1970-12-07

ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I should like to table copies in the two official languages of the report of the Royal Commission on the Status of Women in Canada.



TABLING OF AIDE-MEMOIRE AND NOTE TO UNITED STATES GOVERNMENT

Mr. Andre Ouellel (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, as promised by the Secretary of State for External Affairs on November 25 last, I have the honour of tabling on his behalf the memorandum and note sent to the American government on the trade policy of the United States.



PROCEDURE AND ORGANIZATION


Mr. Grant Deachman (Vancouver Quadra) moved: that the first report of the Standing Committee on Procedure and Organization, presented to the House on Friday, December 4, 1970, be concurred in.


[Stage Direction]
Motion agreed to.


Mr. Doug Rowland (Selkirk) moved: for leave to introduce Bill C-206, to amend the British North America Acts, 1867 to 1965 (Duration of House of Commons).


Some hon. Members:: Explain.


Douglas Charles Rowland: Mr. Speaker, this bill is designed to be a small step in the direction of returning the focus of government in this country to Parliament, where it
belongs. The measures advocated in the bill would, hopefully, increase the influence of the individual Members of Parliament through broadening the range of issues upon which free votes would be possible, thereby strengthening Parliament's role in the policy formation process. Specifically, the bill would take away the right of the Prime Minister to recommend dissolution of Parliament and place that power in the hands of Parliament by establishing a set term of four years for Parliament, except-
[DOT] (2:10 p.m.)


Mr. Speaker:: Order, please. I have to interrupt the hon. member to remind him that he cannot make the statement at this time which he would normally make on second reading. He can only explain the bill briefly. I am not sure whether the hon. member considers his statement to be brief, but he should bring it to a close as quickly as possible.


Douglas Charles Rowland: For me, Mr. Speaker, this is brief. I will bring it to a close as quickly as possible. The bill establishes a set term of four years for Parliament, except in the eventuality that the government is defeated on a specific motion of want of confidence, or if it is defeated on a bill or a portion of a bill-


Mr. Speaker:: Order, please. Unfortunately for the hon. member, the standards of brevity which apply are the Speaker's standards, and the hon. member has exceeded those standards. I must therefore ask the House whether the hon. member has leave to introduce the said bill.


Some hon. Members:: Agreed.


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

[Stage Direction]
PROVISION FOR APPOINTMENT, SALARY AND DUTIES On the order: Introduction of Bills:
December 4,	1970-Mr. Baldwin-Bill intituled:	"An Act
respecting the Auditor General of Canada1'.
Mr. Speaker:: The hon. member will suspect that the Chair has serious reservations about the bill in respect, of course, of its financial aspects. The hon. member knows that a bill which has financial aspects has to be preceded by a royal recommendation. The hon. member very imaginatively has seized upon the recommendation which had been received in respect of a bill which was before the House previously and has been withdrawn. The hon.

December 7, 1970
Auditor General
member apparently considered that the recommendation was still floating around in a vacuum and seized upon it and decided to apply it to his own bill.
The hon. member realizes he has to convince the Chair that His Excellency has actually communicated with the hon. member for Peace River and advised him that he would support his bill and was recommending it for the consideration of the House. I have not been in touch with His Excellency to confirm this, but I would like the reassurance of the hon. member that His Excellency has actually recommended this bill and not another bill which was before the House previously.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I will start by saying that His Excellency did not get in touch with me over the weekend to inform me that he had withdrawn his recommendation. On the assumption that Your Honour might like to hear argument on this point, I have prepared some material.


Some hon. Members:: Oh, oh!


An hon. Member:: Yes or no?


Gerald William Baldwin: I see that I have a hanging jury on the other side. They are against me before I even start. Last Thursday the government somewhat reluctantly withdrew Bill C-190. Bill C-190 had been introduced pursuant to a recommendation of His Excellency which first appeared on the order paper on Friday, November 13 in the absence of the President of the Treasury Board (Mr. Drury) who was not in the House at either the birth or the death of his bill. The recommendation was as follows:
His Excellency the Governor General recommends to the House of Commons a measure respecting the Auditor General of Canada to provide for the appointment, salary and duties of the Auditor General and for the appointment of the required officers and employees.
On November 16 the bill was introduced by the Minister of Agriculture (Mr. Olson) for the President of the Treasury Board in precisely those terms.
I have three grounds upon which I base my submission that this bill can be introduced and proceeded with at least as far as third reading before any question can arise. Even then, in the light of the special circumstances here I submit that no question should arise.
About three weeks ago, in connection with an application I made in the course of a debate on the Canada Grain Act I argued very strongly and, I believe, correctly, that an amendment which the government had introduced to that Act was not covered by the recommendation and that it should not be allowed for that reason. Your Honour then ruled that the amendment was, in fact, merely a repetition of a previous statutory provision which was repealed by the present Grain Act and that the recommendation of His Excellency need not be varied. This is my first point, and I urge it strongly upon Your Honour.
My second point is that the bill is covered by the recommendation of His Excellency which was expressed
in the wording I have read in respect of a measure dealing with the Auditor General of Canada, providing for his appointment, salary, duties, and so on. I shall not take up the time of the House by reading what took place in this chamber last Friday although I have read the record with some interest. When the President of the Privy Council withdrew the bill on behalf of the President of the Treasury Board he presented the House with a unique situation, as Your Honour pointed out. Here was a money bill, brought in pursuant to a recommendation by His Excellency which simply said in very general terms that a measure could be introduced in respect of the Auditor General. There is no suggestion that the recommendation has been withdrawn; the bill has been withdrawn but the recommendation still exists. Moreover, we have heard time and time again from the Prime Minister and from the President of the Treasury Board that this was not the government's bill. Mind you, Mr. Speaker, we did not take this too seriously; we thought hon. gentlemen opposite were trifling with the truth when they said this. But the point they made over and over again was that this was not the government's bill but a bill they had seen fit to bring in consequent upon recommendations by a committee of this House. In these circumstances I submit that the recommendation stands, and that if it is possible for any hon. member to bring in a bill which falls within the four corners of the recommendation, it should be accepted.
The bill I have brought in deals with the Auditor General; it deals with the appointment of the Auditor General, the salary of the Auditor General and the duties of the Auditor General precisely as established in the recommendation which His Excellency made to the government for the benefit of the House of Commons. I contend that as a member of the House of Commons I am entitled to take advantage of the situation. Since there is a recommendation with no bill, I have fitted a bill to the recommendation. The measure I propose ought not to be refused merely because it varies to some extent from the one put forward on behalf of the government, merely because it provides for better conditions for the Auditor General and for the exercise of a greater measure of objectivity in his operations. Otherwise, as I say, it falls squarely within the ambit of the recommendation.
I should like to read to Your Honour one citation from Beauchesne which appears to cover this point- Citation 251:
It may happen that the resolution sanctions some expenditure without fixing the maximum amount to be spent. If, for instance, the resolution recommends that adequate salaries be paid a newly constituted body and the amounts of the salaries are fixed in the Bill based on that resolution, the Committee on the Bill has the right to increase those amounts-
[DOT] (2:20 p.m.)
I suggest that that is authority for the proposition that, when the recommendation is there and is couched in general terms and no bill is before the House, it is

December 7, 1970

proper for a private member to bring a bill in on the basis on which I brought in this bill.
Over and above that, my third point is that I rely on the fact that as the Standing Orders now exist they do not prohibit a member from introducing and debating a bill relating to financial expenditures, though they may inhibit his right to have the bill brought to a position where a vote can be taken on it. I base this point on the vague possibility that Your Honour may not agree with what I have said so far.
Section 54 of the British North America Act, is, of course well known. It provides as follows:
It shall not be lawful for the House of Commons to adopt or pass-
I call Your Honour's attention to those words, "to adopt or pass".
-any Vote, Resolution, Address, or Bill for the Appropriation of any Part of the Public Revenue-to any Purpose that has not been first recommended to that House by Message of the Governor General-
I point out in that regard that historically the Quebec resolutions and the London resolutions, upon which the British North America Act was based, contain somewhat different wording. They contain the wording that "it shall not be lawful to originate or pass". In place of the words "to originate", the British House of Commons, in enacting the British North America Act, used the words "to adopt or pass".
I call to Your Honour's attention that there is a plain difference between the words "to originate" and "to adopt". As the British North America Act has been passed, there is a leeway on the part of any private member to introduce and to debate a bill, but not to require the House to come to the stage of adopting and passing the bill on third reading. The way the House got around that was that in the Standing Orders as they existed before the rule changes we made in 1962 there was a condition precedent that it was essential for there to be a financial resolution, and the financial resolution had to be introduced by a minister and debated in the House. That way provided a practical means whereby a private member, not being able to introduce such a resolution, was inhibited from being able to say that not only did a private member have the right to introduce a bill dealing with money but also to have it debated.
In 1968 when we made our changes to the rules this particular provision was repealed. In place of Standing Order 61 the House introduced Standing Order 62. The first part is simply a re-enactment, a copying, of section 54 of the British North America Act. Subclause 2 provides that there shall be a certain procedure, through the means of printing a recommendation on the notice paper and in Votes and Proceedings when a measure dealing with financial expenditures is to be passed.
My submission is that anything that prohibits a private member from introducing a measure of this kind must
Auditor General
fall within the four comers of Standing Order 62(2). My brief contention in this regard is that that Standing Order constitutes, in effect, an attempt by this House of Commons to amend and to change section 54 of the British North America Act. The British North America Act makes it quite plain that it is competent for any private member to originate, but not to seek to have passed, a bill that deals with financial measures, and this House is not competent on its own to repeal the British North America Act.
Under those circumstances I urge that on any one of those three grounds Your Honour might well allow the introduction of this bill. This would give the House the opportunity to discuss and to debate freely and honestly what in its opinion should be the proper duties of the Auditor General. This officer, who acts on behalf of the taxpayers of this country, must have some clarification of his role, some expansion of his independence and his objectivity, without which the sufferings of the taxpayers will continue ad nauseam.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to draw Your Honour's attention to just one precedent which I think can be presented in support of the position taken by the hon. member for Peace River (Mr. Baldwin). I believe it also goes directly to the question Your Honour raised, namely, whether the recommendation of the Governor General can float around in a vacuum and be picked up by anyone who wants to use it or whether it has to be attached to a particular measure.
I ask Your Honour to look at page 423 of the Journals of the House of Commons for Monday, May 19, 1947. For those of us who deal in procedural matters that is relevantly recent. It so happens that three days earlier, on May 16, we had tabled a petition signed by John Beckett of Winnipeg, Manitoba, and 256,282 other persons praying that the Old Age Pensions Act be amended. Our petition called for the pension, which was then $30 a month, to be raised to $50 a month, for payment to be made at age 65, for the means test to be eliminated, and for various other improvements to be made. Hon. members will realize that these requests involved the expenditure of money. Therefore there might be assumed to be some question whether a petition which asked for these changes could possibly be in order.
The page in the Journals to which I draw your attention records the report of the Clerk of Petitions on the petition that we had presented a few days earlier. I believe that the Clerk of the House of Commons is the Clerk of Petitions, and the Clerk of the House of Commons at that time was none other than Dr. Arthur Beauchesne. After citing the terms of our petition he said:
Although this petition prays for an increase in old age pensions, I submit that the Governor General having already recommended that the scope of the Old Age Pensions Act be amended to increase the amounts to be paid, the constitutional rule that petitions asking for an expenditure of public money are irregular does not apply in this case.

December 7, 1970
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I find that all the requirements of Standing Order 68 have been complied with.
I feel quite certain that Dr. Beauchesne did not go to see the Governor General of that day to find out whether he supported our petition, but he took the view that there was a Governor General's recommendation in favour of an increase in old age pensions and therefore he found our petition in order. I submit there is an analogous situation before us now. There is a Governor General's recommendation that something be done in respect of the Auditor General, and now we have a bill that can make use of that recommendation.


Mr. Speaker:: Order, please. If there is no further discussion on the matter I am quite prepared to give a ruling at this time. I have given serious thought to the matter in that the hon. member indicated a few days ago this bill would be introduced. As I said, I have given serious consideration to the procedural aspects of the hon. member's proposed bill and I am quite prepared now to give my views of the situation.
I have to recognize that the argument proposed by the hon. member for Peace River, gallantly supported by the hon. member for Winnipeg North Centre, is interesting but, I suggest, nothing more. I cannot in any way agree with the hon. member for Peace River. Again I say that he has to receive some kind of commendation from the Chair and those interested in procedure for the arguments which he has submitted for the consideration of the Chair and all hon. members, but I would not think hon. members would expect the Chair to accept those arguments. They point again to the difficulty relating to private members' bills. I fully appreciate this. I gather there have been discussions between representatives of the parties and that there is an intention to have the whole question of private members' public bills referred to the Committee on Procedure and Organization. This would include the bill of the hon. member for Peace River, apart from this one, which is on the order paper and which will bring the whole matter to the fore. It will then be possible for the Committee on Procedure and Organization to make recommendations to the House in respect of the handling of public bills introduced by private members.
[DOT] (2:30 p.m.)
The difficulty of course is that no hon. member, ineluding a member of the Cabinet, can introduce a public bill which implies the expenditure of public funds without a recommendation of His Excellency. This applies not only to private members but to members of the government. They cannot introduce such a bill without the recommendation of His Excellency.
In the case of the Auditor General's bill such a recommendation was required. The bill was introduced to the House with the recommendation. It is of course a very novel approach to say that that bill having been withdrawn the recommendation is still available for anyone who desires to introduce a bill which might be called

the same thing but which provides for something different. The hon. member I am sure would be the first to admit that his bill is not on all fours with the one which was presented by the government. Having admitted that himself, at this moment he has put himself out of court because it is a different bill. His Excellency recommended a bill which was different. He looked at that bill and said to us, "I have seen the bill and recommend it to the House", and it is that bill he recommended. That bill having been withdrawn I do not think it is necessary for His Excellency to communicate with us and ask us to return the recommendation.
The hon. member cannot deal with a bill once it has been withdrawn. There is no recommendation for the hon. member to seize upon and attach somewhat artificially to his own bill. This having been said I would say I cannot accept the hon. member's suggestion and I have to tell him that his bill cannot be read a first time at this time or at any time.



QUESTIONS ON THE ORDER PAPER

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

[Stage Direction]
Question No. 55
Mr. Orlikow:: Has the Government of Canada decided on which special reserve areas in Canada's northland in which resource development activity is to be banned and (a) if so (i) what are they (ii) what criteria were used to identify them (b) if not, when is it anticipated that they will be created?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: The Government of Canada and those departments responsible for development and for conservation in the north have not yet completed their studies of special reserve areas in which resource development activity is to be banned. There are certain areas now being investigated for national parks, special ecological areas under the auspices of the International Biological Program and archaeological sites which will be considered for withdrawal at a later date in an orderly schedule commensurate with present and future requirements. The Government of Canada is particularly cognizant of the need to protect the northern environment because of the critical sensitivity of this environment, and has accepted the principle that unique areas, unless they must be developed in the national interest, must be protected even if no immediate need for aesthetic appreciation or research can be justified, (a) (i) One of the areas withdrawn is the East Arm, Great Slave Lake (Artillery Lake) area consisting of approximately 2,860 square miles. This area was withdrawn from further alienation under the Territorial Lands Act on March 24, 1970. (P.C. 1970-526 and 527) for the purpose of a future
December 7, 1970

national park subject to consultation and agreement with the Indian people. Wood Buffalo National Park was established in 1922. The Thelon Game Sanctuary, established originally under the Northwest Game Act in 1927, is given protection from mining activity by exclusion, and it is not open for staking under the Canada Mining Regulations. There are 16 migratory bird sanctuaries in Canada's northland but these areas are not completely excluded from resource development. These sanctuaries were withdrawn under the Migratory Birds Convention Act. (a) (ii) The criteria used include: (a) Uniqueness of a particular area in terms of landscape, habitat for a particular species of animal or occurrence or other rare biotic or abiotic forms, (b) A specific area for withdrawal may be outlined as being representative of a much larger area which may be defined as units or sub-units of a physiographic area or land form which it is in the national interest to preserve, (c) Preservation of archaeological sites, (d) The potential of the area to meet the objectives set in Section 4 of the National Parks Act dedicating national parks to the people of Canada for their benefit, education and enjoyment, (b) Not applicable.


VISITS OF AMBASSADORS AND HEADS OF MISSIONS TO NORTHERN CANADA
Mr. Mazankowski: 1 How many foreign ambassadors travelled to Northern Canada, visiting Norman Wells, Inuvik, etc., (a) during September, 1970 (b) during October, 1970?
2.	Who were they and what countries did they represent?
3.	What country hosted the tour?
4.	What were the total expenses incurred by the tour?
5.	What was the purpose of the tour?


Mr. Judd Buchanan (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: 1. Ambassors and other heads and acting heads of mission (a) 20; (b) 19.
2.	Tour No. 1 (September 23-29, 1970): Greece, His Excellency Aristide N. Pilavachi, Ambassador; Jamaica, His Excellency Vincent H. McFarlane, High Commissioner; China, His Excellency Yu-chi Hsueh, Ambassador; Colombia, His Excellency Luis Ernesto Ordonez, Ambassador; Swaziland, His Excellency Dr. S. T. M. Sukati, High Commissioner; Israel, His Excellency Ephraim Evron, Ambassador; Japan, His Excellency Shinyichi Kondo, Ambassador; Austria, His Excellency Dr. Eduard Schiller, Ambassador; Venezuela, His Excellency Wolfgang Larrazabal, Ambassador; India, His Excellency A.
B.	Bhadkamkar, High Commissioner; Czechoslovakia, His Excellency Bretislav Matanoha, Ambassador; Brazil, His Excellency Frank Moscoso, Ambassador; Nigeria, His Excellency Edward O. Enahoro, High Commissioner; Afghanistan, His Excellency Abdullah Malikyar, Ambassador; Holy See, His Excellency the Most Reverend Guido del Mestri, Pro-Nuncio; Uruguay, Mr. Gualberto H. Urtiaga, Charge d'Affaires a.i.; Ceylon, Mr. M. Rabot, Acting High Commissioner; Germany, Mr. Wilhelm
Questions
Fabricius, Charge d'Affaires a.i.; Thailand, Mr. Sirajaya Buddhi-Baedya, Charge d'Affaires a.i.; Belgium, Mr. Jules Marchal, Consellor.
Tour No. 2 (October 5-11, 1970): Argentina, His Excellency Constantino Ramos, Ambassador; Lebanon, His Excellency Dr. Alif Gebara, Ambassador; Barbados, His Excellency C. B. Williams, High Commissioner; Netherlands, His Excellency Theo H. Bot, Ambassador; Bulgaria, His Excellency Kiril Chterev, Ambassador; Indonesia, His Excellency R. D. Bandoro, High Commissioner; Peru, His Excellency Cesar A. De La Fuente, Ambassador; France, His Excellency Pierre Siraud, Ambassador; Turkey, His Excellency Irfan Tansel, Ambassador; Cuba, His Excellency Dr. Jose Fernandez de Cossio, Ambassador; Tunisia, His Excellency Dr. Abdelaziz Hamzaoui, Ambassador; Sweden, His Excellency Ake Malmaeus, Ambassador; Pakistan, His Excellency M. S. Shaikh, High Commissioner; Korea, His Excellency Pil Shik Chin, Ambassador; Spain, His Excellency Juan Jose Rovira, Am-massador; South Africa, His Excellency Matthys Izak Botha, Ambassador; Hungary, Mr. Gyula Baranyi, Charge d'Affaires a.i.; Congo, Mr. Jean-Baptiste Mbila, Charge d'Affaires a.i.; Portugal, Dr. Da Silva Preto, Charge d'Affaires a.i.
3.	Government of Canada.
4.	The estimated cost of the two tours is $43,000, an amount which is being shared by three departments, National Defence, External Affairs and Indian Affairs and Northern Development. All the accounts have not been received, but it is likely that the actual costs could be slightly lower than the estimate.
5.	The purpose of the tour was to provide heads of mission accredited to the Government of Canada with an opportunity to see at first hand something of the Canadian north and the developments taking place there. Throughout the world there is growing appreciation of the economic potential of the North and of its peculiar vulnerability to such environmental problems as pollution and erosion. As a result there is considerable interest abroad in the Canadian Government's determination to ensure that as the development of Northern Canada proceeds the environment and the well being of the people are protected. Often the problems involved are not well understood. It therefore seemed desirable that heads of mission in Ottawa see for themselves conditions in the Canadian north and the progress being made there both in terms of utilizing the natural resources and of improving living conditions through the provision of better education, housing and health services. It was hoped that in this way the heads of mission would be able to understand and report more fully to their governments on the policies that Canada is pursuing in its northern areas.
Although travel facilities in the North have improved greatly in recent years, it is still difficult for someone on his own to obtain a comprehensive view of the region in a brief period of time. Some assistance on the part of the Canadian Government was necessary and it was concluded that this could be provided most effectively by means of an organized tour.

December 7, 1970
Questions


WELLS DRILLED BY PANARCTIC OILS LIMITED IN CANADA'S NORTH
Mr. Saltsman: 1. Since its inception, how many wells have been drilled by Panarctic Oils Limited in Canada's north and, in each case, where were these wells located?
2.	What wells have been abandoned by Panarctic, and at what depths?
3.	What is the estimated expenditure in the above well-drilling projects?


J. Judd Buchanan: 1 and 2..
Name	Location	Depth (feet)	Present StatusPanarctic Drake Point N-67	Melville Island	under active operationsPanarctic Sandy Point L-46	Melville Island	6,895	abandonedPanarctic Marie Bay D-02	Melville Island	4,175	abandonedPanarctic Drake Point L-67 (first relief well)	Melville Island	10,671	suspended gas wellPanarctic Towson Point G-67	Melville Island	5,123	abandonedPanarctic Hoodoo Dome H-37	Ellef Ringnes Island	11,072	abandonedPanarctic Homestead Hecla J-60	Melville Island	11,865	abandonedPanarctic Drake Point K-67 (second relief well)	Melville Island	under active operationsPanarctic King Christian D-18	King Christian Island	under active operationsPanarctic Amund Central Dome H-40	Amund Ringnes Island	under active operations
3. According to information received from Panartic Oils Ltd., all-inclusive gross costs applicable to the six wells that have been completed or abandoned are approximately $11.9 million.


DEBT OWED BY CEYLON TO CANADA
Mr. Robinson: What debt, if any, is owed by Ceylon to Canada and what are the terms of repayment?


André Ouellet: The answer in so far as CIDA is concerned, is $11,000,000 comprised of nine development loans. Two development loans amounting to $2,500,000 have a repayment period of 50 years with a grace period of ten years and a service and commitment charge of | of 1 per cent. The remaining seven loans amounting to $8,500,000 have a repayment period of 50 years, a grace period of ten years and an interest rate of 0 per cent.



POSITION OF MR. S. SIDDIQI-DEPARTMENT OF SUPPLY AND SERVICES

['(a) Nil; (b) 228.']
Hon. James Richardson (Minister of Supply and Services):: 1. Yes. Project Officer, Shipbuilding and Heavy Equipment Branch.
2.	Procurement of technically complex systems, products and services with duties requiring the conduct of all phases of the purchasing cycle, including planning, facility and bid evaluations, contract negotiations and document control and related administration.
3.	July 24, 1967.
4.	Yes. Mr. Siddiqi's salary is paid by the Department of Supply and Services and the full amount is recovered from the Air Industries Association of Canada. The loan of Mr. Siddiqi to the Association is in keeping with the Government's policy of interchange of Government employees with personnel from the private sector.



Mr. Forlin: How much does Jamaica owe Canada and what are the repayment terms?

Mr. Andre Ouellet (Parliamentary Secretary to Secretary of State for External Affairs) r In so far as CIDA is concerned, the answer is: $10,000,000 comprised of thirteen development loans. Eight loans amounting to $5,475,000 have a maturity of fifty years, a grace period of ten years and a service and commitment charge of J of 1 per cent. Four loans totalling $4,025,000 have a maturity of thirty years, a grace period of seven years and an interest rate of 3 per cent. The last remaining loan in the amount of $500,000 has a maturity of twenty-

December 7, 1970

three years, a grace period of seven years and an interest rate of 3 per cent.


FUTURE OF CANADIAN EXCHANGE RATE
Mr. Salisman: Will the Government of Canada give assurance to Parliament that the Canadian exchange rate will be allowed to remain on a floating basis for the next twelve months?


Hon. E. J. Benson (Minister of Finance):: No. It remains the intention of the Canadian Government to resume the fulfilment of its obligations under the Articles of Agreement of the International Monetary Fund as soon as circumstances permit.


CANADIAN WILDLIFE SERVICE-RESEARCH MADE ON SHOT SHELLS
Mr. Anderson: 1.	Has the Canadian Wildlife Service made any report on the use of iron shot or teflon coated lead shot in shot shells to replace the untreated lead shot now in use?
2.	Has the Canadian Wildlife Service set a date after which the sale and manufacture of untreated lead shot shells is prohibited and, if so, what is that date?


Joseph Jacques Jean Chrétien: 1. No. Research in materials to replace lead in shot shells was conducted by the U.S. Bureau of Sport Fisheries and Wildlife. The Canadian Wildlife Service, in co-operation with the National Research Council, is conducting tests on the effect of hard shot materials on gun barrels. The preliminary results of those studies are contained in a National Research Council report DME MP-53.
2. No. A date has not been set because at the present time there is no known method of treating lead shot to eliminate or reduce its toxicity.


SALE OF LICENCES FOR HUNTING OF POLAR BEARS
Mr. Coates: 1.	Have complaints been received by the Department of Indian Affairs and Northern Development with regard to the sale of licences for the hunting of polar bears?
2.	What are the regulations for the hunting of polar bears and what is the licence fee?
3 How many polar bears have been killed through the issuing of hunting licences by the Department in the past five years?
4.	Is there any danger that the polar bear will become extinct and, if so, what action is being taken to protect the species?


J. Judd Buchanan: 1.
Yes, for the sports hunting of polar bears.
2. An amendment to the NWT Game Ordinance allowing the sports hunting of polar bear was passed by the Counc 1 of the Northwest Territories in January 1970. The amendment permits the sale of a polar bear sports hunting licence to three classes of subject, namely: (a) Territorial residents charged a fee of $50; (b) Canadian citizens charged a fee of $150; and (c) non-resident aliens
Questions
charged a fee of $250. A licence holder must be accompanied by a licensed guide who is in possession of a polar bear seal. This is to ensure that the number of animals to be taken by sport hunters will be deducted from the present quota allowed to holders of general hunting licences. Therefore, under the legislation a sport hunter must buy his licence from the Territorial Government hire an Eskimo guide and outfitter who is in possession of a polar bear seal indicating that one animal from the settlement quota has been assigned to him by the settlement council, and also pay the settlement council a fee of $1,000 for releasing that part of their quota to him as the quota is granted to the settlement, not to individuals.
3.	Licences for the sport hunting of polar bear are issued under the Northwest Territories Game Ordinance and as the legislation was only passed in January 1970, it is impossible to give a total over the past five years. Since January 1970, four (4) polar bears have been killed through the issuing of sports hunting licences.
4.	No, at a recent international meeting of polar bear scientists it was determined that under the quota system Eskimo hunting does not now threaten the survival of the polar bear population. However, concern was expressed about specific subpopulations and as a result the Canadian Wildlife Service, in cooperation with the Northwest Territories Government, is continuing studies of the polar bear population and distribution and a complete review of the kill limit and the quota allotment to various settlements is to be carried out in 1971.


INCOME TAX AMENDMENT TO ALLOW REPRESENTATION ALLOWANCES FOR SCHOOL COMMISSIONERS
Mr. Rodrigue: Has the Minister of Finance considered the possibility of amending the Income Tax Act so that part of the amount received by school commissioners be considered as a representation allowance?


Edgar John Benson: Deductions from income for tax purposes are a matter of Government policy. If the Government should decide to propose an amendment to the Income Tax Act to make the suggested change, it will be announced at the appropriate time.


LABELLING OF &quot;VAPONA&quot;
Mrs. Maclnnis: Does the Department of Agriculture intend to take action similar to that in the United States by requesting that the manufacture of "VAPONA", Shell Oil Company, include warnings on labels that the strips should not be used in kitchens, dining rooms or food preparation areas and, if not, what are the reasons?


Hon. H. A. Olson (Minister of Agriculture):: No, since conclusions drawn from collaborative evaluation of toxicological and residue data by the Department of Agriculture and the Food and Drug Directorate, Department of National Health and Welfare, have reconfirmed that the use of these strips, in accordance with label directions, does not represent a hazard to human health.

December 7, 1970
Inquiries of the Ministry DEPARTMENT OF AGRICULTURE-REDUCTION IN MAN-HOURS AS A RESULT OF UTILIZATION OF COMPUTERS


Mr. Robinson: How many man-hours have been saved as a result of the utilization of computers by the Department of Agriculture during each year since computers have been used?


Horace Andrew (Bud) Olson: Records are not maintained in such a manner as to provide this information. The computer is used extensively in the Department as a tool for research, much of which would not be possible without this facility.


DEPARTMENT OF AGRICULTURE-LAY-OFFS AND HIRINGS AS A RESULT OF USE OF COMPUTERS
Mr. Robinson: As a result of the use of computers by the Department of Agriculture how many employees have been (a) laid off (b) hired?


Horace Andrew (Bud) Olson: (a) Nil; (b) 228.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Minister of Labour. Are he and the government giving any consideration to a measure to extend the period of benefits under unemployment insurance on an interim basis in view of the difficulties we face this winter? I ask this question because a few weeks ago he indicated he preferred employment to unemployment insurance benefits, which we all accept, but since the government has recognized the importance of increasing benefits, is the government now prepared to recognize the importance of extending these benefits on an interim basis?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, because of the particular season of the year, from December 15 on we have what are known as seasonal benefits which make it much easier to extend the duration of the normal benefits that we would expect to be in force at other times of the year. I feel we have enough latitude in that regard because of the seasonal benefit feature which permits a relaxation of the normal attachment to unemployment insurance, and that we should proceed in the proper manner, by increasing the benefits rather than by extending the duration of the benefits.


Robert Lorne Stanfield: Has the minister had prepared an estimate of the number of persons on unemployment insurance who will have to go off it in the course of the winter months because their benefits will expire even with the seasonal arrangements he has suggested?


Bryce Stuart Mackasey: Mr. Speaker, the estimate of the number of people on unemployment insurance is at the best an estimate which is usually made by the Unemployment Insurance Commission in conjunction with the Dominion Bureau of Statistics and is usually based on the experiences of previous years. Whether or not people will be removed from the rolls during the winter months depends, of course, on the type of work attachment and the number of stamps presently in the person's book, but it is not the policy of the Unemployment Insurance Commission to apply these rules with any degree of severity in the winter months, particularly in respect of those who come under the seasonal benefit arrangement.


Robert Lorne Stanfield: Mr. Speaker, would the minister obtain from the Unemployment Insurance Commission the commission's estimate of what the situation may be and would he at a convenient opportunity give this information to the House?


Bryce Stuart Mackasey: I certainly can inquire whether it is at all possible to obtain this information with any degree of accuracy. Of course it is based on the labour attachment of the claimants when they first come into the plan. It is difficult to inform the House with any degree of accuracy but at least I will try.



INTEGRATION WITH MANPOWER OFFICES

Mr. A. D. Hales (Wellington):: Mr. Speaker, I have a supplementary question for the Minister of Labour. In view of the fact that the Unemployment Insurance Commission offices are separate from the Manpower offices, would the minister advise the House whether he is taking any steps toward co-ordinating or integrating these two departments?


Bryce Stuart Mackasey: The degree of co-ordination is not to be measured by the physical presence of Manpower and the Unemployment Insurance Commission in the same building. I would say we have never had more co-ordination or co-operation than in recent months.



MANPOWER


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. Has the government taken a decision yet on the extension of the manpower upgrading program which is complementary to the government plan to increase unemployment insurance benefits? If so, can he state whether a plan has been devised to allocate these funds by provinces?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, the part of the decision that has been taken in this regard is well known to the House. No further decision has been taken.


Mr. Speaker:: The hon. member for Vancouver-Kings-way.

December 7, 1970


Mrs. Maclnnis:: Mr. Speaker-


Mr. Speaker:: Order, please. I have recognized the hon. member for Vancouver-Kingsway. I shall return to the hon. member for St. John's East in a moment.


Mr. Speaker:: I believe the hon. member for St. John's East has a supplementary to a previous question.


James Aloysius McGrath: Yes, Mr. Speaker. I would like to direct a supplementary question to the Minister of Manpower and Immigration because I do not think the minister understood my question in the first instance. In light of the serious anticipated increase in unemployment, has the government reached a decision yet on extending substantially the manpower upgrading program and, if so, has a plan been devised whereby funds for this program will be allocated by provinces?


Otto Emil Lang: I will be glad to repeat my answer so that the hon. member may now understand it. I indicated that additions to our program in this area have been previously announced to the House. In answer to his question, no further decisions beyond that announcement have been taken.



STATUS OF WOMEN


Winona Grace MacInnis: Mr. Speaker, I should like to direct my question to the Prime Minister. In view of the strong recommendation of the Royal Commission on the Status of Women for the adoption of a national day care Act, is the government prepared to take immediate steps to secure the agreement of the provinces to the enactment of such legislation?


Pierre Elliott Trudeau: Mr. Speaker, the report has just been tabled this afternoon. Cabinet only took cognizance of it last Thursday. We wish to conduct the usual study before making any statement on it. Of course, as the hon. member knows, under the Canada Assistance Plan we are already participating in the payment for day care centres set up by the provinces.


Winona Grace MacInnis: Is the government prepared to
introduce legislation this session to effect changes in the Criminal Code relating to abortion which are in line with the commission's recommendations?


Pierre Elliott Trudeau: The same answer, Mr. Speaker.


Winona Grace MacInnis: Mr. Speaker, I wish you would not abort me before I ask one more question. In view of the fact that the report was three years in the making and its recommendations on this matter are very definite, could the Prime Minister tell us how soon we may expect legislation?


Mr. Speaker:: It seems to me that the hon. member is repeating substantially the question asked previously.
Inquiries of the Ministry REQUEST FOR STATEMENT ON DISPOSITION OF ROYAL COMMISSION REPORT


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: May I ask the Prime Minister how soon we may expect some statement from the government as to what disposition it intends to make of this report, whether the report will be sent to a standing committee of the House or whether the government intends to bring down legislation directly to implement some of the recommendations? Will a statement be made in the near future by the government regarding the report?


Pierre Elliott Trudeau: First we will consider the report; then we will announce to the House what course we will follow.



COMMISSION RECOMMENDATIONS-EMPLOYMENT OF WOMEN IN PUBLIC SERVICE

Stanley Howard Knowles: Mr. Speaker, may I ask the Prime Minister if particular attention will be given at an early date to the recommendations regarding the employment of women in the Public Service which, after all, is a matter which comes completely within the federal purview?


Pierre Elliott Trudeau: I do not
know how long members of the opposition have had this report in their hands but we have just received it; therefore I cannot answer all these questions.


Stanley Howard Knowles: May I rise on a point of order, Mr. Speaker. The Prime Minister said the government has had the report since last Thursday-we have had it for only half an hour.



ROYAL CANADIAN MOUNTED POLICE


Mr. Rene Matte (Champlain):: Mr. Speaker, I should like to direct a question to the Prime Minister.
Can he tell the house if RCMP officers were or are still infiltrated in FLQ cells?



LABOUR CONDITIONS


Hon. George Hees (Prince Edward-Haslings):: I would
like to address a question to the Prime Minister. As the information which has been the result of the hearings of the Senate Committee on Poverty clearly indicates that more than half of the nearly five million people living in poverty in Canada are working, most of them for minimum wages, is it the intention of the government in the

December 7, 1970
Inquiries of the Ministry
near future to hold a meeting with representatives of the provinces to discuss the possibilities of raising minimum wages all across Canada to a point where recipients and their families can emerge from poverty?


Pierre Elliott Trudeau: I am sure the provinces heard the representation of the hon. member.


George Harris Hees: I wonder whether the Prime Minister would hear my representation in this supplementary question. When will he start doing as much to help those who are willing to work for a living as those who are unwilling to work for a living?


Mr. Speaker:: Order, please.


George Harris Hees: I must say to him that if 1 ever have need of a heart transplant-


Mr. Speaker:: Order, please.



DISCUSSIONS WITH ELEVATOR COMPANIES ON POSSIBLE REDUCTION IN STORAGE RATES

Mr. Cliff Downey (Baffle River):: My question is for the
minister in charge of the Wheat Board. In view of the proposed termination of the Temporary Wheat Reserves Act and bearing in mind that there is no need for additional grain storage facilities in Canada in the foreseeable future, could the minister say whether any discussions have taken place or are taking place with the elevator companies regarding a possible reduction in grain storage rates?


Otto Emil Lang: Of course, discussions on rates go on periodically in light of all the circumstances which occur. Some discussions have in fact taken place in the not too distant past.


Cliff Downey: Could the minister indicate to the House whether there is any possibility of reductions?


Otto Emil Lang: It is really premature to comment on the new circumstances which will occur. Over the years the companies have tended to indicate that the storage rates have been higher and the handling rates lower than were required in economic terms. Of course, while there may be a lower amount of grain in storage, it is also anticipated that there will be a higher amount of grain moving through the facilities, and it is my hope that this will in a large way offset the problem for the companies.



REQUEST THAT MARKETING OF RYE, FLAX AND RAPESEED BE BROUGHT UNDER WHEAT BOARD

Mr. A. P. Gleave (Saskafoon-Biggar):: In view of the statement at the annual meeting of the Saskatchewan
Wheat Pool that the marketing of rye, flax and rapeseed should be brought under the operations of the Canadian Wheat Board, and in view of the unsatisfactory operation of the futures market in recent months in regard to rapeseed, will the minister take the necessary steps to implement the request of the Saskatchewan Wheat Pool?


Otto Emil Lang: Some time during the course of last winter a committee studied the question of the marketing of oilseeds particularly. That committee did not come down with a flat recommendation along the lines suggested by the Saskatchewan Wheat Pool but did indicate some need for further study into this question. We have asked that same committee to study the question further with a view to perhaps shedding further light on the question.


Alfred Pullen Gleave: May I then ask the minister whether the fact that he officiated at the opening of the rapeseed futures market at Thunder Bay indicates his support of that type of marketing?


Mr. Speaker:: Order, please.



PRODUCTION AND RECEIPTS POLICY-RECONSIDERATION OF PROPOSALS

Mr. R. R. Soulham (Qu'Appelle-Moose Mountain):: My
question is directed to the minister reporting to the House for the Canadian Wheat Board. It is related to the one just put by the hon. member for Battle River. In view of the statement from the president of the Saskatchewan Wheat Pool emanating from the just concluded annual meeting of the pool to the effect that the delegates felt that the minister's stabilization plan was woefully inadequate, will the minister give consideration to a complete overhaul of his proposals at the earliest possible date?


Otto Emil Lang: The whole point of the proposals in their form was to have discussions with producers and producers organizations. I can tell the hon. member that the statement he has quoted does not represent the general consensus of farmers who have looked at the proposals and the benefit they can bring to prairie agriculture.



PRODUCTION AND RECEIPTS POLICY-PAYMENTS TO FARMERS

Mr. S. J. Korchinski (Mackenzie):: In view of the fact
that the press is leaving the wrong impression that western farmers are to receive $100 million under the grain proposals when in fact there will be a corresponding reduction in storage of $70 million and $20 million under the 3 per cent deduction-


Mr. Speaker:: Order, please. Will the hon. member ask a question. He has the floor for the purpose of asking a supplementary question.
[Mr. Hees.l
December 7, 1970


Stanley James Korchinski: I want to lay the foundation for my question. Since there will also be an undetermined amount for interest payments, will the minister be making an announcement on a program which will in fact put real cash into the depressed western economy?


Otto Emil Lang: I almost have to lay the foundation for my answer by saying that some of the conclusions of the hon. member are incorrect in view of the fact that the temporary Wheat Reserves Act money, for instance, by and large went to the handling companies rather than to farmers-


Mr. Speaker:: Order, please. Obviously this is a debate between the hon. member and the minister.


Stanley James Korchinski: Mr. Speaker, in reply to an earlier question of mine the minister responsible for the Wheat Board indicated that the elevator companies were receiving the payments. Are we to assume that under the new plan the elevator companies will no longer be paid for storage?


Otto Emil Lang: Mr. Speaker, the point I was making, of course, was that the amount of money in question had not found its way into the hands of the farmers. The plan will be that far less grain will in fact be in storage so that the expense will not be incurred. On the other hand, the $100 million which will be going forward to the farmers will be received by them.



CONSUMER AFFAIRS


Thomas Clement (Tommy) Douglas: May I direct a question to the Minister of Consumer and Corporate Affairs. In view of the statement by the president of the Canadian Underwriters Association to the effect that there will be a substantial increase in car insurance rates for 1971, and the literature which is sent out by the Insurance Bureau of Canada telling Canadians to get ready for very sharp increases in automobile insurance, may I ask the minister whether his department or any of its agencies are looking into the question of auto insurance rates to see whether or not any increase for 1971 would be fully warranted?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: The insurance industry is examined from time to time by the Combines Investigation Branch for any breach of that Act, but as the hon. member knows the Act does not deal with whether or not price increases are warranted.


Thomas Clement (Tommy) Douglas: May I
ask whether the restrictive Trade Practices Commission or the Prices and Incomes Commission have taken a look at these car insurance rates to see whether or not there is
Inquiries of the Ministry
any collusion between the various companies, and are they investigating to see why the rates charged in Saskatchewan are substantially lower than the rates charged in other provinces and whether this is by design or because of some difference in cost? If they are not looking into the aspect of collusion, will the minister undertake to see that they do and report back to the House?


Stanley Ronald Basford: The question went all over the place, Mr. Speaker, including Saskatchewan. The Combines Investigation Act, with which I trust the hon. member is familiar, deals with the question of price conspiracies or price collusion. If there is evidence of that, then there is a breach of the Combines Investigation Act.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. I raised this matter last year and the minister undertook to have the Combines Investigation Branch look into the question. Has the minister received any report and is there any evidence of collusion?


Stanley Ronald Basford: Mr. Speaker, it is my practice, as it was of all my predecessors, not to reveal the results of inquiries except by laying charges in court or, as the Act requires, by inclusion in the annual report of the director.
ILater:]


Mr. Speaker:: I believe the hon. member for Peace River has a supplementary to the previous question.


Gerald William Baldwin: Yes, Mr. Speaker, I should like to ask the Minister of Consumer and Corporate Affairs if we are to assume from his answers that the role of the Prices and Incomes Commission will be, to use the vernacular, restricted to that of "bird watching"?



AIRPORTS


Mr. Roland Godin (Portneuf):: Mr. Speaker, I should have liked to put a question to the Minister of Transport, but in his absence I will direct it to his parliamentary secretary.
In connection with the statement made yesterday in Lachute by the President of the Quebec Federation of Labour, Mr. Louis Laberge, is it true that only 2,000 new jobs will be created as a result of the opening of the new international airport in Ste. Scholastique instead of 5,000 as already announced by the government?


Mr. Speaker:: The hon. member for Portneuf will admit that the question, as put, is out of order. He is asking the government to confirm or deny a statement made outside the House, and under those conditions, the question cannot be accepted.

December 7, 1970
Inquiries of the Ministry



EXTERNAL AFFAIRS


Mr. D. W. Groos (Victoria):: Mr. Speaker, I should like to ask the Prime Minister if he will have the Minister for External Affairs report to the House on his return whether he has made representations to the United States government expressing our concern over the forthcoming Amchitka underground nuclear tests and, if so, would he report the result of those representations? This is particularly timely not just because of the expected date of the tests but also because of public statements recently by eminent scientists in California warning of the dangers of a test of such magnitude triggering other earth tremors of far-reaching proportions.
tTranslation]


André Ouellet: Mr. Speaker, the minister is returning tonight from Europe and I am sure he will take action on the hon. member's question at the first opportunity.


Mr. Heath Macquarrie (Hillsborough):: I should like to direct a question to the right hon. Prime Minister, Mr. Speaker. As Premier Smallwood of Newfoundland has declared that he is opposed to any union of his province with the three Maritime provinces but is strongly in favour of a union of Prince Edward Island and Newfoundland, can the Prime Minister advise if the government of Canada is prepared to give to a feasibility study of a Newfoundland-Prince Edward Island union a degree of financial assistance commensurate with that given to the maritime union study?


Pierre Elliott Trudeau: Mr. Speaker, if the premiers of those two provinces were to indicate their desire to embark upon a feasibility study, of course we would consider such a request with as much attention as any other.


IMMIGRATION
Hon. Marcel Lambert (Edmonton West):: I have a question for the Minister of Manpower and Immigration, Mr. Speaker. Earlier this fall the minister promised a white paper on immigration with projected changes foreseen by him in the Immigration Appeal Board. It is now December 7 and the white paper has not appeared. Is the minister in a position to confirm that he will be tabling the white paper between now and the Christmas adjournment or is to be delayed until the new year?


Otto Emil Lang: Mr. Speaker, I do not expect to be in a position to take any such action between now and the adjournment.


Marcel Joseph Aimé Lambert: In light of the increasing pressure of the problems dealing with immigration, can the minister give us an idea when in the new year he will be tabling that white paper?


Otto Emil Lang: The more relevant urgency, of course, to which the hon. member referred, is the issues which require amendments to the immigration Appeal Board Act which have been mentioned. Work is going forward on proposals in this regard on an urgent basis and I hope we can see some concrete move within the House on this matter early in the new year.


UNITED NATIONS
Mr. Georges Valade (Sainle-Marie):: Mr. Speaker, I have a question for the Prime Minister.
Could he tell us whether he intends to consider the suitability of sponsoring at the United Nations a resolution inviting all member states to refuse the right of asylum to kidnappers of politicians, in order to curb the recent rash of such kidnappings?
Right Hon, P. E, Trudeau (Prime Minister): I have not considered the matter, Mr. Speaker, but like the minister's Parliamentary Secretary, I will refer it to him upon his return.


RECONSIDERATION OF POSSIBILITY OF USE OF BAY OF FUNDY TIDES
Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I should like to ask the Prime Minister if he will give consideration to requesting the Minister of Energy, Mines and Resources to re-evaluate the evidence available to his department on the power possibilities of the Fundy tides and thus lessen the adverse reaction his reply brought last week?


Pierre Elliott Trudeau: Mr. Speaker, I shall ask the minister to read this question and see if he has an answer for it.

December 7, 1970


UNITED NATIONS
Mr. David Lewis (York South):: Mr. Speaker, in the absence of the Secretary of State for External Affairs may I direct a question to the Prime Minister. In view of the report to the Security Council by a special commission of the United Nations to the effect that the recent fighting in Guinea was assisted by regular armed forces of Portugal, has the government instructed our representative at the United Nations to prepare some steps and to propose some action against Portugal for this alleged aggression?


André Ouellet: Mr. Speaker, it seems that the members of the Security Council are considering at the present time the draft of a resolution and that the Canadian government representatives with the United Nations are watching the situation closely.
I would like to remind the hon. member that the Canadian government has time and again expressed its opposition to the continuance of Portuguese colonialism in Africa. The Canadian government's position is well known to Portuguese authorities.


David Lewis: Mr. Speaker, I know the government's position, of course. Portugal is also a member of NATO, as is Canada, and may I ask the Parliamentary Secretary whether it is the intention of the government or the minister to take the position that NATO should censure Portugal and perhaps consider its expulsion from that organization for this alleged aggression?


Mr. Diefenbaker:: I hope not.


André Ouellet: As I said earlier, Mr. Speaker, the Secretary of State for External Affairs will be in the House tomorrow probably, but certainly Wednesday, and he will answer the question.


REGIONAL ECONOMIC EXPANSION
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, on December 3 I asked the Minister for Regional Economic Expansion a question concerning the report of a task force appointed by him to investigate economic conditions in Argentia, Newfoundland. Can the minister say whether that report has been presented?
Inquiries of the Ministry


Hon. Jean Marchand (Minister of Regional Economic Expansion):: That report was submitted a few months ago, Mr. Speaker. The question is whether it has been followed up. It has for a large part. Some recommendations were accepted, in particular those relating to the renovation of the castle in Hill National Historic Park, to the rebuilding of a road at Long Harbour, and to the building of a fish factory.
The other recommendations are now under consideration and they will be put into application as soon as they are accepted.


Walter C. Carter: I thank the minister for his reply but I should inform him that the big plan announced on July 6-


Mr. Speaker:: Order, please.




Mr. Barry Mather (Surrey):: Mr. Speaker, I have a question for the right hon. Prime Minister. Having in mind the agreement of recognition between this country and the Peoples Republic of China and the potential value of peaceful trade that may result from it, would the Prime Minister consider making a trip to the Peoples Republic of China in the coming year?


Pierre Elliott Trudeau: I thank the hon. member for his suggestion, Mr. Speaker, and I shall consider it in due course.


NATIONAL SECURITY
Mr. Bruce Howard (Okanagan-Boundary):: Mr. Speaker, may I ask a question related to an answer that was given on Friday by the Minister of Justice. My question is directed to the Minister without Portfolio in charge of citizenship. Has he reviewed the answer given by the Minister of Justice concerning the citizenship of the kidnappers of James Cross? Also, is it his intention to recommend to the government that the citizenship of these criminals ought to be cancelled?


Hon. Robert Stanbury (Minister without Portfolio):: Mr. Speaker, the matter has been considered. It would require a special Act of Parliament. It seems unlikely, however, that these persons would have any opportunity of enjoying any of the privileges of Canadian citizenship without subjecting themselves to the discipline of Canadian law. I am not sure, in the circumstances, whether these people warrant the devotion of any more time and attention by this House.

December 7, 1970
Inquiries of the Ministry


Robert Lorne Stanfield: supplementary question, Mr. Speaker. May I ask the minister, who seems to be fully informed on the subject, whether these people would be travelling with Canadian passports?


Robert Douglas George Stanbury: Mr. Speaker, that question ought to be directed to the Secretary of State for External Affairs.


Robert Lorne Stanfield: Mr. Speaker, no doubt it should be. I will take up the matter with him.


Bruce Andrew Thomas Howard: A supplementary question, Mr. Speaker. In view of the effect of the statute of limitations, under which the opprobrium of the country may be rendered ineffective after seven years, would it not be reasonable for the government to cancel the citizenship of these persons in order to avoid the possibility of their returning to Canada?


Mr. Speaker:: Order, please. That is an argument, not a question.


Mr. Lincoln M. Alexander (Hamilion West):: A supplementary question, Mr. Speaker. Since the minister has indicated that this could only be done by introducing a special Act of Parliament, can the minister advise us whether the government has ruled out the introduction of such an Act in order to cancel the citizenship of these people?


Robert Douglas George Stanbury: No, Mr. Speaker. The government as a whole has not given consideration to this step, although I have examined it. If the hon. member or others wish to make any representations on this subject, we shall be glad to receive them.


CANADIAN BROADCASTING CORPORATION
Mr. J. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, may I direct a question to the Secretary of State. I hope that he will be able to resume his seat in time to answer it. About a week ago, Mr. Speaker, I asked his Parliamentary Secretary if, before hiring an American citizen to head the public relations department of the CBC, the government had considered all other possibilities. I further asked if he would inform the House as to whether this same individual had until recently been an employee of the United States consulate. At that time the Parliamentary Secretary informed the House that the Secretary of State would provide an answer.


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, when the question was asked I was away on a mission abroad. I have not seen my Parliamentary Secretary since I returned, therefore I am not aware of what the hon. member is saying. I shall look into the matter before giving him an answer.


ENVIRONMENTAL AFFAIRS
Mr. John Lundrigan (Gander-Twillingaie):: Mr. Speaker, may I direct a question to the Government House Leader. Since he is just leaving the opposition benches, may I, in the meantime, direct it to the Prime Minister. Can the right hon. gentleman tell us when we can expect legislation to establish the proposed department of the environment which was recommended earlier in the session? Could we have an answer to that question?


Hon. Allan J. MacEachen (Presideni of ihe Privy Council):: Mr. Speaker, we expect to give notice of this very shortly, possibly today or tomorrow.


John Howard Lundrigan: A supplementary question to the Minister of Public Works, Mr. Speaker. May I ask the Minister of Public Works whether the functions of his department relating to the establishment of public works facilities for the fishing industry of Canada will be transferred to the new department of the environment?


Mr. Speaker:: Order, please. I think that in asking a detailed question of this kind the hon. member is anticipating an order of the day.


INCLUSION OF PARAMEDICAL SERVICES UNDER MEDICARE
Mr. Mark Rose (Fraser Valley Wesi):: Mr. Speaker, the Minister of National Health and Welfare looks relatively relaxed today so I shall direct a question to him. Would the minister kindly define what he means by "consensus", as that word applies to the inclusion of paramedical services under medicare?


Mr. Speaker:: Order, please. For the time being the minister will have to continue resting.


Mark Willson Rose: Mr. Speaker, may I rephrase my question.


An hon. Member:: Yes, the hon. member should.


Mr. Speaker:: Does the hon. member wish to rephrase his question?


Mark Willson Rose: Mr. Speaker, I will do my best. May I ask the minister whether he does not feel that the inclusion of paramedical services under medicare ought to be proceeded with in a manner identical to that followed in the case of medicare itself, that is, by allowing each province to enter the scheme when it felt it was ready to do so?


Mr. Speaker:: Order, please. I am still doubtful about the question as asked from a procedural standpoint. The hon. member is making a proposition or suggestion to the House. I think a question asked in those terms is not in order. Perhaps the hon. member might give the matter some further thought. For the moment, I will recognize the hon. member for Humber-St. George's-St. Barbe.

December 7, 1970


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
Mr. Jack Marshall (Humber-Sl. George's-Sl. Barbel:
Mr. Speaker, my question is directed to the Secretary of State. In view of continuing delays in the extension of television coverage to remote parts of Canada, especially northwestern Newfoundland, and in the light of the evidence of the relaxation of austerity measures, will the minister ask for an immediate review of the situation so that these areas may be afforded this communications media as quickly as possible?
Gérard Pelletier: Mr. Speaker, the facts and situations in remote areas of Canada are continuously under review. The Corporation makes constant efforts to reach these far off places. The percentage of those that have not been reached yet declines every year.

[Englishl


NATIONAL MUSEUMS
Robert Lorne Stanfield: Mr. Speaker, may I ask the Secretary of State whether, in view of the disturbing charges made by the hon. member for Battle River with respect to the administration of the museum branch following the presentation to the House of a motion under Standing Order 43, he is considering referring this matter to the appropriate committee of the House for examination?


Gérard Pelletier: Unfortunately, Mr. Speaker, I do not know exactly what the Leader of the Opposition is referring to, but one thing is certain and I keep reminding hon. members of it, the Committee on Broadcasting, Films and Assistance to the Arts, in the course of its forthcoming sittings, may well discuss any matter relating to broadcasting, films and assistance to the arts. I am positive that if the committee feels that the point made by the Leader of the Opposition is important, it will be put on its agenda and hearings will be held on the matter.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. May I assume from the reply of the Secretary of State to my question that he has not conducted any investigation himself into the charges made by the hon. member for Battle River?


Gérard Pelletier: No, Mr. Speaker. I merely said that, unfortunately, the charges brought by the hon. member for Battle River are a mystery to me, for the time being,
Inquiries of the Ministry
perhaps because I cannot remember now who is the member for Battle River.


Cliff Downey: A supplementary
question, Mr. Speaker. Is the Secretary of State not aware of the great increases in administrative costs, travel expenses, and in other areas in the past year or so which have taken place in the museums' branch. Has he not looked into this matter at all?


An hon. Member:: This is not a slow growth area.


Gérard Pelletier: Oh! I see, Mr. Speaker. It comes back to me now and I beg the hon. member to excuse me.
Indeed, there is an inquiry going on on this subject and, of course, it is conducted by the Museum Society that will ultimately send me a report. This is therefore a question which is before the Board of Trustees of the National Museums for consideration.


REDUCTION IN GRANTS TO NATIONAL CANCER INSTITUTE
Mr. Rod Thomson (Balileford-Kindersley):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Why have grants to the National Cancer Institute been reduced, and what is the government's intention with regard to this and other grants this year?


Mr. Speaker:: Order, please. The hon. member's question should be placed on the order paper.


INCLUSION OF PARAMEDICAL SERVICES UNDER MEDICARE
Mark Willson Rose: Mr. Speaker, if I get up any more, I shall need the assistance of paramedical services myself. I shall try again. Is the minister considering allowing paramedical services to be included in medicare on a province by province basis?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, may I advise the hon. member that a federal-provincial conference of health ministers is to take place this week to deal with the whole question of how the extension of the services of the various health professions may be handled by the federal and provincial governments.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the minister whether the government intends to advise the provincial representatives at the conference that the federal government will be prepared to make its contribution to any province that is prepared to extend paramedical services under the medicare program?

December 7, 1970
Inquiries of the Ministry


John Carr Munro: Mr. Speaker, the types of discussions that are taking place relative to how the federal and provincial governments would get together on this whole question of paramedical services and the extension of cost-shared areas precludes my saying what will be done with respect to any particular profession. I am precluded from stating, until the discussions are completed, whether action could be taken just because one province as distinct from others may want an extension.


MEDICARE AND HOSPITALIZATION-RECOMMENDATIONS ON WAYS OF SAVING MONEY
Robert Lorne Stanfield: Since there has been a good deal of talk by the government with regard to ways of saving money in the medicare and hospital plan field, I ask the Minister of National Health and Welfare when we may expect a report on the ways this administration is adopting to save money in this field.


John Carr Munro: As the Leader of the Opposition may be aware, Mr. Speaker, a task force report, which was developed as a result of federal and provincial participation in the whole health cost area, was prepared which contained many recommendations. Many of these recommendations have been accepted by various levels of government in terms of joint action to achieve this objective. The specifics as to what further action can be taken by both levels of government will be made known following the health ministers' conference this week.


Robert Lorne Stanfield: A supplementary question. Following the conference this week, will the minister make a report to the House stating precisely what recommendations have been accepted and at the same time putting a dollar tag on the savings involved?


John Carr Munro: I will be very pleased to consider taking this action, Mr. Speaker.


CANADIAN BROADCASTING CORPORATION
Stanley Howard Knowles: Mr. Speaker, I want to direct a question to the Secretary of State.

Is the minister-


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: After all, one should be bilingual and use both languages. Is the minister now in a position to answer the question I directed to him on Thursday, November 26, which was as follows:
Can the minister state when the CBC will put into effect an arrangement for the escalation of the pensions of its retired employees similar to the arrangements for retired public servants that were passed by this House last spring?

The minister said he would inquire.


Gérard Pelletier: I have an answer, Mr. Speaker.


Some hon. Members:: Hear, hear!


Gérard Pelletier: But this is an answer which probably will not please the hon. member because it is precisely that I have not yet received the answer to his question.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, December 3, consideration of the motion of Mr. Benson, that this House approve in general the budgetary policy of the government.
Marcel Joseph Aimé Lambert: Mr. Speaker, since the budget speech was delivered on Thursday night, we have had an opportunity of assessing what thin gruel it is. The country has had an opportunity to examine the budget. There has been a flow of reaction through newspaper comments and the like. I have yet to see one editorial positively accepting the premises of the minister's speech or the recommendations which he made.
There is a rather odd situation this afternoon. The Minister of Finance (Mr. Benson) cannot be here for the resumption of the debate. There is a valid explanation why he is not here, and I am not complaining about his absence. However, the members of this House are faced with a rather odd situation when discussing the financial affairs of this country. The minister is attending a conference with his provincial counterparts. Financial negotiations and arrangements between the federal government and the provincial governments will be decided at this conference. The members of this House will not have an opportunity to say anything about what will happen in their province. It matters little whether they are members of the government or whether the provincial government is of the same party stripe. They will not participate in the negotiations nor will they represent the people of their province during such negotiations. It is as though the cabinet, which in effect is the government, has almighty power. The administration is the government. The Minister of Finance is subject to the advice of his senior officials.
Yesterday, by way of historical interest, I read volume three of the Mackenzie King memoirs which dealt with the early years of dominion-provincial conferences. In 1945 and 1946, particularly 1946, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) participated in those negotiations. They were very difficult. He knows even within the limited disclosures by the diaries of Mr. Mackenzie King, there was much horse trading and knifing in the back. It makes one wonder whether
December 7, 1970

the ministers of the federal government and their officials made power sharing deals with the representatives of the provinces. It was as though they were carving a pie, namely, the Canadian body corporate. This pie was being carved by the representatives of the federal and provincial governments, each struggling for more power. These memoirs give a great insight into what has evolved as a result of negotiations between the federal and provincial governments in the fields of finance and health, as well as other areas in which there is joint jurisdiction. It is not a pretty picture.
I am struck by the complacency with which these decisions are accepted by members of this House. It represents an abdication of the right and duty of members to represent the people in their own provinces. They are not in the picture at all. Some sort of deal will be worked out. There will be preliminary negotiations with regard to the renewal of the federal-provincial agreements and fiscal arrangements which have to be worked out next year. Possibly some deal will be worked out with regard to changes that will be made in the income tax field. Yet what will hon. members have to say about an income tax system worked out and possibly agreed upon by others. What will the members of this House have to say about this situation? I am sure many hon. members share the feeling of frustration that I have. I am using this opportunity to put this, their own problem, before hon. members.
[DOT] (3:20 p.m.)
It amounts to this: the government of this country boils down to fewer than 40 men who are the wheelers and dealers of the interests of all Canadians It is as though the federal government says "I want this part for my empire" while each of the provinces says "I want equal dominion over the same area." Whom are they quarrelling over? What is going to be gained? I know what is going to be lost-it is the poor hide of the Canadian taxpayer which comes out of these deals the worst for wear. So this afternoon, in commenting upon the budget proposed last Thursday night, I am reduced to the position of a man who is in a broadcasting booth in a radio station and talks to a lot of people without knowing what effect his words are having on them.
This budget, and the whole procedure surrounding it, is most important. It lies at the core of government. It represents the ways and means the government must adopt to raise the money to make possible the supply which it will ask this House to grant. We are dealing now with the other half of the balance of the government's whole administrative spending program.
I wish the government would adopt a consistent policy with regard to the presentation of budgets. There have been fluctuations from one point of view to another, depending on circumstances. I recall the minister's predecessor, now the Secretary of State for External Affairs (Mr. Sharp), telling us that having regard to the complexity of a modern economy, and in order to exert a better degree of control, he intended to propose that there should be two budgets in a year. Presented with
The Budget-Hon. M. Lambert this prospect, however, the present Minister of Finance (Mr. Benson) said: Oh, no, there is no need. Last March, when no tax changes were proposed and it was quite obvious that the minister was dropping the surtax on income tax, he acquiesced in this view and was quite prepared to accept it at that time; unless there was another budget there would be no continuation of the surtax; it did not bother him one bit. As a matter of fact it was not intended that there would be a further budget, because any such move would give rise to the possibility of tax changes which were the subject matter of the white paper on taxation, a new system which was not then to be ready.
So, why have we been presented with a budget at this time? After all, when Parliament reconvened in October it was not intended that there should be a budget this fall. Indeed, I am sure there was no intention of presenting a budget three weeks ago. Has it been brought down because there is now an indication that the economy is not going well? Is it because the October figures indicate that the budget deficit which had been forecast was likely to be considerably greater than was expected last summer, particularly in June, as a result of the minister's undertaking that more money would be passed on to the provinces? I admit that allowance must be made for the acceleration of payments to the provinces, but this is a once-in-a-lifetime event, cramping up the procedure by one month; it does not represent any continuing betterment of provincial positions, since the provinces will only get a windfall payment this year representing one month's payment of tax. Nevertheless, there was need to save some $250 million. After all, the minister will be obliged to go to the market for a lot of money this year and next year. If he is trying to save $250 million, a continuation of the surtax becomes necessary. The procedure is simple. The tax forms are there; it is the simplest way. This is reason number one for presenting us with a further budget.
It is likely, too, that there was a belated attempt by the government to fight unemployment. Notwithstanding statements made inside this House and outside it by leaders of political parties in opposition to the government, by the head of the Canadian Congress of Labour and others, that unemployment will be serious this winter, much more serious than the government appears to believe, nothing was done until-and this may be the ironic consequence of events in Quebec-a number of complacent cabinet ministers suddenly realized that unemployment was likely to be very serious and that some token effort, at least, would have to be made to show that the government was trying to deal with the situation. In addition, of course, it was realized that the government was running increasingly counter to the advice of the Economic Council of Canada.
There is possibly a third reason, Mr. Speaker. During the middle of the year and in the early fall, money was poured very generously into some regions of the country by the Minister of Regional Economic Expansion (Mr. Marchand). The House was treated to a succession of bulletins, almost daily, as massive injections of money were announced. Incidentally, I am not satisfied that all
2356*-43

Mortgage and Housing Corporation will have a $40 million expansion of its capital budget, all of this for 197172. So here again, there is nothing to help fight this winter's unemployment; this proposal is designed for the next fiscal year.
Then, there is to be an expansion of the industrial incentives program. I must be very careful here, Mr. Speaker, since an area that you know rather well is to be designated for special incentives. Also included is the city of Montreal and surrounding areas. I was told by one government official that in the province of Quebec 99 per cent of Quebeckers live in areas that are now designated for special incentives. I wonder why the other one per cent was not included. However, 99 per cent of the population presumably live in special incentive areas.
Direct loans will be made to the footwear industry, and these loans are to be available only in 1971-72. No help is to be given to the industry this winter. The sum of $5 million was previously announced for the shipbuilding program for 1971-72. Again, there is no assistance for 1970-71.
Old age pension and guaranteed income supplement increases amount to $200 million out of a fund that is earmarked for old age security. Those people who have contributed to the fund are told they will get their contributions back in greater quantities, but not until April 1, 1971. The change in the family allowance program represent merely a redirection of the money. It was said that there should be a redistribution of income to the lowest income groups in the weaker regions. I do not understand how anyone can say that old age pension and family allowance recipients live in greater numbers in weaker regions. I would think quite the contrary, and I cannot see how this is going to help the lesser developed regions of the country because old age security recipients and family allowance recipients are spread across the whole of the country.
[DOT] (3:40 p.m.)
Let us then look at the capital cost allowance supplement which would permit manufacturers and processors to value investment in new equipment at 115 per cent of the actual cost. It is suggested this plan will cost the treasury $25 million. In other words, there will be another $25 million presumably left in the private sector, but none of it in 1970-71 and precious little, I would say, in 1971-72. Frankly, all the adoption of this plan means is that the present economic situation is not good enough to entice manufacturers and processors to carry out normal business investments. There has been a lag because of the flatness of domestic economy. Now, a longer and a bit bigger carrot is going to be dangled for a period of about 15 months. There will be a windfall involved here for people who normally would be constructing new buildings and changing machinery. I cannot envisage a major industry being able to assess the market and come to the decision that it should construct a major plant, making the necessary acquisition for the plant and the new machinery by March 31, 1972. This is just not done that way by major industries. It cannot be done that way.
The Budget-Hon. M. Lambert


An hon. Member:: You are wrong.


Marcel Joseph Aimé Lambert: An hon. member on the other side disagrees with me. A major industry just cannot build a plant, purchase and instal the machinery within that period of time. There may well be a replacement of machinery and additions made to plants. This may well help to some degree, but let us not fool ourselves that a major industry will be enticed to come into a particular area and avail itself of the advantages of this provision.
The budget speech also contained this statement:
In addition to the increasingly expansionary fiscal policy, monetary policy since late last winter-
I find that a most amazing statement. It talks about something in addition to the increasingly expansionary fiscal policy. Where was there any expansion in fiscal policy during the past year? Taxes were maintained at the same level and we now have the new proposal to increase taxes by renewing the surtax. As a matter of fact, that was the heart and core of the last budget. This was an ill-founded proposal. That budget also referred to increasing consumer credit control. If anyone can talk about that as being expansionary on a fiscal basis, he should start to explain the English language. There is no way the last budget should be considered as anything but an inflationary one. The government said consumer credit controls were absolutely essential and we were going to have them within a month. Of course, we saw their demise in June because there was only one result at the end of consumer credit controls and that was increasing unemployment in this country. In any event, somebody was misguided enough to indulge in the folly of thinking that consumer credit controls were necessary last summer to deal with the problem of inflation which existed then.
We are told there was an expansionary fiscal policy On the contrary, there has not been one bit of expansion in fiscal policy. In so far as monetary policy is concerned, there has been relaxation of the bank rate and accompanying declines in the commercial bank prime rates. Even this morning, a further decline was announced by one bank. When I consider the effect of this so-called expansionary monetary policy on the average rate of interest on long term government bonds, I conclude that the people of Canada who are picking up government bonds just do not believe the government.
I invite hon. members to look at the Bank of Canada's statistical summaries which indicate the incredible position of this government having to pay an average of 8.13 per cent on its long term bonds. It is true that in the last month the rate has declined to about 7.5 per cent. If the government in this case is not believed by the public, how on earth can anyone ask for a lower interest rate? The farm improvement loan rate is set on the basis of that government long term rate. The Central Mortgage and Housing Corporation interest rate is set in relation to that rate. Farm Credit Corporation loans are set on the basis of the government's long term rate. This is sup-

December 7, 1970
The Budget-Hon. M. Lambert
posed to be the best rate in the country. When this best rate is over 8 per cent, it means that the public just does not believe the government and that its performance is not credible. Let us not say there has been this vast improvement as a result of expansionary monetary policy.
Let us consider some of the criticisms and comments. The minister made a great deal during his opening statement about the change in the direction of the rate of unemployment. There has been just one slight deviation for one month, and even in that regard the minister said it resulted from a sort of general public service lexacon which may cause variations from the trend from time to time. In other words, it was just as likely that we had to maintain a downturn in the rate of increase of unemployment. Let us see what it is after Christmas. What I am saying in this regard is that I do not believe the minister's optimism is justified based upon the change in unemployment statistics in one month.
[DOT] (3:50 p.m.)
Nor can I see justification for optimism with regard to the consumer price index. If one would take a look at page 903 of the November 1970 Statistical Summary of the Bank of Canada, one will see that with regard to the consumer price index there has been a slight downturn or levelling off of the curve in late October and November of 1970. However, this is a reflection of a much sharper turndown in food prices. There has been nothing but a constant climb in all the other elements which go into making the consumer price index. One has only to look at the chart as soon as the fall surplus is over- which is the harvest season-and one will see a turnup after Christmas in a number of food prices such as fruits, vegetables and certain types of meat. Then, we will see again a turnup in the consumer price index. I regret that as everyone else does.
I mention again that I do not think the reference to either the rate of unemployment or the change in the consumer price index this year is a sufficiently strong base for the minister's enthusiasm and optimism in the opening paragraphs of his speech. The representatives of the provinces are meeting in Ottawa. It will be very interesting to read what they have to say to the minister and how they react. I am sure the Parliamentary Secretary to the Minister of Labour (Mr. Perrault) has already taken cognizance of what has been said by the Premier of his province. He, of course, has had a lot of experience with the Premier of his province. The people of British Columbia found the Premier of that province much more reliable than the hon. gentleman because he went nowhere in the provincial House.
Then, there was the emphasis on the foreign trade balance. The minister made much in his speech about the rate of increase which had taken place. But the rate of increase in the third quarter levelled off. The gap between exports and imports continued, mostly because imports declined due to the flatness of the domestic economy. Canada just was not importing as much in the
[Mr. Lambert (Edmonton West).!
last quarters of 1970. We will see what happens in respect of the last quarter as a result of the unfortunate strike in the automobile industry. This will knock our trade figures for a loop. There will be a very serious cut.
I was very intrigued with the attitude of the minister when he was interviewed on television immediately after the presentation of his budget. I remember how he almost climbed down the throats, if that were possible, of his interviewers because they were being most skeptical about his performance and his budget, particularly when one of them asked about the man in the middle income group and what on earth was being done for him.
The man in the middle income group has become the sacrificial lamb of the country. In respect of unemployment insurance, it is his body that will be bled. In so far as family allowances are concerned, the cutoff is $10,001. Is it the $10,000 a year man who is rich now? When the minister was asked this question, he replied that such a man was within the rich class. If that is so, then I find that the policeman, the commissioned officer of say major rank, the sergeant of the mounted police, the carpenter, the plumber, the electrician and the garage mechanic are all above $10,000. They are, then, in the rich class in this country. The minister made some statements to the effect that less than 10 per cent of the taxpayers of this country are above the $10,000 class. Ah, in number perhaps, and I am not so sure for 1970.
If we look at the 1969 Edition of Tax Statistics covering the 1967 calendar year-and I refer hon. members to the summary table number 2 on page 10-we will find that those who have filed returns on which the total income was $10,000 a year or more in 1967 represent about 10 per cent of the total number of people. They earned 18 per cent of the income but paid 37 per cent of the tax. If we add the increases in salaries and wages that have been received by Canadians since 1968, at an average rate of between 8 per cent and 9 per cent and in some instances more, we see that more and more people have moved into that rate above $10,000. I judge, therefore there would be rather more than 10 per cent in numbers who would be earning more than 18 per cent of the income. It may go as high as 25 per cent of the income earned in this country. These people will certainly have paid well over 40 per cent of the personal income tax. These are the people who are to be hit harder.
I do not know, Mr. Speaker, but it seems to me that a small group of individuals in this country who are not the aristocracy of business but who represent a cross section of the working populace of this country, whether they are white collar, blue collar or whatever collar people-I suppose most of them wear sport shirts now-


An hon. Member:: Turtleneck.


Marcel Joseph Aimé Lambert: Turtleneck-they are the ones who are bearing the brunt of the tax load. They are the ones who, presumably in the mind of I do not know whom, are to be bled much more because at every turn it is those in the $10,000 and up bracket who go into the pen to have their throats cut.
December 7, 1970

[DOT] (4:00 p.m.)
I would have liked to have seen the minister do something in the budget by way of a tax cut for the lower income groups. The injection of money there would have been that much more quick and effective. For instance, there could have been a 6 per cent reduction in personal income tax for all income classes, which would inject $325 million. If it were for those earning less than $6,000 a year, it would require $87 million in tax forgiveness. A 10 per cent reduction in personal income tax rates for those earning less than $6,000, would inject $140 million.
If the minister wanted to do something that has been advocated from both sides of the House-and I know that a number of government supporters are in favour of it-be would have reduced the sales tax on building materials. I say "reduce" because I think that in the light of the changes that are being proposed for old age income security and the GIS, one must leave 4 per cent of the sales tax paid into the old age security fund inviolate at this time. Therefore, I say that the minister could have reduced the sales tax on building materials to, say, 4 per cent. The total tax take now under the reduced building program is in the neighbourhood of $225 million, so it would only be about two thirds of that amount which would be injected into the economy or given up out of revenue.


Mr. Perrault:: Provincial revenue as well?


Marcel Joseph Aimé Lambert: I am not talking about the provinces. The sales tax program with regard to building materials starts here. I will not engage in the practice of giving provinces certain advice. If they see fit to remove a portion of their sales tax from building materials, I think the Canadian nation would benefit thereby.


Raymond J. Perrault: Hear, hear.


Marcel Joseph Aimé Lambert: I will only advise the government in whose House I am a member, not the others.
The third thing I would do is to remove uncertainties in the export market. There are a number of other incentives that could have been considered. Many of our export industries are now having to enter into long term agreements based upon a floating Canadian dollar. Because of the threat of the repegging of the dollar, they are unable to engage in the market in normal hedging operations. They cannot lay off and buy forward because the dollar might be pegged back at 96 cents or 97 cents, where it is readily defendable under the present circumstances. Ask the lumber industry, ask the auto parts industry and ask a number of other export industries just how easy it is to do business. Ask the heavy chemical industry where lay-offs by the hundred are taking place. We will have to consider what has been happening to the Canadian economy. It has been receiving some heavy body blows during the past years, many of them because one step was not related to another.
The Budget-Hon. M. Lambert
The minister thought he was going to fight inflation by accelerating the tariff cuts with regard to the Kennedy round. A number of industries were going to be barely able to keep alive on the basis of the cuts over the five years. The knife was being shoved into them slowly. Ask the heavy chemical industry, ask the fine paper industry and ask some of the others what is happening to them. Their position is exceedingly difficult as a result. First of all, they face heavy additional competition on the domestic market; second, their prices sire greatly accelerated by reason of the unpegging of the dollar and the uncertainty as to when the dollar may be stabilized. It is not that I am necessarily an advocate of a pegged dollar, but we happen to be part of a team that is working in the International Monetary Fund. We all subscribe to the Breton Woods Agreement; we are all signatories to it, but twice now Canada has seen fit to say "I am going to take the ball and I am going home". If everybody else did the same, what would happen?
I will ask hon. members whether any of them remember the absolutely nonsensical and suicidal international financial battles that were waged in the 1930's when we had completely unrestricted currencies.


Mr. Laing:: R. B. Bennett.


Raymond J. Perrault: Your hero.


Marcel Joseph Aimé Lambert: At that time the Canadian dollar was caught in the same position as other currencies. Of course the Minister of Public Works (Mr. Laing) is talking through his usual hat. I would like to see him rise to his feet to give a reasonable and reasoned argument regarding the condition of moneys in the 1930's and subsequently. Let us look at what happened to England, France, Germany, Italy, Japan, and all the others. Now, there is a considerably greater stability at the present time, but it is at a fearful price as the Canadian government for certain reasons sees fit to sit on the outside of the international monetary agreement.
I would have liked to have seen the government make some proposals to expand the incentives with regard to pollution control machinery, both for municipalities and industry. There is something that will accomplish several things. It will help to control pollution, and certainly people are worried about that today. We know that industry and government have to have some help in order to achieve that control. That would have been a proper step because, in addition, employment would have been provided both in the production of machinery and the operation of the plants.
Certainly we could have renewed or expanded the system of incentives for sewage treatment that existed some years ago by introducing a forgiveness feature into any grant system, as was done at that time, so as to assist the municipalities to deal with the effluent that comes from their sewage systems. This is one of the worst sources of pollution, and yet little or nothing is being done to assist municipalities in dealing with the problem.

December 7, 1970
The Budget-Mr. Saltsman Therefore, I move the following motion:
That the motion be amended by deleting all the words after that" and substituting therefor:
"this House deplores the abysmal failure of the government to make any budgetary proposal to effectively stimulate the Canadian economy with a view to an early substantial reduction of high winter unemployment and to alleviate the economic plight of pensioners and other Canadians in receipt of incomes below * the poverty level, as described by the Economic Council of Canada".
[DOT] (4:10 p.m.)


The Acting Speaker (Mr. Laniel):: Hon. members have heard the motion put by the hon. member for Edmonton West (Mr. Lambert). The hon. member for Waterloo.


Mr. Max Salisman (Waterloo):: Mr. Speaker, the budget serves to confirm something which has been obvious to most observers for a long time. It confirms that Canada's economic objectives are in tatters and that the Trudeau government has abysmally failed to solve some of the serious difficulties in this country.
When the Economic Council of Canada set out the goals for this country, stable prices, full employment, steady growth, and a viable balance of payments, everyone was in agreement that these objectives could be achieved with some kind of intelligent approach to economic problems. What happened to these objectives?
Let us deal with full employment. The unemployment situation in Canada is disgraceful. No words can describe the damage done by this government. We have the highest level of unemployment of any industrialized nation in the world. That is some record, but this government has managed to achieve it.


Robert Lorne Stanfield: And they have only started.


Max Saltsman: Let us hope they get stopped in a hurry.
As for growth, again the record of Canada is worse than that of any other industrialized nation. The government tries to manufacture figures to show that we are getting something like 7 or 8 per cent growth, but it does not say how much of that figure is the result of inflation. The other thing the government does not say is that the remaining growth shown in those figures results from the burgeoning population. If we want to compare our growth with that of other nations, the key is in the per capita comparison. It is amazing how a government could have shattered the economy so effectively.
There may be some members on the other side of the House who will say that I have just taken two of the goals, and that the government has been more successful with the others. Well, let us take stable prices. The government maintains that prices have risen less rapidly in Canada than in any other country in the world, except Finland. It is true that there has been a marginal improvement in prices but the question to be asked is, at what cost? What kind of price do we pay for a marginal improvement? It is true that prices have been held down marginally, but the government will not be able to do

that in future because the lid is coming off now. The Prices and Incomes Commission has turned out to be a major fiasco. It has not been effective. Prices have been held down only in some sectors that were vulnerable to pressure. For instance, banks have not held down prices. In the last three years, their profits have increased by almost 75 per cent. There has been failure in the area of stabilizing prices, Mr. Speaker, and there is very little to be proud of regarding that. Any marginal improvement has been achieved at enormous cost to the sectors.
We do not have a viable balance of payments. When a government is preoccupied with trying to reduce the value of the dollar, when it is embarrassed by the $4 billion and more it has in reserves, that is not a viable balance of payments situation. One of the difficulties with the balance of payments in this country is the slow growth of our economy. Unemployment is diminishing economic activity and because of our dependence on branch plants from the United States there is a slowdown of imports. Our policy of tight money, which fortunately is being relaxed now, and of high interest rates, has brought money into Canada that was in large measure speculative and was not necessary. The so-called improvement in our balance of trade has not been good. It cannot be sustained and is an embarrassment to us at this moment.
Unemployment has cost us a great deal, Mr. Speaker. Rather than try to give you my views or my figures on this cost, I should like to quote the words of a federal official as reported in the Globe and Mail of June 17, 1970. The article reads:
Unemployment may cost Canada $5 billion this year in lost production and the cost of providing welfare payments and job retraining for the unemployed, federal officials say.
This does not begin to put a dollar value on the human costs involved in job loss and disrupted family life. Nor does it include relief payments by the provinces and municipalities.
The article goes on to mention the hidden unemployment which does not show up as a statistic. The reference is to people who would have been in the labour force and part time workers who would have been glad to work had employment been available. This editorial concludes by indicating that such lost production cannot be recovered.
One would have thought there would have been an outcry in the country as a result of this terrible record, but I regret to say that such has not been the case. The government's suicidal economic lunacy is often camouflaged by events. At the same time that the budget was brought in, all Canadians were relieved to learn that Mr. Cross had been released and all attention was focussed on this matter. Very little attention has, therefore, been paid to the budget or to the economic policies of the government.
But, Mr. Speaker, the matter of Mr. Cross, the province of Quebec and the budget did not stop there. This budget was designed to take some steps to deal with the difficult unemployment problem in Quebec. An idea was advanced by the Premier of Quebec but was not incor-
December 7, 1970

porated in the budget. This budget is insipid; it is not going to answer the problem but will only create new problems.
The people of Canada want to see unemployment cured in Quebec and every other province. The measures proposed in this budget, the capital fund that is suggested, will neither cure unemployment in Quebec nor do anything of significance for the rest of Canada, Mr. Speaker. The dimensions of the problem are too great to be overcome by the picayune proposal of $40 million or $50 million to be pumped into Quebec some time in the future.
On various occasions Premier Bourassa has said that he must have at least 100,000 new jobs for the province. The record shows that in a modern society every job created costs almost $30,000. For the province of Quebec alone, fast arithmetic shows that the cost would be $3 billion. Even under the designated area program, which pays 20 per cent of the cost, that means pumping $600 million into one province immediately-and the problem is not confined to just one province.
How can we accomplish any kind of intelligent objective with the type of program the government has presented? For the whole of Canada, $150 million is available. That is a lot of money but not enough for dealing with a problem of the magnitude of the one that exists. The money is a teaser, because there is not enough to deal with the problem. Questions will be asked about it. Some will say that it is well and good for the government to make available this money, but they will want to know where it is to come from. I will deal with that point as I progress.
[DOT] (4:20 p.m.)
On budget night everyone was expecting a tax cut, or, if not a tax cut, at least a dropping of the 3 per cent surtax. I think everybody had a reason for expecting that. A tax cut would have been the sensible thing to bring in, and opposition critics might have been hard put to find reasons for condemning the government for its actions. The government would not have found that intolerable. But there was no tax cut. There was not even a dropping of the 3 per cent surtax. One wonders, why did the government not drop it? It seemed like the best thing to do. Removing the surtax would have pumped money into the economy and, apart from the economic benefits of such a move, the boost in terms of psychology would have been enormous.
We have often heard ministers of finance say, when defining their economic objectives, that it is equally important for us to attain certain important psychological objectives. Why were taxes not cut? They were not cut because the government had put intself into a box. It could not afford to do so. It did not have the money it needed, because it has been giving away money in many areas. I suggest that the government's action in allocating this money to certain areas is not as useful or as helpful as either a tax cut or a removal of the surtax would have been, because that action would have stimulated the economy directly. Actually, the government has closed
The Budget-Mr. Saltsman
off, through its policies, many of its available sources of revenue. Let us look at what is being done.
One measure being proposed is increasing the depreciation allowance up to a maximum of 115 per cent. The depreciation allowance has been suspect for a long time. No one has suspected it more in the past than the Minister of Finance (Mr. Benson). I should like to refer to an article that indicates the minister's thinking on the question of depreciation allowances. These allowances, according to this article, constitute a great giveaway program and the federal government will probably take steps to reduce the size of this program. Instead of following that course the minister, in his budget, has introduced an accelerated program. The article was printed in the Monetary Times of September, 1968. It is entitled, "Ottawa-and deferred taxes". The subheading is. The question is: Can the Federal Government today afford to grant capital cost allowances as a means of stimulating growth?" The Article reads:
Big business may soon have reason to examine a further dimension of the Just Society: The Federal Government, with ample cause to do so, is almost assuredly taking a hard long look at capital cost allowances-the rates of depreciation allowed for tax purposes.
Projections made on the strength of a study done for the Carter Report suggest that since 1949 tax deferrals, arising from capital cost allowances, are now close to $6 billion. That is $6 billion which Ottawa never got and which had to be made up
in other ways, notably by increasing taxes paid by individuals_
hardly tolerable for a government which has been so chronically strapped for cash.
The article then refers to reporting and reads:
The report to the tax authorities can understate actual earnings to a degree that is totally misleading of their value. DBS, for example, uses the returns made to tax authorities in calculating profit trends. Would the trend have declined so vigorously (if at all) last year if corporations hadn't been writing off new investment of the preceding years at the maximum rates?
Later, the article continues:
This is one major cause for another look at capital cost allowances. Another is the consequences for the company that makes maximum use of them. It is, in effect, overstating cost of expansion and understanding return, distorting its balance sheet and building into its operations a windfall benefit as a permanent fixture-
The estimated $6 billion of deferred taxation since 1949 would have permitted a corresponding reduction in other forms of taxation. Suppose it had been lumped into reducing the personal income tax? The effect of such an action would have been to mcrease potential spending power of individuals to some extent, no small inducement to growth itself and, by far, of a healthier nature.
The writer of the article interviewed the minister. It was his impression that since the minister was a former accountant, he was well aware of some of the abuses connected with capital cost allowances. He thought the minister wanted to take a more realistic approach to capital allowances. As so often happens, when people become ministers they forget some of their previous good intentions. The point is that the capital cost allowance is not a good way to stimulate the economy. It is good for two things. First, the capital cost allowance improves the profitability of some corporations; second, it enables a

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The Budget-Mr. Saltsman
corporation to hide the fact that its profitability has been improved. It would have been far better if the minister had taken the amount of money involved from some of these corporations and given it back to the people who want to spend it. The problem is not a shortage of machinery. The problem is not the necessity of encouraging capital expansion. The problem lies in the shortage of purchasing power.
The people of this country need many things, but they do not have the money to buy them. By cutting taxes, we could have stimulated the economy. By taking other steps, such as increasing income tax exemptions, we could have further stimulated the economy. That stimulation would have been reflected by increased purchasing power, which would have started the wheels of industry moving again. According to the minister, it is anticipated that this new measure will cost the government about $250 million. That is almost the same amount of money that the government would have lost if it had dropped the 3 per cent surtax. The minister is thereby saying to us that the best way of meeting our present day problems is by giving industry the benefit of this money instead of by cutting taxes for ordinary people. I think he is dead wrong. I cannot understand his reasoning or logic.
If the government is short of money and wishes to maintain the flow of funds, surely the granting of these increased depreciation allowances was not the way to solve its difficulties. Increased depreciation allowances create difficulties. Of course, the first impact of such measures is to encourage people to modernize their plants. There can be no argument about the value of plant modernization programs. The government is allowing industry the money to do that. The increased depreciation allowance will enable industry to construct buildings and acquire machinery. To the extent that the allowance is used to erect buildings, it will create employment. Yet, when the allowance is used for the purpose of machinery acquisition, two things happen. The tendency is for more automated machinery to be used. In the short run, that throws people out of work. To that extent, the allowance does nothing for the man who suddenly finds himself unemployed.
In addition, the machinery itself is seldom bought in Canada. Most of such machinery that we use in this country is imported from the United States. Therefore, first, we see the usual offset taking place as a result of automation. There are fewer jobs as a result of automation, and automation increases which increased capital cost allowances. That unemployment is compensated for by increased employment in the capital goods sector. So goes the theory. But that will not happen in Canada, because our machinery for the most part is not made in this country. Perhaps it would have been better if the government had said these grants were to apply only to purchases made in Canada. Yet even so, there would be some obvious difficulties. The measure itself is poorly designed. I cannot comprehend why it was used, particularly since the government has had such bad experiences with depreciation allowances every time it has permitted them. The last time the minister used them, his purpose was to slow down the economy. That did not work. He
did not learn anything from that experience. He is talking about using increased depreciation allowance and more rapid write-off to stimulate economy. I do not see how that will work. It certainly will not work as effectively as other measures.
[DOT] (4:30 p.m.)
I now wish to deal with the regional development program. For years, many of us have fought for regional development programs to stimulate the economy of some less industrially developed parts of Canada. We are now taking a second look at the whole program. It does not make any difference who first had the idea for this program. If there is a way of ruining an idea, the Liberal party will find it. They have a fantastic talent for destroying good ideas.


Mr. Barrett:: What a philosophy.


Max Saltsman: I am glad the hon. member is awake. It is always better to speak to a group whose eyes are open, even if their ears are not.


H. Gordon Barrett: Make it good so we will stay awake.


Max Saltsman: The idea of regional development was good. It received the support of virtually every political party. What has happened to this program? Regional development must be enormously selective. It must be pinpointed and restricted to very few areas if it is to work. If not, the incentives could be so enormous that they will become self defeating.
Virtually all of Canada has been designated under the regional development program. It would make more sense, and there would be less paper work, if the government would state which areas of Canada are not designated under the regional development program. The entire Atlantic region, all of Quebec except one per cent, the entire province of Manitoba, a large part of Ontario, Saskatchewan, Alberta and British Columbia are designated. What is the sense of this program? When this fact is pointed out to the minister, he says not to worry because there will be different rates of incentive; the present rates will apply to the new areas designated but there will be different rates for the areas presently designated.


Robert Lorne Stanfield: Give him a few more months.


Max Saltsman: At least we are together in this. It is a comedy. The Minister of Regional Economic Expansion (Mr. Marchand) appeared before a committee of which I was a member. I am sorry I did not have time this afternoon to look for a specific reference. If someone wants it, I will locate it. The committee at that time was discussing the level of grants. The maximum was going to be 25 per cent. One of the members of the committee asked the minister whether he would consider a 30 per cent maximum. The minister replied that if there was to be a 30 or 35 per cent maximum, the government might as well operate the industry instead of giving all that

December 7, 1970

money away. The minister was correct. What has been proposed today? The government is proposing a maximum of 50 per cent.
The regional development program has not significantly helped those areas which need help. Even by raising the maximum to 50 per cent, those areas will not be significantly helped. We have now reached the point where the cost is so great that we may as well operate the industries. A Canada development corporation should be established. It should take over the crown corporations. There should be a policy of economic planning to ensure that the designated areas have industry.


Some hon. Members:: Hear, hear!


Max Saltsman: There can be no other way. We have learned that offering a bigger and bigger bribe is not paying off. We have no information as to how many industries would have located in the designated areas if the incentives had not been offered. We do not know how long the industries will remain in these areas, nor do we know whether they are the type of industries that are viable and useful to the various parts of the country.
How long are these programs going to continue? Although the government is relying on them, we have now reached an end point. Whatever merit the programs may have had in enticing industries through tax concessions and grants to some of the less industrially developed areas of Canada, experience has shown that this has not worked and there is very little promise of it working in the future. We must face this fact.
With less costs to the Canadian taxpayers and more potential, the crown corporation seems to be the most suitable vehicle for this kind of approach. The history of DEVCO in Cape Breton illustrates what we are suggesting. Meanwhile, the program is costing a great deal of money.
The government has pointed out its inability to find money. The Carter commission report was examined in this House, but we still do not have a capital gains tax in Canada. To my knowledge, we are the only industrialized nation that does not have a capital gains tax. This has cost the country a great deal because what it does not get in one area, it has to get from another. Those who do not pay the capital gains tax are subsidized by the wage and salary earners of this country. They pay tax on every cent they earn. There is a limit on how much people can be taxed at any given time.
The allowances to the oil and mineral industries, which we hoped would be changed, apparently are not to be changed. Without waiting for the report of the committee, the minister announced that he was again going to be generous to this area. His courage failed him. I regret that the courage of the members of the committee also failed them. Instead of criticizing the minister for making a statement of this kind while they were drafting a report, they included congratulations in their report. I am sorry to say this because I have a high regard for most members of the committee. It appears that the pressure on them is too great, even for those noble committee members.
The Budget-Mr. Saltsman


H. Gordon Barrett: I like that word-noble.


Max Saltsman: I am glad you like it. Keep on listening and you may learn something. There is evidence that the low income and middle income wage and salary earners in this country are greatly overtaxed. This is because of the benefits of depreciation allowance, capital cost allowance and capital gains. There are no capital gains or depreciation allowances for the wage and salary earners. They cannot write off anything. They must pay high levels of tax. Income could be obtained from other sources than the wage and salary earners of this country. Even those earnings over $10,000 are being treated unfairly in comparison to other sectors of the economy.
Another area I wish to deal with is the gross inefficiency of the economy because of policies this government has adopted. We have said on many occasions-and this might be a good occasion upon which to repeat it-that we in Canada use 30 per cent more capital per worker than does the United States, the wealthiest nation in the world, yet we produce 30 per cent less. Every study which has been made shows that this dismal record does not arise through incapability on the part of the workers of this country or through the misuse of resources but, rather, because of the way in which capital is managed in our branch plant economy.
[DOT] (4:40 p.m.)
I shall be moving an amendment in a few moments, Mr. Speaker. Let me conclude by saying this. The ability of this government to congratulate itself on things for which it should be ashamed, surpasses the imagination. The minister talks about the good state of our current balances; he tells us that our foreign reserves are in great shape; he notes our better price performance and the decline in short-term interest rates. Yet, while all this great stuff is going on, we are slipping further and further behind. Not long ago, Canada enjoyed an income per capita which was the second best in the world. We have now slipped to fourth place, behind Switzerland and Sweden.


Some hon. Members:: Shame.


Max Saltsman: Canada is a country with vast resources. What more could a country ask for than we have here?


Thomas Clement (Tommy) Douglas: Good
government.


Max Saltsman: Right; that is what we need, we have been blessed by everything except an intelligent government.


An hon. Member:: And an opposition.


Max Saltsman: Oh, the opposition is doing all right. It is the government.
We are living in a society which is being challenged by dangerous men, by people who have no use for democracy or for our institutions. No doubt, there have always
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been men like these, and there always will be. What we ought to remember is that they play on real grievances *which exist in society. There is ammunition available to them. They can ask: What good is your system of democracy if you cannot find a job, or if you cannot find a house? In this way, our society is in danger unless we do something about it.
The government showed a willingness to suspend civil rights when it felt democracy was in danger, and it used drastic and dangerous means in doing so. Where is the government's courage when we in the opposition ask them to bring forward, not measures which prejudice civil liberty, but bold measures to curtail the economic chaos in this country?


Some hon. Members:: Hear, hear.


Max Saltsman: Why is it so terrible to ask that the government set up a fund, not of $150 million, which would not really help the people of Quebec, but amounting to billions of dollars to deal with the many social and economic questions which confront us? Now is the time for the government to mobilize the savings of the people of this country whether they are in banks or in trust funds and use them for the benefit of Canada, because those who hold them at the present time are not doing so, or failing to do so effectively enough. This is what needs to be done. This is a time to act with courage, conviction, and understanding.
. There are certain steps which should be taken immediately and these are set out in our amendment. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words:
"and this House deplores in particular the failure of the government to alleviate the plight of those in receipt of inadequate incomes by providing that no income tax shall be paid by single persons earning $2,000 a year or less, or by married persons earning $4,000 a year or less, and also by providing tax relief for those in the middle income brackets."



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: 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 Humber-St. George's-St. Barbe (Mr. Marshall-National Defence- Suggested special militia training program for young Canadians; The hon. member for Rocky Mountain (Mr. Sulatycky)-Combines-Curtailment of restrictive practices of professional societies; the hon. member for Fraser Valley West (Mr. Rose)-Public Service-Sharing of decisions affecting job classifications with employees- amendment of legislation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson, that this House approves in general the budgetary policy of the Government, and the amendment of Mr. Lambert (Edmonton West), and the amendment to the amendment of Mr. Saltsman.
Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I am happy to say a few words on the budget that was introduced last Thursday. I listened to the Minister of Finance (Mr. Benson) with great interest, and I do not rise to speak in this debate as a financial expert, but as an individual who wants to express his opinion on a budget that the Minister of Finance has tried to defend and about which he has tried to arouse enthusiasm.
Mr. Speaker, I read this budget many times on my way to my constituency for the weekend. I would have liked to prepare these remarks better, but I did not have time to do so, because my train was late today.
I am always astonished when I compare Canada's budget with that of other countries with almost the same population. This country, with a $13 billion budget for 20 million citizens, does not succeed in providing the necessaries of life to low-income families and in solving once and for all the situation with regard to consumption.
We do wonder, Mr. Speaker, and like all the others, we try to find where the problem lies. I, for one, maintain that we overspend on administration and underspend on participation. Very little money is paid out to those who stand in need of it.
For instance, the Department of Agriculture estimates total several hundred millions of dollars, but if we take the administration costs into consideration, we are utterly astonished to realize how little farmers get. That is why I said earlier that too much money goes into administration and none is left for those who would need it so much.
This budget once again reflects the erroneous mentality of bureaucracy. The minister contends that the expansionary fiscal and monetary measures he took are beginning to show results which will further improve. He said that most economic indicators show an improvement of the Canadian economy and that unemployment is easing off. This one is a bit steep and if the minister would take a tour around my region, he would notice immediately that unemployment is not easing off at all.
The first measure proposed by the minister is designed to jack up unemployment benefits. Indeed, I would like to make a few remarks on this point.
While benefits were expected, according to the rumours from the government side, to be doubled, they will be raised by 10 per cent only, and this is not likely to solve the unemployment problem in the least. The sufferings of the unemployed will continue.


December 7, 1970

In my region, the problem is not one of whether the benefits are going to be raised or not. The minister should have thought of changing the unemployment insurance regulations by requiring, for instance, a smaller number of stamps. To qualify for benefits, a worker needs 30 stamps but he can never work long enough to accumulate that many unemployment insurance stamps.
In my constituency, hundreds of workers are not eligible for unemployment insurance benefits because they have not accumulated enough stamps. After two, three, four of five weeks of discussion, they are told that this is a regrettable situation, but they will have to seek help elsewhere.
This is when they are directed to welfare offices. For a family of five, six or seven children, welfare is no fun. However welfare allowances are expected to double in my region since the workers have been unable to accumulate stamps and are not entitled to allowances.
If the minister or his officials had made the effort to further study the allowance increase so as to permit the unemployed to cope with a higher cost of living, they would thus have solved the most urgent problem. In addition, the minister told us that loans in the amount of $150 million will be granted to the provinces through a fund intended to stimulate the economy and this money will be used to finance, during the year to come, job-creating investment projects.
Mr. Speaker, there again loans are involved. The government merely says: We are ready to support the provinces, the municipalities and the companies wishing to borrow, so that they can get deeper into debt.
We have only two money sources, as the Minister of Finance (Mr. Benson) says, taxing and borrowing. And these estimates point to borrowing.
On this matter of borrowing, I read a newspaper article reporting what the Quebec Premier thinks of the benefits offered the provinces by the government. I believe that he was expecting something other than availability of loans. I quote:
For the first time in several years, the Quebec Minister of Finance can indulge in the luxury of choice between several options: borrow slightly less than last year on the money markets or improve Quebec's credit rating; or maintain borrowing at its present level and use surplus liquidity to convert into debenture loan part of the short-term commitments of the government toward school boards, for instance; or borrow more this year and increase capital expenditures and several extrabudgetary items such as government investments in SOF and Soquem.
As concerns the cyclical stabilization fund dealt with by the Prime Minister (Mr. Trudeau), here is what I read in a newspaper:
It is therefore quite a service that Edgar Benson has rendered his Quebec colleague. Nevertheless, it should be mentioned that the new $150 million fund is not yet exactly the contingency assistance fund called for last June by the premier of Quebec.
Mr. Bourassa had proposed the establishment of permanent machinery; the program announced by Mr. Benson will terminate in a year and a half. Mr. Bourassa wanted the contingency assistance fund to be replenished by statute with certain federal taxes, which would vary according to the needs; the funds made
23568-44$
The Budget-Mr. Gauthier
available to the provinces will come from the consolidated revenue of the central government and their importance is left entirely to the discretion of the latter. Mr. Bourassa had suggested that the contingency assistance fund give the provinces both loans and grants; the federal Minister of Finance has kept only the loans.
That is what we regret. Had the Minister of Finance followed all the suggestions of the present premier of Quebec, we would not have to deal only with loans, borrowing and mortgages in connection with the provinces. It must not be forgotten that the sum of $150 million will be used in so far as the province of Quebec is able to borrow and municipalities and other organizations keep on running into debt.
[DOT] (5:00 p.m.)
I wonder where we will end up with all those debts, and whether we are not doing the provinces a disservice by allowing them to double their debt without ever getting direct help that does not lead to debt.
But, what can be done? Our present financial system is made for debts, and must make the best of it. After collecting about $13 billion in taxes from the people, the federal government asks the provinces to go into debt for it. The minister proposes as a third measure, and I quote:
-it is intended to allocate a further sum of $23 milion to departments and agencies to undertake further capital improvements in regions where unemployment is most severe.
When considering that $23 million are divided among the various departments, I immediately think of the Department of Agriculture. Indeed, I am anxious to see what will be the amount allotted to that department especially in Quebec, because the budget does not propose any measure to promote agriculture in that province. I trust that the Minister of Agriculture (Mr. Olson) will take into account the different letters he receives and that he will take the necessary steps, in order to stimulate Quebec agriculture.
I am anxious to see what steps will be taken, because I would like some of those credits to be affected to farming in my area where 75 per cent of the people are connected with farming and need some help comparable with that received in other areas. Our district has experienced some disasters and I hope that the Minister of Agriculture will let us know the amount that the Minister of Finance wants to give the department of Agriculture and the sum that will be forthcoming for our regions.
The minister also stated as follows:
A further $20 million will be allocated to development of roads.
It is no use hoping to get any thing for our regions. It is for Montreal. This sum of $20 million will be spent on the development of the new airport and will not alleviate in any way unemployment in our region.
As the minister stated, the purpose of this budget is to stimulate the Canadian economy and alleviate unemployment. Of course, the big problem today is unemployment. But what causes this unemployment? First of all, the

December 7, 1970
The Budget-Mr. Gauthier
increase in interest rates has favoured the big fellow to the detriment of the little one.
Today measures are proposed to reduce unemployment when for two years there was harping on inflation. Inflation has never existed at the level of the worker, of the small wage earner, but rather at the level of big finance. The government is still promoting the latter to create inflation.
The government is presenting both ineffectual and temporary measures to give assistance to the low-wage earner and the unemployed. Such measures will have no immediate effect in my area.
As for the $40 million for the Central Mortgage and Housing Corporation, once again is a measure which, because of the high rate of interest and the very strict terms imposed by that agency, will have no effect. No family man with an average income can build a home in my district. That is the situation for all those who wish to build a low-cost home. I know that the loans are far the big contractors and not for the average citizen.
In my region there is a housing shortage. The $40 million will be used for building about 4,000 homes. In my opinion, this is not a solution for the family man who needs a dwelling and must pay a very high rent because he has many children. In cities nowadays landlords refuse to rent to a family with five children.
The government will have to find a better formula. If it does not want to lower interest rates for fear of antagonizing financiers, let it give at least rebate to average wage earners so that they may build a house.
In this budget speech, the minister also said that:
The proposals set out in the White Paper on Income Security will have important fiscal and economic implications which will mean additional payments of $200 million and a new redistribution of income for those in the lower income group and the less favoured areas.
We agree with the principle of old age pensions, but not to give the older people a guaranteed income, as is proposed; this is only a pretext to appoint hundreds of inspectors merely to go and search senior citizens' homes to see if they have hidden $50 or $100.
[DOT] (5:10 pun.)
That is why we are calling for across-the-board allowances and pensions, to avoid the expense of 3,000 inspectors snooping in homes to check on whether a certain senior citizen is not getting $5 or $10 more than he should. In fact, I believe the guaranteed income costs as much in inspections and salaries as the senior citizen is getting.
If we give old people a flat-rate pension, those who do not need it should reimburse it when making out their income tax returns. The Taxation Division is well enough organized to make the relevant inquiries, which would do away with the two inspection systems we now have.
Every week-end, we are faced with 30 or 40 cases of old people being dealt with unfairly. The inquiry was not carried out properly and we have to go back and find the error. We manage to do it but at the cost of God knows how many headaches. The government should pay out pensions whenever practicable and put an end to its policy of distributing grants only to create employment.
Let us do away with administrative costs and inspectors' salaries, and then we will be in a position to hand out to our older citizens increased pensions without increased taxation.
The same is liable to happen with respect to family allowances. A system set up to investigate to the last cent expended is also recommended in this instance. There is going to be a reduction in the amount of family allowances paid to the wife of a man earning $4,500 or more.
Never will $16 be granted for each child, except to a few families but the rest will need it too. In fact, the head of a family who earns $6,000 or $7,000 a year but who has 7, 8 or 9 children will not be so much better off.
I have here an article published in today's newspaper and signed by Mr. Paul Sauriol, about family allowances. He is presently in favour of this measure, of course, because all the press as well as Information Canada, which is financed by the government and speaks up for its policies, would be hard put to it to give an unbiased opinion. However, this is what Paul Sauriol writes:
The proposed change in family allowances is the only one of the three where the government really advocates dropping universal benefits in favour of selective allowances.
The monthly allowances would be increased to $16 per child for families with an income of $4,500 or less, and the allowances would be gradually reduced as the family income increases and they would cease completely for families with an income in excess of $10,000 a year.
When the head of a family earns $10,000 a year but has 11 children he cannot be said to be rich. And in relation to that I quote further:
One thing must be said, first of all: the real value of family allowances, their purchasing power, has greatly diminished these last few years as a result of price increases, so that the $16 per child given to underprivileged families would merely reestablish the former purchasing power of present allowances.
The principle of selective assistance to most disadvantaged families is excellent, but the decreasing rate suggested in the white paper has one serious defect, because it does not take into consideration the number of children in a family, nor their age. Wednesday's papers mentioned the case of one family where the father earns a little more than $10,000 and where the twelve children are eligible for allowances. Under the proposed reform, that family would not be entitled to any allowance while another one with three children and having an income of $7,000 would get $33 per month. The family-


Mr. Deputy Speaker:: I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. Barney Danson (Parliamentary Secretary to Prim© Minister):: Mr. Speaker, I really had hoped to deal at some length with the intelligent contributions made to

December 7, 1970

the debate by speakers for the opposition, but unfortunately so far I have been unable to find anything sufficiently constructive to really counter. As a matter of fact, they discounted themselves by the weaknesses of their arguments and by the contradictions which were prevalent. However, I suppose that is to be expected because they have their job to do and they have to extend themselves to face a budget as strong as this is. But now that the big guns are coming up in the debate-I understand I am to be followed by the hon. member for Prince Edward-Hastings (Mr. Hees)-I think the tempo should pick up and excitement reign as this House deserves.
[DOT] (5:20 p.m.)
I feel, in all sincerity, that this was a most imaginative budget because it dealt with the issues as they are and not as we would like them to be, and it dealt with them in a realistic manner. We were able to look at things in specific terms and in the total context of the situation that faces our country as a great trading nation in the world today, bearing in mind the program we have had for the last many months to curb inflation which has had a high degree of success, with the unfortunate side effects that were regrettably to be expected and certainly greater than we had wished.
We have used very specific and sharp instruments rather than the broader, blunt instruments which the hon. member for Waterloo (Mr. Saltsman) suggested. The opposition always have neat packages, but today they had a great, big package of actions which they advocated with no real understanding of the consequences of those actions. I am not saying they advocated the wrong action, but it is not the one we chose. We chose to deal with the problems in our country that are of a regional nature to a large extent, and we are trying to zero in on them.
I think that the budget policies have been particularly consistent and they are part of an over-all program. I do not think the Budget can be isolated from other programs which this government is undertaking. It should be considered in relation to the white paper on tax reform, that on income security and that on unemployment insurance, plus the fiscal and monetary policies of the government as well as the actions of the Prices and Income Commission. I think these things express the philosophy of the government and are the articulated steps to deal with our problems.
What is most important in the budget is a rejection of the old, standard, universal type of program which was perhaps good in its times. Perhaps as a result of welfare programs and policies of this type, which we followed over the past years, our economy has changed and has shifted. Today when we talk of a middle income group, we really mean the group in the $10,000 to $25,000 income range. I think it is a fortunate country that has a middle income group with that size of income, but that is not the fact, we have replaced the principle of universality with an attach on specific problems.
The Budget-Mr. Danson
I think the government was well intentioned, and certainly it was an opportune time to try to eliminate a means which is demean ng. It is something which we would not like to face and we would not like to see other people face, nor is it generally administratively efficient. The result, however, was that those who really needed help in our expanding and affluent society were getting less help, and those who did not need it were getting it. This was costly and inefficient. Now, we are zeroing in on those people who need help. I do not suggest for a moment that we are doing as much as is necessary or as much as we would wish. I think we are doing as much as we can, and we are doing it in stages.
There is a minimum of pump priming. The things that are being presented in this budget and in our other programs are those which are economically viable, and this is extremely important. There is not much point in pouring money down the drain in welfare programs. Some must be continued, but to the extent possible we should build the type of programs that help sustain themselves and help to lift up the deprived so that they can be self sustaining. There are those who suggest that by providing this type of assistance to people we are creating a welfare society, a type of society that depends on welfare, people who are permanently on welfare. That has been the case to a large extent in the past, but we are trying to overcome this tendency to have generations in the same family develop a welfare psychology.
Certainly, these people are the exception rather than the rule. As I understand it from surveys that have been done both in this country and elsewhere, a very high percentage of those people in receipt of welfare are unemployable for a large number of reasons. Some 45 per cent are unemployable because of physical or mental disability. They just cannot work or they are too old. Well over one third are women who have been abandoned, who are divorced or widowed and are left with dependent children still of school age. When you distil this down, less than 5 per cent of welfare recipients are able to work but are not working. Sociologists tell us that even among this group, there are undetected psychological problems which might prevent them from working These studies were carried out in Canada and also in the United States. The results in both countries were amazingly close. It would be a shame to think that this group of less than 5 per cent is typical.
There are those who advocate throwing out welfare programs because there are those who abuse them But there is no point in throwing out the baby with the'bath water, and I suggest that all those who abuse our government programs and our tax systems are not welfare recipients. There are many people who are quite affluent and who abuse our system in one way or another, so let us not pick on that small group.
I think we realize that equalization payments, which are part of our system and have been good in the past have not been adequate to deal with the disparities in our regions. Those of us who come from favoured

December 7, 1970
The Budget-Mr. Danson
areas-and I consider the area from which I come as being particularly favoured-are conscious of the fact that we are favoured because we are part of Canada and only in a united and prosperous Canada can we remain favoured. However, we hope we will all be equally favoured. If the other parts of the country are able to become economically viable so that unemployment is decreased and people are prosperous, then we from the Toronto region for instance would benefit from that because they are our markets and we become theirs. The trade and prosperity that is generated helps to lift up all of us. In this respect, and particularly in view of recent events, I think those of us from such favoured regions are happy to see our government take an initiative to help pull other parts of the country closer to the level which we enjoy.
Perhaps we are disappointed in some ways that we will not have a tax reduction, but I suggest we might have had a tax increase as a result of these programs because these programs will make us more prosperous and the more money we make, the more taxes we pay. I do not object to taxes of that sort. But by the same token, even though we come from a favoured region, the urgency of other programs is no reason for neglecting the legitimate needs of the great urban centres which are prosperous also. I refer to the expansion of airport facilities in Toronto and the many other factors that necessarily have to be dealt with in a growing urban area.


Mr. Marshall:: Information Canada.


Barnett Jerome Danson: Information Canada could tell us a great deal, and I am sure it will.
The interesting part of the programs in the budget is the recognition that society has changed, that government has changed, and that the relationship of one to the other has changed considerably. In years gone by, in the days when government expenditures were something like 7 per cent of the gross national product, the government played a small part in our lives. But today, when you consider all the levels of government, we are talking in terms of 40 or 45 per cent of the gross national product which passed through the hands of government. Government is a big factor in our lives. It would be nice to say that less government is the best government, but that is not the case. First, it is not necessarily the best-I am not suggesting it could not be better-but less government is not going to be the case in our time. I think any realistic person who examines what is happening now will realize that government has improved. What we have done is blend the private and public sectors, and it is important that we continue to do this. The government should act as a conduit to the public sector, directing the economy to the extent that is necessary, and no more, so that we can all prosper by it.
e (5:30 p.m.)
In the budget speech on December 3, at page 1741 of Hansard the minister referred to provision of a further $40 million to the capital budget of Central Mortgage and

Housing. In August $100 million was added, and some $200 million has been provided for low-cost housing. This stresses the direction the government is taking. The government has infused in the order of $1 billion into the private sector and the construction industry primarily for low-cost housing. This is where the help is needed.


Marcel Joseph Aimé Lambert: But it is needed this winter.


Barnett Jerome Danson: This is where help is needed, rather than for high-cost housing. The money will start the program moving. We have signalled our intention to help the economy in this way, and I think this is important. The hon. member for Waterloo spoke at some length about the provisions for accelerated depreciation and gave all the reasons why he thought this was bad. This is not to be done all at once, but at least we are telling the economy that we are starting to expand in this direction. We must be careful, however, not to overdo this because of the success we have had so far with our anti-inflation programs.
If the hon. member for Waterloo wants to list the reasons why accelerated depreciation is bad, he may do so; but I would like to quote from a memo which an eminent economist wrote to himself on October 20. This was B. J. Danson, M.P., outlining why he felt accelerated depreciation is good. Occasionally, when I have thoughts I try to put them in writing in order to develop some degree of logic. Therefore I said to myself that aside from the infusion of mortgage funds for housing, which we have in great measure, I believed the most effective and least costly tool could be the acceleration of depreciation on capital equipment for industry. This might follow the pattern of double depreciation used in 1962, although the degree of impetus to the economy could be controlled by the degree of acceleration. In other words, rather than the current 20 per cent on machinery it could be that 25 per cent or 33J per cent would be more adequate.
Amongst the advantages is the relatively limited effect on revenue as opposed to massive spending programs. The effect on revenue is great-$25 million in the first year and $250 million over the whole period. This is positive spending and not pump-priming spending. Then many deferred expansion programs would be freed because we know there will be incentive for this type of program. This would considerably offset some of the pessimism that has existed in the business community.
Another advantage is that jobs would be created immediately in the engineering and construction of the machinery itself, plus the concurrent auxiliary expansion necessary to house and service it. When new machinery is delivered, the utilization of it creates more jobs. The hon. member for Waterloo suggested that it eliminates jobs because of increased efficiency. Certainly this might be a factor, but I would hate to see our economy sponsor increased inefficiency in order to create jobs or continued inefficiency. Productivity would increase by means of additional modem capacity and the replacement of older and less efficient equipment.

December 7, 1970
Smaller companies, frequently Canadian-owned with limited resources, would be encouraged more readily than larger corporations whose decisions are less influenced by limitations on available capital. This could be an area where the question of Canadian ownership could be enhanced as was suggested by an hon. member. There could be greater incentives for Canadian-owned businesses. I do not think that this is an area where we want to build up nationalism, but we do want to give impetus to productivity and efficiency. Flexibility can be obtained through the rate at which or the period in which purchases must be made. The experience of the early sixties was highly successful and gave considerable impetus to Canadian-owned companies even though there were no qualifications regarding nationality.
Another factor which we might consider is allowing this accelerated depreciation under the regional expansion program. I understand this program does not so qualify at the present time. We would develop some flexibility in our regional expansion program through capital cost acceleration. We have already introduced the principle of using 115 per cent of value for depreciation purposes at existing rates. I should like this principle to be watched very closely in order to make sure that it does not overheat the economy. By the same token, the areas of greatest industrial concentration naturally have the greatest potential for unemployment of skilled workers, and this is happening already. I submit that this provision in the budget will help alleviate that condition.
A matter which may be related to the budget, and one which was raised at the hearings on tax reform-I believe it is mentioned also in the report on the status of women-is aid to day care centres. This question was not included in the report of the finance committee, but a submission was made in the brief by the Vanier Institute for the Family to the effect that day care centres should be encouraged. I think this could be achieved by a budgetary measure.
It is good business to have more women in the work force, and the provision of day care facilities would encourage them to return to work. I do not believe that most businessmen have thought seriously of this, however. If we consider providing something like a 150 per cent write-off for the expense in the first year of establishing day care facilities, we might find them more interested. It makes good business sense and good social sense. Women would be happy to work, knowing that their children would be taken care of and it would be a great contribution to the morale and efficiency of our society.
Another area for concern is summer student employment, which will soon face us. In considering this question I have come to the conclusion that no one massive program will look after all students but, rather, what is required is a mass of programs, each one to look after some students. I was surprised and delighted at the success of the program for hiring students which was provided by our armed services last summer. It seemed to work out well for the students, and the armed services appeared to be happy with it. Having had that success, we should look at ways to improve that program rather
The Budget-Mr. Danson
than just providing more bodies for square-bashing. Perhaps the program could be developed as a paramilitary peace corps in Canada, with the students becoming involved in questions of the environment, ecology, pollu-tino clean-up and the like. In my own city of Toronto I should like to see them work on cleaning up the Don River.
I understand that Arctic command has some ideas germinating about taking students into the Arctic in the summer. They could work with the native people and help in the new communities by cleaning up the filth in the rivers and elsewhere. Perhaps this would serve to get young people enthused about the Arctic. If a few hundred were to start on such a program, some would become Arctic oriented. Some might become so Arctic oriented that they would be willing to devote their futures to it. I think that would be great for this country. In subsequent years, those who went there previously could help other students in going to the Arctic. I think the Arctic is a practical area for this kind of activity.
[DOT] (5:40 p.m.)
Last night I spoke at a function known as police appreciation night at the Centennial Baptist Church, Markham, in my constituency. It occurred to me that it might be worth while to have students during the summer months working with our police forces. It would improve their appreciation of what the police have to do and contend with. These students could talk to their fellow students about their experiences. The experience would be a revelation. Also, some of our youth might be inspired to make law enforcement their career. Our police forces at all levels ought to participate in that kind of program, which would be of minimum cost and extremely helpful. When I spoke to ex-chief Mackay of the Toronto police, who has now gone to greener pastures as chairman of the Liquor Licence Board, I learned that he thought this suggestion was worth while. Apparently it is not new. He also felt that people should be encouraged to a greater extent to employ summer students in their homes and cottages.
There are many other things I should like to talk about at this time. However, there are other members who wish to speak and I shall close my remarks by making one more point relating to national objectives. I am certainly not trying to articulate our national objectives at this time. Some of our difficulties stem from the fact that we must work from election to election. It is not that we do not try to think of the long-term; it is merely that our thinking is circumscribed by the fact that we must face an election every four years or so. Nevertheless, the Economic Council is looking at the long-range picture. The Prices and Incomes Commission seems to be looking at some of our short-range problems. These problems are always present and affect management, labour and society in general.
It seems to me that if we could bring these disparate bodies of society together we would see, if we could look far enough ahead, that all of our national objectives are identical and that the things we each want in Canada for our children or for our children's children are the

December 7, 1970
The Budget-Mr. Hees
things we want for society as a whole. If we could bring all these various groups together we would see, if we could look far enough ahead, that we have a mutuality of interest in the solution of our common problems and that we have common objectives. I think it would be found that our objectives and even our methods are not mutually exclusive. We could then fill in the gaps in greater harmony.
Since I know that we are to be favoured with an address by the hon. member for Prince Edward-Hastings (Mr. Hees), and because more members are now entering the House-they want to listen to him-and time is getting on, I shall defer to the hon. member.


George Harris Hees: Mr. Speaker, may I start by thanking the Parliamentary Secretary for his graciousness in terminating his remarks, thereby giving me a chance to finish my speech before six o'clock. I appreciate this very much indeed.
The budget that has been presented by the Minister of Finance (Mr. Benson) I believe could be summed up as an expenditure of $500 million to try to bolster the economy which, because of lack of positive government economic policies, has been allowed to run down in a rather shocking fashion.


Mr. Bell:: Shame!


George Harris Hees: We all hope that this infusion of $500 million will greatly reduce unemployment. We can only wait to see what the results will be, hoping that they will be successful. I believe this budget pays far too little attention to incentives to stimulate the economy and make it possible for employment not to be provided just on a temporary basis as a result of construction projects but on a continuing and expanding basis. I believe that by stimulating the economy we could provide the expansion of our continuing economic processes, those processes carried out by industry, so that we could have not simply an increase in employment now but a continual increase of employment because the economy would be stimulated, would be moving faster and would be continuing to employ more and more people.
I believe that the 115 per cent capital cost allowance is a move in the right direction and will no doubt result in additional purchases of capital equipment which would not otherwise be made. I believe there are three other moves that the government could and should make at this time to stimulate the economy. First, it should bring great pressure to bear-and I know that these people listen when pressure is applied-on the chartered banks of this country to lower their commercial lending rates so that construction and the general operations of industry can be expanded and employment increased.
Second, I believe the government should introduce tax incentives in the form of tax rebates paid on the basis of increased productivity, which would induce industry to make the necessary expenditures on new plant, equipment and production systems which are needed in order
to lower costs and selling prices, thus making our products more competitive, making it possible to sell them in greater volume and thereby enabling more people to be employed.
Third, I believe the government should announce that it has decided not to cancel the 21 per cent tax on the first $35,000 of corporate profits, which tax is particularly important to small businesses. It should announce that the 21 per cent tax will remain and will not be replaced by the regular 50 per cent rate. This kind of move, Mr. Speaker, is very much needed to restore the confidence of business in the future of the economy, and to persuade industry that it is justified in making the expansionary moves which we all know are being held back in large number at the present time.


Some hon. Members:: Hear, hear!


George Harris Hees: That is making it impossible to employ the number of people we should like to see employed in our country.
I should like to speak for a few moments on the position of the Auditor General, who has been brought under attack very severely by this government during the past few weeks. Actually, there has been by the government a process of attack on the Auditor General for the past several years. These attacks have been brought to a head rather spectacularly during the past few weeks. For many years, as we know, this country has benefited greatly by having the expenditures of the federal government checked and commented upon in the yearly review to Parliament known as the Auditor General's report. Although the primary job of the Auditor General is to see that proper accounts are kept by all government departments, he is also authorized by the legislation to report on any matter that he considers should be brought to the attention of the House of Commons.
All governments, both past and present, have been embarrassed from time to time by disclosures of wasteful spending of public funds. This has made them more careful about expenditures in the future and the country has benefited as a consequence. From time to time, Mr. Speaker, when I was a minister I was shocked to learn from the Auditor General's report of stupid mistakes which departments for which I was responsible had made. Although it was extremely embarrassing at the time, the knowledge that a watchdog had a constant eye on our operations made me and those who worked for me do a better job of running the departments for which we were responsible.


Some hon. Members:: Hear, hear!


George Harris Hees: All the members of the government did a better job because of the careful and constant watch which the Auditor General kept on all moneys spent by departments. But, Mr. Speaker, by the presentation of

December 7, 1970

the government's bill in respect of the Auditor General, all this was to be changed. The proposed bill would have taken away the right which the Auditor General enjoys under the legislation.
[DOT] (5:50 p.m.)


Grant Deachman: I rise on a point of order, Mr. Speaker. The point of order is quite clear. There was before the House a bill dealing with the Auditor General. That bill was withdrawn with the unanimous consent of the House. I think the hon. member was a party to that decision. The hon. member knows one does not reflect in this House upon decisions of the House. The bill has been withdrawn; we cannot go back to it and discuss it in this debate. The bill was withdrawn by unanimous consent of this House.


Mr. Deputy Speaker:: Does the hon. member for Prince Edward-Hastings (Mr. Hees) wish to speak to the point of order?


George Harris Hees: Yes, Mr. Speaker. As the hon. member who has just spoken will know if he reads the rules of the House, when a bill is disposed of by a vote of the House, whether it is passed or rejected it cannot be debated further in the session. When a bill is presented but is not acted upon, hon. members are at liberty to debate or speak about it as much as they want.


Mr. Deputy Speaker:: Order, please. I wish to dispose of the point of order. It seems to the Chair that the bill having been withdrawn from the House, and the fact that this was by unanimous consent, will give more force to my ruling. The matter is not now before the House. The bill could be reintroduced by the government later this session. It seems to me, with respect, that the point raised by the hon. member for Vancouver Quadra (Mr. Deachman) is not well taken.


George Harris Hees: Thank you very much, Mr. Speaker. I ask Your Honour to note that the interjection of the hon. member has taken approximately four minutes of my time. I would appreciate it if I could go to four minutes past six o'clock in order to complete my remarks. As I said before I was so rudely interrupted, the proposed bill would have taken away the right which the Auditor General enjoys under the present legislation of calling to the attention of Parliament instances of wasteful spending of public funds that have come to his attention. I refer to such items as the Bonaventure, the $8 million St. Lawrence harbour that will never be used, and the approaches to the Prince Edward Island causeway. The proposed bill would have restricted him essentially to a bookkeeping function with no right to comment on bureaucratic mistakes and extravagances.
Hon. members know that the first move along the road to dictatorship is the removal of criticism by a government or would-be dictator. That the government would think it could get away with a move which would have
The Budget-Mr. Hees
removed it from detailed and informed criticism for misuse of funds is a shocking example of arrogance and is a measure of how far this government has moved along the road to dictatorship.
This measure was obviously aimed at the present Auditor General, Maxwell Henderson. Over the years, under both Liberal and Conservative governments Mr. Henderson has been diligent in reporting to Parliament and the public instances of wasteful and foolish government spending. This has apparently irritated cabinet ministers and senior civil servants to the point where today they have decided that at all costs and in any way available to them he will be removed from office. If they had succeeded it would have been one of the most serious blows ever struck at parliamentary government in this country. The time to stop this march toward dictatorship is now.
Even before last week the opposition made it very clear that they intended to fight every inch of the way this latest move to suppress criticism. As a consequence of this determination the government lost whatever courage it posessed, which was very little, turned tail and ran. However, Mr. Speaker, the government's position has been made very clear by the undermining of the position of the Auditor General-which members of the cabinet have systematically undertaken, by the downgrading of his staff and the undisguised hostility which members of the cabinet openly show toward him.
The position of the Auditor General should be further protected from this government and any future power-hungry government which would like to prevent any criticism of its actions. I am convinced that further protection should be given to the Auditor General by requiring a two-thirds vote of both Houses of Parliament in order to remove him from office, instead of the present simple majority. A simple majority vote enables a government with an over-all majority, such as the present Liberal government which also has a majority in the Senate, simply to call in its members and vote him out of office.
The hostile attitude of the government makes it obvious that added protection is needed for the office if the Auditor General is to continue to carry out the very valuable task which he performs for the people of Canada. I believe that such a move should be brought before Parliament at the earliest possible moment, for the benefit of parliamentary government in this country.


Stanley Howard Knowles: May I call it six o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Is it agreed that the hon. member for Winnipeg North Centre (Mr. Knowles) shaU call it six o'clock?


Some hon. Members:: Agreed.
At six o'clock the House took recess.

December 7, 1970
The Budget-Mr. Sulatycky AFTER RECESS
The House resumed at 8 p.m.


Mr. Allen B. Sulatycky (Rocky Mountain):: Mr. Speaker, I should like to commend the Minister of Finance (Mr. Benson) on the budget statement he delivered to this House last week. I believe Canadians should hear more statements of this type. In addition, his address contained a budget which I believe will strike with pinpoint accuracy at the most troublesome areas of unemployment in the country.
However, it is not so much the budget itself I wish to discuss tonight as the statement which went with it and the confidence displayed in that statement, though the budget itself was certainly well thought-out and contained a program vastly better than anything presented in the last few hours by spokesmen for the opposition parties. But let us consider the budget statement for a few minutes and examine some of the confident statements which the minister made, together with some of the facts to which he drew our attention as far as the Canadian economy is concerned.
My hon. friend pointed out that employment is, in fact, rising in Canada and that unemployment on a seasonally adjusted basis appears to be decreasing. He went on to say that real output in the economy is rising. Later he told the House we were experiencing a considerable boom in housing in Canada and that apart from housing, capital investment was strong. He said, further, that 1970 would go on record as the best year ever in international trade. Last, he informed us that Canada had achieved a record envied by other countries in the world in putting the brakes on price increases. From the third quarter of 1969 to the third quarter of 1970, consumer prices rose by only 3 per cent compared with 5.7 per cent in the United States and even larger increases in many other countries. Only one country had a better record, Finland, with an increase of 2.8 per cent.
The minister did not paint a completely rosy picture. He admitted there was an unemployment problem and said that the rate of growth of employment must improve. But all in all it was a very optimistic and confident statement, the kind of statement which is rarely heard in Canada these days. Sometimes, when we display optimism of this kind as we discuss the prospects of our country we are accused of being stupidly patriotic. Generally, when this House discusses the future of our country and the prospects of its economy we display a most pessimistic attitude. This negative or pessimistic attitude is evident throughout the country as it is in this House. I noticed it on the evening the Minister of Finance made his statement. Whenever he expressed confidence in the Canadian economy or in the future of this country there were snickers and guffaws from the opposition benches.
This is indicative of the attitude taken by some members of this House, including the Leader of the Opposition (Mr. Stanfield). I have heard it expressed on other occasions; for example, during the debate on the Speech from the Throne. But it does not alter the fact that the vast majority of the people still have great confidence in

this country. I believe we have to fight the type of negative attitude displayed by some people in this country and in this House. It is nothing new. The pages of history are filled with pessimistic predictions as to Canada's future. The one which perhaps most ludicrously underestimated Canada's potential appeared in an English newspaper of 1871 as follows:
A word or two on Canadian finances in general would be in season. Canada is one of the most overrated colonies we have. The country is poor and crushed with debt. The province and city of Quebec are notoriously bankrupt.
In the end, the Dominion will have to go into liquidation. One day, when the load gets too heavy, Ontario is pretty certain to go over to the States, into which it dovetails and where its best trade outlet is.
[DOT] (8:10 p.m.)
I suggest it is time we began to develop a positive attitude in relation to the prospects for this country, which are certainly very bright indeed. The attitude of people in this country seems to be that that we should criticize everybody and everything. This includes foreign countries. It is time we began to look at the good things in Canada and to take an optimistic and positive approach, the type of approach that the Minister of Finance took in his budget.
I should like to quote from a recent article that appeared in the Banff Crag and Canyon in which the editor was berating the Canadian Broadcasting Corporation for its anti-American attitude. In a constructive spirit he suggested that the CBC should present a program on what a good country Canada is and how we as citizens can make it even better. He went on to say:
Maybe a series on the opportunities to get away from it all in the north and the chances to make a good living there.
Certainly, there are plenty of people in other parts of the world who would welcome the chance to come to Canada-[DOT] to enjoy the things we take for granted.
The CBC should be pointing out, to Canadians, the many good things that await them right in their own country and forget about wasting the taxpayers' money on expensive programming beating the daylights out of the United States of America.
Those people who take a negative approach seem to think that government should do everything for them. They criticize government because it is not doing enough, and seem concerned only with what government can do for them personally. I suggest this approach is not only improper but does not display the type of positive attitude that has brought this country to its present state of prosperity, an attitude it will be necessary to adopt in the future to bring about even greater prosperity. Those who take a negative approach feel that some powerful central authority, be it a provincial or federal government, will look after them. Instead of expecting the impossible, I suggest these people should show a little initiative and attempt to improve their own position, as they could well do if only they would so determine.
Many people in this country have the idea that it is a wealthy country, that Canada has great resources, that the land is rich and that from the land and its resources we can do well economically both as a nation and as individuals. I suggest that the time when we can do this
December 7, 1970

is almost over. It is time we began to think, not of what we can get from the land to make ourselves wealthier but what we ourselves can contribute to this country.
I was interested to note that of all the industrialized nations of the world, Canada appears to be the least inventive. According to my information, residents of at least ten major countries filed patent applications at rates very much in excess of the rate in Canada. For every one patent application filed in Canada by a Canadian, 18 are filed by foreigners. Canada's rate of inventiveness is probably the lowest in the entire world. I suggest this is because we expect the country to be rich, to give everything to us. We do not use our intuition and apply our talents to the inventing and devising of methods to improve our economic situation and to develop technology. I suggest this attitude is due to our negative outlook.
I should also like to quote from an article that appeared several months ago in a leading United States daily. This article very much reflects my own opinion of the attitude of people toward government and toward what they expect from government, and illustrates how individual initiative contributes toward both economic and social growth. The article reads, in part:
There are few greater powers on earth than the cumulative
effect of individual initiative rightly directed-
Today, as they look about them, men are staggered by the immensity and the complexity of the problems confronting them. The threat of war, spreading pollution, racial bitterness, vast poverty, urban blight, crime and violence, the withering away of moral and religious standards, personal and public tensions, these and many more challenges bewilder the individual. And, to a degree unprecedented in history, millions look to some central source of public authority to save them.
But one need only talk with wise public officials, with thoughtful political scientists, with insightful historians to perceive how fruitless it is to look to such central authority to make the world, or a nation, right.
What is required is the awakening of a realization that most of these problems-above all, those which stem from a lowering of personal and civic standards-can only be solved through a massive grass roots effort. There must come the time when the average individual recognizes that he must actively participate in solving one or more of the problems which he sees around him.
Such individual effort has a breadth, a sweep, an inspiration which no organized government program can equal.
I believe that is the type of initiative that comes from taking a positive approach. It is the attitude that is engendered by the sort of positive statements that the minister made last week in his budget address which help to build a belief in Canada, a belief that will foster economic growth. Aside from the benefits that will accrue from the programs announced in the budget, the optimism and confidence expressed in the speech are a very good sign for Canada.


Walter C. Carter: Mr. Speaker, I
nave to agree with one remark made by the previous speaker, the hon. member for Rocky Mountain (Mr. Sula-tycky) namely, that the statement we heard last Thursday evening from the Minister of Finance (Mr. Benson) is the kind of statement that is not too often made. On behalf of the Canadian people I say thank God it is not made
The Budget-Mr. Carter
too often. It is quite obvious that what the colleagues of the Minister of Finance refer to as a budget speech is nothing more than the confession of the Minister of Finance and the government that their illogical and insane policies, their so-called war on inflation and their deliberate attempt to create unemployment have had, as we on this side of the House predicted, a ruinous effect on the economy of this country. This government has forced the economy to the brink of disaster by its illogical and ill-conceived policies to fight inflation.
Sitting in this chamber and watching the Minister of Finance deliver his address last Thursday night, one got the impression that his skin was so thick that in comparison a rhinoceros would be a sensitive creature. The Minister of Finance demonstrated to the Canadian public that he does not know where his economic policies are taking this country. Certainly, this budget is the latest piece of documentary evidence we have had to prove this point.
[DOT] (8:20 p.m.)
Last March we saw the minister stand in his place and say to the Canadian people that the brakes were on. The words he then used were "restraint," "cutback" and "tighten the government's purse strings." He said a surplus was essential for our economic well-being, and to hell with unemployment; because the Minister of Finance, as did his leader the Prime Minister (Mr. Trudeau), made the statement that they were prepared to drive unemployment to an all-time high in an endeavour to win their so-called, phony war on inflation.
In his budget speech on Thursday night, without batting an eyelash the minister performed a complete about-face. Instead of forecasting a budgetary surplus of some $300 million, he said there would be a deficit of $320 million. In spite of the fact that we have a seriously sick economy with probably the highest rate of unemployment in years, with housing starts right across the country, especially in the Atlantic region, at an all-time low, with profits and volume of new business declining rapidly, the minister talked as if the economy was never better and is going ahead full blast. The minister would have us believe that the economy is advancing in leaps and bounds, that the unemployment situation is rapidly disappearing and that seasonally adjusted unemployment is rapidly falling off.
The minister would have us believe that we are having a boom in housing and that we will go into 1971 with an all-time high and, as he stated, one of our best years in international trade. It is quite obvious that the minister is being fooled by his own figures, because in 1970 the unemployment figure rose to an almost all-time high, with predictions being made by competent economists and those who are eminently qualified to make such predictions that unemployment will increase possibly to 9 per cent.
In spite of the remarks of the minister concerning the housing boom and the number of starts, in fact housing starts as of November 10 in the Atlantic area showed a Gtcime, for the first nine months of this year, of 39 per

December 7, 1970
The Budget-Mr. Carter
cent. The minister, with his usual contempt lor the unemployed ol this country, announced an immediate increase of 10 per cent in the rate of benefit for those receiving unemployment insurance. I am sure the people on the rolls of the unemployed must think this is a magnanimous effort on the part of the Minister of Finance and the government! It amounts to an additional $4 or $5 a week.
We on this side of the House feel that the government has an obligation to do everything possible to alleviate the suffering of those unemployed this winter, particularly in view of the fact that their plight is due in no small measure to the actions taken by this government in the past year and a half. If this government had any real feeling for the unemployed people it would have proposed an emergency amendment to the Unemployment Insurance Act to provide for substantially increased benefits from January 1 to July 1, which will be the critical months ahead for people on the rolls of the unemployed. The increased benefits should be in line with the recommendations of the Gill report. The present ceiling on unemployment insurance benefits is $53 per week. We believe in updating the Gill report recommendations which would increase the ceiling for a man with dependants to $60.24. This figure is arrived at by calculating the benefits as 60 per cent of income. There is currently a surplus in the unemployment insurance fund of $464 million, which we believe is adequate to finance such a temporary measure.
We believe that the government should have removed the 3 per cent surcharge on personal income and corporate taxes. It is estimated that such a move on the part of the government would inject an additional $150 million into the private sector of the economy. If this government had been seriously interested in helping Canadians and in trying to stimulate the economy, not only would it have removed the surtax but it would have announced a 10 per cent reduction in personal income tax for those earning less than $6,000 per year. This would have injected an additional $140 million into the economy. This additional money would have been injected mainly into the economy of the more depressed regions of Canada where the distribution of personal income is less, particularly the Atlantic provinces.
The government's proposed amendment to the Regional Development Incentives Act, which will have the effect of including a part of Ontario and Quebec including Montreal, will be seriously detrimental to the Atlantic area, especially to the province which I represent. What chance do the Atlantic provinces have to compete with new industry when so much of the industrial heartland has been made eligible for incentives? With close to 65 per cent of Canada designated as special areas in the economy, economically depressed, underindustrialized areas can no longer have special status. As somebody said the other day-I believe it was in the Globe and Mail when everything is designated, nothing is designated. With regard to the province of Newfoundland, the only benefit we will derive from the budget presented by the Minister of Finance is the $5 million allocated to the guaranteed
loans program. Maybe we can look forward to another $1 million in Newfoundland through accelerated public works programs, but this will not achieve the objective of substantially reducing unemployment in my province this coming year.
While I am talking about unemployment I should like to refer to a question I posed to the Minister of Economic Regional Expansion (Mr. Marchand) this afternoon concerning the plight of the people in the Argentia area of my riding, where things are pretty tough as a result of the phase-down of the United States naval station three. On July 6 of this year the Minister of Transport (Mr. Jamieson) went to Newfoundland and with his usual described as an emergency assistance program aimed at flurry announced that a $2 million plan, which he softening the effects of the phasedown of the U.S. naval station at Argentia, would be put into effect. In his usual style he went to great lengths to describe them as crisis projects. They include the construction of a community stage and other facilities for the fishermen. They include the construction of a boatbuilding and boatrepair facility. They also include $100,000 in the way of boatbuilding subsidies.
The minister indicated the government would make $450,000 available by way of grant to enable the department concerned to make an immediate start on the Castle Hill national historic park. He referred to a sizeable amount of money for the reconstruction and paving of approximately nine miles of road in the area. He referred also to a recreational area in Jersey Side leading to a nature trail at a site close to the Castle Hill project. As I have said, the minister's statement did not amount to very much and the people in the area have concluded that it is nothing more than a blast of hot air. I might add that only one or two of the projects announced by the minister, on which he claimed some $2 million would be spent, have been started. Less than $500,000 of that amount has been spent on the projects and this has not provided many jobs.
[DOT] (8:30 p.m.)
It seems the government has recognized the real extent of the emergency in words only, because of all the projects announced only two have actually commenced. If that is the best the government when it has been recognized by all concerned that a real emergency exists and a large number of people have been thrown out of work because of circumstances over which they have no control-such as the phasing down of the U.S. naval station-I would hate to see this government endeavour to bring in benefits in an area where an emergency does not exist.
In all fairness to the Minister of Transport I should say it is quite possible he is not solely responsible for what is happening in that area. It is possible he is not receiving full co-operation from the Newfoundland government. It is possible he is not receiving the required co-operation from other government agencies which are involved, and it is possible the bureacracy has taken over with its usual

December 7, 1970

lack of response to the problems facing the people of this nation.
There are a number of possible excuses that could be put forward by the Minister of Transport and his colleagues in the cabinet, but I am afraid that is of little [DOT]consolation to the people of the area who face serious social and economic consequences as a result of the U.S. naval station being phased down. I am inclined to believe that the Minister of Transport, presumably speaking on behalf of his colleague the Minister of Regional Economic Expansion, has led the people down the garden path with nothing but empty promises of grandiose plans involving multimillion dollar expenditures. The people concerned in the area do not condone such action on the part of our government. Too much time has already been lost. These people have been left up in the air for almost a year, with very little more to show than they had last year at this time.
I urge the government and the Minister of Regional Economic Expansion especially to take immediate action to bring relief to the people of the area who are desperately groping for a way in which to retain their independence and keep body and soul together. I also urge the government to make representations to the United States government with a view to having the existing facilities which are not now being used by the base, and are lying dormant, turned over to the Canadian government, the Newfoundland provincial government or the private sector for possible development. I have great faith in that area of Newfoundland. I believe it has the necessary potential to get back on its feet if the government is willing to go in there and do its share in helping the various groups that are desperately groping for an answer to the very serious problems facing the people.
To return to the special incentives program announced by the Minister of Finance on Thursday last, I am convinced this will have a detrimental effect on the economy of the so-called have-not provinces, especially the Atlantic provinces of Canada, because I believe by designating parts of Ontario and parts of Quebec, including Montreal, as special areas little incentive will remain for industry to establish itself in the Atlantic region. So I do not believe we have any great reason to be jubilant or to get on our knees to the Minister of Finance when he states that other areas will be designated as special areas under the special incentives program, because this will have a detrimental effect on the Atlantic region.
I do not think we have any great reason to be jubilant over the announcement of the Minister of Finance in respect of the other incentives he says are being suggested by the Department of Regional Economic Expansion when we realize that almost 80 per cent of the money allocated for special incentives will be pumped into the new Quebec designated areas. I might ask what this leaves for Newfoundland or the other eight provinces of Canada which so desperately need added incentives for industry and new employment opportunities.
It has been said that the Minister of Regional Economic Expansion, in lauding the program of his department
The Budget-Mr. Carter
expects it to create a number of jobs in Canada because money is to be made available to industries under the Regional Development Incentives Act. What the minister does not say, in announcing that 500 jobs will be provided here or 500 jobs will be provided there, is that he is speaking of perhaps ten years hence, and that while the industries to which assistance is provided are projecting a total employment of 500, 1,000 or 1,500 people, it does not mean they will start employing that number of people right now in 1970 or, indeed, in 1971. Some of these industries will fail. Some will never get off the ground.
I believe the minister mentioned an industry in the riding of my colleague the hon. member for Humber-St George's-St. Barbe (Mr. Marshall). This was to be a hockey-stick factory which would employ 50 or 75 people. This figure is being used by the minister and his colleagues in an effort to boost their own stock and justify the action they are taking under the special incentives act. However, the industry to which I refer never got off the ground. It is dead before it can start. Many of the plants which we hear about, and which are expected to employ large numbers of people as a result of special grants from the department, never get started; consequently, the minister is misleading the Canadian people by endeavouring to have them think he is providing these jobs as a result of special grants and other incentives to industries in certain areas.
To sum up, I would have liked this government on Thursday night, through the Minister of Finance, to have shown its sincerity and its desire to strengthen the economy by taking a number of concrete steps and making definite proposals which I believe would have the effect of strengthening the economy. I believe the government should have removed the surtax on personal and corporate income and should have made every effort to restore business confidence and lay the groundwork for the private sector to expand the economy, because true expansion can only occur in the private sector.
I believe the government should initiate reforms in the construction industry. This could be done by reducing or eliminating the 11 per cent sales tax on building materials. We have heard the minister in this House express a desire to increase the housing starts in Canada and make it possible for the Canadian earning an average salary to acquire a home of his own. There is one thing the minister could have done: he could have followed the recommendation of his predecessor by impressing upon his colleagues in the cabinet the need to eliminate or reduce the 11 per cent sales tax on building materials. Such a move on the part of the government would have been an expression of its sincerity in trying to bring an end to the housing problems and in providing housing for the Canadian with an average salary.
[DOT] (8:40 p.m.)
We believe, also, that the government should increase the amount of money for mortgages available through Central Mortgage and Housing Corporation. We believe these moneys should be made available on a regional

December 7, 1970
The Budget-Mr. Badanai
basis. There are parts of Canada where housing is more badly needed than in other areas; therefore, we believe that in certain provinces-and I can speak for the province of Newfoundland-much more money is needed for housing than in the more wealthy provinces.
When the minister referred to his magnanimous offer of $40 million for housing, this was an insult to Canadians and especially to those who are now living in substandard conditions. I say this because $40 million is not even a drop in the bucket and certainly will not go any way toward solving the housing problem in Canada. Indeed, I can tell the minister ways in which this $40 million could be spent in parts of my riding.
Therefore, as I said at the outset, the budget speech was obviously an admission by the Minister of Finance and his colleagues that they have been wrong in their policies to fight and to curb inflation. He gambled but he has lost. He is not prepared to go all the way and admit his mistake, so he is trying to soften the blow by bringing in a few temporary measures, makeshift measures, that will have no lasting effect on the economy of our country.
I conclude my remarks by repeating what was said by the Premier of British Columbia, that the Canadian people would have been 3 per cent better off had the Minister of Finance sat in his seat and not risen to make the non-budget speech on Thursday night.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, it has been said that one thing as sure as death and taxes is the certainty that a finance minister in presenting his budget is immediately denounced as inept and shortsighted, no matter whether he proposes a raise or a reduction in taxes or confirms them as they are. On Thursday, December 3, when the Minister of Finance (Mr. Benson) read the budget speech, the opposition reacted as predicted. They said, "Nothing good is in it. It didn't lower taxes. It didn't forecast a surplus. It didn't raise the security pension to $150 for everybody without a means test". According to its critics, the budget was a useless exercise.
Let us examine the proposals in this document without prejudice and see whether there is anything good in them. To an unbiased observer the budget reveals a 16 months program of spending that will pour $300 million into the battle against unemployment. It will add a further $200 million to the economy to pay for the announced increase in old age pensions and guaranteed supplements.
Unemployment insurance benefits are to be increased by 10 per cent immediately. Loans totalling $150 million will be made to provinces through a fund to finance job-creating capital projects next year. A further $23 million will be allocated to federal departments and agencies for capital improvements in areas of highest unemployment, which will also take care of the province of Newfoundland. A further $20 million will be allocated to development of roads and other local services for the new Montreal international airport.
The capital budget of Central Mortgage and Housing Corporation will be increased by $40 million for housing projects. The industrial incentives program will be expanded to establish a new system of capital incentive grants for areas of acute unemployment and to establish a system to guaranteed loans. The group of measures includes the assistance to shipbuilding announced recently by the Minister of Industry, Trade and Commerce (Mr. Pepin), which I hope will also assist the Port Arthur shipbuilding yards in northwestern Ontario. A capital cost allowance supplement will permit manufacturers and processors to value investments at 115 per cent of actual cost and enjoy higher than usual depreciation on capital projects. Business enterprises that will be affected will save an estimated $25 million in taxes in the fiscal year 1971-72.
These and other benefits contained in the speech of the Minister of Finance are designed primarily to take care of those in the low-income bracket and to boost employment, and are aimed specifically at increasing capital investment in industr;al development. I congratulate the minister for resisting the temptation to cut taxes prematurely, because had he done so he would not have been able to announce a program of jobless benefits and an increase in pensions, to say nothing of grants to Canadian shipbuilding.
The official opposition's critical assessment of the measures contained in the budget does not make sense, and they have failed to indicate any positive changes that under the circumstances could be construed as being practical. As far as members of the New Democratic Party are concerned, they can always be counted on to introduce proposals to cut taxes and, of course, to introduce programs costing impossible sums of money.
The budget was to a great extent based on the proposals contained in the white paper on social security, about which the Ottawa Journal of December 1 in its leading editorial said something to the effect that when the white paper proposals are implemented, Canada will have the most comprehensive guaranteed income plan in the world. The editorial reads in part:
That is the answer to doctrinaire socialists, or dreamy idealists, who say that the white paper does not go far enough in redistributing income.
Happily, the year 1970 was our best year in international trade. The clouds that darkened our economic horizon were relatively high unemployment and inflation, and the budget was geared to fighting these enemies. I have no doubt that the government will continue to introduce measures to control both.
[DOT] (8:50 p.m.)
While our economy has been greatly helped by healthy exports, I should like to suggest that the re-pegging of the dollar at 2.5 cents higher than it was, thus setting the Canadian dollar at 95 cents in relation to the U.S. dollar, would have an immediate impact on earnings in the pulp and paper industry, iron ore and most of the other export industries. I mention the pulp and paper industry in particular because the constituency which I represent,

December 7, 1970

along with others in northwestern Ontario, is heavily dependent upon the export of pulp and paper as well as other forest products. The increase in the value of the Canadian dollar has posed a very serious problem for most export industries. I believe that industries affected by the present exchange situation are not likely to attract capital for investment unless the government decides to revalue the Canadian dollar at a more realistic rate than the present one.
Contrary to the belief of some of our economic nationalists who are forever deploring foreign investment in Canada, we still need investment capital, preferably Canadian of course. But Canadian capital alone is not sufficient to meet the demands of an expanding economy to reduce unemployment to the minimum. It is all very well to urge increased ownership of Canadian resources and industry whenever possible, provided we do not discriminate against the non-resident investor. We should be thankful that foreign investments have made possible the standard of living which we now enjoy.
My colleague, the hon. member for Kenora-Rainy River (Mr. Reid), when speaking at the recent policy convention of the Liberal party in Ottawa pointed out that the economic nationalism campaign is a campaign of the rich in areas such as Toronto and southern Ontario, where there is not any shortage of capital, and is not concerned with other parts of the country where there is shortage of capital. I even find the nationalism of the Minister of Energy, Mines and Resources (Mr. Greene) as expressed in his speech which he delivered in Denver, Colorado, hard to take. Happily, he has since declared that he had been misunderstood.
When the government tables the policy statement on foreign ownership, I hope it will not contain some of the extreme proposals made to it in the report of the House of Commons Committee on External Affairs and National Defence. I was not a member of the committee at that time but I have had a chance to study the report since it was made public. It appears that the report was approved by the committee with undue haste. It suggested, as a guideline, 51 per cent Canadian participation in foreign companies and that an alien control agency supervise and control the activities of foreign firms in Canada.
I for one would disagree most emphatically with any such proposal, and I would have cause to worry greatly were it not for the fact that I have confidence in the good sense of the cabinet to reject any such inconsiderate recommendation. I have reason to believe that this final recommendation was made at a committee meeting when only 17 of 30 members were in attendance, and of those present only 11 voted for it, one voted against the proposal and five abstained from voting. On a matter of such grave importance I submit that the report in question should be recalled by the chairman and reintroduced into the committee for further consideration.
Canadians, unfortunately, are not inclined to gamble on risky things the way our friends south of the border do, yet some Canadians resent our neighbours' desire to control something here which they brought about with
The Budgets-Mr. Badanai
American money and initiative. We should be aware that Canada's economic potential in the field of resources still requires foreign capital to develop it.
One Deputy Minister of Energy, Mines and Resources, Mr. Jean-Paul Drolet, made more sense than did his minister when he stated, addressing the Canadian Institute of Mining and Metallurgy convention on the subject of foreign ownership of our natural resources, that the controversy over foreign ownership is unimportant as long as the best interests of the Canadian people are being served, and that the government must work with the mining companies, no matter what country they come from, in order to best serve the interests of Canadians. I am talking about partnership between the government and private enterprise for the benefit of the community", the deputy minister said. A number of studies have suggested that whatever the criteria, foreign-owned companies do not perform very differently from domestic-owned companies and the government should intervene only when the interest of the Canadian people is not considered first.
We are concerned with an industry that has an annual value of about $5 billion and is expected to double in the next ten years. "Foreign investment," said Mr. Drolet, "comes to Canada because foreign investment is essential to Canada's economy and its growth." Capital investment means expansion, expansion means jobs and jobs mean prosperity for all. I have never heard a man working for the Great Lakes Paper Company, Abitibi, Canada Car or Steep Rock Iron Mines complaining or wondering whether the shareholders are Canadians or Americans. What employees are concerned with is continuity of their jobs. That is what we want-jobs.


Lincoln MacCauley Alexander: Right.


Hubert Badanai: While the budget speech did not make a direct reference to pollution, this question is taken very seriously by the government. The Minister of Fisheries and Forestry (Mr. Davis) has been devoting a great deal of his time to solving the problems of pollution. He is an ardent advocate of pollution control measures and has succeeded in making industry sit up and take notice. Of course, pollution control will be a costly program which will have to be extended over a period of many years. The government will have to decide what is absolutely essential and urgent and what can be deferred.
I have here, Mr. Speaker, an article which appeared under the heading "Special Report-Pollution Control" in the Newsletter issued by the Spruce Falls Power and Paper Company, Limited, in February, 1970. The report reads in part.
Water is one of our great natural resources. Without it we could not exist. Our bodies need it as much as our industries do. We drink it and are refreshed. We wash in it and are clean. We swim in it and are exhilarated. We fish in it for sport and for profit. We build homes and cottages near it for aesthetic satisfaction. We build factories near it to have transportation routes and because industrial processes require it. Clean water is life-giving, yet many of this country's water sources are polluted.

December 7, 1970
The Budget-Mr. Badanai
[DOT] (9:00 p.m.)
Pollution has existed from time immemorial. As a problem, however, its impact has only been felt since localized population densities have produced more waste than our lakes and streams can assimilate.
Pollution comes from three major sources: from human and animal waste, from industry and from erosion carrying soil and debris into our lakes and streams.
In spite of the excellent past and present work by some municipalities and industries, many of our lakes and streams are still polluted-
Water pollution has become a national problem.
One clear trend that emerges from a look at the economics and politics of water pollution control is that the politics are fast becoming more important than the economics.
"The public hue and cry," says the Pulp and Paper Magazine of Canada, "will pressure Canadian industry into cleaning up its streams over the next decade despite the cost. The only slim hope is that industry can succeed in educating the public and government to adopt reasonable water quality standards, stringent enough to keep the water clean but not so expensive that they will force industries out of business. As one industry executive put it: "A pristine pure stream would be of small consolation to a man deprived of the means of earning his living"-
Many companies have made extensive investments in waste control systems during a period when there was little if any legislative pressure on them to do it. In many cases there was some financial return on the investment. But now that governments are stepping up their requirements and introducing stringent standards, considerable outlays will be required to meet these new conditions, and there will be little or no financial return.
Money is one of the keys to solving many problems in the pollution field. The technology is advancing and with enough money much can be done to improve our environment. However, we are still searching for means that will give the desired result that the country can afford based on economics. As federal justice minister John Turner said: "The physical solution is available. The problem that remains is an economic one, and perhaps, an administrative one. It costs money to treat water before discharging it into a stream."
In the nine-year period from 1960 to 1969 inclusive, Canadian pulp and paper mills representing 75% of the industry's total production spent more than $95-million on pollution control facilities-
In Ontario alone, it is estimated that primary treatment for all mills would cost $28 million and even this amount would not reduce suspended solids to the required OWRC regulations. In Quebec, the water board estimates mills in the province will have to spend $100 million to meet the board's recently announced requirements.
Looking at the industry as a whole, some estimates have placed the further capital cost of pollution control in excess of $250 million, with an annual operating cost of $40 million, to install primary and secondary treatment in every mill in the Canadian pulp and paper industry.
On a former occasion, Mr. Speaker, I indicated in this chamber what the pulp and paper industry is doing in its efforts to control this menace. The Great Lakes Paper Company in Thunder Bay, for example, is spending millions of dollars to curb the pollutants which infest the air over the Kaministikwia River, and they are to be congratulated on their successful beginning. Of course, the most desirable condition would be a pollution-free environment, but this ideal state is only possible in a completely sterile environment in which there is no life.
It would be most desirable to have both the housing to accommodate the increasing population and the facilities
for work and recreation in a pollution-free atmosphere. But in our growing urban and industrial community we must learn to live with change. We must also recognize that people create pollution. The fact that we cannot achieve perfection is no excuse for not doing as much as we can, but we still have to be practical and realistic. The fact that the government, in co-operation with the provinces and the United States, is deeply concerned about the problem of protection of the environment on the borders of our Great Lakes is shown by their seizing every opportunity which new technology is bringing into the control of pollution.
I am also concerned about the St. Lawrence Seaway Authority, which is reported to be seeking higher tolls on the Seaway and the imposition of tolls on the Welland Canal, which would adversely affect the economy of Thunder Bay and northwestern Ontario. Cheap transportation has always been vital to Canada's success as an exporter. Owing to the vastness of the country, this factor must be kept alive if we are to export surplus wheat, iron ore and other goods and supplies economically. In reverse, the price of imports would probably soar if rates were scaled up. The shippers would just foist increased fees on the consumer in the form of higher prices for goods purchased.
Ontario manufacturers, basing their business on export, are already facing fantastic competition from countries which possess a number of advantages. The Seaway Authority is running the risk of putting Canadian industry out of competition if it raises user charges and increases export costs. The result would not help to reduce unemployment. I would therefore urge the government to reconsider any proposals for raising fees on a transportation system because the net effect of such an increase would be increased prices of food and services.
In the matter of housing, every community has its problems. The Minister of Finance (Mr. Benson) has recognized the need to boost the capital budget of Central Mortgage and Housing Corporation. Under the capable leadership of the minister responsible for housing and urban development, these problems are being tackled with vigour and intelligent application in an effort to give every family in the land a decent home.
The budget, Mr. Speaker, reflects the goals of the government: the reduction of unemployment, the control of inflation, the promotion of social justice, and it seeks to encourage a prosperous economy.
[DOT] (9:10 p.m.)


Alfred Pullen Gleave: In discussing this motion and amendment, Mr. Speaker, one wonders what the main purpose was in presenting this minibudget. Some people have been unkind enough to suggest that the purpose of the budget was to retain the 3 per cent surtax. That may have been the prime objective. The whole tenor of the budget creates the impression that the government is unsure about where it is headed. It is not sure of the means to get there and does not know what it wants to accomplish. Is the main commitment to correct

December 7, 1970

the heavy unemployment situation, or to fight inflation? The budget does not indicate which.
The budget does not set out a clear plan or program to accomplish whatever end the government has in mind. It leaves the impression that the government intends to act as an umpire in the Canadian economic arena. When those engaged in the struggle fall out of the ring, the umpire will pick them up, throw them back in and tell them to try again. I quote from the document entitled "Budget Highlights" as follows:
Most economic indicators show improving trends in the Canadian economy. Employment is rising, unemployment appears to be falling-
Employment only appears to be falling! I continue quoting:
-and we have moved out of the pause in the growth of production of goods and services.
It states that there has been a pause. Nothing has been happening. The people of Canada know that nothing has happened. It has now been put on the record. I am reminded of an old saying of many years ago, that prosperity is just around the corner. The government could have used the old stock phrase rather than inventing a new one.
Latest figures suggest that the high level of exports established early in 1970 is being well sustained.
Canada's price performance compares extremely favorably with all other major trading nations of the western world.
As stated by a previous speaker, Canada has dropped to fourth place among the western nations with regard to standard of living. There is no commitment to full employment in this document. There is nothing to assure the Canadian people that they will not lose their jobs and become non-earners. There is no commitment to fully use the resources of Canadians. Some hon. members have referred to large figures. The previous speaker talked in terms of billions of dollars. Perhaps some day we will be told how much was lost in productivity because of the number of people who were unemployed last year. I wonder what the total would be in terms of houses, roads and bridges that could have been built for Canadians to enjoy.
We hear and read many statistics, but to get the true picture we must talk to the people involved. A sign on a very good house in Saskatoon indicates that it is for sale. Why? The owner, an architect, has found it necessary to leave Saskatoon because of limited job opportunities. It was necessary for him to move somewhere else to get a job so that he could support his family. A worker in a hotel, whom I happen to know, advised me that her sister had been fired from a beauty establishment because there was not enough work to keep her busy. The owner of the establishment simply advised her that her services were no longer required. These are people, not just statistics. This is the way our economy has been functioning. Farmers are told to take their land out of production. People trying to sell clothing and other items to retail and other outlets in Saskatoon are not receiving the size of orders that they normally do. There are rental
The Budget-Mr. Gleave
signs in the wholesale district of that city. These facts indicate what is actually happening to the economy.
Canadians hoped for the presentation of an economic pattern for this country in the budget. Instead they are left with the unpleasant and uncomfortable feeling that unemployment will continue to be high this winter. There is no clear indication of what will happen next summer. High interest rates continue and investors are discouraged. This affects all sectors of the economy. It affects that part of the economy in which I have always earned my living. It affects farmers who wish to invest in machinery, a feed lot or the various other enterprises involved in a farm. The government is proposing subsidizing loans for capital growth. Were will it all end?
The previous speaker talked about the need for foreign investment. There is division in the country on this matter. He is, of course, entitled to his opinion. We have reached the point where we bribe foreign investors; they are paid to locate in certain areas of Canada. I shall give an example to show how ridiculous the situation is. In the city of Saskatoon a refinery was built from scratch by local people. It was bought by British American Oil, resold to Gulf Oil and is now being closed. Well paid people are being moved out of this city, people who were employed in that industry. They are going to Alberta, to British Columbia and to Nova Scotia. Yet this was industry which we had established in that city, an industry which paid for itself from the time there was only a little service station there. All the money necessary for its establishment was earned out of Saskatoon and out of the Prairie region it served. It will no longer be there, and we are now trying to persuade smaller industries to come in.
[DOT] (9:20 p.m.)
In another area of Canada, $6 million is going to a foreign outfit. Do you know how things will end up, Mr. Speaker? A while ago I was organizing a rural area and a chap drove me around. I asked what he was doing and he said, "I was farming up to last spring." I asked him why he quit and he said they had sold the farm. When he was a young man he told me he had rented a half section. He said he would take me around and show me. It was one of the best half sections in the area. He was very proud of it. He took me around and showed it to me. He said, "I planted those trees. That is a nice farmstead. I kept it painted." I said, "Why aren't you still there?" and he replied, "The lady who owned it decided she would sell it to her nephew."
That is where this country is heading. We shall work the land, plant the trees, improve the buildings, make a nice farmstead, and when it is done somebody else will own the thing and tell us we are through. It is time we quit being starry-eyed and decided where we are going. Mention has been made of the large sums of money which will be made available to the province of Quebec. I am not concerned about the amount of money which will be made available to Quebec, and I am a westerner. What I am concerned about is that Canada should be an operating country, a viable country economically, and

December 7, 1970
The Budget-Mr. Gleave
that Canadians should own it. Any government which runs this country should be as concerned about one section of it as it is about another. Surely, if a government has a right to call itself a national government it must be concerned about all sectors of the economy.
What concerns me most directly, though, is what is happening in the area where I live. I am concerned about whether this budget or minibudget is helpful to the hundreds of people who live in that community. As far as I am concerned, the answer to that question is no. The government has no program which would meet the needs of this community. I do not say this in a narrow sense because I realize that agriculture and industry are interdependent. Farming is not isolated from the economy as a whole but is part of the total economy. If the whole sector does well, then farming will probably do well, and if farming does well one can be reasonably sure that industry as a whole will do well. Agriculture is an industry which multiplies the purchasing power of the money it earns; this purchasing power is spread out because farmers are unable to keep what they make; they have to spend it.
A recent task force report talks about retraining farmers and taking them off the land. It is utter nonsense to say that people must be taken off the land and trained for other jobs when the rate of unemployment is as high as it is today. What jobs? Has this government ever made a commitment to the 3 per cent unemployment level as recommended by the Economic Council? When the government makes a commitment of this kind maybe we can take some of the recommendations of the task force seriously, but until it does, I for one do not intend to take them seriously. At the present time we cannot provide sufficient jobs for those who want to move out of agriculture, let alone for those whom some economists up in the ivory tower might propose to move out as well.
In the same document, Mr. Speaker, great play is made of the $100 million stabilization fund which is to be set up for farmers. This is to be a one-year shot, if it is done even for one year. Let us accept that these people mean what they say. In future years the stabilization fund will be supported by the means of a 3 per cent deduction'- and this is not to be 3 per cent off the net but 3 per cent off the gross. It will be like a property tax. Under the plan which is proposed, the farmer will pay whether he has a loss or whether he makes a profit. It comes off the top, Mr. Speaker. It is off the gross, and it is ridiculous.
There may be some who will say, "Let us make it 1 per cent, not 3 per cent." I shall not discuss this idea of stabilization in great detail because there will be other opportunities to do so, but I say to the government, "Tell the whole story; do not come into this House with half the story. Tell the people that the farmer will be contributing off the top and that he will pay this money to stabilize his income at a level which may not even be above the poverty level."
Mr. Speaker, I do not want anyone to guarantee me poverty; I can do that for myself. I do not need a government to guarantee me poverty. When they undertake to
see that the income level will be at or above the cost of production to the average efficient farmer, then they are talking about a guaranteed income, and that is a reality. But what they have been talking about is a myth, a dream. They should listen and talk to the farmers as I did a week ago, sit in a hall and listen to 25 of them and get the feedback. Then they would know what the farmers think. At present we do not know what the government intends to do. Hon. gentlemen opposite should go to meetings and get the farmers opinion.
We shall not be sure of the size of the deduction until the minister gets up one of these days to make a full statement. I have asked the minister in charge of the Wheat Board more than once to make a statement on motions. It is about time he told the House exactly what he has in mind. The people of Canada pay attention to the budget and think: More cash. There go the western farmers again, money running out of both pockets and going strong.
A similar thing occurred last year when the government talked of giving the farmers $140 million. They have not yet received this money, and probably will only receive about half that amount. Not only does the government expect the farmers to pull themselves up by their bootstraps; they expect them to hold themselves up by their bootstraps once they get there. That is about the basis of the program. To offset the cost of the program the government will discontinue the storage payments and discontinue PFAA. They will try to recoup the money they spend. That is the typical approach of this government. I have been here a couple of years now and can almost recognize the pattern.
e (9:30 p.m.)
The government said that it will increase old age pensions by taking from the rich and giving to the poor. But when you examine this more closely, you find that those at the upper level of the pension group are going to finance those at the bottom. There was no mention of the rich; they did not figure in the equation at all. When the government says it is going to stabilize farm income and incomes from cereal grains, they mean they will do it at the expense of the people concerned. They are going to use the open market system to the greatest extent possible. That is one forecast that I make.
On one side you have myth, on the other side reality. When hog prices drop to 22 cents a pound or $22 a hundred; nothing happens. There is a stabilization program on hogs; the only trouble with it is that it does not work. Through this budget the government is adopting a "now you see it, now you don't" approach. It is putting up money for loans here, money for loans there; The impression is left that the drop in farm income is going to be relieved, that unemployment will diminish with the creation of additional jobs.
I sincerely hope the grain farmers of western Canada will send a signal to this government that is loud and clear, telling the government they do not accept the proposed cereal grains program. This program will not

December 7, 1970

pull the farmers out of their difficulties. I suggest the government face that fact right now, rather than slog along with the program for four or five years and then try to clear up the problems it will leave behind.


Mr. Maurice Foster (Algoma):: Mr. Speaker, the hon. member for Saskatoon-Biggar (Mr. Gleave) has presented a very gloomy picture of the Canadian scene. Fortunately, in his budget speech last Thursday night the Minister of Finance (Mr. Benson) presented a much happier picture, one in which we have reached the peak of the unemployment problem on a seasonally adjusted basis and are moving into a period of less unemployment during 1971. I suppose the voices of doom and gloom that we hear from the far corner of the House are only to be expected since the members there tend to take this approach.
This budget that the Minister of Finance presented last week tends to be a very selective document. It tends to have specific effects on localized regions throughout the country. Not the least of these, of course, is the special attention that has been paid to the sovereign counties of Stormont, Glengarry and Prescott, in which Mr. Speaker has a special interest in that he represents them in this House of Commons. I am sure all hon. members in this chamber have special sympathy for the unemployment and economic problems in his constituency. Because of the non-partisan position that he occupies in this House with great dignity, he is unable to take the government to task publicly and get them to deal with these problems. In any event, his message seems to have got through and I believe all hon. members will rejoice in his area being one of many parts of this country which have been designated for assistance in acquiring new industries.
This policy of helping areas of special need, such as areas of high unemployment, is consistent with the selectivity approach of the government as outlined last week in the white paper on social security. The approach there was not to universality but to selectivity; to put the resources of the country where there is greatest need. So with this budget, the majority of the resources are put where there is greatest need. Much of the budget's attack is directed at the fight against unemployment during the forthcoming winter months. Its approach is not only directed to public expenditure in areas of high unemployment; it also seeks to stimulate the private sector through grants to private industries which wish to locate in areas of high unemployment. In addition, Central Mortgage and Housing Corporation is to receive more funds for loan purposes.
I suppose some historians may look on this budget as being the Quebec crisis budget, since it was presented a few weeks after the recent events in that province. In addition, the budget places a great deal of emphasis on the stimulation of industrial activity in and around the metropolitan area of Montreal. Included in this is the designation through the Department of Regional Economic Expansion of the southwestern part of the province of
The Budget-Mr. Foster
Quebec for industrial incentive grants. Some $130 million has been allocated in this regard. A like benefit is also divided amongst the counties of Stormont, Glengarry and Prescott. Funds have been set aside for new access roads and ancillary services around the new Montreal airport at Ste. Scholastique, as well as special assistance being given to the shipbuilding and footwear industries, many of which are located in the province of Quebec.
Looking at the unemployment figures in the province of Quebec and the recent events that occurred there, I believe most Canadians will view with sympathy the special problems of that province. At the same time I think there is a feeling in some parts of Canada that the provincial and municipal authorities in Quebec and in the city of Montreal have a responsibility, not only to control the violent acts that have been committed by groups like the FLQ but to provide a level of public administration that will encourage the private sector of the economy to invest in the province. If this were the case, unemployment in the province would not be of crisis proportions and the federal government would not have to present a budget that earmarked the majority of its funds for one province and for one metropolitan area. Surely this kind of budget places some strain on national unity.
[DOT] (9:40 p.m.)
Having said this I say that many parts of the budget contain benefits which apply throughout the country, including an increase of 10 per cent in benefits under the unemployment insurance fund. Many parts of the country will have very heavy unemployment this winter, and these benefits will be especially welcome. This will act as an interim adjustment between January 1 and June 30, when the new scale of benefits will come into effect. The contribution of $54 million to the unemployment this winter will help remove the sting of being unemployed during the winter months.
I am most pleased to see the establishment of a new $150 million loan fund to stimulate activity through public works projects carried out by provinces and municipalities. At a time when we have high unemployment it is most appropriate for the federal government to put funds into the hands of the provinces and the municipalities for public works projects which will create employment. I believe much of this money in the province of Ontario should be used on sewer and water projects in the small towns and communities. Practically every small community throughout the province is being pressed by the Ontario Water Resources Commission to establish new sewage treatment plants and sanitary sewers. However, the level of provincial and federal government assistance is so low that these municipalities cannot afford to carry out the work.
In many cases the municipal tax level would be doubled, and in some cases tripled, if these new facilities were provided. Therefore, I believe the Minister of Finance should designate that in the province of Ontario these funds amounting to $17 million be earmarked to

In conclusion, I find the most encouraging part of the budget presented by the minister the fact that he feels unemployment reached a peak in the last quarter of 1970 on a seasonally adjusted basis. He anticipates that our gross national product will rise during the second half of 1971 at a rate of over 8 per cent. If such a rate of growth can be achieved while we are controlling inflation, our unemployment picture will certainly show improvement. Therefore I hope the minister's prediction, based upon information available to him, is correct.
[DOT] (9:50 p.m.)


Cliff Downey: Mr. Speaker, I, too,
join the previous speaker in expressing the hope that the prediction made by the Minister of Finance (Mr. Benson) in his budget speech will be a reality and that the economy will move ahead. I certainly believe it is a pleasure for everybody here to have the opportunity in a budget speech to discuss some of the problems in Canada. I think that probably the bulk of the problems we face today can be attached to the budget or to finances in general.
Although the minister's remarks in the budget speech indicate hope for an improved economy, hope that the situation will be better in the future, I believe there is still some confusion in many of our minds concerning whether the methods he uses will really do the job. It was comforting to me to see the emotion displayed on the minister's face when he listened to the remarks of the hon. member for Saskatoon-Biggar (Mr. Gleave) concerning the beauty parlour operators in Saskatoon who were being thrown out of work. It is an indication, to my mind, that he has a heart. Sometimes when we travel across the country there would seem to be an indication that the people do not believe our Minister of Finance really has a heart.
The minister has been saying that the purse strings are being loosened, whereas in reality I believe the purse strings really were loosened in respect of the banking system early last summer, although nothing really happened. Credit was eased and any business which showed an indication that it was a good prospect had funds available to it. I suggest that the announcement now that the purse strings will be eased is merely an effort to make people have a little more hope in the future. Nothing is moving ahead. The demand for money is not there. Confidence in the economy has been shattered.
There is a projection in the budget that there will be improvements in the capital cost allowance base for the manufacturing and processing industries. This is fine. Predictions were made concerning the amount this would cost the treasury in respect of tax money, but really there will be no cost to the treasury if these industries do not have the confidence and the demand for their products which would encourage them to move ahead. I question whether or not these industries will take advantage of the improved capital cost allowance base.
Then we have the matter of unemployment. This is a difficult situation. Certainly there is a trend for all people
The Budget-Mr. Downey
to depend more on government services to provide for them from the cradle to the grave. I realize a government must recognize these trends and follow, certainly to some degree, the wishes of the people. But I say we should have more public projects and that we should redirect many of our funds presently being used for unemployment insurance and various other social measures to government work projects. In character building I believe it is far more important for the people to do a day's work for the money they receive.
Arguments have been put forward that in many areas of the country people who have families should not be moved and therefore should not be offered employment in another part of the country where jobs are available. I can hardly buy that concept because we as Members of Parliament, or a great many of us, must spend six or eight months of the year away from our families. I cannot really legitimatize the argument that many of the people who are receiving unemployment insurance are not in the work force because of the mobility factor, and that they should not leave their homes at least for some period of time when jobs are available in another area. I suggest that every able bodied man in this country should be looked at again in terms of what he can do and where he can do it. The excuse that he cannot become a truck driver or something else because he is a plumber, a carpenter or has some other vocation is not reason enough for not being employed if a job of some kind is available.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Jack Marshall: Mr. Speaker, on November 26 I asked the Minister of National Defence (Mr. Macdonald) whether in view of the success of the summer student militia program introduced by the government, which employed some 5,000 students, he would consider introducing a special militia training program similar to the program introduced by the Progressive Conservative Party in 1961, which oriented many young Canadians into training for civil defence and at the same time tended to overcome unemployment which had reached comparatively serious proportions.
I brought the question to the attention of the minister because I was very closely involved in this training program and found it to be invaluable in many respects. My reason for pursuing my request for this type of program tonight is that I am still convinced such a program would be invaluable due to problems in our country with which evidently we are having a difficult job to cope.

December 7, 1970
Proceedings on Adjournment Motion
While I am reluctant at this time of night to bring back members on the opposite side to answer my question, I do so without apology due to the offhanded answer I received from the minister, for which he is becoming famous. He ignored the common courtesy I extended in sending him not only a copy of my question but also some background notes. Members on the opposite side of the House continually are prodding for positive suggestions which they could consider, and therefore I offer this common sense idea which I feel should be given serious consideration.
[DOT] (10:00 p.m.)
It is very evident that the government now realize the almost fatal mistake they were making in reducing the Canadian forces strength over the past two years to what was inevitably to become a state of ineffectiveness but for the unfortunate turn of events in Quebec. And as in their lack of realization of the value of military insurance against any kind of aggression, terrorist activities in Quebec, which we would all like to believe never happened, came upon this country without warning. Now I am sure they realize the need for preparedness to ensure security not only from without but from within.
The success of the summer student militia training program emphasizes the value of military indoctrination, not particularly to create military might but to instil leadership qualities, discipline and youth development, not only for our students but, just as important, for those who are still in their developing years after leaving school. Just as this training program was of considerable value to young men in our country in assisting in civil defence in 1961 when this was the thinking of our military minds, so would such a training program be of great value in training a cross-section of our country in aiding the civil power in case of a recurrence of hostility and insurrection.
Since the summer training program was so successful in combating unemployment, so would such a program continue to create a multi-purpose effect, not only to alleviate unemployment but to give the youth of our country a sense of purpose in the growth and progress of the country which they will one day be called upon to lead. While time does not permit me to elaborate further on the many other advantages, although the Minister of National Defence repeated that he was not considering such a program, the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) just a few hours ago, when speaking in the budget debate, mentioned many other advantages of the training of our youth in contributing to the development of the Arctic, in supplementing the police force, combating pollution, and other ideas which are worthy of consideration.
A special all-year militia or reserve force training program should be introduced as soon as possible, under the responsibility of the reserve forces of Canada, to stand ready as a part-time force which, instead of being given more responsibility by lip service and being continually withdrawn should in fact be a supplement or back-up of
our regular forces. It would be interesting to know just how many more troops would have been available for other tasks, if the need arose, while we faced the terrorist situation in Quebec. I hope that someone with a little military knowledge is aware of the need for future preparedness.
The youth of this country are our most valuable asset; not the minerals, not the oil, not the gas, but our youth. They are being neglected because we have failed them somewhere along the line. If we keep telling them to participate and involve them only in dialogue, we are being dishonest in not giving them a sense of participation and involvement. A Canada-wide youth development or training program, or whatever we want to call it, will give them a sense of purpose and will show that we care. I urge the Minister of National Defence to consider, with the Minister of National Health and Welfare (Mr. Munro) and the Minister of Manpower and Immigration (Mr. Lang), initiating such a program as soon as possible.


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the hon. member attributed to me some sentiments a few moments ago which he said I expressed in the budget debate and which I would gladly claim, but I have yet to participate in the debate so I must disclaim credit for them.
In his question the hon. member indicated a general interest in the employment situation in Canada, the general advantages of military training in the character building process of Canadian youth, and a particular concern combining the two general interests in a specific program of six-week courses under a special military training program.
The hon. member will be aware of the specific, imaginative and viable measures to combat unemployment and to alleviate the hardships of those who are now unemployed which were contained in the budget presented last Thursday. Since the hon. member has spent his day, as I did, listening to the budget debate, it is probably not necessary to recite to him the litany of measures proposed in the budget to aid those who are, regrettably, now unemployed and to create new employment opportunities.
To quote from the budget speech, some of these measures are directed toward immediate needs of the winter ahead. Others are intended to reinforce existing policies and ensure that the economic pick-up in sight for the year ahead will be both strong and sustained. They will also be directed in large part to those regions of the country where unemployment is highest and to those groups in our society whose incomes are low.
Obviously the hon. member's general concern, and that of the government, about unemployment and its consequences are identical. With respect to his specific suggestion I should like to refer him to the reply of the Minister of National Defence (Mr. Macdonald) as recorded at page 1494 of Hansard of November 26. In the absence of the minister I can add nothing further to the answer at

December 7, 1970

this time. I can, however, assure the hon. member that his specific representation will again be brought to the minister's attention upon his return.



COMBINES-CURTAILMENT OF RESTRICTIVE PRACTICES OF PROFESSIONAL SOCIETIES

Allen B. Sulatycky: Mr. Speaker, last week I had occasion to ask the Minister of Consumer and Corporate Affairs (Mr. Basford) what steps he had taken or may have contemplated taking with regard to curtailing the restrictive practices of certain professional societies. Mr. Speaker, you and member of this House who belong to professional societies will know and understand that statutes in our provinces give to professional bodies a unique position in that these societies can pretty well legislate as to all circumstances surrounding the practice of their particular profession within a province.
As a result, professional societies may to a great extent regulate the fees which members charge and they may also regulate the number of people who enter the profession. I am not so much concerned with the fees charged by members of professional societies as I am with the practice of those societies in restricting the membership of a profession within a province.
My attention has been drawn to the practices of dental societies and I wish to zero in on them particularly.


An hon. Member:: Drill them, Allen.


Allen B. Sulatycky: 
Patrick Morgan Mahoney: Mr. Speaker, I am sure the hon. member will appreciate that in responding on behalf of the Minister of Consumer and Corporate Affairs (Mr. Basford) I must, of necessity, restrict my comments to the areas coming under the jurisdiction of his department and not follow what might be a natural propensity, that of roaming into areas of responsibility that the provincial legislatures have chosen to delegate to certain provincial societies and professional societies.
The Economic Council of Canada in its report on competition policy recommended that services, including those of professional groups, be included within the Combines Investigation Act. The recommendations of the Economic Council are before the government in preparing revisions for the Combines Investigation Act. The government's intention will be disclosed when the bill to revise the act is introduced and the hon. member will have every opportunity, following the bill's introduction, to make any representations he deems desirable. The Minister of Consumer and Corporate Affairs will be interested in reading the hon. member's remarks as well as in receiving information from anyone else relating to this subject.

December 7, 1970
Proceedings on Adjournment Motion PUBLIC SERVICE-SHARING OF DECISIONS AFFECTING JOB



CLASSIFICATIONS WITH EMPLOYEES-AMENDMENT OF LEGISLATION

Mark Willson Rose: Mr. Speaker, no doubt many members of the federal civil service rejoiced at the statement on November 27 by the President of the Treasury Board (Mr. Drury) who announced to the House in response to my question: "The government is now reviewing the Public Service Staff Relations Act." One does not need to be a specialist in labour relations to say that the period between 1964 and the present time has been one of uncertainty and instability for many career people within the service. To charge that the situation has been chaotic is perhaps overstating the case, Mr. Speaker. None the less, the reclassifications in the professional category were to have been completed by July 1, 1967 some three years ago. They have been postponed time and again, and today there are nearly 5,000 professional people, or 17 out of 28 groups, yet to be completed. These groups have to be satisfied with a classification heading termed as a "provisional assignment".
Why has there been so much foot-dragging in this? Why have certain groups such as engineers, who challenged their classification, never been given a reason for a review board ruling? Why are there the closed files? Why are most of the professional institute people "flying blindly" when bargaining for individuals or for particular services? I should also like to ask, what is the "gimmick" behind the whole classification jungle?
Mr. Speaker, my interest in this classification matter came about because it was my custom to visit inmates of federal correctional institutes from time to time. I find that when I make these visits most of my time is spent with correction staff who buttonhole me and complain bitterly, rightly so, about classification problems. Many civil servants believe that so long as the determination of classifications and duty assignment remains inflexibly enshrined as a non-negotiable right of management, in this case the government, the whole progressive system of collective bargaining is a meaningless ritual and a farce.
Suspicions abound that as the government, through negotiation, upgrades the salary for a particular classification, there often shortly follows a change in the job description and the position is downgraded. Civil servants feel that the government has it both ways. It can and does raise a civil servant's pay and, through manipulation of the classifications, lower it at the same time. The offending part of the Public Service Staff Relations Act which permits the government to do this is section 7. It provides as follows:
Nothing in this act shall be construed to affect the right or authority of the employer to determine the organization of the public service and to assign duties to and classify positions therein.
In the time remaining to me I wish to cite a few examples which give rise to the suspicion and bitterness which characterizes many public servants as a result of section 7. First, a CR-3 challenged his classification. The
[Mr. Mahoney.J
board of review reclassified the employee to CR-5 and awarded retroactive pay to March, 1968. He has received no retroactive pay to date. Why? Because the management is now reviewing his duties.
Second, under the general service classification cooks are classified FOS-6 everywhere except in Archambault, a new federal institution, where they are classified FOS-5, a saving of $1,800 per year. Incidentally, last Thursday the cooks signed a two-year agreement. However, I understand that all general services are to be reclassified as of October, 1970. Third, a technical inspector 6 was assigned extra duties. He was reclassified in the engineering scientific support group which carries the same maximum salary as TI-6. I suspect that this move was taken because a promotion to TI-7 would cost the government an additional $1,100 per year.
I anticipate that the government will take refuge from these charges by saying that these anomalies only happen during reorganization or with new positions. However, that is far from the whole story. The solutions to problems such as I have outlined lie in the government giving up some of its high-handed management prerogatives and beginning to share these decisions with those affected. I hope that the President of the Treasury Board (Mr. Drury) will amend section 7 so that classification and job descriptions can become a negotiable part of the future bargaining process. It is only enlightened and sensible that this be done. The government, which is one of the largest, if not the largest employer in Canada should provide a model for other employers to emulate. It is appropriate that the Public Service Staff Relations Act be amended. The vehicle for review could be a parliamentary committee equipped to study the matter, where all the facts could be aired.


Patrick Morgan Mahoney: Mr. Speaker, the late show provides members who have asked questons and have not received satisfactory answers the opportunity to again raise the matter. It also gives them the opportunity to raise numerous other matters not asked in the initial question. This is something of a handicap to those who are responsible for answering, and I can only apologize to the hon. member for my lack of clairvoyance and reply for the President of the Treasury Board (Mr. Drury) to the question which the hon. member asked on November 27. As reported at page 1538 of Hansard, the hon. member asked:
[DOT] (10:20 p.m.)
Is the President of the Treasury Board considering the amendment of the Public Service Staff Relations Act to allow decisions affecting classifications and job restrictions, now the sole prerogative of the government, to be shared with its employees?
The reply is as follows: As the President of the Treasury Board stated at the time, this legislation is under review by the government and it would be improper for me to try to predict what changes the Public Service Staff Relations Act might undergo. I can only say that in connection with this review there will be hearings, at which time I imagine certain interested parties will put forth the hon. member's suggestion.
December 7, 1970

The hon. member further inquired as follows:
In view of the fact that many C.R. positions are being reclassified and reduced at the present time, does the minister not feel that this procedure makes a farce of the whole collective bargaining process?
To this question the reply is as follows: I take issue with the hon. member's premise, namely, that many
Proceedings on Adjournment Motion
C.R. positions are being reclassified and reduced at the present time. There is an ongoing reclassification review by Treasury Board of many jobs in the public service and the C.R. category has not been singled out either for review or for purposes of reducing the wage scales.
Motion agreed to and the House adjourned at 10.23 p.m.
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Tuesday, December 8, 1970