Harvey Aiken: Mr. Speaker, on a point of order, I should like to point out that the hon. member for Calgary North (Mr. Woolliams) was here to defend himself when a previous member misinterpreted him. I think the present comment is quite wrong and misquotes what the hon. member said.


John Gilbert: Mr. Speaker, I will have an opportunity tomorrow afternoon to continue my remarks. I hope the hon. member for Calgary North will be here, because I never wish to misquote him. Therefore, may I call it ten o'clock?



ROUTINE PROCEEDINGS


Mr. Laniel:: Mr. Speaker, I rise on a point of order-

Mr. Speaker, I would like to ask unanimous consent of the House to revert to Routine Proceedings in order to table the first report of the Committee on External Affairs and National Defence on the matter placed before it, i.e. the question of Nigeria. Should unanimous consent be given, I also intend to recommend that the report be concurred in.


Mr. Deputy Speaker:: It might be redundant to point out that it was not necessary for the hon. member to rise on a point of order. I believe he could have risen at ten o'clock when the hon. member would have resumed his seat. However, I believe there is no objection to our proceeding this way. Is there unanimous consent to allow the hon. member to present the report?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Is there unanimous consent for the hon. member to move concurrence in the report?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, perhaps the hon. member should be given permission to read the report before it is concurred in.


Mr. Deputy Speaker:: I would point out that when concurrence is sought at the time the report is presented, the practice of the House is that the Clerk read the report.


Mr. Bell:: You would think the House leader would know the rules by this time.


Gérald Laniel: Mr. Speaker, I take pleasure in tabling the first report of the Committee on External Affairs and National Defence and recommending that it be concurred in.

The Second Clerk Assistant:
Pursuant to its order of reference dated Monday, January 12, 1970, your Committee has the honour to present its first report.
[DOT] (10:00 p.m.)
Recognizing the natural wish of the Federal Nigerian Government to come to the aid of its own countrymen, but also having regard to the disparate emergency food and medical supply situation which the committee understands exists in parts of Nigeria, your committee urges the Canadian government to continue and strengthen its
January 13, 1970

representations to the government of Nigeria to approve and arrange for the utilization of the facilities offered by Joint Church Aid and Canai-relief for the immediate delivery and distribution of the supplies available to these agencies, under the supervision of any agency or authority appointed or approved by the government of Nigeria, in the hope that such delivery may commence within the next 24 hours and continue for whatever interim period may be considered necessary by the Federal Nigerian Government.


Mr. Deputy Speaker:: Is it the pleasure of the House to concur in the report?


Some hon. Members:: Agreed.


[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
Heath Nelson Macquarrie: Mr. Speaker, I asked my question nearly two months ago. Having followed it through with some research I am convinced that it is even more important than it was at the time it was first asked. I have been reading some documents from the Commission on Bilingualism and Biculturalism, and my appraisal is further reinforced. Language is tremendously important in Canada today, both symbolically and realistically. Administrative efficiency is, of course, tremendously important in our times when the apparatus of the state is so powerful and its influence so pervasive.
I have always been an advocate of bilingualism in the government structure, but how we bilingualize institutions and departments of the government through the bilingualizing of individuals is a ques ion of great importance and great delicacy. Certainly government institutions should and must be bilingual, but what of the process whereby the individuals go through what we may describe as the bilingualizing course?
It is a great and valuable asset to know two languages, but it is very difficult for many people. Indeed, one of our finest neurologists pointed out that it was almost impossible for anyone past the age of puberty to become thoroughly and fully proficient in a language other than the original one. The process of bilingual training is very hard on many people who are doing hard and important
Proceedings on Adjournment Motion work in the service of the country. Perhaps it would be well to appraise the expenditure of time and effort and the laborious, difficult and often times, alas, unsuccessful immersion courses which many of our public servants are now taking. The sad part is that many who are immersed do not stay immersed, and this may well have deleterious effects upon their work output.
I will not dwell upon the emotional aspect of this question, the kind of thing which is stirred by the remark of the Prime Minister (Mr. Trudeau) about the running of elevators by unilingual people. But these things are involved. Nor will I dilate upon the great cost. I note a recent item which indicates that last year we spent $5,770,000 to give training to
5,000	employees of the government. So there is indeed a great cost involved. I was therefore delighted when I read the speech of that most excellent public servant, Mr. Gotlieb, Deputy Minister of the Department of Communications last fall when he spoke about the possibility of language computers which, in his words-
-can translate French to English and English to French. And the equipment has no inhibitions about who uses it.
We may soon reach the stage where telephones and television can be equipped with small, inexpensive translation computers that can instantly translate either of our official languages into the other.
I have read that one of the officials of the Department of the Secretary of State said that this happy state of affairs may be ten years away. But I wonder how far we are away from full, not to say perfect, thoroughgoing bilingualism. So the ten-year period does not upset me at all. It was once said by a great French philosopher that to govern is to foresee. I am sometimes dubious about the ability to foresee of the present government. But surely in an age where technology is so advanced and the acceleration of scientific development is still increasing, we must and should be alert to every opportunity to make the best use of modern technology for the best of national purposes.
I think that the rapid development of computerization in this field is something to which the government should give full attention as quickly as possible. I understand from financial institutions in the United States that great steps are being taken in this area.
I do not propose that we should expect miracles in a political institution, but perhaps this might be as close to a miracle solution of
January 13, 1970

Proceedings on Adjournment Motion an important matter as we are likely to reach. We all want full-fledged, functional bilingualism in this country. Institutions must and should be bilingual, and it must be achieved without pain to individuals and without developing a state where linguistic qualifications transcend all others. I believe the leading scientist in the government is going to reply to this question, and I would ask that urgent attention be given to this very important, potential breakthrough.


Charles Mills (Bud) Drury: Mr. Speaker, the honourable and learned gentleman has raised questions on what he describes as the "foreseeability" of the present government. This, perhaps, is indicative of the problem which he has set the computers. I would defy him, and a number of other well-known forensic experts, to translate that expression in the exact sense he intended, that is, the question of the "foreseeability" of the present government.
I think this illustrates the nature of the problem. Language, French or perhaps even more particularly English, is capable of tremendous nuances, tremendous shades of meaning, part of which is conveyed by phonetics and inflections of speech, and part of which is conveyed by different pronunciations of different words spelled in the same way.


An hon. Member:: And by shrugs.


Charles Mills (Bud) Drury: Part of the meaning is conveyed in the order in which the same words are used. As yet we have not found a computer, even the largest, capable of programming, comprehending and producing all these shades and nuances which the human brain- perhaps the world's greatest computer-has been able to achieve in a number of instances.
For some time now the National Research Council has been supporting research work at the universities of Saskatchewan and Montreal, designed to produce a reasonable and practicable system of machine-translation from English into French. The hon. gentleman is probably well aware that considerable additional work is being done in this field, particularly in the United States, in languages rather less mundane than English and French-some of the eastern European languages and some Asiatic languages-but to date no one has achieved more than a rudimentary system of translation. This, of course, has to be extensively edited by a human computer or a person trained in translation.
[Mr. Macquarrie.l
I think it is rather more likely that we will reach a level of bilingualism in primary, secondary and higher education in this country which will be more widely effective and more usable than the kind of machine program indicated here. We can now and in the reasonable future will be able to do primitive work, if nothing sophisticated.


Mr. Deputy Speaker:: Order, please.


Mr. P. M. Mahoney (Calgary South):: Mr. Speaker, this participation in the adjournment debate arises out of my dissatisfaction with an answer given me by the Secretary of State (Mr. Pelletier) as reported at page 92 of the English edition of Hansard of December 17. The question was a follow-up of questioning by myself and other members, on December 4, reported at pages 1587 and 1588 of Hansard, concerning the ruling announced on December 3 by the Canadian Radio-Television Commission denying the use of microwave or other technical systems for the importation of television programs from United States stations to Canadian markets.
[DOT] (10:10 p.m.)
Effectively, the ruling denies access to United States television for Canadians living too far from the United States border to receive the signal off the air, either directly or via community antenna television systems. This does not affect Vancouver, Winnipeg, Toronto, Ottawa or Montreal. It does deny United States television to Calgary, Edmonton, Regina, Saskatoon, Sudbury, Halifax and St. John's. No Canadian will dispute that the Canadian broadcasting system envisaged by the Broadcasting Act is essential to our national identity. Most will dispute that geographic discrimination has a valid place in the development of that policy.
The CRTC expressed concern about enlarging United States advertising markets in Canada. That consideration is purely fatuous. The CRTC is, or should be, well aware that it is entirely within the competence of today's technology to delay the signal and edit out the bulk of the commercial content. The advertising aspects of this competition can be readily resolved. The sanctity of the idea that cablevision must transmit the signal, the whole signal, and nothing but the signal, was destroyed on June 25, 1968, when cablevision companies were required to delete the eastern
January 13, 1970

election results from United States signals distributed in Vancouver while the polls were still open there.
In reaching its decision, the CRTC determined, "The fact that through force of circumstances many U.S. stations now cover other parts of Canada ... does not justify a decision... which would further accelerate this process." The corollary of this position is: the fact that through force of circumstances many parts of Canada are not now covered by U.S. stations justifies a decision which would perpetuate this situation.
It is with considerable trepidation that an ordinary Canadian enters into the never-never world of the professional Canadian. But I am compelled to ask, does the CRTC really feel that it is serving the national interest by creating yet another division in an already overly-divided Canada: those who should be permitted access to U.S. stations because a fact of geography prevents the CRTC from denying such access, and those who shall be denied access to U.S. stations because a fact of geography permits the CRTC to deny such access? While the question of which are the first class citizens and which the second may be open to dispute by the professional Canadians, there is no doubt in so far as those who have been denied a right on purely geographic grounds are concerned.
Section 2(b) of the Broadcasting Act reads as follows:
-the Canadian broadcasting system should be effectively owned and controlled by Canadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada;
It is in the execution of its mandate to achieve and maintain this basic purpose-and let it be emphasized that while "safeguard" embraces the concept of maintenance, "enrich and strengthen" embrace the concept of achievement-that the CRTC must justify its decision.
If, in the process of safeguarding the cultural, political, social and economic fabric of Canada, the CRTC is right in refusing a licence permitting "the enlargement of the Canadian audience and market areas of U.S. networks or stations" then surely, in the process of enriching and strengthening the same fabric, its obligation is to reduce the same audience and market areas where it can. This will involve the simple policy of not renewing existing CATV licences as they expire, except on condition that the applicants not distribute U.S. programs. Let us not only prevent the extension of this rupture in our cultural,
Proceedings on Adjournment Motion political, social and economic fabric; let us also mend it where we can. Let us not only preserve the fabric where it remains intact; let us patch it where it has been torn. Let us not only safeguard the pure; let us enrich and strengthen those already corrupted.
When the Secretary of State first answered questions on this subject on December 4, I felt his instincts were right. He indicated that the decision "could very well justify a statement on motions" and, again, that the CRTC's autonomy did not prevent the government giving it guidelines. This instinctive reaction was the right reaction. It was, therefore, particularly disappointing to find, on December 17, that the minister had got his instincts well under control and was relying on the letter of the law. The commission is independent, and cannot be instructed by the government.
This ruling has profound political implications. It is the government, not the CRTC, that will be held politically accountable for the decision. Surely, with the adventures of another independent body, the Company of Young Canadians, rather fresh in its memory, the government recognizes that reality.
We were pretty happy with the work of the CYC in Calgary. That opinion was not shared in Montreal, and for very good reason. As far as I know, Montreal is reasonably happy with the CRTC. That opinion is not shared in Calgary, and for very good reason. Nor is it shared in Edmonton, Regina, Saskatoon, Sudbury, Halifax and St. John's for the same good reason.
We are all awaiting with interest to see if the government will react with the same vigour to the politically unacceptable conduct of the independent commission as it did to that of the independent company, or whether it has certain geographic priorities of its own.


Hon. Robert Stanbury (Minister without Portfolio):: Mr. Speaker, as the hon. member has observed, the Canadian Radio-Television Commission is an independent body established under the Broadcasting Act to supervise and ensure the development of the Canadian broadcasting system, free of partisan political control. If that act should be amended, the Secretary of State (Mr. Pelletier) would welcome the suggestions of hon. members. However, the Broadcasting Act, section 23, allows the Governor in Council to set aside or refer back to the commission for reconsideration its decision to issue, amend or renew a broadcasting licence, but there is no such authority in the case of a rejection of an
January 13, 1970

Proceedings on Adjournment Motion application, nor was any such authority suggested by the Secretary of State on December 4.
Because of the concern expressed by the hon. member for Calgary South (Mr. Mahoney) and others, the House has already referred the annual report of the commission to the Standing Committee on Broadcasting, Films and Assistance to the Arts to give members an early opportunity to explore this decision of the commission.
I understand that arrangements have been made for the chairman of the commission to appear before the committee this Thursday. There should then be a full opportunity to question him and to consider the matter fully. I hope all interested members will take this opportunity to study the question as carefully as it deserves and give the commission the benefit of their views.


David Orlikow: Mr. Speaker, on November 27 I asked the Minister of Consumer and Corporate Affairs (Mr. Basford) whether the anti-combines division of his department would investigate the simultaneous increases in the price of nickel announced within two days by three of the major nickel producers of this country.
My question was motivated by the very sharp increase in the price of metals produced and sold in Canada and the disastrous effect these increases will have on the government's plea to all sectors of the Canadian economy that they exercise moderation and restraint so that the galloping increase in the cost of living might be moderate.
The Financial Times of January 5, 1970, reported that the price of lead in 1969 increased by 27 per cent; the price of nickel increased 24 per cent; zinc, 15 per cent; tin, 12 per cent; aluminum, 7 per cent and copper, about which we had some considerable discussion this afternoon, increased by 26 per cent. This does not include the latest increase which was announced and which the government persuaded the companies to put off for two months. This will increase the price of copper by 45 per cent in one year.
[DOT] (10:20 p.m.)
What happened? On October 25 the International Nickel Company of Canada announced that nickel prices were being increased by a record 24.8 per cent. Inco's
fMr. Stanbury.]
new price for electrolytic refined metal was $1.28 (U.S.) per pound, up $1.03 (U.S.) per pound. Sherritt Gordon, another of the major producers, matched Inco's 25 cents a pound increase for nickel sold in the United States and overseas but raised its Canadian price by 23 cents a pound. The next day the third large producer, Falconbridge, completed the round of nickel price increases when it raised the base price of electrolytic nickel by 25 cents (U.S.) to $1.27 (U.S.) a pound f.o.b. Thorold.
The district organization of the United Steelworkers, the union which represents all the workers employed in the mining and processing of nickel, called on the Prices and Incomes Commission to hold a public hearing, offering to demonstrate on the basis of the research done by the union's research department that the companies' profits were so substantial there was no need to increase prices as they had done.
Industries affected were quick to announce that the sharp increases would inevitably and almost immediately lead to increases in their prices. Mr. Togham, President of Chrysler Canada Limited said-and this is reported in the Globe and Mail of October 26-that the 25 cent price increase in the metal was bound to increase the price of cars. Similarly, Mr. O.S. Leslie, President of Atlas Steels Limited, probably the biggest domestic user of nickel, said the new price increase was certain to have an effect on the cost and price of stainless steel.
I want to put on record the financial position of the companies concerned. One can find these figures in the Financial Post. The net income of International Nickel in 1967 was $141 million. In 1968 it showed a modest increase to $143 million, but the total assets had grown from $115 million to $396 million; in other words, by about $275 million in one year. This is a pretty substantial increase and one which does not indicate any need on the part of this company to increase its price by 24 per cent at one time.
Sherritt Gordon's net profit in 1966 amounted to $3,760,000. In the next year it had increased to $5,392,000, and I am sure 1968 showed a further increase. The net income of the Falconbridge Corporation dropped a little in 1968 as compared with 1967, from $25 million to $23 million. But the total assets increased from $248 million to $284 million, a substantial increase and one which would indicate that this company, too,
January 13. 1970	COMMONS
could very well have done without an increase at the time announced.
What I am saying is simply this: the anticombines section of the hon. gentleman's department should exercise the responsibility given to it by the law to investigate these simultaneous and identical price increases, which in my submission indicate clearly that we have here a combine in any sense of the word and one which ought to be prosecuted to the end of obtaining an order to discontinue the kind of collusion which is obvious in the price increases announced in October, 1969.


Mr. Paul Langlois (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, when the hon. member for Winnipeg North (Mr. Orlikow) first raised the matter of increases in nickel prices in the House of Commons on November 27, he requested the Minister of Consumer and Corporate Affairs (Mr. Basford) to ask the combines section of his department to investigate whether there had been illegal collusion. The
DEBATES	2353
Proceedings on Adjournment Motion minister replied, as reported at page 1305 of
Hansard:
The director of research under the Combines Investigation Act watches specific price movements and if there is a possibility of a breach of the act he has a statutory duty to take proceedings.
As the minister has pointed out, it has been the policy in the House for the minister responsible for the Combines Investigation Act not to reveal what inquiries are under way, in accordance with section 28 of the Combines Investigation Act, until such cases are either taken to court or reported in the annual report of the director. The minister remains aware of the price increases referred to by the hon. member, as does the director, who is keeping a watch on the situation in accordance with his usual practice. Identical price increases in such industries, however, are not by themselves strong evidence of collusion. I can only add that we can continue to expect proper enforcement of the legislation.
Motion agreed to and the House adjourned at 10.30 p.m.

Wednesday, January 14, 1970