1970-06-08

PRIVILEGE


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I rise on a question of privilege in respect of which I gave Your Honour notice and also filed what might be called a caveat on Friday afternoon. It has to do with statements made by the Minister of Finance over the weekend in the face of his refusal to deal with the same matters in the House.
During the last week in particular a number of questions were directed to the Prime Minister, the Minister of Finance and others. Today I have read and reread these questions and answers, and the only impression to be derived is that the government had no intention of making any announcement or moving toward any specific proposals to deal with the problems of inflation and unemployment. I have a number of these quotations here, but I will not take the time of the House to read them.


Mr. Trudeau:: Why not?


Gerald William Baldwin: They include questions and answers on June 1, May 25, May 29, and twice on June 4. The Prime Minister, it may be, did not have time over the weekend to read them, but I have read and reread them with some interest. In the face of this we have now witnessed the extraordinary spectacle of the Minister of Finance and other government people involved making proposals at the Federal-Provincial Conference of Finance Ministers in Winnipeg over the weekend in which they advocated very specific wage restraints and controls, with a hint that such may well be the subject of sanction and enforcement. Thus, what we heard during the past week in response to our questions was only an exercise in a sly and furtive form of deceit-an attempt to keep from this House facts and proposals it is entitled to hear at first hand.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!
[DOT] (2:10 p.m.)


Gerald William Baldwin: This House and the country have been remarkably patient with respect to the government's stumbling and blundering. We in the opposition, because government members have sat silent and helpless-


Some hon. Members:: Oh, oh!


Gerald William Baldwin: -have attempted to obtain some idea of what the government proposes to do. The question of the wisdom or not of these proposals is irrelevant to the issue I am now raising. The sad and pitiful spectacle emerges of a government which does not know where it wants to go, and even if it did it does not know how to get there. We have known this for some time. The country is finally waking up to the fact.
There is a responsibility upon the Prime Minister (Mr. Trudeau), the Minister of Finance (Mr. Benson) and others to be frank and honest in the House in connection with this serious problem. Solutions will not come about unless there is confidence and trust between government and Parliament and government and the people. Unless the government responds frankly to proper questions in the House, the present lack of confidence will increase in the country and the possibility of a solution will be even less than it is today.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Before the Minister of Finance responds I have to mention that the hon. member for Winnipeg North Centre also filed a notice somewhat along the same lines as the one which was filed by the hon. member for Peace River. Perhaps the hon. member for Winnipeg North Centre might be allowed to express his views before the Minister of Finance speaks.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, thank you for giving me this opportunity to carry out the intention which I indicated to you in the notice I sent to your office this morning. I raise this matter as a question of privilege and I may say, Mr. June 8, 1970
7814	COMMONS
Proposals Respecting Wage Restraints Speaker, that I am resolved to do it in what is sometimes referred to as a low key. Nevertheless, I feel that this is a very serious matter.
I draw Your Honour's attention first of all to words from May, which you have frequently drawn to our attention, as to the true meaning of parliamentary privileges which according to May, it is as follows:
Parliamentary privilege is the sum of the peculiar rights enjoyed by each house collectively as a constituent part of the High Court of Parliament, and by members of each House individually, without which they could not discharge their functions-
I contend, Mr. Speaker, that one of the rights without which we cannot discharge our functions in this House of Commons is the right not to be misled, the right when government statements are made to us to believe that they are true. If that situation does not obtain, not only are we prevented from the proper discharge of our functions but this House can well fall apart.
Sir, because I seriously ask you to find that I have a prima facie case of privilege I wish to make it clear that I am not alleging that there was a deliberate misleading of the House, and accordingly I am not asking you to find that there was deliberate misleading of the House last week. But I do assert, and I ask you to find, that what went on last week raises some very serious questions that ought to be gone into by a standing committee of the House.
The hon. member for Peace River (Mr. Baldwin) has already referred to a number of days on which questions were asked and answers were given. In order to pinpoint the matter I am content to confine my references to Tuesday, June 2, and Thursday, June 4. On Tuesday, June 2, the hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas), after having asked about wage restraints, asked the Minister of Finance (Mr. Benson) if it was the government's intention to cover the entire field of other incomes, "particularly profits, interest, rents and prices." The minister's reply was:
I had not thought of making that request of the provinces.
When newspaper reports persisted that something like this was going to happen at Winnipeg on Friday my leader, the hon. member for Nanaimo-Cowichan-The Islands, raised the matter again on Thursday, directing his questions to the Prime Minister. The Prime Minister gave us various statements which made it clear that in his view what the Minister of Finance had said on Tuesday was


correct, that the government had no thoughts along these lines.


An hon. Member:: What page?


Stanley Howard Knowles: When the hon. member for Nanaimo-Cowichan-The Islands pressed the matter with the Prime Minister, as reported at page 7714 the reply was:
Mr. Speaker, I think the hon. member would save a lot of his time and the time of the House if he were to take the word of the Minister of Finance against that of a canard.


An hon. Member:: What a word!


Pierre Elliott Trudeau: "Imposition of wage controls"-read the question.


Stanley Howard Knowles: Mr. Speaker, I have done a lot of reading over the weekend. I am quite prepared to become a member of the Standing Committee on Privileges and Elections for the purpose of this reference where we can go into the matter in full. The whole impression given to us was that the government had no thought of going to Winnipeg with proposals for wage restraints, wage controls, guidelines, or what have you. Hon. members are aware of the fact that even as late as Friday afternoon at least one Ottawa paper was still reporting that the Prime Minister had said this would not happen-


Pierre Elliott Trudeau: I did not.


An hon. Member:: Oh, oh-touchy, touchy!


Stanley Howard Knowles: said that at least one Ottawa newspaper was still reporting that the Prime Minister was saying this would not happen. The Press Gallery was only doing what we were doing, believing the answers we were getting from the government side of the House. Yet at Winnipeg a program of wage restraints or controls was announced.
I know, Mr. Speaker, before anybody mentions it, that it was announced in the form of an appeal from Dr. Young, the Chairman of the Prices and Incomes Commission. I know it will be argued that this was not an announcement of government policy. But this is a fiction that it is getting pretty hard for any of us to believe. I draw attention to the fact that in a report in the Saturday Globe and Mail by David Crane from Winnipeg there are several references to Finance Minister E. J.
June 8, 1970

Benson and his remarks. In particular, I should like to quote the following:
Mr. Benson said the decision to try a new approach, through wage and salary guidelines, was taken after the Canadian Labour Congress convention in Edmonton last month showed no willingness on the part of labour to support the voluntary restraint program of the Prices and Incomes Commission.
It would be unrealistic to expect such guidelines would attract support from any substantial segment of organized labour.
Mr. Speaker, I know that two explanations can be advanced. One is the usual course of picking the exact words, the exact question asked by the hon. member for Nanaimo-Cowi-chan-The Islands and the exact reply, and saying, "See, it really was not incorrect; it really stands up if you examine it." I know that the other explanation or defence will be that the announcement was not made by the government but by Dr. Young.
Mr. Speaker, surely we are old enough around here to know that the Prices and Incomes Commission now speaks for the government. We are old enough to know that it would be impossible for the Minister of Finance not to have thought of these things on Tuesday of last week and yet by Friday be ready to agree with Dr. Young.
If I have gone a little farther than I intended in documenting the question of privilege, I ask Your Honour's forgiveness because I do not want to put Your Honour in the position of having to decide from the Chair today that, ipso facto, there was a case of deliberate misleading. But I do plead with Your Honour, because of the fact that there was all this confusion last week, because there is a real difference between what was said in the House and what happened in Winnipeg, to agree that we have a question of privilege, and that a committee should go into it. I go back to what I said when I first got to my feet, that one of our basic rights is the right not to be misled, the right, when the government makes a statement on the floor of this House, to believe it.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: that right is destroyed it will be pretty hard for this place to carry on. In view of last week's developments I believe that the people involved should be asked to appear before the Standing Committee on Privileges and Elections so that we may go into this matter and clarify it. Accordingly, if Your Honour should rule that I have presented a prima facie case
Proposals Respecting Wage Restraints of privilege I would be prepared to move the following motion:
That the apparent conflict between statements on income restraints made by the government on Tuesday and Thursday, June 2 and June 4, in the House of Commons, and the position taken by the government on Friday, June 5, at a federal-provincial conference of finance ministers at Winnipeg, be referred to the Standing Committee on Privileges and Elections, so that the said committee may call witnesses and take whatever steps it deems necessary to clarify this situation.
[DOT] (2:20 p.m.)


Pierre Elliott Trudeau: Mr. Speaker, I agree with the two previous speakers that it is important that the House be not misled.


An hon. Member:: You do it all the time.


Pierre Elliott Trudeau: I am afraid both of them have misled the House as a result of their inaccurate reading. They have misled the House by indicating that my answers in some way had been less than truthful. Well, Mr. Speaker, in order for them to establish a prima facie case it would be important for the hon. members to read the questions to which I gave the answers. As the hon. member for Peace River (Mr. Baldwin) indicated, I have not spent the weekend reading Hansard, but I did-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -while they were talking look at the questions that were asked of me. In every case they were talking to the imposition of taxes on wage gains or to compulsory measures. The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) on page seventy-seven twelve, in the right-hand column, is asking-


Stanley Howard Knowles: It is
page 7712.


Pierre Elliott Trudeau: It is seventy-seven twelve or 7712. I do not think there is much difference.


Mr. Sharp:: They think we are misleading the House.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: He asked if there was to be "a proposal for imposing a federal tax on wage gains in excess of the guidelines", and so on. The next question he asked was a repetition. He asked about "a proposal for a tax on any wage gains in excess of the guidelines", and so on. The hon. member for Peace River lower in the same column
June 8. 1970
7816	COMMONS
Proposals Respecting Wage Restraints asks about "any scheme for imposing wage and price controls".


Gerald William Baldwin: Read it all.


Pierre Elliott Trudeau: If you flip the page instead of flipping your top you see that on page 7714 the Leader of the NDP comes in with another question "regarding the imposition of wage controls or the imposition of any tax on wage gains to keep them in line-
There were not in Winnipeg, as far as I know, any such proposals. I fail to see how either hon. member can establish a prima facie case by saying, "No, we had no knowledge that there would be such an imposition", because in fact there was none.


Gerald William Baldwin: There are no extenuating circumstances.
Kon. E. J. Benson (Minister of Finance):
Mr. Speaker, I should like to go a step farther than that because I was asked a question earlier in the week about whether the government was going to make proposals with respect to wage guidelines and so on, and I indicated that the government was not. The situation is that Dr. Young is the head of the Prices and Incomes Commission which has done a very useful job in Canada in obtaining commitments on the side of business and has tried to obtain commitments on the side of Labour. As an independent commissioner he also approached governments, and I specify here not only the government of Canada but the governments of the provinces as well, and made a proposal which he presented at Winnipeg and which this government chose to accept.


Stanley Howard Knowles: And
the government did not know of it before?


Mr. Benson:: One of the things the hon. member for Winnipeg North Centre has tried to say is that the Prices and Incomes Commission is directed by the government of Canada.


Stanley Howard Knowles: And
are they not?


Edgar John Benson: This is not the case.


Mr. Orlikow:: That is a lie.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Edgar John Benson: On a question of privilege, Mr. Speaker, somebody has called me a liar.


Some hon. Members:: Oh, oh!


Some hon. Members:: Withdraw!


Mr. Speaker:: Order, please. No member has
the right to say that another member, whether he is a minister or not, has uttered a lie.
As hon. members know, the Minister of Finance has the floor. If there are interventions which do not come to the attention of the Chair, it is difficult to call on the member to give an explanation or withdraw. As far as the Chair is concerned, the Minister of Finance has the floor. If someone rises and suggests that another member has told a lie he must, of course, withdraw that statement. If any member rises and does this, he will be in contravention of the rules of the House and called upon to withdraw. For the moment the Minister of Finance has the floor.


Edgar John Benson: I wish to indicate that the intervention was by the hon. member for Winnipeg North (Mr. Orlikow).


Some hon. Members:: Shame!


Edgar John Benson: I request that the hon. member withdraw that intervention.


David Orlikow: Mr. Speaker, I am the
member to whom the minister is referring. I recognize that the language I used was not parliamentary and I will withdraw it. However, I say to the minister that I do not believe-


Mr. Speaker:: Order, please. It is the hon. member's right to believe or disbelieve statements made by other hon. members, although as a community we are required to accept the truth of statements by members.


Edgar John Benson: The plain fact, Mr. Speaker, is that Dr. Young made proposals to each of the provincial governments and the federal government. The federal government chose at Winnipeg to accept those proposals. I reiterate that this is an independent commission. It is not controlled by the government. We did not make suggestions to the commissioners as to the proposals they should make. They consulted the government in the same way they consulted the provincial governments. I am pleased, for the sake of Canada, that all the governments to a degree are going to support the proposals of Dr. Young.


Mr. Speaker:: Perhaps we should not get involved in the substance of the matter referred to by the hon. member for Winnipeg North Centre and the hon. member for Peace River. The decision to be made on the subject before the Chair is purely procedural. The
June 8, 1970

Finance
Chair has to decide in the circumstances whether there is a prima facie case that ought to be referred to a committee or which requires action of some kind.
The matter raised by the hon. member for Winnipeg North Centre is essentially the same as that raised by the hon. member for Peace River, except in the ease of the hon. member for Winnipeg North Centre there is a proposed motion.
On examining closely the point raised by the hon. member for Peace River it appears that he has endeavoured in his notice filed with the Chair, which he has reiterated in the course of his presentation, to bring two aspects of the question before the House, namely, that certain statements, because of their nature, ought to have been made in the House and that replies given in response to questions in the House have misled and deceived hon. members.
The first point, namely, that certain statements ought to have been made in the House, is a question that has been raised from time to time over the years. It is a difficult problem, one that has tried the wisdom of many of my predecessors, and one for which I fear it is difficult to provide a solution.
It has been raised by hon. members during this Parliament on a number of occasions. I have ruled from time to time, whenever the matter has been raised, that it was not really a question of privilege which justified a motion being put to the House for debate and on which a vote would eventually be taken to decide whether the matter would be referred to a committee.
I must acknowledge my greater difficulty in dealing with the second point raised by the hon. member to the effect that replies given to questions in the House have misled and deceived members. The hon. member for Winnipeg North Centre and the hon. member for Peace River have indicated that they do not propose to suggest there has been wilful misrepresentation to the House. They suggested that the matter might perhaps be cleared up after further study by a committee of this House.
[DOT] (2:30 p.m.)
If the intent of the proposed motion were to establish a deliberate deception by a member or by members, the Chair must consider the often-cited statement on that point made by my distinguished predecessor, Mr. Speaker
Michener, which is to be found at page 584 of the Journals of 1959, in the following words:
In my view, simple justice requires that no hon. member should have to submit to investigation of his conduct by the House or a committee until he has been charged with an offence.
If the Chair were to accept the motion proposed by the hon. member for Winnipeg North Centre, and if the matter were sent to the Committee on Privileges and Elections, what would be under consideration there except the conduct of a minister? I suggest that this is what would be under consideration, and that this could be done only by adopting the procedures and measures which have been suggested on a number of occasions by the Chair, particularly by Mr. Speaker Michener in the ruling to which I have just referred.
It does seem to me that implicit in the question raised by the hon. member for Peace River is a dispute or a misunderstanding arising between members as to allegations of fact. The Minister of Finance has interpreted the situation as he sees it. Obviously, he is in disagreement on this point with the hon. member for Winnipeg North, the hon. member for Winnipeg North Centre and the hon. member for Peace River. As stated in citation 113 of Beauchesne's fourth edition:
A dispute arising between two members, as to allegations of facts, does not fulfil the conditions of parliamentary privilege.
I have to rule in the circumstances that the motion proposed by the hon. member for Winnipeg North Centre does not fulfil the requirements for a prima facie case of privilege and I cannot accept it to the extent of putting it to the House at the present time. I have to rule there is no prima facie case of privilege.



ROUTINE PROCEEDINGS


Edgar John Benson: Mr. Speaker, I would like to report to the House on the meeting of the Federal-Provincial Committee of Ministers of Finance and Provincial Treasurers in Winnipeg last Friday and Saturday.
There were some significant developments during the course of this conference which have an important bearing on current eco-

June 8, 1970
Finance
nomic conditions in Canada and which I would like to outline in some detail tor the information of hon. members.
In my remarks to the conference regarding the economic situation, I reminded provincial ministers that the fundamental objective of the federal government is to halt the inflationary spiral of costs and prices in order to pave the way for a return to the path of strong but stable growth. At the same time I emphasized it is vitally important that we should remain flexible enough to meet changing conditions in order to maintain a sound economic balance.
As the provincial ministers were well aware, the necessity of maintaining flexibility was sharply underlined by the recent massive build-up of our foreign exchange reserves and the resulting decision of the government to allow the exchange rate to float above its fixed margins.
I advised the conference that we fully recognized that any appreciation of the Canadian dollar for an extended period of time would tend to add a further measure of restraint to the economy. I said that further restraint would not be appropriate and that we would offset by other measures any such restraining effects on the economy. Nevertheless, the problem of inflation remains a matter of fundamental concern. Nothing that has happened up to this point suggests that we can let up in our fight to break the inflationary spiral of costs and prices.
As I told the conference, there is a considerable danger that a continuation of the current substantial increases in wages and salaries will seriously undermine the initial progress we have made in slowing down the rate of price increases. Most members of the House will already be aware that Dr. John Young, Chairman of the Prices and Incomes Commission, proposed to ministers that the federal and provincial governments join in supporting the adoption of guidelines to establish reasonable upper limits on wage and salary increases in present economic circumstances.
At their conference last February, the first ministers of the federal and provincial governments endorsed a set of proposals adopted at the National Conference on Price Stability. These proposals were aimed at establishing a yardstick against which to measure the reasonableness of price increases in relation to costs. I believe the agreement reached at this national conference has played a significant part in restraining the rise in prices to date

this year. It has also restrained profits, which in the first quarter of this year were down 3.8 per cent from the total in the same period last year.
We have been greatly disappointed that the leaders of organized labour have declined to join representatives of other sectors of the economy in helping to work out the terms of an agreed approach which held some reasonable promise of being both fair and effective. For some time after the National Conference on Price Stability we continued to hope that organized labour-appreciating its own selfinterest in the maintenance of strong and stable growth.-would at least evolve some way of its own of co-operating with the national undertaking launched by the Prices and Incomes Commission. The attitude evident on the part of delegates who attended the recent convention of the Canadian Labour Congress in Edmonton now makes it abundantly clear that it is no longer realistic to expect such co-operation to be forthcoming.
At the conference in Winnipeg, the provincial finance ministers and treasurers generally indicated strong support for this new proposal put forward by the commission and all of those present agreed to put it before their respective governments for consideration. For our part, Mr. Speaker, I made it clear that the federal government is prepared to give its full support to the kind of wage and salary guidelines outlined by Dr. Young.
We agree the time has now come to establish a yardstick against which to measure the reasonablness of wage and salary increases in relation to productivity and other relevant factors in an effort to end the relentless and damaging cost-price spiral which continues to plague the economy. I acknowledged that it would be unrealistic to expect such guidelines would attract support from any substantial segment of organized labour. But these proposed criteria would provide important guidance for those in both government and private sectors responsible for decisions about granting wage and salary increases, as well as for mediators and arbitrators. Equally important is the fact that such guidelines would provide the Canadian public with a yardstick against which to judge the reasonableness of future wage and salary settlements in relation to the public interest.
We agree that in the interests of equity it is also important that provincial governments should intensify their efforts to curb the upward climb of rents in many urban centres and to use their influence to restrain increases
June 8, 1970

in the fees of the professions. The success of the new program proposed by the Prices and Incomes Commission depends in a vital way on the degree of co-operation forthcoming from all levels of government, institutions, the private sector and the general public.
I want to make it perfectly clear that the federal government remains determined to break the back of inflation. We are hopeful that this further measure will prove effective, together with existing policies, in halting the cost-price spiral. If it does not, then the government is fully prepared to consider other measures which may have to be adopted to eliminate this threat to the well-being of our economy and of all Canadians.
The conference also dealt with questions involving the financial relationships between the federal and provincial governments, which have an important bearing on their respective fiscal positions and their impact on the economy.
I agree to accelerate by one month the payment to the provinces of taxes the federal government collects on their behalf. The practical effect of this proposal is to make available to provinces other than Quebec, which collects its own taxes, approximately another $150 million during the current fiscal year.
Our estimates for the current fiscal year originally provided for a payment to the provinces of $867 million for net equalization and estate tax payments. As a result of new statistical data which has since become available, it is estimated the payment for the current year, together with adjustments for 196869, will actually amount to more than $920 million. This represents an increase of around $60 million.
As a further means of easing the tight cash position of the provinces, I also proposed a change involving grants for technical and vocational training schools. After provision is made for capital grants during the current fiscal year, the credit remaining to the provinces for this purpose is approximately $150 million. I suggested that we should seek to work out conditions providing for the payout of the remaining $150 million credit in cash over a two-year period commencing in the current fiscal year.
[DOT] (2:40 p.m.)
Taken together, these three measures, plus some minor adjustments in other payments, would make available to provincial govern-
Finance
ments $300 million more than originally provided for in the current fiscal year.
In March, I anticipated a budget surplus of $250 million, which included an estimated drop in federal revenues as a result of imposition of consumer credit controls of around $50 million. Since it has been decided not to proceed with this measure, the surplus as calculated in the budget would be revised upward to $300 million. This would now be reduced to a surplus of $150 milliion on the basis of the developments I have just outlined.
In the budget, I estimated that our net cash requirement for the current fiscal year would amount to $525 million, excluding that needed to finance foreign exchange transactions. The net increase in the budgetary expenditures of $100 million, after allowing for the change relating to consumer credit controls, plus the further $150 million required as a non-budgetary item to cover accelerated tax collection payments, would increase our net cash requirements by a total of $250 million to a total of $775 million.
On the basis of the national income accounts, I estimated that the surplus in the federal sector, excluding the Canada Pension Plan, would decline from $570 million in the last fiscal year to $130 million in the present fiscal period.
Excluding the loss of revenue expected as a result of establishment of consumer credit controls, the federal surplus would amount to $180 million this year in terms of the national income accounts. The net effect of the budgetary measures which I have outlined would be to reduce this surplus to around $30 million. These figures may be altered somewhat by the detailed revision of the national accounts, but given the margin of error in those statistical estimates the basic situation remains unchanged.
This reduction in the projected surplus in the federal sector will provide an important new stimulus to the economy, which we consider to be warranted in the present economic circumstances.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I want first of all to thank the minister for having sent me a copy of his statement in advance so that I could see what it did not include. A very important conference has just been held between the Minister of Finance (Mr. Benson) and his colleagues and their counterparts in the provinces. That conference covered more than one subject. Inflation and wage restraint did not represent

June 8, 1970
Finance
the total scope of the conference, and to this extent the minister's report today fails to disclose what was the subject of the greater portion of the discussions at the conference, namely, the reaction of the provinces to the white paper on tax changes. I deliberately say tax changes and do not use the word "reform" because it is becoming more and more apparent as the public reacts that the public does not consider the proposals in any way a reform.
In any event, I would have liked the minister to indicate, in view of the attitude of the provinces to the white paper, what were their reactions to it. After all, it is absolutely implicit and goes to the very heart and core of any income tax system in this country that there be the closest degree of co-operation between the federal government and the provinces. At the moment it looks as though the federal government has decided to go into an orbit of its own and that the provinces, frankly, could not care less.
I will make the prophecy that it will be a long time before the white paper can be implemented if the present attitude of the government to the provinces in regard to these tax proposals is continued. There has to be a much greater modification of them and conciliation shown by the federal government toward the provinces and their proper aspirations in regard to our tax system.
Having said that, I want to turn to what was said in connection with the other part of the conference. I think it is quite right to say that we agree that the reaction of the provincial governments was in keeping with their responsibilities. After the provincial representatives have referred the matter to their colleagues and the provincial governments have taken an official attitude, I trust the provinces may be able to bring forward some suggestions that will assist in making the attempt to fight inflation more successful. I suppose that inflation is internally the most serious problem facing Canada today, though I would say it will be soon overtaken by the problem created by the increasing degree of unemployment.
I also feel it is unfortunate that organized labour, presumably through the spokesmen of the CLC and the CNTU, has so far failed to show any real initiative in making the fight against inflation a common cause. I would have thought it would be better on their part to participate in dialogue with the government in the fight against inflation, even if they do not agree with the views of the other side-

and they are fully entitled to their opinions- instead of merely standing on the sidelines and taking what I suggest is a purely negative stance.
I come now to a further point, one emphasized by the Minister of Finance this afternoon. I refer to his insistence that Dr. Young acts completely independently of the government. I should like to know what is the government's stand. The country is facing the problem of inflation, and the responsibility of fighting it is the government's. Yet they are standing idly by, presumably offering Dr. Young as a sacrificial lamb in this instance.
I say that a degree of leadership is now called for on the part of the government of Canada. If this independent commission dealing with prices and incomes is unable to get all the parties together, is the solution merely to throw up one's hands? I would say that the duty of the government is clear. From this point on the Prime Minister (Mr. Trudeau) must make every effort to get organized labour to participate with him and members of the cabinet in a meaningful dialogue in order to fight inflation. Let them get down to talking instead of insulting one another from a distance. I would say that this is the essence of leadership. If inflation is left as a problem for Dr. Young and his colleagues to resolve, the government is abdicating its own responsibility.
The minister indicated, as some slender reed of success or claimed success on the part of the Prices and Incomes Commission, that there has been a decline in business profits and that this was brought about voluntarily. The minister has to be much more credible than that. There is no evidence that in the first quarter of this year or in the first month of this year the decline in business profits has been attributable to voluntary restraint. All I ask the minister to do is to look at the figures for lagging retail sales, for auto sales and at the slump in the construction industry. Let him look at the wholesale decline in the issuance of building permits and the 40-odd percent decline in new housing starts.
Then the minister has obviously forgotten the decline in agricultural incomes that has now worked its way into the system and which is why we now see that business profits have declined. They have declined because they are just not there. To say that this has been the result of voluntary restrictions by businessmen, and is therefore evidence of the success or partial success of the Prices and Incomes Commission, I suggest is really stretching the point.
June 8, 1970

[DOT] (2:50 p.m.)
The minister claims that the government must now establish a yardstick against which to measure wage increases. You know, this being converted to the idea that wages must be somehow related to some productivity, is even later than Saul going to Damascus. This particular administration has a responsibility too. It cannot divorce itself from the actions of its predecessor administration which took us through the settlement in respect of the dock workers in Montreal and the seaway workers. These 30 per cent and 35 per cent wage settlements of course set the pattern. Frankly, I would suggest one would think that the workers in other industries had completely lost any sense of proportion if they did not go along with the same sort of settlement encouraged three, four or five years ago by the government.
The government says it intends to break the back of inflation but, strangely enough in our position, we find that inflation is international. We import inflation or at least it is influenced by other countries. In part in many instances inflation does come to us to the extent that we buy goods from countries where there is inflation. We have responsibility too. The hon. member who wanted to make a quip from his seat rather than from his head might look at the consequences of releasing the dollar.
The minister says that imports will come in in greater quantity and that therefore prices will be reduced. It is all very well to hope that this will be the result provided there is no inflation elsewhere, but if the countries with which we deal in such great quantities do not have any control over their inflation we will only be bringing it into this country. Particularly there is the comparison of prices. There is always, shall we say, the long-range goal of parity in respect of wages with the United States. If there should be high or severe inflation in the United States we will feel that push too. It all boils down, however, to unemployment at the end of the road in the decline of Canadian industry. This is where the problem lies. If we are to fight inflation by releasing the dollar and getting imports which crowd out Canadian production, of course there will be unemployment. And so we fight the fight.


Mr. Speaker:: Order, please. The hon.
member for Edmonton West I am sure will not mind my reminding him of the provisions of the Standing Order. I always hesitate to interrupt an hon. member when he is com-
Finance
menting on a ministerial statement, particularly on such an important matter. There is, however, a Standing Order which provides that comments by spokesmen on behalf of opposition parties should be brief. I am taking into account the importance of the matter and the interesting comments of the hon. member, but I would ask him to keep in mind the limitations imposed by the Standing Order.


Marcel Joseph Aimé Lambert: Mr. Speaker, I was endeavouring to reply to an eight-page statement which raises important points. I trust that the importance of the subject will not be detracted from perhaps rather lengthy remarks. If the remarks hurt hon. members opposite, that is fine; they must bear with them. In any event, the burden is being placed on the backs of the workers of this country.
The budgetary proposals made by the min. ister, the accelerated payments, presumably will help the provinces. This is a once-in-a-lifetime measure. It is not a measure which can be re-used. He cannot go on accelerating things which he has not got. I hope this will help some of the provinces, but I repeat that it is not a long-term solution but is rather a stop-gap solution at the very best.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, on page 4 of the minister's statement he says:
I acknowledged that it would be unrealistic to expect such guidelines would attract support from any substantial segment of organized labour.
By these words the minister condemns his own policy. How does the minister propose to carry this policy into effect? Does he intend to do so at the point of a bayonet? Does he think he can make a labour force work when that labour force feels it is unfairly discriminated against and feels that the measures he has brought in are unjust? Surely the minister must realize that unless he has the co-operation of labour and that unless labour feels that the policies brought in affect not only them but other segments of the economy his policies cannot be made to work in a free society.
It is not necessary for me to remind the minister that we often give up one freedom in return for greater freedoms. We accept certain actions in the interest of society but we do this only when we think we are being called upon to make our contribution while other people are making their contribution as well. But when the minister brings in guidelines which apply to labour alone and points his finger at labour as the villain in the whole

June 8, 1970
Finance
piece of inflation, he is simply condemning his own policy. He cannot in this way obtain the co-operation that is essential if we are to have any restraint at all in this country.
The comments of hon. members opposite, Mr. Speaker, are very typical of how they treat a serious problem of this kind with flippant remarks. I think it might do them a lot of good if they would delay their remarks for a little while instead of sitting there and throwing these inanities into the air.
The government has created a bias against labour ever since it took office. If we go back and examine the record we can see that from the very day this government came into power there has been an attempt to point the finger at labour. In his last budget speech the minister virtually invited the employers of this country to put their people out on strike. We saw this again in the attitude of the Prices and Incomes Commission in respect of its unrealistic approach and cry that labour should co-operate when the commission knew that the kind of thing it was asking organized labour to do was impossible. The commission knew that the CLC could not say to every union in the country that it must go along with this. There are democratic principles involved in these organizations. They reach decisions on their own. Often they reject the advice of their leaders. The commission has asked the leaders of the trade union movement to do something or to accept something which they could not do. Now we see the culmination of this kind of arrangement.
The minister points out that there has been compliance and acceptance by the business sector. That must surely be the greatest misstatement not only of the day but of this whole year. What sort of voluntary acceptance was it that the Prices and Incomes Commission suggested? It asked business not to increase its profits to any great extent. As the hon. member who preceded me pointed out, one of the reasons business profits are not higher than they are now is not because of the admonition of the commission but because those businesses which were in a position to take a profit had already done so. It is simply because the economic climate is such that the profits in some sectors of the economy are not there.
We want to see something done about inflation. We recognize that it is a problem, although it is not the greatest problem this society has to face. Anyone who can recall the hungry thirties, the unemployment and the grief that were created, knows that cer-

tainly the degree of inflation we have today is not the worst problem our society has to face.
[DOT] (3:00 p.m.)
But since we do have to take some action along this line I suggest to the minister that he accept the suggestion put forth at the conference by the government of Manitoba for an incomes policy that would deal with all forms of income, a policy that would look into professional fees, into rents, into profits and into the various ways in which people get their rewards in our society. Unless he does this, I cannot see any hope. But if he is prepared to accept the position of the Manitoba government, and if he is prepared to put forth to the country through Parliament a fair way of assessing and calling for sacrifices on the part of everyone in our society, then he will find that labour will be the first to agree with him.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, we are quite willing to see the Minister of Finance (Mr. Benson) and the government take steps to fight inflation and we recognize that the minister is sincere when he talks about his anti-inflation policy, but we have serious doubts as to the means he is taking to attain that goal.
First of all, we should get a clear understanding of what is meant by the words used. When the Minister of Finance talks about inflation, he refers to prices being inflated, for if we look it up in the dictionary, it is stated that inflation is an abnormal increase in available currency and credit beyond the proportion of available goods.
However, this is not the situation prevailing today. It is not that there is too much money in circulation in ratio to production for if this were so we could only advise that the government continue its fiscal policy in order to drain off such a surplus.
The present "inflated prices", a more appropriate description of the inflation the Minister of Finance would have us believe in, result from increased production costs. Before establishing the Prices and Incomes Commission, the minister should have appointed a commission to determine the causes of these "inflated prices", which would probably have made it possible to take more realistic action, more likely to correct the situation.
For example, a few years ago the government lifted all restrictions on interest rates on mortgage loans and now it is twice as expensive to finance construction projects generally.
June 8, 1970
That is an example of inflated prices which contribute directly to inflation.
Furthermore, the tax on building materials has inevitably caused inflated prices.
Those are two direct causes of inflation, or rather of inflated prices. If we really wanted to fight inflated prices, we should take measures against what causes them.
Each year, there is a gap of about 20 per cent between the goods available and the purchasing power of Canadians who want to buy those goods, and to buy them, they need wage increases which infallibly result in inflated prices.
Another source of inflation and inflated prices is the fact that Canadians lack purchasing power. The previous speaker suggested establishing minimum wages for all Canadians.
As reported on page 4 of his statement, the Minister of Finance thinks we should establish, and I quote:
-a yardstick against which to measure the reasonableness of price increases in relation to productivity-
This point is important to determine whether prices are at a normal level or whether wage increases will produce a proportional increase in production. Today, the high unemployment rate is still a factor of reduced productivity and therefore, higher retail prices of products.
We do not have enough time to suggest all the remedies to fight inflation. Unfortunately, we note that those applied by the government up to now have been completely ineffective. Indeed, it does not tackle the real causes of inflation.



EXTERNAL AFFAIRS


Mitchell William Sharp: I should like to report briefly to the House on the recent Rome meeting of NATO foreign ministers which I attended and on the visits I paid after the meeting to Yugoslavia, Roumania and Ireland.
First of all, I should like to table English and French texts of the communique and declaration issued by the NATO ministers with the suggestion that they be printed as an appendix to Hansard.


Mr. Speaker:: Is this agreed?
NATO Foreign Ministers' Meeting


Some hon. Members:: Agreed.
[Editor's Note: For text of communique and declaration referred to see appendix.]


Mitchell William Sharp: Discussions are already under way between various NATO members and individual Soviet bloc countries on such important east-west problems as the limitation of strategic arms, Berlin, and the Federal German Republic's relations with its eastern neighbours. At Rome, NATO ministers met to discuss what further steps the alliance and its members should take to promote improvement in east-west relations.
One possibility examined at Rome was the idea of a move in the direction of broader multilateral discussions, either in the form of a large conference or series of conferences, or a standing commission on east-west problems. Canada took the position that the idea of a conference at the right time and in the right circumstances would be most useful. We felt, however, that the actual decision to convene such a meeting should not be taken until an east-west consensus had emerged on the aims [DOT]of a conference and on the subjects which could usefully be discussed, and until a conference had reasonable prospects of success. Similarly, we saw merit in the idea of setting up a standing commission, although we thought that the time was probably not yet right for it. It is our view that progress in the individual east-west talks which I mentioned a moment ago would be a good yardstick for determining when the time had come to broaden discussions out into a general multilateral forum. We must keep in mind the primary importance of moving ahead on the substance of outstanding issues.
Canada placed emphasis at Rome on the desirability of broadening the range of specific subjects under discussion with the other side. In 1968 and 1969, NATO had already indicated its interest in the possibility of mutual and balanced force reductions in central Europe, but as yet there has been no formal Soviet response. At Rome, Canada urged NATO to go beyond its previous position and make a clear and forthright offer to explore with the members of the Warsaw Pact how to start negotiations on force reductions. To demonstrate the seriousness of NATO's approach, we said that the alliance's offer should include suggested guidelines for the reductions, and a precise procedure for communications with the other side. A forthcoming, explicit offer of this kind would, in our view, have the best chance of obtaining a positive reply.

7824	COMMONS
NATO Foreign Ministers' Meeting
Our two main preoccupations in Rome were, first, to urge that the alliance adopt a positive but realistic position on the subject of multilateral discussions, with emphasis on the substance of the issues at stake and, second, to have NATO make a firm offer to talk on balanced force reductions.
In both of these respects, the outcome of the meeting was very satisfactory to Canada. On the first point, the meeting agreed that "in so far as progress is recorded as a result of... ongoing discussions-in particular on Germany and Berlin-the allied governments ... would be willing to enter into multilateral contacts with all interested governments. One of the main purposes... would be to explore when it would be possible to convene a conference.... " This reasoned, step-by-step approach to the question of a conference is in line with our own thinking. The communique also refers to the possible establishment of a permanent body in due course, as one way of starting multilateral negotiations.
[DOT] (3:10 p.m.)
On our second point, NATO's declaration on balanced force reductions explicitly invites interested states to hold exploratory talks on the subject and suggests four specific considerations which the allies would put forward in such talks. The Italian Foreign Minister was asked to transmit the offer to the other side, and in fact has already done so.
I think members will agree that the positions adopted by the alliance in Rome represent a clear step forward in the search for better relations with the east. I was also struck by the mood of co-operation and willingness to compromise displayed by all at the meeting.
We shall watch carefully for evidence that the other side is willing to respond positively. Early results may not be forthcoming, but in the months ahead Canada and other members of the Alliance will be exploring actively the prospects both for an eventual conference and for talks on balanced force reductions, so that the momentum which has now been developed is maintained.
While in Rome I called for the first time on the Secretary of State of the Vatican.
From Rome I went to Belgrade and then to Bucharest at the invitation of the Yugoslav and Roumanian governments. In Roumania, I flew over some of the flooded areas and was able to see for myself the desolation caused by the tragic national disaster that has taken

DEBATES	June 8, 1970
place there, and to appreciate what it means in terms of human suffering and as a major setback to the Roumanian economy. On the way home I paid a brief official visit to Dublin.
In each case I had talks with the President, the Prime Minister and the Foreign Minister on a wide range of bilateral and international questions including the results of the NATO ministerial meeting. I should like to table the communiques issued on my visits to Belgrade and Bucharest. In Dublin the talks were less formal and no communique was issued.


Mr.  R. Gordon L. Fairweaiher@Fundy-Royal: Mr. Speaker, the minister was kind enough to make a copy of his statement available, and I thank him for this courtesy. I must tell him that we have had a somewhat difficult time keeping track of his progression across Europe.
We were alarmed, falsely as it turned out, by the implications of France's alleged refusal to grant overfly privileges for the minister, only to be very much relieved by the Prime Minister's assurance that it was all a canard. No sooner had we checked our dictionaries to enable us to understand that word than we were having to respond to the minister's offer of a Canadian peacekeeping force for the Middle East. This generosity sent us scrurrying to the military experts to see, if the Canadian offer were taken up, whether enough troops would be left in Canada to enable us to assert our northern sovereignty or, as a matter of fact, any other sovereignty that the government has in mind to assert. When the Minister of National Defence (Mr. Cadieux) was asked about the offer, he did not say it was a canard. He simply said he did not know anything more about the offer than I did. Perhaps we will learn a little more about this generosity as the week progresses, but I would like to submit to the minister that peacekeeping, of course, is a useful role for Canada provided the Security Council is able to establish clear and unambiguous ground rules for its operation.
The NATO ministerial meetings in Rome took place amidst ongoing initiatives-the Soviet and United States talks on strategic arms limitation, the Geneva disarmament conference, the initiatives in Berlin and by the Federal Republic of Germany, the proposal for Warsaw Pact-NATO meetings and the possibility, as the minister explained to us, of mutual force reductions. Personally, I think the minister is correct in hesitating about institutionalizing, by way of a commission,
June 8, 1970
east-west problems. Surely, the world has institutions aplenty, but what seems to me to be lacking is the will to make these institutions work with any degree of effectiveness.
Brooding over NATO must be the paradox of partnership with the cruel and repressive government of Greece and the colonial posture of Portugal, which spends its fortune not on improving domestic conditions but on continuing its colonial African empire of Angola, Mozambique and Portugese Guinea. These are issues which will not die, despite how much easier it might be if we did not have to face them. Future historians of this age may well wonder if lack of communication procedures was not, in fact, the most obvious gap in the efforts that governments make to lessen the danger of conflict and war. I suggest, Mr. Speaker, that if NATO ministers do nothing else during 1970 than find a technique for east and west to talk, they will have accomplished something of very great value.
The contacts the minister made in eastern Europe can only be useful. It is to be hoped that Canada will soon be able to announce the dispatch of a Canadian ambassador to Roumania. We are in the embarrassing position of having a Roumanian ambassador here, and I think it is important that we clear up this anomaly. The flood which has caused so much death and anguish in that country evoked an obvious and speedy response from Canada, both in cash and in food. We hope that the generosity of this country, and of other nations, will find its way quickly to those in need and will not be diverted, as we have some reason to believe might be happening, into state agencies for use for their own purposes.
Finally, Mr. Speaker, I could not help but be struck by the whimsical understatement in the one sentence in the minister's statement about his visit to Dublin: "On the way home, I paid a brief official visit to Dublin." I imagine the minister will agree that the Prime Minister of Eire has a little more on his plate just now, gracious as he would want to be to the minister, than visits from Canadian officials at this difficult time in that country.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I am glad to welcome the minister back to Canada from his European trip. I am particularly glad that he was able to pay visits to Yugoslavia and Roumania, and perhaps I should not forget to mention Ireland. These first two countries, while they are on the other side of the so-called Iron Curtain, 22478-5
NATO Foreign Ministers' Meeting can, like Canada, play a positive role in the complicated task of avoiding the disasters that would arise out of conflict in Europe or in the Middle East.
With regard to Roumania, I can only hope that the Secretary of State for External Affairs was not too embarrassed that there was no Canadian ambassador in Bucharest. I remind him and the House that Roumania is an important country. It has often shown an example to the world in its courageous stance of independence in relation to the super powers. If this absence of a Canadian ambassador in Roumania is due to what has been called "Trudeau austerity," as the minister seems to have hinted, it is a senseless manifestation of it.
To me the minister's statement on NATO smacked, as usual, of perhaps too much ministerial caution. While favouring a European security conference, the ministerial statement indicated that the conference should not take place until an east-west consensus had emerged on just about everything, or until the conference had a reasonable chance of success. I suggest that such hedging about of the proposal with preconditions may well mean that it will never come about. Would it not be better to risk failure than not to try at all? We think that the western allies should show their readiness to talk about anything that might lead to an end to the dangerous, highly armed confrontation in Europe. In our view, our attitude should be positively positive.
I am pleased that the proposals for a balanced forces reduction seem to have taken a step forward. They should be pressed with vigour and dispatch.
I deeply regret the absence in the minister's statement of any reference to the NATO situation vis-a-vis Greece. The NATO charter refers to the principles of democracy, individual liberty and the rule of law. These are supposed to be the keystones of the alliance. The foreign ministers of Norway and Denmark both raised the incongruity of these principles with the conduct of one of the NATO countries, namely, Greece. For two years, an iron dictatorship has held down the people of that country by torture and the denial of human rights.
[DOT] (3:20 p.m.)
Why was the minister so silent, as apparently he was, when this issue was raised? Are we to accept the suggestion that NATO is merely a military alliance? Are the words of



June 8, 1970
Questions
the NATO preamble simply eloquent hypocrisy? If so, how can our government or any other government in NATO justify to its people, and particularly to its young people, continued adherence to an instrumentality which is used to cloak tyranny of the rankest type? I hope the minister will break silence and line up Canada with our Norwegian and Danish friends on the side of democracy.


CRIMINAL CODE
Hon. John N. Turner (Minister of Justice) moved: for leave to introduce Bill C-220, to amend the provisions of the Criminal Code relating to the release from custody of accused persons before trial or pending appeal.


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

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

Mr. Muir (Cape Brelon-: The Sydneys):
1.	Has the Prime Minister received a letter from Mr. Daniel Bonnar, 100 Fraser Avenue, Sydney Mines, Nova Scotia, dated February 7, 1970, protesting in general the pre-retirement program of the Cape Breton Development Corporation and also the fact that men who were willing to continue work were forced to go on a pre-retirement allowance at sixty years of age?
2.	What was the nature of the reply from the Prime Minister's Office?
3.	Was a copy of Mr. Bonnar's correspondence forwarded to the Minister of Regional Economic Expansion and, if so (a) what attention has been given by the Minister of Regional Economic Expansion (b) what was the nature of the reply, if any, forwarded by the Minister to Mr. Bonnar?


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: I am informed by the Prime Minister's office and the Department of Regional Economic Expansion as follows: 1. Yes.
2.	The reply, dated February 16, 1970, acknowledged receipt and informed Mr. Bonnar that his presentation had been noted and

was being brought to the attention of the Minister of Regional Economic Expansion.
3.	Yes. (a) The Minister wrote to Mr. Bonnar on April 6, after receiving a report from the Cape Breton Development Corporation, (b) The reasons for the pre-retirement plan were explained.


RESEARCH-DEPARTMENT OF JUSTICE
Mr. Robinson: 1.	What research studies have been carried out by, or on behalf of, the Department of Justice during each year 1960 to 1969 inclusive?
2.	What research studies are now being carried on and/or are contemplated during the next five years?
3.	What was the cost of each of the research studies completed in each year 1960 to 1969 inclusive?
4.	What is the estimated cost of each of the studies now in being or contemplated during the next five years?


John Napier Turner: 1 and 3. See reply to Question 618 answered on March 11, 1970.
2 and 4. The planned Legal Research Section of the Department of Justice has not been established yet. Consequently, it is not possible to forecast what, if any, research studies are proposed nor to assign a cost figure to them.


NCC-ACQUISITION OF LAND FROM E. B. EDDY COMPANY
Mr. Broadbent: 1.	Has NCC acquired parcels of property from E. B. Eddy Company and, if so, which ones?
2.	In each case, what was the price paid?
3.	Does E. B. Eddy Company occupy land owned by NCC and, if so, what are the rental or other financing arrangements in each case?
4.	Does NCC rent any land from E. B. Eddy Company and, if so, what are the financial arrangements?


Mr. Mariin P. O'Connell (Parliameniary Secretary to Minister of Regional Economic Expansion):: 1. Yes one parcel comprising approximately 6 acres in the City of Ottawa (bounded by Oregon, Booth and the Ottawa River).
2. $1,010,000.
3.	No.
4.	No.


PUBLIC SERVICE-DAY-CARE CENTRES AND SPECIAL LEAVE FOR CHILDBIRTH
Mr. Broadbent: 1.	Is the government now considering the provision of day-care centers at the place of employ-
June 8, 1970

ment to assist the many female employees in the public service with small children?
2.	(a) Is there now a provision for a male employee of the federal public service to have time-off with pay on the occasion of his wife having a baby and, if so, what is the basis for it (b) is there any provision for a female employee of the federal public service to have time-off with pay for the childbirth (c) is the government considering the grant of leave with pay for such women?


Hon. C. M. Drury (President of the Treasury Board):: 1. No.
2.	(a) Yes. Except where there is no provision in a collective agreement, a male employee in the public service may be granted special leave with pay up to a maximum of one day on the occasion of the birth of his child. This provision has come about as a result of negotiation in collective bargaining, (b) No. (c) No.


THE HAGUE CONFERENCE-RATIFICATION OF AGREEMENTS SIGNED BY CANADA
Mr. Fortin: 1.	Were the three agreements signed by Canada during the eleventh session of The Hague Conference ratified and, if not, for what reasons?
2.	What action is the federal government taking to ratify the agreements concerning provincial legislative jurisdiction?
3.	When is the next session of The Hague Conference to be held and what is the agenda?
4 What progress has been made in the studies of this subject mentioned at page 8298 of Hansard of May 5, 1969.


Mr. Jean-Pierre Goyer (Parliamentary Secretary to Secretary of State for External Affairs):: 1. As they are still under study, Canada has neither signed nor ratified the three conventions resulting from the eleventh session of the Hague Conference on Private International Law.
2.	Two of the conventions (that on the recognition of divorces and legal separations and that on the law applicable to traffic accidents) are the subjects of detailed questionnaires sent to all provinces. No such action has yet been taken with respect to the third convention on the taking of evidence abroad in civil or commercial matters.
3.	The twelfth session of the Hague Conference is tentatively scheduled for October 1972. The agenda will probably include as subjects (1) the responsibility of manufacturers for their products, (2) succession to property (especially as relates to the administration of estates) and (3) maintenance obligations relative to adults.
22478-5J
Questions
4. The studies concerning the conventions on the recognition of divorces and the law applicable to traffic accidents are well advanced. Study of the convention on the taking of evidence abroad in civil or commercial matters is at a more preliminary stage.


FEASIBILITY STUDY OF CANADIAN OCEAN-GOING FLEET
Mr. McCleave: 1.	Is there a feasibility study of a Canadian ocean-going fleet being made and, if so, has it been instructed (a) to regard the permanent sea-lift requirements of such Canadian corporations as MacMillan-Bloedel Limited, the Aluminum Corporation of Canada, the Canadian Pacific System and Imperial Oil Limited, as an existing Canadian chartered ocean-going fleet (b) to establish how many foreign flag ships are chartered now by these and other Canadian corporations?
2.	Would the government consider extending to Canadian corporations the same tax treatments extended to corporations in other prominent marine powers such as the United Kingdom and Norway for the purpose of operating ocean-going ships?
3.	Has the inquiry made a comparative study of current world labour rates and, as Canada now has no ocean-going fleet under its own flag, has the inquiry approached Canadian labour leaders to establish what rates and working conditions would be acceptable to Canadian seamen if Canada did have an ocean-going fleet?
4.	How long has such inquiry been in progress, who are the personnel carrying it out, and when does it expect to make its report?


Mr. Gerard Loiselle (Parliamentary Secretary to Minister of Transport):: The Canadian Transport Commission advises as follows: 1. As announced in the House of Commons on June 3, 1969, (Hansard p. 9380), a "Canadian Merchant Marine Feasibility Study" is being made and the terms of reference explicitly require the identification and quantitative forecast of major Canadian ocean-borne export and import trades.
2.	The consideration of fiscal and other measures must await the findings of the study and an analysis of the cost/benefit effects upon the Canadian economy.
3.	A detailed comparative analysis of labour costs is explicit in the terms of reference.
4.	The study commenced about one year ago and the report is expected about September 30, 1970. As noted in the announcement referred to in the answer to question No. 1, the contract for the study was awarded to: Hedlin Menzies & Associates Ltd., Winnipeg, Toronto & Vancouver who have subcontracted parts of the study to

June 8, 1970
Questions
George G. Sharp, Inc., New York, and Gibson Transportation Ltd./Gibson Shipbrokers Ltd., Vancouver and Montreal.


INDIAN STUDENTS ATTENDING UNIVERSITY
Mr. Orlikow: 1.	Of Indian students attending university in each year since 1967, how many of those who began the first year completed the full course in each year?
2.	How many Indian students attending university in each year withdrew before the end of the academic year?


Mr. Russell C. Honey (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: 1 and 2.
Year	Enrol-	Comple-	With-ment	tions	drawals1967-68	225	184	411968-69	293	245	481969-70	337	262	75


CANADA ARTS COUNCIL
Mr. Skoberg: Are there any members on the Canada Arts Council from Manitoba, Saskatchewan, Alberta, and if so, who are they?


Hon. Gerard Pelletier (Secretary of Stale):: Yes. Miss Kathleen Richardson is from Winnipeg and Mr. Louis A. Desrochers is from Edmonton. Another member, from Saskatchewan, will be appointed soon.


UNEMPLOYMENT-RESPONSIBILITY OF LEADER OF ORGANIZED LABOUR
Mr. Robinson: What degree of responsibility must the leader of organized labour assume for the growing unemployment and declining industrial production in Canada?


Hon. Bryce Mackasey (Minister of Labour):: It is not possible to determine the degree of responsibility of any person or institution.


QUEBEC-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Quebec for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in Quebec (including staffing) for each year 1961-62 to 1969-70?

4.	How many cases has the parole staff had under their supervision in Quebec for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society or any other voluntary agency of Quebec had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society or any other voluntary agency for each year 1961-62 to 1969-70?


Hon. G. J. Mcllraith (Solicitor General):: 1.
Parole staff positions.
Fiscal	Parole	Support	Year	Officers	Staff	Total1961-62	8	6	141962-63	9	6	151963-64	9	6	151964-65	12	6	181965-66	16	12	281966-67	16	12	281967-68	20	15	351968-69	24	15	391969-70	30	17	472. Average	annual costs	Fiscal	Parole	Support	Year	Officers	Staff	$	$	1961-62	6,940	3,250	1962-63	6,940	3,250	1963-64	7,180	3,370	1964-65	7,360	3,370	1965-66	8,132	3,501	1966-67	8,682	3,972	1967-68	9,362	4,357	1968-69	10,082	4,655	1969-70	10,804	4,906	3.	Information not available in form requested as, until the current fiscal year, budget allocations were not computed on a geographical or activity centre basis.4.	Cases under direct supervision of Parole StaffFiscal Year	Number of Cases1961-62	2481962-63	2861963-64	3511964-65	3581965-66	4271966-67	4301967-68	5781968-69	7711969-70	834Cases under supervision of John Howai	;ty or Other Voluntary Agency	Fiscal Year	Number of Cases1961-62	7251962-63	597
June 8, 1970

1963-64		656
1964-65		503
1965-66		665
1966-67		827
1967-68		758
1968-69		749
1969-70		981
6. Parole grants John Howard		
Fiscal Year*	Society	Other1961-62	$2,750	$32,1501962-63	3,100	36,3001963-64	4,400	32,7001964-65	4,450	27,9951965-66	4,892	43,3371966-67	5,130	46,2801967-68	7,860	52,8351968-69	9,635	45,3051969-70	9,395	52,786* Computed as	of end of fiscal	year.


NOVA SCOTIA-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Nova Scotia for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in Nova Scotia (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in Nova Scotia for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society of Nova Scotia had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society of Nova Scotia for each year 196162 to 1969-70?


George James McIlraith: 1.
Parole staff positions
Fiscal Year	Parole Officers	Support Staff	Total1961-62	1	1	21962-63	1	1	21963-64	1	1	21964-65	1	1	21965-66	3	2	51966-67	3	2	51967-68	3	3	61968-69	4	3	71969-70	5	4	92. Average Fiscal Year	annual cost Parole Officers	Support Staff	1961-62	$ 7,440	$3,450	1962-63	7,440	3,450	
Questions
1963-64	7,680	3,5701964-65	7,860	3,5701965-66	8,832	3,8011966-67	9,382	4,2721967-68	9,962	4,6571968-69	10,882	4,9551969-70	12,304	5.2063. Information	not available in form re-	quested as, until the current fiscal year, budget allocations were not computed on a geographical or activity centre basis.	4. Cases under direct	supervision of ParoleStaff	Fiscal Year	Number of Cases1961-62	51962-63	291963-64	201964-65	171965-66	181966-67	541967-68	821968-69	1281969-70	1735. Cases under supervision of John Howard	Society	Fiscal Year	Number of Cases1961-62	931962-63	841963-64	831964-65	661965-66	961966-67	881967-68	951968-69	1161969-70	1266. Parole grants	Fiscal Year*	John Howard Society1961-62	$3,9001962-63	3,5001963-64	3,4501964-65	3,6801965-66	5,6341966-67	6,3351967-68	6,7801968-69	8,9151969-70	7,811Computed as of end	of fiscal year.


ONTARIO-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Ontario for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?

June 8, 1970
Questions
3.	How much was the total annual budget of the two National Parole Service offices in Ontario (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in Ontario for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society [DOT]of Ontario had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society of Ontario for each year 1961-62 to 1969-70?


George James McIlraith: 1. Parole staff positions
	Parole	Support	
Fiscal Year	Officers	Staff Total	1961-62	7	7	141962-63	9	8	171963-64	9	8	171964-65	9	8	171965-66	12	10	221966-67	13	11	241967-68	19	15	341968-69	23	17	401969-70	31	22	532. Average annual cost	Parole	Support	Fiscal Year Officers	Staff	$	$	1961-62	6,900	3,250	1962-63	7,040	3,250	1963-64	7,380	3,370	1964-65	7,660	3,470	1965-66	8,632	3,601	1966-67	9,182	4,072	1967-68	9,862	4,457	1968-69	10,482	4,755	1969-70	11,104	5,006	3. Information	not available in form re-	quested as, until	current	fiscal year,	budgetallocations were not computed on a geographi-	cal or activity centre basis.	4. Cases under direct supervision of	ParoleStaff	Fiscal Year	Numbers of	Cases1961-62	43	1962-63	24	1963-64	43	1964-65	81	1965-66	76	1966-67	76	1967-68	119	1968-69	256	1969-70	588	5. Cases under supervision of John Howard	Society	Fiscal Year	Numbers of Cases1961-62	3081962-63	2691963-64	2271964-65	2371965-66	3301966-67	3901967-68	3781968-69	4151969-70	5366. Parole grants	Fiscal Year*	John Howard Society1961-62	$11,8501962-63	13,7001963-64	12,2001964-65	15,5851965-66	22,6821966-67	27,9551967-68	29,1331968-69	32,7201969-70	34,194
^Computed as of end of fiscal year.


MANITOBA-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Manitoba for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in Manitoba (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in Manitoba for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society of Manitoba had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society of Manitoba for each year 1961-62 to 1969-70?


George James McIlraith: 1.
Parole staff positions:
Fiscal Year	Parole Officers	Support Staff	Total1961-62	2	2	41962-63	2	2	41963-64	2	2	41964-65	2	2	41965-66	3	3	61966-67	3	3	61967-68	4	3	71968-69	4	3	71969-70	7	4	11

June 8, 1970

2. Average Annual costs		
Fiscal	Parole	Support
Year Officers		Staff
1961-62 $ 7,440		$3,350
1962-63	7,440	3,3501963-64	7,600	3,4701964-65	7,960	3,4701965-66	8,832	3,6011966-67	9,382	4,0721967-68	10,062	4,4571968-69	10,782	4,7551969-70	11,504	5,0063. Information	not available in form re-	quested as, until the current fiscal year, budget	allocations were	not computed on a geo-	graphical or activity centre basis.	4. Cases under direct	supervision of ParoleStaff	Fiscal Year	Numbers of Cases1961-62	241962-63	331963-64	191964-65	261965-66	171966-67	141967-68	201968-69	491969-70	645. Cases under supervision of John Howard	Society	Fiscal Year	Numbers of Cases1961-62	591962-63	881963-64	1081964-65	901965-66	1021966-67	1291967-68	1441968-69	1361969-70	1156. Parole grants	Fiscal Year	*	John Howard Society1961-62	$ 3,2001962-63	4,2001963-64	6,8001964-65	5,8371965-66	6,3161966-67	9,0351967-68	10,1351968-69	9,4301969-70	8,690
* Computed as of end of fiscal year.
Questions


SASKATCHEWAN-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Saskatchewan for the years 1961-62 to 1989-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in Saskatchewan (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in Saskatchewan for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society of Saskatchewan had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society of Saskatchewan for each year 1961-62 to 1969-70?


George James McIlraith: 1.
Parole staff positions
Fiscal Year	Parole Officers	Support Staff	Total1961-62	2	2	41962-63	2	2	41963-64	2	2	41964-65	2	2	41965-66	3	3	61966-67	3	3	61967-68	5	4	91968-69	6	5	111969-70	6	5	112. Average annual costs Parole Fiscal Year Officers	Support Staff	1961-62	$7,340	$3,350	1962-63	7,340	3,350	1963-64	7,580	3,470	1964-65	7,960	3,470	1965-66	8,732	3,601	1966-67	9,282	4,072	1967-68	10,062	4,457	1968-69	10,982	4,855	1969-70	11,204	5,006	3. Information	not available in	form requested as, until the current fiscal year, budget allocations were not computed on a geographical or activity centre basis.
4. Cases under direct supervision of Parole Staff
Fiscal Year	Numbers of
1961-62	16
1962-63	5
1963-64	5
1964-65	5
1965-66	3
1966-67	9
Questions

June 8, 1970
1967-68	30
1968-69	58
1969-70	98
5. Cases under supervision of John Howard Society	
Fiscal Year	Numbers of Cases
1961-62	53
1962-63	72
1963-64	71
1964-65	81
1965-66	63
1966-67	104
1967-68	144
1968-69	155
1969-70 6. Parole grants	125 John Howard
Fiscal Year*	Society
1961-62	$3,400
1962-63	4,600
1963-64	5,300
1964-65	7,695
1965-66	11,089
1966-67	9,690
1967-68	12,800
1968-69	13,925
1969-70	8,391
*Computed as of end of fiscal year.


BRITISH COLUMBIA-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of British Columbia for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in British Columbia (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in British Columbia for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society of British Columbia had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John Howard Society of British Columbia for each year 1961-62 to 1969-70?


George James McIlraith: (Solicitor General): 1.
Parole staff positions
	Parole	Support	
Fiscal Year	Officers	Staff	Total1961-62	4	3	71962-63	5	3	81963-64	5	3	81964-65 	6	5	111965-66	12	9	211966-67	13	9	221967-68	16	11	271968-69	18	12	301969-70	20	13	332. Average annual costs	Parole	Support	Fiscal Year	Officers	Staff	1961-62	$7,340	$3,350	1962-63	7,340	3,350	1963-64	7,580	3,470	1964-65	7,860	3,470	1965-66	8,632	3,601	1966-67	9,282	4,072	1967-68	9,962	4,457	1968-69	10,682	4,755	1969-70	11,204	5,006	3.	Information not available in form requested as, until the current fiscal year, budget allocations were not computed on a geographical or activity centre basis.4.	Cases under direct supervision of Parole Staff:Fiscal Year	Numbers of Cases1961-62	551962-63	501963-64	701964-65	1031965-66	1301966-67	1521967-68	3701968-69	5441969-70	6955. Cases under supervision of John Howard	Society	Fiscal Year	Numbers of Cases1961-62	1381962-63	1511963-64	1581964-65	1671965-66	1941966-67	2081967-68	1651968-69	1281969-70	1386. Parole grants	Fiscal Year*	John Howard Society1961-62	$4,8001962-63	5,4001963-64	6,7001964-65	8,0351965-66	7,2381966-67	8,3801967-68	8,0251968-69	5,2251969-70	4,525
^Computed as of end of fiscal year.
June 8, 1970

Questions


ALBERTA-NATIONAL PAROLE SERVICE
Mr. Orlikow: 1.	How many parole staff (positions) have there been in the Province of Alberta for the years 1961-62 to 1969-70?
2.	How much, on the average, has it cost to maintain each position?
3.	How much was the total annual budget of the two National Parole Service offices in Alberta (including staffing) for each year 1961-62 to 1969-70?
4.	How many cases has the parole staff had under their supervision in Alberta for each year 1961-62 to 1969-70?
5.	How many cases has the John Howard Society of Alberta had under its supervision for each year 1961-62 to 1969-70?
6.	What has been the parole grant to the John
Howard Society	of Alberta	for each year 1961-	to 1969-70? Hon. G. J.	Mcllraith	(Solicitor	Genera1. Parole staff positions Parole Fiscal Year Officers	Support Staff	Total1961-62	i	1	21962-63	2	2	41963-64	2	2	41964-65	2	3	51965-66	5	5	101966-67	5	5	101967-68	7	6	131968-69	8	6	141969-70	10	6	162. Average	annual costs	Fiscal Year	Parole Officers	Support Staff	1961-62	$7,440	$3,350	1962-63	7,440	3,350	1963-64	7,680	3,470	1964-65	7,960	3,570	1965-66	8,732	3,701	1966-67	9,282	4,172	1967-68	9,862	4,557	1968-69	10,582	4,855	1969-70	11,604	5,206	3.	Information not available in form requested as, until the current fiscal year, budget allocations were not computed on a geographical or activity centre basis.4.	Cases under supervision of Parole StaffFiscal Year	Numbers of1961-62	31962-63	-1963-64	71964-65	61965-66	11966-67	231967-68	441968-69	761969-70	1745. Cases under supervision of John Howard	Society	Fiscal Year	Numbers of Cases1961-62	1631962-63	1491963-64	1421964-65	1151965-66	391966-67	1631967-68	1851968-69	1841969-70	2386. Parole grants	Fiscal Year *	John Howard Society1961-62	$9,6501962-63	8,7001963-64	8,4001964-65	9,1201965-66	10,6861966-67	12,2801967-68	15,6451968-69	13,8901969-70	17,419
Computed as of end of fiscal year.


ELK ISLAND NATIONAL PARK-CAPITAL EXPENDITURES
Mr. Mazankowski: 1.	What was the total amount spent on capital expenditures in Elk Island National Park during the fiscal year 1969-70?
2.	What are the details of expenditures?
3.	How are surplus materials disposed of?
4.	What was the declared surplus in 1969-70?
5.	What was the total amount of surplus declared?
6 How much was realized?
7.	What capital expenditures are considered for the fiscal year 1970-71?
8.	What are the details of these expenditures?


Russell Clayton Honey: 1. $109,929. 2. Detailed expenditures	
Development Recreation Area	$46,952
Beaver Exhibit	5,789
On Site Aspen Exhibit	6,530
i ton Trucks-3 Replaced	6,786
3 ton Trucks-2 Replaced	10,632
Fence Boundary	17,696
Replace Radio Equipment	899
Miscellaneous Equipment	10,684
Trailer Asphalt Equipment	3,961
Total


$109,929 COMMONS DEBATES
[Stage Direction]
June 8, 1970
Questions
3.	Through the Crown Assets Disposal Corporation.
4.	Redundant and worn out machines and appliances.
5.	$10,086.83.	
6.	$2,415.27.	
7.	$27,000.	
8.	Details of Expenditure Reconstruct Boundary Fence	$ 7,000
	Replacement-3 ton Truck	7,000
	Replacement-4 ton Truck	2,300
	Fire Equipment	500
	Signs	5,000
	Green Cutting Equipment	900
	Replacement-One Ton Truck	3,000
	Miscellaneous Equipment	1,300
	Total	$27,000

Mr. Robinson: Will the federal government consider the feasibility of passing legislation whereby international unions in the United States will be made liable to their Canadian members for total wages lost when a strike by the union in the United States results in loss of jobs to the Canadian membership?


Bryce Stuart Mackasey: The government is always willing to consider the feasibility of any legislative proposals but it is not likely, for a number of reasons, that such consideration in this case would have a useful result.


STATUS OF ACTION AGAINST JOHN C. DOYLE FOR PAYMENT OF TAXES
Mr. Coates: 1.	What is the status of the action initiated by the federal government against John C. Doyle for payment of taxes?
2 On what date was the action taken by the federal government and what is the amount of the unpaid taxes claimed by the federal government?
3.	If the settlement has been reached, what was the amount accepted by the federal government in settlement?


Hon. Jean-Pierre Cote (Minister of National Revenue):: 1 and 2. A Writ of Extent was issued out of the Exchequer Court of Canada on July 8, 1963 for the sum of $3,410,130.90, with the Government's claim being registered against assets valued in excess of the income tax liability.
3. No settlement has been reached. The tax assessments have been appealed to the Exchequer Court and the appeal is scheduled to be heard starting May 25, 1970.
[Mr. Honey.)


FIRST CLASS AIR TRAVEL BY FEDERAL OFFICIALS
Mr. Coates: 1.	What officials of the federal government are allowed to travel first class on airways in Canada and outside Canada?
2.	On what occasions do federal government officials fly first class and what was the additional cost for the transportation of federal government officials in first class accommodation in the past fiscal year as compared with the cost of economy flights?


Charles Mills (Bud) Drury: 1. Deputy Heads and Heads of Agencies. Senior Executive Officers where first class air travel is authorized by their deputy head.
2. On Government business travel when approved as in 1 above and when economy class is not available. Less than 5% of government business travel by air is first class. Cost information is not available.


QUEBEC-GRANTS TO INDUSTRIAL MILK PRODUCERS
Mr. Gauthier: 1.	What grants were paid to Quebec industrial milk producers for the years 1967, 1968 and 1969?
2.	What amounts were withheld for marketing costs or for over-production penalties from Quebec industrial milk producers during the years 1967. 1968 and 1969?


Hon. H. A. Olson (Minister of Agriculture):: 1. Net subsidy payments to Quebec industrial milk and cream shippers are as follows: 196768, $41.2 Million; 1968-69, $44.4 Million; 196970 (incomplete), $36.7 Million.
2. Amounts withheld from subsidy payments towards the cost of exporting surpluses were: 1967-68, $4.5 Million; 1968-69, $7.2 Million; 1969-70 (not final), $13.6 Million.


INDIVIDUALS PAYING INCOME TAX ON INCOMES UNDER $3,000 1968-1969
Mr. Lambert (Bellechasse): What was the number of individuals with an income of less than $3,000.00 who paid income tax during 1968 and 1969?


Joseph Julien Jean-Pierre Côté: 1968: There were 1,630,704 individuals with total incomes of less than $3,000 before exemptions and deductions who paid income tax during 1968. 1969-Information not available.
June 8, 1970


REPRESENTATIONS BY CLC REGARDING ITS SOCIAL ACTION PLAN
Mr. Yewchuk: 1.	Has CLC made any representations to the Canadian Government concerning its social action plan recently revealed at the national convention?
2.	If any such representations were made, would the government be willing to work with CLC in organizing certain under-privileged members of Canadian society?


Bryce Stuart Mackasey: 1. No.
2. A reply to this could be determined only if and when such representations are made.
Orders for Returns
3.	Were these transportation costs included in the $7,402 indicated by the government as the additional assistance provided to the Embassy at Stockholm in connection with the negotiations and if they were not included as additional costs, for what reason?


Jean-Pierre Goyer: 1. Approximately $3,325.
2. (a) John M. Fraser; (b) Ottawa; (c) Five; (d) Economy class commercial flights for full distance in all cases.


NATIONAL PARKS-EXPANSION OF ACCOMMODATION FACILITIES ASSISTANCE TO CHILDREN OF PRAIRIE FARMERS TO ATTEND UNIVERSITY
Mr. Yewchuk: Will the government consider giving social financial assistance to children of Prairie farmers who are currently experiencing economic difficulties in order to permit them to attend university in the next academic year?


Edgar John Benson: The Canada Student Loans Act provides for assistance to all full-time university students who can demonstrate financial need. The criteria used in determining the amount of loan to be granted include the income of the parents of a dependent student. Thus, any change in the income of a student's family will be reflected in the amount of aid available to the student. Lending in the three prairie provinces under this program has shown an increase to date this loan year compared to the last full loan year (July 1 to June 30) as follows:
1968-69 (whole year)
Alberta $8,340,345 Sask. $6,564,848 Man. $3,448,789
1969-70 (10 months to April 30th) $10,744,249 $ 8,421,671 $ 4,326,396


NEGOTIATIONS BETWEEN CANADA AND RED CHINA-TRANSPORTATION COSTS
Mr. Coates: 1.	What has been the cost to the federal government for transportation provided to members of the government service who have participated in the negotiations presently underway between Canada and the Government of Red China in Stockholm?
2.	What are the names of the persons who were required to fly to Stockholm for these negotiations, from what location did they fly to attend the meetings at Stockholm, on how many occasions and, in each instance, did they fly economy, first class or by government aircraft, either the full distance or a portion of that distance?
22478-6J

Question No, 1,922-Mr. Noble:
1.	Is it the intention of the government to expand accommodation facilities to meet the requirements of an increasing number of visitors to the National Parks by acquiring suitable areas now available for such new park development?
2.	In considering additional areas for National Parks, would the government give serious consideration to acquiring the area now available with the closing of the Meaford Tank Range?


Russell Clayton Honey: 1. Yes.
2. When the Department of National Defence declares land surplus, its potential for use by other governmental agencies is examined. Due consideration will be given to the park potential of the Meaford Tank Range.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Noble: 1.	How many consultants not associated with the Public Service of Canada have been retained by the Department of Manpower and Immigration since its establishment?
2.	What are (a) the names of the firms or individuals retained (b) what was the reason in each instance for retaining the service (c) what was the cost in each instance where a firm was involved (d) what was the fee and expense where an individual or individuals were involved?
Return tabled.



Mr. Coaies: 1.	How many consultants, not associated with the Public Service of Canada have been retained by the Department of Manpower and Immigration during the present Parliament?
2.	What are the names of the firms or individuals retained, what was the reason in each instance for retaining the service and what was the cost in each instance where a firm was involved and what was the fee and expense where an individual or individuals were involved?
Return tabled.
June 8, 1970

Wage and Salary Restraint


VETERANS AFFAIRS-RESEARCH STUDIES
Mr. Robinson: 1.	What research studies have been carried out by, or on behalf of the Department of Veterans Affairs during each year 1960 to 1969 inclusive?
2.	What research studies are now being carried on and/or are contemplated during the next five years?
3.	What was the cost of each of the research studies completed in each year 1960 to 1969 inclusive?
4.	What is the estimated cost of each of the studies now in being or contemplated during the next five years?
Return tabled.


HIRING OF MESSRS. ROBIDOUX AND AUSTIN BY DEPARTMENT OF VETERANS AFFAIRS
Mr. Laniel: Were Messrs. Robidoux and Austin, currently working in Vimy and Beaumont-Hamel, hired as locally engaged employees by the Department of Veterans Affairs and, if so (a) on what date were they hired and at what salary at the time of employment (b) what was their respective salary at the end of December, 1968 (c) what is their salary at present (d) what other benefits are attached to their position at present, and are they similar to those they had prior to January 1, 1969 (e) what were their duties and responsibilities prior to January 1, 1969 (f) what are their present duties and responsibilities (g) what are their normal channels of communication within the Department in the discharge of their duties for submitting recommendations, suggestions or claims (h) what job security do they have?
Return tabled.


Mr. Crouse:: I rise on a point of order, Mr. Speaker, concerning question No. 513 in my name on the Order Paper. It is a simple question concerning the procedure followed by the government. It has stood on the Order Paper since November 19 without being answered. I again respectfully ask, through you, sir, that the government endeavour to give me a reply to the question.


Yves Forest: Mr. Speaker, I have made representations to the Department of Public Works and I expect an answer soon.



MOTION TO ADJOURN UNDER S.O. 26 THE CANADIAN ECONOMY INFLATION-GOVERNMENT POLICY RESPECTING WAGE AND SALARY RESTRAINT

Max Saltsman: Mr. Speaker, I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring

urgent consideration, namely, the federal government's policy to implement a restraint program against the wage and salary earners of this country as announced on Friday at the federal-provincial conference in Winnipeg. Any policy which seeks to hold down the incomes of one group of the economy, while leaving the incomes of other groups unrestrained, is discriminatory and inequitable and should be resisted by this Parliament.


Mr. Speaker:: The hon. member for Waterloo has filed the required notice and I have had an opportunity to give serious consideration to the proposed motion for the adjournment of the House. Under the terms of Standing Order 26 the hon. member suggests that this House should adjourn to consider "the federal government's policy to implement a restraint program against the wage and salary earners of this country." The hon. member goes on to argue his case by suggesting that such a policy "is discriminatory and inequitable and should be resisted by this Parliament."
There are a number of serious considerations which militate against the proposed motion. First, I remind the hon. member that the business which he seeks to displace is a supply motion under the terms of Standing Order 58, notice of which was given last Friday. In other words, we have already in actuality, set aside government business for the purpose of discussing a supply motion. I would find it difficult to pre-empt the supply motion in favour of a motion under Standing Order 26, even if under the provisions of Section 9 of Standing Order 26 the debate suggested by the hon. member for Waterloo might be postponed.
The second difficulty stems from the very nature of the subject matter proposed for discussion. Although it is one of extreme importance, and of national concern and interest, it seems to me it is one that will be the subject of continuing discussions and negotiations extending over a period of time. In such circumstances, I suggest that the Standing Order cannot apply.
The third difficulty I see in the motion as proposed is that it is rather in the form of a condemnation of a proposed government policy. A debate of this nature is normally put before the House by way of a no-confidence motion rather than by virtue of the provisions of Standing Order 26.
For these reasons, I do not agree with the hon. member's proposal that this matter be debated in the House under the provisions of Standing Order 26.
June 8, 1970

Inquiries of the Ministry ORAL QUESTION PERIOD	and Incomes Commission? If it does so
believe, what are the reasons?



TAXATION


Hon. George Hees (Prince Edward-Has-tings):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. Because of the obvious need for close co-ordination between federal and provincial tax policies, and because of the wide differences of opinion expressed in the conference during the weekend by the provincial and federal governments on the important question of tax reform, and because all Canadians are equally affected by provincial and federal tax policies, would the government seriously consider the possibility of substituting for its present proposals as listed in the white paper a coordinated effort between federal and provincial governments aimed at working out a policy in the best interests of all Canadian taxpayers?


Edgar John Benson: Mr. Speaker, the Ministers of Finance and provincial treasurers met in Winnipeg at the weekend. Three submissions were made by the provinces which had not been reviewed by the federal government up to that time. The Ministers of Finance and provincial treasurers agreed that we should analyse the submissions which had been made and discuss them at a later time. We intend to do this.



THE CANADIAN ECONOMY


George Harris Hees: I have a related question for the Prime Minister, Mr. Speaker. As the federal government has no plans to enforce the 6 per cent wage guideline which was outlined at the Winnipeg conference, and as the President of the United Automobile Workers, the body which sets the pattern for wage agreements on the North American continent, has stated flatly that his body will have nothing to do with the government's 6 per cent limitation on wage increases, does the government have any reason to believe that its present proposal in the form of the 6 per cent guideline has any better chance of success than various other proposals put forward to organized labour over the past year through the Prices


Pierre Elliott Trudeau: Well, Mr. Speaker, these reasons are very simple to give. We believe in the democratic process and we believe that there is some merit in appealing to people when the public interest is at stake.


An hon. Member:: Hear, hear!


Pierre Elliott Trudeau: We think that by explaining-


George Harris Hees: You have one fan, at least.


Pierre Elliott Trudeau: Mr. Speaker, I see that there is not very great support for this on the other side of the House. Apparently those hon. members do not trust democracy to work. They think you have to use a big stick and statutory measures to force people to act for the common good. On this side of the House we believe in taking the first step first and appealing to the people to use their own sense of voluntary co-operation in order to combat the evil of inflation. We hope that the people will understand what the public interest means better than the opposition does.


Some hon. Members:: Hear, hear!


George Harris Hees: Mr. Speaker, the opposition is even more anxious for this approach to be successful than is the government.


Some hon. Members:: Oh, oh!


George Harris Hees: Mr. Speaker, as this is the same approach that the government has been failing with during the past year, time after time, I simply ask the Prime Minister, when does Alice expect to emerge from Wonderland into the hard, cold world of reality?


Gerald William Baldwin: When is she coming forth from blunderland?


Mr. Speaker:: Order, please. The hon. member's supplementary is, I suggest, argumentative.



INFLATION-MANITOBA PROPOSAL FOR RESTRAINT ON ALL FORMS OF INCOME

Max Saltsman: Mr. Speaker, may I direct a supplementary question to the
Minister of Finance? In view of the presentation of the government of Manitoba to the federal-provincial conference in Winnipeg for a policy of restraint on all forms of income, including rents, profits, interest and executive
June 8, 1970

Inquiries of the Ministry salaries, can the minister indicate whether it is his intention to support and accept the position of the government of Manitoba in the interest of fairness?


Edgar John Benson: Mr. Speaker, the steps that were taken at the previous meeting of first ministers, and again at the meeting of federal and provincial finance ministers and treasurers, were to request that the provinces should take every step possible to make sure that rents do not rise too quickly and that professional organizations would be dealt with by them. There was general agreement that they should move in this direction, and many of them indicated that they had moved in this direction.


Max Saltsman: Can the minister assure the House that the proposed guidelines stated at the conclusion of the federal-provincial conference, and the indications the minister gave us today, will not be implemented until a committee of the House of Commons has had an opportunity to examine the entire proposal?


Edgar John Benson: No, Mr. Speaker.



INFLATION-PROPOSED SIX PER CENT WAGE INCREASE LIMITATION-CONSULTATION BY DR. YOUNG WITH GOVERNMENT

Gerald William Baldwin: Although the minister has said that the government and the Prices and Incomes Commission are at arm's length, is it not a fact that at Winnipeg he was fully aware of the nature and details of the proposals by Dr. Young before he commenced his speech and made his statement?


Edgar John Benson: Mr. Speaker, Dr. Young, I understand, was in contact with all the governments before the meeting at Winnipeg for informal discussions in which he stated the suggestions he had in mind so that they could be considered before the meeting took place.


George Harris Hees: A supplementary question to the Prime Minister, Mr. Speaker. Does the Prime Minister seriously intend to leave the impression with the House that the Chairman of the Prices and Incomes Commission does not consult very intimately with members of the government before he comes out with any proposal or policy? Does he expect us to believe that he acts completely independently and on his own?


Mr. Speaker:: Order, please. It is very difficult for the Chair to accept the question as asked. The question was asked in an argumentative way. Perhaps the hon. member would like to rephrase the question.


George Harris Hees: As you know, Mr. Speaker, I hate to be argumentative, so I will ask my question in a straightforward and unargumentative way. Does the Prime Minister intend to leave the impression with the House that the Chairman of the Prices and Incomes Commission makes his decisions and comes forward with proposals and propositions to the Canadian public completely on his own, without very close consultation with ministers of this government before he does so?


Gerald William Baldwin: Does he do it in splendid isolation?


Pierre Elliott Trudeau: Mr. Speaker, on the contrary, there is consultation with the government. There was consultation with all governments before the Chairman of the Prices and Incomes Commission made his February proposals to the private sector of the economy. He also consulted with business and with labour. He follows the same procedure with governments, including our own. His aim, I take it, is not to come up with a proposal which will catch the authorities by surprise. He wants to test them first. He wants to see how far they are prepared to support him. In this sense he has consulted us but he has consulted us with a view to seeing how we would react to one thing or another, and then he goes on and acts on his own authority.



INFLATION-PROPOSED SIX PER CENT WAGE INCREASE LIMITATION-APPLICATION TO OLD AGE PENSIONS

Mr. Frank Howard (Skeena):: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. Will the proposition that the 6 per cent ceiling be imposed on all increases be adhered to with respect to increases for old age pensioners?


Edgar John Benson: Well, Mr. Speaker, the question of old age pensioners was dealt with in a debate in the House not too long ago. The old age pensioners have the sympathy of this government and no government in the history of Canada has done more for our old age pensioners than we have in the past several years.


Some hon. Members:: Oh, oh!


George Harris Hees: There speaks 30-buck Benson.
June 8, 1970



INFLATION-SUGGESTED LIMITATION OF BANK PROFIT INCREASES TO SIX PER CENT

David Orlikow: Mr. Speaker, may I direct a supplementary to the Minister of Finance. Inasmuch as five chartered banks have now reported profit increases averaging some 22 per cent, can the minister indicate to the House whether the government is considering imposing a 6 per cent limit on the profit increases of the chartered banks, such as is proposed for workers?


Frank Howard: Of course not.


Edgar John Benson: Mr. Speaker, at the meeting earlier this year of the Prices and Incomes Commission, the banks made an agreement with regard to restricting their profits. I trust that the Prices and Incomes Commission will make sure they are adhering to this and, if they are not, I trust that the commission will bring it to the public's attention.



INFLATION-PROPOSED SIX PER CENT WAGE INCREASE LIMITATION-APPLICATION TO POSTAL UNION DISPUTE

Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. In view of the support given by the government to the Chairman of the Prices and Incomes Commission with respect to the recommendation for compulsory wage and salary guidelines, would the minister say if the exact timing of this announcement has anything to do with the current issue before Treasury Board involving the postal unions?


Edgar John Benson: Not at all, Mr. Speaker.



INFLATION-ADOPTION BY PROVINCES OF SIX PER CENT LIMIT ON WAGE INCREASES

Gilbert F. Rondeau: Mr. Speaker, I would like to ask the Minister of Finance a question. As the provinces seem to have accepted at the Winnipeg meeting the request of the government for a 6 per cent wage increase ceiling, would the minister be prepared to tell the House whether the provincial governments have committed themselves to pass legislative measures to implement a 6 per cent wage increase ceiling?
tEnglish]


Edgar John Benson: Mr. Speaker, at Winnipeg the Ministers of
Inquiries of the Ministry Finance indicated that they sympathized with the proposition, that they would take it back to their governments and report to the Chairman of the Prices and Incomes Commission.



INFLATION-PROPOSED SIX PER CENT WAGE INCREASE LIMITATION-NOTIFICATION OF MINISTER BY DR. YOUNG

Mr. Robert C. Coates (Cumberland-Colches-ter North):: A supplementary question, Mr. Speaker. Would the Minister of Finance inform the House on what date the Chairman
of the Prices and Incomes Commission first informed him of his intention to present the proposal he presented to the Federal-Provincial Conference of Finance Ministers at Winnipeg?


Gerald William Baldwin: Who spoke to whom?


Edgar John Benson: Mr. Speaker, it was last week some time. I shall have to check and make sure of the exact time. The chairman of the commission approached our government at the same time as he approached other governments in this country.


Gerald William Baldwin: Nuts!


Marcel Joseph Aimé Lambert: supplementary question, Mr. Speaker. How is the minister able to reconcile his answer with that of the Prime Minister, that the Chairman of the Prices and Incomes Commission of course consults closely with government ministers? The proposal as put forward certainly would have been in that general area.


Edgar John Benson: Mr. Speaker, the Chairman of the Prices and Incomes Commission came to the government and put forward his proposal just before the conference. I am not sure of the exact date, but I will check it. He informed us that he was approaching other governments at the same time.


Gerald William Baldwin: How naive do you think we are?


George Harris Hees: Mr. Speaker, would the minister advise the House when the government told the Chairman of the Prices and Incomes Commission to bring forward this suggestion?


Mr. Speaker:: Order, please.


Edgar John Benson: On a point of order, Mr. Speaker-


Mr. Speaker:: Order, please. The minister seeks the floor on a point of order. He shall have the floor in a moment. Obviously, we
7840	COMMONS
Inquiries of the Ministry are now entering the field of debate and perhaps we might go to another subject. Since the minister has risen on a point of order, I will recognize him.


Mr, Benson:: On a point of order, Mr. Speaker, I simply wish to point out to my hon. friend, as I did earlier today, that we do not give instructions to the chairman of the Prices and Incomes Commission.


George Harris Hees: Nonsense; we do not buy that.



EXTERNAL AFFAIRS


[Stage Direction]
Mr. R. Gordon L. Fair weather (Fundy-Roy-al): Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. Can he enlighten his colleagues and the House about his proposal regarding Canadian participation in a peacekeeping force in the Middle East?
Mitchell William Sharp: Mr. Speaker, when I was in eastern Europe I was asked whether, if there were a peace plan or a ceasefire that involved peacekeeping forces, Canada would be willing to participate. I said yes, in principle.


Mr. J. M. Forrestall (Darimouih-Halifax East):: I wonder if the minister-


Mr. Speaker:: Order, please. Is the hon. member rising on a supplementary?


J. Michael Forrestall: Yes, Mr. Speaker. Will the minister be kind enough to indicate who was involved in these discussions when this feeler was put forth, in response to which the minister replied in a positive manner?


Mr. Paul Yewchuk (Athabasca):: I have a supplementary question for the Secretary of State for External Affairs. Can the minister state whether he put this proposal as a Canadian proposal to the United Nations, and whether the United Nations has agreed with the idea of a peacekeeping force returning to the Middle East?


Mitchell William Sharp: As the hon. member knows, resolution No. 242 of the Security Council provides the framework within which a settlement of this conflict might be reached. Unfortunately, very little progress has been made. In so far as the question of a peacekeeping force is concerned, while it is important that the world should know that, in prin-

DEBATES	June 8, 1970
ciple, we would be prepared to participate, I am afraid that it may be some time before we are called upon to fulfil that role.


PRICES AND INCOMES COMMISSION
Mr. W. B. Nesbitt (Oxford):: I have a question for the Minister of Finance. Will the minister consult with the Chairman of the Prices and Incomes Commission to find out just how the lists were devised by the commission for sending out these pamphlets that have been issued? I have received four pamphlets. I also have in my hand a pamphlet that was sent to a person who has been dead for four years. This is a scandalous waste of hundreds of thousands of dollars.


Edgar John Benson: am sure that if the hon. member received four he needed four. However, I will refer the question to my colleague, the Minister of Consumer and Corporate Affairs.


LABOUR RELATIONS
Mr. Thomas S. Barnett (Comox-Alberni):: wish to address a question to the Minister of Labour in connection with the towboat tie-up on the west coast of Canada. I direct the minister's attention to a reply he made, as recorded at page 7544 of Hansard. The minister indicated he might be making a statement to the House before the end of last week. Can the minister either give a direct indication of the situation at the moment or indicate when he may be making the statement to which he referred in his answer a week ago today?


Bryce Stuart Mackasey: I apologize for not having made the statement, Mr. Speaker. Events have been moving rather quickly on the coast. Any statement I might make in the House could jeopardize the proposed settlement. I can indicate, however, that the representative of the Department of Labour is meeting today with the unions to offer them the package proposal advanced by the employers over the weekend. I have no way of knowing whether that package is acceptable. I hope to know later today.


Thomas Speakman Barnett: I intended to direct a supplementary question to the Minister of Justice but apparently he has been called out of the chamber. Perhaps the Solicitor General might respond to my question. I have received
June 8, 1970

requests that the Minister of Justice intervene in the situation because certain union leaders have been incarcerated for contempt of court. I have been asked to request the Minister of Justice to intervene in this matter with a view to facilitating a better mood for completing negotiations. Can the Solicitor General indicate to the House the position the Minister of Justice might take on this question.


George James McIlraith: Mr. Speaker, I will be glad to bring this request to the attention of the Minister of Justice. I hesitate to ask the minister to do anything that could be interpreted as interfering with a prosecution that is before the courts.


VIOLENT DISTURBANCES
Mr. Steven E. Paproski (Edmonton Centre):: My question is for the Solicitor General. Can the minister make a report to the House on the government's co-operation in putting an end to professional terrorist bombings in Montreal?


George James McIlraith: Mr. Speaker, I do not know what report can be given to the House on the matter. The three police forces directly concerned are working together to investigate these offences. It has never been the practice to give information about an investigation during the course of the investigation.


MANPOWER
Mr. B. Keith Penner (Thunder Bay):: I have a question for the Minister of Manpower and Immigration. It is supplementary to the question I asked last Friday concerning the closing of a gold mine in Geraldton, Ontario. What immediate action will be taken by Canada Manpower to assist the nearly 200 men who will lose their jobs as a result of the closing of this operation?


Hon. Allan J. MacEachen (Minister of Manpower and Immigration):: Mr. Speaker, I have asked Canada Manpower counselors in Thunder Bay to go to Geraldton today to discuss the question with the employer and employees, and to make the services of the department available to those employees who are affected.
Inquiries of the Ministry EXTERNAL AFFAIRS


MIDDLE EAST-REQUEST BY ISRAEL TO UNITED STATES FOR PHANTOM JET PLANES
Mr. S. Perry Ryan (Spadina):: I have a question for the Secretary of State for External Affairs. At the recent NATO council meeting in Rome did the minister oppose the request of the Israeli government to the United States government for Phantom jets?


Mitchell William Sharp: No, Mr. Speaker, I made no comment on the subject.


REGIONAL ECONOMIC EXPANSION
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wish to put a question to the Minister of Manpower and Immigration.
Given the alarming situation now prevailing in the city of Montmagny, where 1,500 people are out of work, would the minister be prepared to recommend to his colleague the Minister of Regional Economic Expansion to include the city of Montmagny in the special area of the district of Quebec, which would enable it to undertake works to provide employment to the greatest possible number of workers.


Mr. Speaker:: Order. I think that the hon. member asked this question only a few days ago. If my memory is correct, the hon. member put the question to the minister himself. He is now asking another minister to request his colleagues to study the matter. I do not think that the question as put is in order.
Moreover, the hon. member has already drawn this issue to the attention of the House.


Joseph Adrien Henri Lambert: Mr. Speaker, on a question of privilege.
I admit that I did put that question to the Minister of Regional Economic Expansion, but since then I have received representations. In view of the seriousness of the situation, I would surely have directed my question today to the Minister of Regional Economic Expansion, but since the Minister of Manpower and Immigration has some responsibilities in this respect, I put the question to him for that reason.
June 8, 1970

Inquiries of the Ministry


FINANCE
Gerald William Baldwin: My question is for the Minister of Finance. In light of the statement made in Winnipeg by the President of the Treasury Board that there will be further cuts by the federal government in hospital services, medicare and post-secondary education, will the minister recommend that the government set its own house in order first by following the recommendations of the Auditor General and the Public Accounts Committee to curb extravagance and waste in federal spending?


Mr. Speaker:: Order, please. The question as asked is not acceptable procedurally.


REPRESENTATIONS BY BANK FOR INTERNATIONAL SETTLEMENTS CONCERNING RETURN TO FIXED DOLLAR EXCHANGE RATE
Mr. John Burton (Regina East):: My question is for the Minister of Finance. Has the government, the Minister of Finance, the Department of Finance or the Bank of Canada received any representations from bankers meeting at the Bank for International Settlements urging Canada to return to a fixed exchange rate? If so, can the minister indicate what the response of the government is or will be?


Edgar John Benson: Mr. Speaker, the Minister of Finance is responsible for the exchange rate. I have received no such representation. I will have to inquire to see whether the various people mentioned in the question have received such a representation. I have not, nor has the government.


John Stratford Burton: A supplementary question. Can the minister inform the House whether the viewpoint apparently expressed by the Bank for International Settlements at its meeting also represents the viewpoint of Mr. Rasminsky?


Mr. Speaker:: Order, please. I would not think that the question as asked is in order.




Hon. D. S. Harkness (Calgary Centre):: have a question for the Secretary of State for

External Affairs. In view of reports over the weekend that Canada has sent some short landing and take-off aircraft to assist in the relief operations in Peru, can the minister inform the House as to the extent of the assistance Canada has now agreed to give to relieve what is probably the biggest, natural disaster in many years?


Mitchell William Sharp: I understand that the Parliamentary Secretary to the Prime Minister made a statement on Friday last. The information I have is identical with the information he gave, so I do not think I can add anything at the present time.


Mr. W. M. Howe (Wellington-Grey):: Bearing in mind the tremendous number of people who sustained injuries in this disaster and need to be hospitalized, would the Prime Minister consider making available to Peru some of the 200-bed hospitals which I understand the Department of National Defence is keeping for an emergency?


Pierre Elliott Trudeau: We shall consider any request which is reasonable and which we can reasonably meet. I understand that the Department of External Affairs is in communication with our embassy there. The first leg of our assistance has taken effect, in the sense that some of our planes are now arriving in Peru. As to the other matter, I thank the hon. member for the suggestion, and we shall consider it.



ALLEGED REFUSAL OF FRANCE TO GRANT SECRETARY OF STATE FOR EXTERNAL AFFAIRS OVERFLY PRIVILEGES

Pierre Elliott Trudeau: May I take this opportunity to make an explanation which I feel I owe to the hon. member for Fundy-Royal. He has just left the House but perhaps he can read what I say in Hansard. It has to do with a question he asked me on Thursday about the reported refusal of France to grant overflight privileges to the Secretary of State for External Affairs. I replied that there had been no such refusal, and my answer was correct; there had been no such refusal. But I went on to add, basing my assertion on information from the Department of National Defence, that no such request had been made. I am now told by the Secretary of State for External Affairs that there was a request made and that the request was granted. So things ended up even more nicely than I then thought.
June 8, 1970



FINANCE


Marcel Joseph Aimé Lambert: Mr. Speaker, on Wednesday last I asked a question, intended as notice for the Minister of Finance, concerning steps taken by the Columbia Cellulose Company Limited, which, incidentally, is one of the largest pulp exporters in Canada, to establish a Canadian currency equalization surcharge of between 5 per cent and 8 per cent on all its foreign sales of pulp in order to compensate for the effects of freeing the dollar exchange rate. Has the minister received any information about this practice? Does he know whether similar steps have been taken by other Canadian exporters, and what is the response of the government to action of this type by Canadian exporters?


Edgar John Benson: Unfortunately, I was away at the end of last week and the question was brought to my notice only just before the question period began. I must look into the details. If it means that Canadian exporters have not been charging enough for their products, and that they can get more money for them, I do not think we can object. But I must look into the situation in order to understand fully what is involved.



FREEING OF DOLLAR EXCHANGE RATE-OFFSETTING OF EFFECTS ON LUMBER AND SMALL BERRY INDUSTRIES

Robert Carman Coates: My question is also related to the consequences of the decision to free the Canadian dollar. Is the Minister of Finance in a position to tell us whether legislation will be proceeded with before the recess designed to offset the serious damage which has already occurred to the lumber industry and to minimize the consequences to the small berry industry which also depends to a substantial extent on export markets?


Edgar John Benson: When we moved to the floating exchange rate, I undertook to look at some of the difficulties which might be expected to develop as soon as the rate had settled down. I do not see that we could possibly introduce legislation before the parliamentary recess.


Robert Carman Coates: In view of the strong objections to this step which the lumber industry has taken through its various associations, and
Inquiries of the Ministry the extreme difficulty in which it has been placed, may I ask whether the minister intends to take any action to help them to surmount these problems?


Edgar John Benson: Not at the present time. Of course, when our dollar was undervalued exporters had a great advantage, and when it was brought back to a more normal level through the free play of the exchange market exporters enjoy a little less of the advantage which had been theirs. In some cases particular difficulties may arise and we are willing to examine those cases and ascertain what is involved. There are assistance programs administered by the Department of Industry, and they are much more numerous than they were a few years ago. But there is no intention to bring in legislation before the end of the session.


Mr. H. Russell MacEwan (Central Nova):: Has the minister received representations from industries such as the lumber industry, the pulp and paper industry, and so on, objecting to the move which has been made?


Edgar John Benson: Yes, Mr. Speaker. I have received a good many representations from exporters with regard to the position of industries which will now be less favourably situated. I have also received congratulations from importers and consumers on the fact that the cost of imports will be lower. It will take some time to determine the over-all effect.



REMOVAL OF SALES TAX ON BUILDING MATERIALS-MEASURES TENDING TO LOWER MORTGAGE INTEREST RATES

Paul Yewchuk: I should like to ask the Minister of Finance whether he has any intention of announcing the removal of the 11 per cent tax on building materials as well as other measures which will tend to bring about lower interest rates on mortgage loans?


Edgar John Benson: think the easing of the monetary situation has already resulted in interest rates coming down somewhat. The treasury bill rate last week was under 6 per cent for the first time in a long while, and there have been indications of other interest rates coming down somewhat. With regard to fiscal measures, if tax changes are to be made they will be announced in the normal manner in the House.
June 8, 1970

Inquiries of the Ministry LABOUR RELATIONS



ACADIA FISHING COMPANY AND BOOTH FISHERIES-ASSISTANCE IN SETTLING STRIKE-PROVISION OF COLLECTIVE BARGAINING

Frank Howard: My question is directed to the Minister of Labour. Does the hon. gentleman plan to take any steps to assist in settling the strike of fishermen against Acadia and Booth Fisheries in Nova Scotia?


Bryce Stuart Mackasey: No, Mr. Speaker.


Frank Howard: Does the minister intend to take any immediate steps to put into effect the recommendations of the Woods task force on labour relations that fishermen be given the right to collective bargaining?


Bryce Stuart Mackasey: This is always a possibility when these proposed changes are brought before the House.



UNEMPLOYMENT INSURANCE


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to address a question to the Minister of Labour.
In view of the fact that for several months we have been promised a white paper on the Unemployment Insurance Commission, can the minister assure the House that this white paper will be tabled before the summer adjournment, and tell us if the document will be based on the findings of the Gill Commission?


Bryce Stuart Mackasey: Any white paper that I may bring forward on unemployment insurance before the end of the session would, of course, have to take into consideration the recommendations of the Gill report. I am still hoping I shall be able to bring in this paper before' the end of the session.



MANPOWER


Mr. John Lundrigan (Gander-Twillingale):: My question is addressed to the Prime Minister. At the risk of sounding parochial, may I ask whether the government would attach some urgency to government programs planned for the benefit of Canada's most east-
erly province so as to alleviate the unemployment situation there which appears to be getting worse instead of better?
Righf Hon. P. E. Trudeau (Prime Minister):
Over the past days and weeks, various ministers have indicated that there is indeed urgency being attached to this matter and, in fact, a considerable amount of assistance has been given.


John Howard Lundrigan: A number of programs have been planned for that province but in the normal course of events it is bound to be some time before they can be implemented. We are now in the middle of summer and the unemployment rate is something like 20 per cent. In the circumstances, would the Prime Minister consult with his colleagues in the effort to speed up these government programs so that they might have some minor impact on the unemployment situation in the near future?


Pierre Elliott Trudeau: This suggestion is very much in the mind of the government. Indeed, the proposals which the Minister of Finance made in Winnipeg on Friday involving the expenditure of some of our current financial surplus in various parts of Canada were thought up with a view precisely to making sure that our surplus would be spent in order to assist the particular parts of Canada which need help the most.


John Howard Lundrigan: A supplementary question, Mr. Speaker. Is the Department of Manpower and Immigration planning to modify its manpower programs in order to try to create some opportunity for people of upper middle age who are basically unemployable and largely untrainable owing to the lack of fundamental skills and education and try to modify-


Mr. Speaker:: Order, please. The hon. member's supplementary is very general in nature, and I suggest to him invites a response from the minister which should normally be made to the House by way of a statement on motions.


John Howard Lundrigan: May I finish my question and ask the minister whether he is planning to revive the Newstart program on a general level across Canada, a program which apparently had some relevance to people of upper middle age who are largely untrained and who need some basic skill?
June 8, 1970


Mr. Speaker:: Order. I have to give the same ruling on the further supplementary as I gave on the first. It seems to me that the hon. member's question is much too general to be acceptable. He might follow my suggestion and inquire whether a statement will be made.


John Howard Lundrigan: I can certainly make an inquiry along those lines, but I was wondering whether the minister was going to reintroduce the Newstart program. However, I will ask whether the minister will make a statement on this very urgent matter.


Allan Joseph MacEachen: Mr. Speaker, I will consider making a statement on the matter.



THE CANADIAN ECONOMY


Mr. Thomas M. Bell (Saint John-Lancas-ter):: Mr. Speaker, I have a question for the Minister of Finance with respect to earlier questions asked of him. Having in mind that the Prices and Incomes Commission earlier this year accepted from the government the responsibility to instruct the steel industry about steel price increases, how does the minister reconcile his statement now of noninstruction with the earlier action that was requested by the Minister of Consumer and Corporate Affairs?


Mr. Speaker:: Order. When a member asks a minister to reconcile one statement with another, it is obviously argument and not in order.



PENSIONS


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance. In view of statements made by the minister over the weekend, and again in the House this afternoon, expressing the government's sympathy for old age pensioners, may I ask whether the government is now considering an increase in the old age pension before the end of this session?


Edgar John Benson: Not
to my knowledge, Mr. Speaker.


Stanley Howard Knowles: supplementary question, Mr. Speaker. Would
Inquiries of the Ministry the minister then indicate how much all this sympathy is worth?


Edgar John Benson: Mr. Speaker-


Mr. Speaker:: Order, please.


George Harris Hees: Thirty-buck Benson.


EXTERNAL AFFAIRS
Francis Andrew Brewin: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Is the government taking steps to remove the anomaly to which he referred of Canada being unrepresented by an ambassador in Rumania, which is not only an important country but one which has recently suffered serious disasters?


Mitchell William Sharp: Mr. Speaker, as the hon. member has pointed out, we do not have an ambassador resident in Bucharest. The Rumanian government, however, as an indication of the growing relationship between our two countries, has decided to have an Ambassador resident in Ottawa. I told the Foreign Minister while I was there that as soon as my colleague the Minister of Finance gave me a little more money we will consider doing the same thing in Bucharest.


Francis Andrew Brewin: A supplementary question. Is the delay in sending a representative to this important country due, therefore, to the government's austerity policy?


Mitchell William Sharp: Mr. Speaker, it is quite clear from statements that I have made that the government considers it necessary, in order to promote the financial stability of the country, that there be a very close check on expenditures. As a result of the program put into effect last year, we did close some missions and we are not reopening them as rapidly as we would like. I am sure that hon. gentlemen on the other side of the House will respond affirmatively to our virtue in this respect.


Sylvester Perry Ryan: Mr. Speaker, I have a supplementary question for the Secretary of State for External Affairs. Is priority being given by his department to opening embassies or establishing trade missions in Francophone countries over other countries?

7846	COMMONS
Inquiries of the Ministry


Mitchell William Sharp: No, Mr. Speaker, but we are looking at our representation there just as we are in other parts of the world. There are a number of missions that we would like to open in due course and hope to be able to do so.


Paul Yewchuk: Mr. Speaker, my question is supplementary to the one asked by the hon. member for Spadina and is directed to the Secretary of State for External Affairs. In view of the fact that the government of Taiwan has indicated great interest in having Canada establish at least a trade mission in Taiwan, does the minister have any intention of doing so?


Mitchell William Sharp: No, Mr. Speaker.


Mr. Barry Mather (Surrey):: Mr. Speaker, I have a question I want to ask the Minister of Finance. Would he consider drawing the federal government's wage and salary increase restraint guidelines to the attention of the commission examining parliamentary incomes?


Mr. Speaker:: Order, please.


Steve Eugene Paproski: Mr. Speaker, I should like to direct my question to the Prime Minister. Would the Prime Minister please state to the House why he did not attend the Liberal caucus thinkers conference this weekend in Edmonton? Could it be that he had a more pleasant task to perform?


Mr. Speaker:: Order, please.



FINANCE


John Stratford Burton: Mr. Speaker, I wish to address a question to the Minister of Finance. Could the minister inform the House whether at the meeting of finance ministers over the weekend in Winnipeg there was any discussion of offsetting measures or special problems arising from the change in government policy to a floating exchange rate?

DEBATES	June 8, 1970


Edgar John Benson: Mr. Speaker, I did answer that question in my statement. If my hon. friend will read it, I think he will find the answer.


Mr. Speaker:: Orders of the day.
[DOT] (4:10 p.m.)



GOVERNMENT ORDERS


Thomas Miller Bell: That the government has displayed its mismanagement and abuse of powers and has failed in its responsibility to protect the public treasury in relation to the refitting of H.M.C.S. Bonaventure in particular; and generally there has been neglect and default in carrying out programs and recommendations designed to protect the taxpayers of Canada from waste, extravagance and other abuses in the spending of government money and for these failures the government deserves the condemnation of the House.
He said: Mr. Speaker, we have had a long afternoon of questions of privilege, statements and the like, and even though the hour is late I hope that this motion will commend itself to the members of the House. It may receive a mixed reaction from some, but I think all members on the treasury benches will welcome an opportunity to put their side of the case concerning the Bonaventure before the House and on the record. Personally, as a member of parliament, I feel that I have a grave responsibility to bring this matter forward for discussion, and I am more than pleased that my colleagues have agreed that it should be the basis for an opposition motion on an allotted day.
I never thought that the time would come, Mr. Speaker, when I would feel sorry for a civil servant. But I must admit I do now, because I feel that many of the civil servants who have been involved in the Bonaventure fiasco should have their day in court. I firmly believe that it can only be here, in this forum, which is the highest court in the land.
There are, as I see it, two general responsibilities with regard to the Bonaventure, and both are interrelated. I have arbitrarily called them the financial responsibility and the political responsibility. I think the financial responsibility has been dealt with quite well.
June 8, 1970

This responsibility on behalf of the taxpayers has been handled in the committee report that was released in connection with the Bonaventure inquiry. For the record, the report appears in Votes and Proceedings No. 122 dated May 13. I should like to take this opportunity to commend the members of the committee for the excellent work they did. I say this without any reservation. New ground was being broken. The members of the committee went into the full story. As one who has studied the report many times in minute detail, I can say that I believe they did a good job of which we should all be proud. They came up with an unanimous report as everybody knows. This is even more to their credit.
The political responsibility, the second responsibility to which I have referred, however, is still very much up in the air. A great deal should be said about this. In referring to the report, I should like specifically to draw attention to items 5 and 6 of the general conclusions and recommendations. Since these will form part of the basis for our motion today, I think I should read them. The first is item 5, which appears on page 775:
The Committee recommends that the departments concerned determine the reasons why departmental officers involved in the refit performed in the manner they did and also to take appropriate action to ensure that such inefficiency be eliminated in the future. This will require changes to the system under which they work and may require disciplinary action in regard to personnel involved.
Then, item 6 is as follows:
The Committee fails to understand why the Deputy Ministers of National Defence and Defence Production, realizing that the cost of the refit of the Bonaventure was, month by month, getting out of control, did not order an "on-the-job" investigation.
Those are the two pertinent items on which we base our motion. For an authority in respect of this motion I should like to refer to Dawson on "The Government of Canada". This is a reputable political book. It is not one of these political histories written by Pickersgill or LaMarsh. He is an oracle.


An hon. Member:: Or Trudeau.


Thomas Miller Bell: Added to the list is another well-known historian who is now in this Parliament. The following words, which appear on page 219, I believe are pertinent in this regard:
The minister can never afford to forget-
I shall deal with that later.
-that he will be expected to defend and justify his department's policies before Parliament and the

Refitting of HMCS "Bonaventure"
country, and yet at the same time he realizes that those policies must be technically and administratively sound if they are to meet the need which has called them into being. Success in administration, said Walter Bagehot, "depends on a due mixture of special and non-special minds-of minds which attend to the means, and of minds which attend to the end."
I interject here to say that in this case the minister who has primary responsibility also has the background of the two minds. He has the full civil service background. In fact, he is the number one leader of the civil service establishment and, of course, he has made the big jump into active politics. He is a member of the treasury bench. He is the oracle of everything that is right and wrong in this country. I continue the quotation:
Inasmuch as the minister is politically responsible for everything done in his department, he is given supreme authority, and he therefore has the power to overrule any of his civil servants at any time. They, for their part, give the best advice they can; and if the minister persists in disregarding it -as he has a perfect right to do-they must then acquiesce, and bend all their energies to the problem of making the best of what they are convinced is a mistaken policy. The minister has the privilege of overruling his civil servants even although it involves the making of blunders, and the minister also has the privilege of defending those blunders in Parliament and suffering, if need be, for them.
I think, because it is of further significance, that we should look at the Glassco Commission report which some people may think is more up to date. I refer to Volume 1 at page 32, under the heading "Unlimited Liability" of Ministers. The report reads:
Concurrently with the development of the "public" service concept, it has become established that direct accountability to Parliament and to the public is imposed only on ministers. Public servants continue to be answerable for their honesty and competence to their ministers, through the ascending scale of their departments, but they bear none of the political consequences of their acts.
I quote further from the same page:
Since the emergence of this principle, it has been accepted that ministers are accountable for all the administrative acts of their departmental staffs.
There are many quotations which could be added to these. It is also pertinent, in establishing the basis for this debate, to point out that the Financial Administration Act, Part I, Organization, deals extensively with these responsibilities. To give an idea of how the President of the Treasury Board (Mr. Drury) would become involved-and I am sure he knows about this-I should like to quote, for example, section 5(2)(f):
such of the provisions of any other Act respecting any matter in relation to which the Treasury Board
7848	COMMONS
Refitting of HMCS "Bonaventure" may act for the Queen's Privy Council for Canada pursuant to subsection (1) as may be specifically-
Then, we have section 6(b) which reads: for the establishment of general administrative standards of performance and respecting the assessment of the performance of portions of the public service in the light of such standards;
I hasten here to add that it is for this reason that, at the moment, I think the President of the Treasury Board is the minister responsible to Parliament for the situation which now exists. This responsibility is separate from any previous involvement he may have had. I should also like to say for the record that it is well known the President of the Treasury Board was the Minister of Industry from July 25, 1963 until May 8, 1969.
I believe this is correct. The Parliamentary Guide seems to indicate that is so. That is the background of the responsibility which I feel is unanswered here.
I should like to place on the record one other matter which I believe has some significance in respect of my interest in the Bonaventure. It will also indicate to the House that this matter was not suddenly sprung on the government, but goes away back. If the government is not aware of the way this whole business developed, I would point out to hon. members that everything is recorded in the debates for that period.
We might go back to the first reference I could find which is in Hansard for January 24, 1966. At that time I asked a question about the decision in respect of the repair and refit of the Bonaventure. Then, on February 3, the member for Burnaby-Coquitlam asked further questions concerning the Bonaventure. He was informed by the present minister that the bids had been opened. The contracts were not formally awarded until later, but he established that the bids from the Montreal shipyards were $5.7 million and $5.8 million and that the bid from the Saint John yard, which at that time we thought was away out of line, was $8.5 million. The minister went on to other questions.
[DOT] (4:20 p.m.)
The hon. member for Cape Breton South, now the hon. member for Cape Breton-East Richmond (Mr. Maclnnis), did not have any doubts at that time about where we were going. He put interjections on the record, even before the contract was let, which indicated there would be a severe escalation in costs. A supplementary question asked on February 3 by the hon. member for Calgary

DEBATES	June 8, 1970
North, now the member for Calgary Centre (Mr. Harkness), has some significance in this respect. He asked the minister:
As a supplementary question, what proportion of the five million odd dollars is on the firm price basis?
The minister answered:
I have not got the figures here but I was told it was the major portion. If the hon. gentleman wishes to know, I will ascertain precisely.
That was when the first reference was made to the $5 million. A question was asked whether this was a major portion, and of course the minister acquiesced.
Let us go on to other references in Hansard, so that the background on this can be established. The minister, in reply to another question, referred to good accounting practices. He was taken up on that by the hon. member for Pictou, now the member for Central Nova (Mr. MacEwan). I do not know what the minister meant by "good accounting practices". Then, of course, we had the little interlude when the minister was considering the contracts, and rightly so. He had quite a few weeks in which to go into the tender bids extensively before he officially awarded this contract. We had also the strange interlude when it was discovered that, before the bids had even been requested, the navy had been told the contracts were going to go to Quebec. Here was an odd situation. At least three firms had tendered for this contract, but previous to the call for tenders, the navy had started plans to go to Quebec city. I will not be sidetracked on that. The minister had talked of clairvoyance, but he thought it was after the fact.
There is only one other reference in Hansard that I think is important. On April 27 of the same year, the minister announced the formal awarding of the contract. At that time, the hon. member for Edmonton West (Mr. Lambert) asked:
Mr. Speaker, I have a supplementary question. Do any of these contracts have any contingency clauses such as those often contained in building contracts, as a result of which padding can take place often to the extent of 10 per cent
He spoke of 10 per cent; I do not know what the amount was finally. He went on:
If so, to what percentage do they exist?
The minister answered:
Mr. Speaker, these contracts do not contain contingency clauses.
So, that is the story. It establishes my interest and I hope also makes it clear to the
June 8, 1970

House that there was a long history to the whole Bonaventure issue, long before the committee report was made. To repeat what I said here today, I want to give everybody an opportunity to take part in this debate. I feel it is extremely important that we air this matter in Parliament and that the minister give us his full story.
I think that the President of the Treasury Board (Mr. Drury) must, on behalf of the government accept full responsibility for the Bonaventure matter. He should rise in his place today and tell us the whole story, as he knows it, from the very beginning in 1966. He should start with the original tendering and the award of the contract that he made, as minister of defence production, in 1966. He should deal with the first contract escalation, to which I did not refer but it is all in Hansard, from $5 million to $8 million. Perhaps I had better put that on the record because that was a matter in which I became involved.
Before the ship had left Halifax to go into the St. Lawrence, we heard there was going to be an even further escalation of the cost.
I asked a question with regard to that and the minister was straightforward at the time. On April 22, 1966, I asked this question:
Will the minister check into reliable reports emanating from Halifax this morning as the Bonaventure left Halifax with Department of Industry officials aboard, that the estimate will probably go over $8 million?
I can only say that at that time the contract had escalated to $8 million. Therefore, there is an extra responsibility on the minister since he knew in the early days of this contract that the cost was escalating and he should have, if he did not, called in his officials. He should tell us of the various conferences he has had with them, whether this matter was referred to him by his civil servants and, it so, what was the action. The minister should deal specifically with items 5 and 6 of the committee report to which I referred. He should report on the inquiry that he said has been under way in the department. On television the other night the minister referred to some sort of an inquiry having been inaugurated, unless my facts are incorrect.
It is incumbent upon the minister to give us the whole story for the following two reasons: first, because of our established tradition that a minister should stand behind his deputy and his other civil servants, as I have outlined in the quotations I brought forward; and second, and just as important, because there must now finally begin an accounting

Refitting of HMCS "Bonaventure" of the government's action regarding the two recommendations which were passed unanimously by the Public Accounts Committee.
I look forward to hearing the minister's reply as I move this motion, seconded by the hon. member for Dartmouth-Halifax East (Mr. Forrestall).


Mr. Randolph Harding (Kootenay West):: too, would like to hear the minister's statement on the remarks made by the previous speaker. I will try not to cover the same ground covered by him. I find that the motion before the House is an extremely interesting one, particularly as it deals with protecting the public treasury from spending by the government. The motion, as I see it, deals with the important problem of planning, supervision and efficiency in government expenditures. I feel this is a very timely topic, especially in view of the government's present austerity program. I feel it is our job as elected representatives to insist on efficiency in government and to demand that the taxpayers' money be spent without waste and in the best interests of the nation generally. I might add that there will always be disagreement among the various parties as to the priorities for public spending and the emphasis which should be placed on certain government programs. However, there should be no disagreement when it comes to demanding that inefficiency and waste be eliminated wherever it exists. There is no doubt that there is abundant evidence to show that large amounts of public money have been wasted because of inefficiency and lack of co-ordination in a number of government departments.
[DOT] (4:30 p.m.)
The Auditor General is the watchdog of government spending. His annual reports are the basis upon which the Public Accounts Committee is able to check into some of the expenditures being made by the various government departments. It was through the Auditor General's report that the Public Accounts Committee investigated the expenditures made on the refit of the aircraft carrier Bonaventure and eventually turned up the mess of ineffectiveness and incompetence which existed in the letting of a number of contracts.
This investigation resulted in the 41 page report of the Public Accounts Committee which was presented to this House about a month ago, and which was a biting indictment of the slipshod and haphazard methods used by the Department of Defence Produc-
7850	COMMONS
Refitting of HMCS "Bonaventure" tion in both estimating and letting out a number of contracts with regard to the refit of the carrier.
As a member of the Public Accounts Committee for the past two years I have become convinced that the Auditor General's department is a real safeguard in keeping an eye on government spending. However, it is apparent his department is in need of a sharp expansion if the whole field of government spending is to be adequately covered. It seems to me that the making of reports on the obviously foolish types of expenditure is only part of the problem. The losses to the nation from imperfect accounting procedures are no doubt substantial, and proper financial control programs are essential in every department; but again, I feel this is only part of the problem. To date, Mr. Speaker, no department has been set up to appraise the benefits the nation receives, or does not receive, from government expenditure programs. Potential losses in this respect could be immense.
In fact, it was the Minister of Regional Economic Expansion (Mr. Marchand) who told this House just a year ago how costly the lack of co-ordinated action had been so far as the Canadian taxpayers were concerned. He pointed out that since 1963 we had spent over $1 billion on various programs to help eliminate regional disparity and, because of the lack of co-ordinated action, he estimated we had wasted about half of that amount. Perhaps, as an economics professor at the University of Toronto has suggested, this country should have an Economist General in addition to an Auditor General. I presume his duties would be to report fully upon the effectiveness and the value of the various programs which have been set up to assist various aspects of our economy.
It seems to me that it should be of the utmost importance to appraise adequately the results which are being achieved by our various programs. This knowledge of costs and benefits would be of immense value in reassessing the programs, or directing financial resources to other types of resource development. However, one thing is crystal clear in the field of public expenditures. We must insist upon the right of full disclosure and the right to criticize foolish expenditures. As this task is too great for any ordinary member, it is essential that adequate agencies be set up to do the job, and that they be allowed to carry out their duties free from interference or coercion. This is absolutely essential in our democracy and I am certain the general

DEBATES	June 8, 1970
public will insist that this type of scrutiny continue, and expand, as it is in the interests of Canadians generally.
I have made some very general remarks about public expenditures and intend to follow them up with a few examples of departmental expenditures to show how essential it is for governments to keep a constant and careful check on their various departments. However, first of all, I would like to comment on the work of the Public Accounts Committee which delves into the reports submitted by the Auditor General.
In my opinion, the Public Accounts Committee of the House of Commons is doing a good job. All of the members of the committee, regardless of party, are interested in stopping foolish expenditures, and are desirous of seeing improved supervision take place in those departments requiring it. If the government and the departments concerned will accept the recommendations made by the committee, I am certain that most of the slipshod methods of estimating and the letting out of meaningless contracts will be avoided. This will also save vast sums of money for the public treasury and avoid embarrassment for both the government and the departments concerned.
It would appear that, over the years, many of the recommendations made by the Public Accounts Committee have been ignored. A good example appears in the list provided on June 19, 1969, in the committee's fourth report. From this it is evident that a majority of the committee's recommendations have been ignored. I can well understand how a department might have difficulty in accepting all recommendations, because once a certain accounting system is set up it is difficult to make too many changes. However, once an inefficient procedure has been pointed out by the committee, there should be no repetition of that mistake which in most cases was responsible for excessive waste in the spending of public funds.
I should like to refer to the committee report that I have just mentioned. It points out a number of recommendations made by the committee to the government, many of which had not been carried out by the various departments at the time that report was published. The list is headed, "Summary of the Positions of the Recommendations and Observations of Your Committee," and I quote:
The following is a summary of the positions of the recommendations and observations of your Committee contained in Appendix 1 of the 1967 report as of June 5, 1969:
June 8, 1970	COMMONS
A list of a number of categories and items follows, and shows their disposal by the government. We find that a total of 55 recommendations were set forth by the committee. Ten of these were referred back to the Auditor General, and two were withdrawn by the Public Accounts Committee itself. This left 43 recommendations which had been made to the government, and I think we could consider them as the actual recommendations of the committee. Out of this total no action, to the date of the report, had been taken on 14 of the recommendations. The executive had indicated disagreement with another 14 of the recommendations. Progress had been made on six of them; five of them had been implemented; two of them had been partially implemented; one was soon to be implemented, and in another case the action taken was not satisfactory to the committee. If the Public Accounts Committee is going to do an efficient and effective job, its work must be recognized by the government to a greater degree than is indicated in this report. I want to point out that the members of the Public Accounts Committee come from all parties in this House and every member, without exception, is interested in seeing that Canadians get full value for every dollar spent.
[DOT] (4:40 p.m.)
I should like to go back to one of the items mentioned in today's motion, Mr. Speaker, and that is the Bonaventure. This is a good example of the weakness and inefficiency of one or more government departments. I was a member of the Public Accounts Committee which examined the expenditure on the Bonaventure refit, originally brought to our attention by the Auditor General. I was astounded at how ineffective and inefficient were the terms of a number of contracts. Slipshod and haphazard methods had been used in the drafting of contracts and I believe this eventually resulted in excessive spending of the taxpayers' money. I do not wish to point to any individual in government but I feel that this example should be a lesson to members in this House, and to the government in particular, that the departments concerned should carefully check procedures when letting out contracts. If we are to get better value for the money we spend some tightening up will have to be done. I never thought when first dealing with the refit of the Bonaventure as we discussed it in committee, that it would lead to the revealing and shocking departmental procedures used in the spending of the taxpayers' dollar.
DEBATES	7851
Refitting of HMCS "Bonaventure"
If I may, I shall pick out one or two examples to illustrate how slipshod methods used in letting out contracts led to public money being wasted. One of the best examples is the small contract dealing with the briefing room chairs. This matter has been raised in the House before, but in raising it again I want to point out that, while the amount of money involved is small, the disturbing thing is that such a slipshod and haphazard method could have been used in any department of government. I believe this aspect of the matter disturbs every member of the House.
The committee found it very difficult to establish the real cost of moving the briefing room chairs. After a great deal of work, and after hearing testimony which proved to be incorrect, the committee found that the Davie Shipbuilding Company, which had the initial contract, had moved the chairs out in May of 1966 because, it was stated, they required the area for the purpose of conducting electronic tests. Later we found that two separate contracts for the same chairs were let out by the Department of Defence Production. This information angered every member of the committee. It makes one wonder what type of accounting system the department has,-


An hon. Member:: Hear, hear.


Randolph Harding: -when two contracts are let out for the same job, each in a different amount. I will not go into the numbers of the contracts. The subcommittee was told that the cost of moving the chairs off the Bonaventure was high because there had been a great deal of difficulty in unlatching them from the briefing room floor. It was said that it had been necessary for workmen to crawl between the floor and a false ceiling to enable them to get at the nuts and bolts which attached the chairs to the floor so that they would not slide around in heavy weather. This explanation sounded logical and the committee accepted it, until we went to Nova Scotia to check the Bonaventure ourselves. Then, we found that it was not necessary to crawl anywhere to unlatch the chairs, all that had to be done was to tilt them forward and lift them up.
As I said previously, members of the committee were angered to find that someone had attempted to fool them over what the committee thought was an excessive cost for removing these chairs from the ship. One thing led to another, and then we found that there were two contracts; the job had been paid for twice. One of the committee recommendations was that the $4,173 paid under
June 8, 1970

Refitting of HMCS "Bonaventure" the last contract be returned to the government. This is a small amount, but it indicates the slipshod method by which contracts are let.
The committee then examined the cabins in detail and found excessive charges for repairs made to them. Sheets were drawn up by the department and given to the Public Accounts Committee showing why certain repairs were made to furniture in the cabins. Different reasons were given by various witnesses, but finally we were told that the sheets did not mean much-
[DOT] (4:50 p.m.)


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


Stanley Howard Knowles: Carry on.


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


Some hon. Members:: Agreed.


Randolph Harding: Thank you, Your Honour, and I thank hon. members of the House. I will not impose too much upon their generosity. Before concluding, I wish to make one or two points about the furniture repairs. In my opinion, they were excessive. Also, this matter involved some poorly drawn contracts and despite the assurances that have been made, I suggest the public interest was not being watched. On examining the matter further we found that there were verbal agreements that certain repairs had to be done. Certain conditions were set down on sheets, but we were told there was an understanding that repairs over and above those specified on the sheets would need to be carried out in the cabins. If that is an example of the type of estimating that has been going on in this particular department, I say something ought to be done. Members of the House should insist that action be taken to correct this situation.
Before sitting down I wish to make one more point. I know other hon. members wish to take part in this debate. It is not only the matter of the Bonaventure that upsets me and other members of the House. Anyone examining the report of the Auditor General, and I have attended numerous meetings of the committee, will find listed department after department and item after item in which there has been gross over-estimating of

costs. Goods have been bought before the department has examined them. I am thinking of a case in which a number of buses were bought from a newly established company which was manufacturing them for the first time. The result was terrifically heavy repair costs for the government. How in the world any department could accept delivery of a number of buses that it had not inspected properly is beyond me. That is the type of business administration we deplore. It must be corrected.
I also wanted to speak about the fire which took place on the hydrofoil. The failure to set up proper and adequate fire protection systems on the vessel resulted in the loss to the Canadian taxpayer of many millions of dollars. Consider, also, Expo 67. There, the public purse was not as well protected against many of the expenditures made as it might have been. If certain steps had been taken at the proper time, certain sums of money could 'have been recaptured for the public purse. The Auditor General's report deals with item after item after item coming under a number of departments.
In concluding, I sincerely urge the government to adopt many of the Glassco Commission recommendations which have not yet been adopted. We ought to go much farther in that direction in order to make certain that the people of this nation obtain as full a return as possible for public money spent. I am convinced that ministers of the government responsible for the over-all programs of government spending will need to insist on a far greater degree of efficiency than the report of the Public Accounts Committee and other information coming forward to members of the House during the present session has shown to exist at this time. May I thank hon. members for their indulgence in allowing me to speak for a few minutes longer.


Mr. Real Caouelie (Temiscamingue):: Mr. Speaker, the motion under consideration reads in part as follows:
That the government-
-and I would add that none of the governments which followed one another protected the Canadian people. I continue reading the motion:
-the taxpayers of Canada from waste, extravagance and other abuses in the spending of government money and for these failures the government deserves the condemnation of the House.
June 8, 1970

The motion deals with the refitting of the H.M.C.S. Bonaventure which normally would have cost $5 or $6 million but which has cost $17 million to the treasury. This is why the parliamentary committee carried out an investigation on these expenses which are but a pure and simple squandering of public monies.
When this matter was considered by the parliamentary committee, a check was made of the works carried out on the Bonaventure, as evidenced by the proceedings of the Standing Committee on Public Accounts No. 20, chaired by the hon. member for Wellington (Mr. Hales).
In October 1966, 52 chairs were removed from the deck of the ship and transported to the naval overseeing store for survey. A little further in the report we can see pictures of those 52 chairs. They are arm-chairs which look very much like airplanes seats.
[DOT] (5:00 p.m.)
I quote from the Minutes of Proceedings of the committee:
On completion of repairs or renewals, chairs are to be transported from store to ship and resecured to deck in briefing room.
The price quoted to perform the work of this serial number was 1,040 man-hours at $3.95 an hour with a labour charge of $60. plus a 71 per cent mark-up on materials used, for a total of $4,173.
In the early stages of our investigation prior to visiting H.M.C.S. Bonaventure in Halifax, the Committee was led to believe that the job description contained on this serial number was, in fact, an accurate description of the work to be done.
The justification for this large expenditure of funds was, according to testimony, due to the fact that the chairs were bolted to an inclining floor.
When the Bonaventure was visited, the members of the committee-
-found that this previous testimony was totally inaccurate and grossly misleading. In fact, the chairs were not bolted to the floor, and were neither unduly heavy or awkward. Further evidence on board the ship indicated that there was a short route to the deck.
As I said a while ago, certain photos were published, as well as fairly accurate estimates of the cost of repairs to that famous ship.
For instance, renewal of two drawer pulls on a wood secretary cost $123.10. The cost of renewal of two hinges on the drop-leaf of the wood secretary-a small board which is dropped to make a small secretary-amounted to $186.60. Hinges are expensive these days! Refinishing the drop-leaf of the same secretary cost $530. It therefore cost $839.70 to repair a nice little wood secretary. It must have been some beauty, Mr. Speaker.
Refitting of HMCS "Bonaventure"
And the government complains about inflation! This is a shameless waste of public funds.
$96.50 were spent to renew the mirror of a small medicine cabinet, of which we have a photo and which we see in very ordinary houses. To renew a door-knob cost $61.90. The total cost of repairs amounted to $258.20. Such waste is unbelievable.
The lock of a wardrobe was repaired; material cost $6 and labour, 28 man-hours, $146.80.
A berth drawer was also repaired-a bed with a drawer underneath it, as we have often seen. Here are the details of the repairs: one missing drawer to be replaced, $300.40; two drawers to be refinished, $346.40; one drawer handle to be renewed, $61.90. The total cost amounted to $708.70.
The committee found out all these things while visiting the Bonaventure. Repairs cost $17 million and I believe the government is willing to sell it for $250,000. And even at that, a buyer has yet to be found!
The expenditures amounted to $17 million, which means the Canadian people were robbed of at least $8 or $10 million. And I must say it is not only in the Defence Production Department that such things happen, but in other departments as well.
Let us take for instance the Department of National Defence. A few years ago, it was discovered that our servicemen had a supply of fatigue clothes for 1,000 years to come, paid by the Department of National Defence and the Defence Production Department.
Mr. Speaker, at that time the Auditor General of Canada had warned the government against such extravagance, but the government never paid heed to those warnings. Why? Because by negotiating such purchases and awarding repair contracts, the government indulged in patronage in order to help friends not only of this government but also of previous governments, of 1965, 1963 and 1962. Indeed such patronage existed when I first came here, namely from 1946 to 1949.
No wonder people are seen to stick to the government and to act as its propagandists or publicists. Such things went on in the two political parties which succeeded each other in power since Confederation.
In the broadcasting field for instance, the Auditor General did not beat about the bush when it came to making recommendations to the government. The Glassco Commission did exactly the same thing. For instance, in para-
June 8, 1970

Refitting of HMCS "Bonaventure" graph 54, some remarks are made about the CBC's revenues and expenditures. Here is an extract from the report:
Salaries and wages paid for work not performed.
In previous reports, we have referred to payments aggregating approximately $450,000 per annum by the Canadian Broadcasting Corporation to employees for scheduled hours during daily or weekly tours of duty which were in excess of the actual hours of attendance.
And this happened at the CBC, an agency that I like, but I like even better still to acquaint the Canadian citizens with it.
The payments were made in accordance with the provisions of the various union agreements and the Corporation regarded payment of compensation calculated in this manner as proper-
-still, the work was not done-
-having regard to the effect of scheduling requirements for its present studio facilities, the availability of artists, the exigencies of actuality broadcasts and the nature of broadcast program production.
Mr. Speaker, fantastic amounts are spent by the CBC. In fact, this year, this corporation will cost the Canadian taxpayers 191 million dollars. There was a time, during an elections period I know, when CBC employees made hotel reservations in Montreal, in Quebec and in Trois-Rivieres totalling $48,000 and these rooms were never once occupied. Reservations were made, bills were paid with the taxpayers' money and the rooms were not even occupied. So much for the employees of the CBC. But surely somebody is responsible for such a state of things. It helps to make us realize all the difference between state agencies and private business. If a private company were to be under such management as the public sector there would not be one company left in business today for they would all be bankrupt.
[DOT] (5:10 p.m.)
The government is not bankrupt because it could not care less about expenditures, the people of Canada are paying. When funds run out, it gets more money by raising taxes. And that is the way public monies are spent.
I can hardly believe that no one is responsible for such excessive expenditures, for such abuses. I have here the Auditor General's report. Paragraph 72 is enough to convince anyone that there is still much waste. I quote:
72. Indirect compensation to chartered banks.
It is not an expenditure, but it amounts to the same thing and Canadians do not know anything about it. Most hon. members do not either.
[Mr. Caouette.l

And to go on with the quotation:
It continues to be the practice of the government to maintain large balances on deposit with the chartered banks, receiving interest only on balances in excess of an aggregate interest-free amount of $100 million.
In other words, the government does not earn any interest on $100 million on deposit in a chartered bank. It starts earning a small interest if the deposit exceeds $100 million.
Interest amounted to $20.1 million in 1968-69. The average effective rate was 5.64 per cent.
In proceeding that way, the government is losing large sums of money. If the chartered bank where the government has a savings deposit is entitled to multiply that deposit by 14 under the Bank Act, since any savings account in a chartered bank constitutes a reserve in the Bank of Canada, we can easily imagine the unlimited powers of the banks, while the government, to please bankers, exempts them from paying interests on such a fantastic sum as $100 million!
Let us see what is happening in another area. According to the estimates of June 1964, the National Arts Centre was to cost $18,223,000. The estimated final cost reached $46,426,000, exceeding the original estimate by $28,203,000.
The accumulated out lay to March 31, 1969 was $43,779,000 which was provided for by annual appropriations of the Secretary of State.
I would bet anything that the Secretary of State (Mr. Pelletier) was not even aware of it.
Of that amount, $39,631,000 pertains to the construction of the Centre including the underground garage-a building complex which was to cost $18 million-and $3,463,000 to consultants' fees. Those who supervised the work and made sure that plans were followed were paid $3,463,000 as fees.
Mr. Speaker if this is not an outright gift to political friends I can no longer make head or tail of politics.
An additional amount of $1,000,227 was spent since the end of the year. This is in addition to full-scale political patronage through which people are granted amounts of the order of $3,463,000. No wonder some people stick to the system. And if attempts are made to direct their thought to other things, to get them interested in something serious, it is absolutely impossible, because they are totally dependent on the system. It pays them at the expense of the population.
June 8, 1970	COMMONS
Is it any wonder that young people rebel right in the heart of Montreal and touch off bombs by the half-dozen? The powers that be will wake up the day those bombs explode under their seats, and in the meantime they will have done very little to prevent such incidents. In many cases, they will perhaps have deserved their fate. The people will not be fooled with impunity.
Mr. Speaker, it is a well-known fact that I abhor terrorists; however there is another type of terrorists who dig into the taxpayers' pockets and could not care less about people. If we meet these people, they make fun of us. Whether members or ministers, most of them are on their knees before political organizers who make the others work and keep for themselves the money handed out right and left by the government! A sum of $3,463,000 in fees paid out to consultants! Things are going from bad to worse.
As I said earlier, no wonder our young people are rebelling against society, when it has reached the point of wasting public monies as it has done with the $17 million ear-marked for the refit of the Bonaventurel How much did the silent partners of electoral fund make out of it, particularly those of the Liberal party now in power? It was even reported that some Americans had contributed to the Liberal electoral fund. We were told that big companies also contributed to the electoral fund of the Conservatives who, once in power, are at the mercy of their silent partners. What can they do? They put up with it and the Auditor General in turn calls them to order. But one day will come when Canada's young people will call everyone to order and this through violent action unfortunately. Some people will bear the responsibility for this violent action. This is a salutary warning to all representatives of our political parties. You can fool all the people for some time; you can fool part of the people all the time; but it is impossible to fool all the people all the time. The day of reckoning will come.


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


Some hon. Members:: Carry on.


David Réal Caouette: Mr. Speaker, I thank my colleagues for their generosity. I shall not make ill use of it because some members want to speak on this same subject of extravagant and wasteful expenditures.
DEBATES	7855
Refitting of HMCS "Bonaventure"
Under the heading "Higher costs of procurement in Canada" the following appears in the Auditor General's report:
In August 1962, the Department of Supply and Services contracted on a target-incentive basis with a Canadian manufacturer on behalf of the Department of National Defence for 434 Mark NC 44 Mod. 1 torpedoes, at an estimated cost of $8,747,000, or approximately $20,200 each. The price included the cost of pre-production engineering, tooling and testing.
The contract was awarded without competition-
-This is known as free for all for the government. No tenders are called.
-to the only Canadian supplier, notwithstanding the knowledge that earlier in 1962, this supplier had tendered prices to the United States government for the United States model of this torpedo, the Mark 44 Mod. 1, that were 40 per cent higher than those of the successful United States tenderer. Deliveries were completed in 1965 at an estimated cost of $7,962,000, or $18,300 each, but the contract has not yet been settled.
It must be about to be settled if it has not been yet. Mr. Speaker, in the Auditor General's report, paragraph 113 reads as follows:
Hydrofoil development program-
By September 1969, $48.5 million had been expended, an increase of $3 million during the preceding twelve months-
In its Fourth Report.. .presented to to the House on June 20, 1969, the Public Accounts Committee expressed concern that the Treasury Board had not been provided with a proper estimate of the probable overall cost of the project at the time initial approval was sought and urged the Treasury Board to investigate cases where it subsequently becomes apparent that proper estimates were not provided. The committee found that a good deal of money was expended on research which was a duplication of efforts in other countries and felt that greater reliance on the experience of other countries could have effected large economies in the program.
The ship, commissioned as H.M.C.S. Bras d'Or- "Golden Arms"
-in July 1968, underwent foil-borne trials during the summer of 1969. While we understand it performed satisfactorily, a segment of the main foil developed cracks and must be replaced. In December 1969, the Treasury Board approved further expenditure of $2.2 million mainly for operation and maintenance, including the cost of the replacement of the main foil segment which the department has estimated at $450,000.
We have spent half a million dollars to repair the broken foil and $2.2 million for maintenance only. The Treasury Board knew how to find the money needed for that purpose.
[DOT] (5:20 p.m.)
The Treasury Board is not short of funds for favouring financial election backers. How-
June 8, 1970

Refitting of HMCS "Bonaventure" ever, when Montreal postal employees request a salary adjustment, a modest expenditure compared to such shameless squandering, they are told they are unreasonable and uncooperative about fighting inflation. They are accused of all the sins of the world.
A plan has even been brought forward for putting straitjackets on union members, asking that they do not demand increases of more than 6 per cent a year. The government is unwilling to pay workers in proportion to work done. That it cannot accept. However, it does not matter if government expenditures reach $100 million. There is no stinting there. But when it comes to helping workers, they stay up whole nights stubbornly telling union leaders they are unreasonable.
And at the same time, the same government, the same Treasury Board are telling banks and finance companies to increase their interest rates.
For instance, last year, banks were boasting about profits from 20 to 30 per cent higher than before.
Did a government member object to that increase? Of course not, but they object to workers asking for salary increases in excess of 6 per cent a year. Therefore, there is one law for the poor and one law for the rich. That is how the government is acting towards Canadian citizens.
I shall now deal with the cancellation of a project, and I quote:
Cancellation of Northumberland Strait Crossing project.
In 1956 the Province of Prince Edward Island asked the federal government to examine a proposal-
I went there last year.
-for the construction of a causeway across Northumberland Strait as an alternative to the existing ferry system. During the next several years studies were made which resulted in the conclusion that a permanent crossing involving a combination of causeway and bridges was feasible.
Everybody knew it was feasible. This proposal would have been helpful to the citizens of Prince Edward Island. In effect, more tourists would have come to visit that province and New Brunswick as well. I keep on quoting:
Early in 1962 approval in principle was given to the Department of Public Works to proceed with the project, with the stipulation that a combined causeway-tunnel crossing to handle only road traffic be investigated.
After further consideration the project was cancelled officially in February 1969.


So this project was looked into for seven years; the time necessary for studies at a university. Therefore it is beyond doubt that the possibility of building a causeway across Northumberland strait was looked into by university people. I quote further:
In the meantime a substantial number of payments had been made for land required for the approaches to the proposed crossing and work had proceeded under a number of contracts for the construction of the approaches for both highway and railway traffic.
Costs incurred in connection with the project to March 31, 1969 may be summarized as follows:
Consultants did not cause the causeway to be built there, but they were experts. They put their knowledge at the service of the nation.
Consultants-consortium	$10,817,000
-others	519,000
Construction of approaches-
-to that famous causeway-
4,998,000
Acquisition of land	422,000
Miscellaneous	188,000
This must be for the coffee break in the morning and in the afternoon.
Mr. Speaker, $16,944,000 has been spent for the building of a causeway which it has been decided not to build.
Some assistance has been asked of the government for the building of approaches to James Bay, where many new natural resources could be found and developed. But the government is not interested. It is none of its business.
To build a causeway, then not to build it, to undertake a feasibility study, to promise at election time to have it built and then not to build it, all that cost $17 million. The government can afford to do that. The money is paid to people actively engaged in election campaigns.
This concludes my remarks. I would have many more comments to make about government expenditures, but I will let others have their say. However, I repeat that Canadians are becoming increasingly aware of such things. The friends of the party-political favour seekers, government supporters, contributors to campaign funds-are having a field day, but it will not last forever.
Older members may not be in the House in two, five or six years from now, but younger members will still be here. I ask members of all parties to consider seriously the situation because Canadian youths, not only young Quebecers, will lose faith in us. I visited four
June 8, 1970	COMMONS
western provinces last week and I think we must be on our guard. Let us not take risks as we have done until now. Let us be honest administrators. If we cannot get elected by honest people without the money of those who contribute to campaign funds, we shall be defeated by others who will not necessarily be contributors to election funds and that is why I ask all members of Parliament to seriously consider the situation and tell the government what is happening, as the Auditor General of Canada was not afraid to report the facts.
However, the government does not take notice. It ignores the recommendations of the Auditor General who writes his report, throws light on wrongdoings, abuses and waste. The government does not want to see what is happening.
Now, Mr. Speaker, if the government does not do something, others will. It rests with the government, whether it is Liberal, Progressive Conservative, Creditiste or something else, to put its administration in order and to check its expenditures before others do it. We must see to it that each dollar collected from taxpayers is used to provide services to Canadians and make sure that integrity-and especially the administrative integrity-prevails in Canada. Thus the electors will be satisfied with our work.
[DOT] (5:30 p.m.)


Charles Mills (Bud) Drury: Mr. Speaker, the mover of the motion, the hon. member for Saint John-Lan-caster (Mr. Bell), began his remarks with a background of philosophy of ministerial responsibility largely crystallized from Mr. Bagehot. As a consequence of this and because of my previous experience he asked me to give a blow by blow account of the incidents concerning the refit of the Bonaven-ture on the assumption that I had as full knowledge of the facts as perhaps anybody else.
On the government side we take no exception to the doctrine of ministerial responsibility as enunciated by Bagehot. We indeed accept the fact that public servants are responsible for their actions not to the House but to the executive-to the ministers-and are answerable not to the House but to the ministers. As a consequence, it is the ministers who must accept both real and technical responsibility for the actions of the civil serv-22478-7
DEBATES	7857
Refitting of HMCS "Bonaventure" ants and/or the departments for which they are administratively responsible.
However, in this matter there is an implication of a concept of continuity of government and government departments. The person who is responsible on a day to day basis for his department is the minister. In the case of the Bonaventure we are dealing with the administrative responsibility of two departments, namely the Department of National Defence and the Department of Supply and Services as successor to the Department of Defence Production. I think it would be much more appropriate if the minister having responsibility for these matters and for the people involved were to reply to the invitation issued by the hon. member for Saint John-Lancaster, rather than myself. Later in this debate the Minister of National Defence (Mr. Cadieux) or one of my colleagues on his behalf, and the Minister of Supply and Services (Mr. Richardson) will be answering for the administrative responsibility they hold in relation to these two departments and their connection with the Bonaventure refit.
In so far as the remarks made initially by the hon. member for Saint John-Lancaster are concerned, I have had a look at Hansard and particularly the series of questions and answers back in 1966 relating to the Bonaventure. I believe that anyone who reads the full text-not all of which was quoted-of these questions and answers will be satisfied in this case, firstly, that the terms and conditions of the contracting and the nature of the contracts in question were fully explained, and that at no point was there either an apparent or real misleading of the House.
When subsequent allegations appear to be different from one's earlier understanding, one is always concerned that there may have been some misleading. But having reviewed the record I am satisfied that no such situation existed in respect of the present circumstances. In so far as the motion itself is concerned, I must thank the hon. member for Saint John-Lancaster for having been extremely gentle with the government. While the words of the motion on the Order Paper are highly condemnatory and are in rather intemperate language, he was sufficiently reasonable not to endeavour to adduce any evidence to support the motion.
However, while I am grateful for his consideration and gentleness, I must also thank him for providing me on a supply or opposition day with an opportunity to place on the record what is probably not very exciting
June 8, 1970

Refitting of HMCS "Bonaventure" material but which, rather, is an account of the various measures the government has taken in recent years to improve or increase the efficiency and effectiveness of the public service. The changes the government of Canada has introduced to increase efficiency and effectiveness in the public service fall into three general categories. First, the adoption of a new approach to management; second, changes in organization to achieve this end; third, the introduction of new approaches and procedures in the fields of administrative management, planning and budgeting.
After a quarter of a century of large-scale government in Canada we finally have learned that you cannot achieve efficiency, effectiveness, probity and prudence in the spending of public funds by piling regulation upon regulation. For too long Treasury Boards have sought to achieve these desirable ends by controlling departments and by telling them in ever greater detail how to manage their affairs. The end result of this process, unfortunately, has been not only to achieve probity and prudence in public expenditures but also to erode those qualities of creativity and enthusiasm which are essential to effective management and administration.
We in the present government are trying to change that. We are seeking to provide ministers and their departments with the authority and the machinery with which to better discharge their responsibility to the cabinet and to this House for the effectiveness of their programs and the efficiency of their administration. This means that they will be doing their own evaluation of the effectiveness with which their programs achieve the government's objectives. They themselves will be applying the tests of efficiency with which their programs are administered. To this end the departments of the government of Canada are introducing the internal operational audits which are required to support its operation.
This does not mean that having delegated responsibility to departments, the government can or will simply hope for the best. We, the collectivity of ministers, remain responsible for the effectiveness and efficiency with which departments discharge the responsibilities which have been delegated to them. So we in turn must establish mechanisms for reviewing the performance of departments; for reviewing their evaluation of their programs and their administration.


[DOT] (5:40 p.m.)
The principal change in organization which has been made to this end has been the designation of a single agency, in place of four or five, to act for the cabinet in reviewing administrative management in the public service. This agency, the Treasury Board, is responsible for ensuring that methods for evaluating the effectiveness of programs and the efficiency of administration are developed and applied throughout the government of Canada. It is responsible for ensuring that the best possible organizational forms and staff development techniques are employed throughout the public service. It is responsible for ensuring that high standards of probity and prudence continue to apply in the expenditure of public funds. And it must do all this without usurping the responsibilities of operating departments.
The second major change in organization was to separate the Treasury Board from the Department of Finance, as recommended by the Glassco Commission under the chairmanship of the late Mr. Glassco. This has had the effect of enabling one minister to concentrate his undivided attention on economic policy, and another to concentrate his attention on the continuing evaluation of programs and administration. In a country the size of Canada, with a government as large in scale and as diverse in activities as ours, this change was essential if both functions were to be performed well. In addition to these changes in organization, and again as a consequence of the change in the philosophy of management in the public service, substantial changes have been made in our approach to planning and budgeting and to administrative management.
Let me say something first about the changes the Treasury Board has introduced and is still introducing in administrative and personnel management. We are seeking, essentially, as I have said, to develop techniques for the evaluation of departmental performance as a substitute for regulating or controlling it. In the field of organization this means encouraging departments to review their organization and participating with them in the evaluation of the proposals which are made. No government has, I think, engaged in more wide-ranging reviews of organization that this one. Indeed, members opposite have sometimes criticized us for concentrating too much on these searches for increased efficiency.
June 8, 1970

In the field of personnel management we have innovated even more. We have introduced collective bargaining into the public service on a massive scale, giving to public servants in one fell swoop the rights and privileges enjoyed by other workers across Canada. We have revolutionized the classification system. To give one index of the scale of the change and of the simplification, we have reduced the number of position classes from 200 to just under 70. We-here I mean the Treasury Board and the Public Service Commission together-have introduced new programs for the development of personnel, including the training of developing executives, the career assignment program, language training and programs for educational leave; and we currently are engaged in developing a program for the interchange of personnel between governments and between government and industry.
In the field of administrative transactions, as in the field of organization, we are similarly seeking to substitute the evaluation of departmental performance for its regulation. By administrative transactions I mean the inputs into administration-accommodation, contracts for construction and services, travel, the acquisition of materials and supplies, and the system for accounting for all these public expenditures. If we are able to establish norms or standards by which departments ought to be guided in their administrative transactions, and if we are able to develop along the department's techniques for evaluating performance against these norms, we will have found a substitute for the regulations of the past. I might tell hon. members in passing that I am just now in the process of establishing a special administrative policy branch in the Treasury Board secretariat for the purpose of speeding up these developments.
I have spoken so far of the principal elements of administration-organization, staffing and the other administrative inputs. Over and above all this is the evaluation of administrative efficiency generally. Here again the Treasury Board is seeking to develop new approaches and new techniques. In a few pilot projects we are identifying units of output and then measuring the cost of producing these outputs, both over time and as between administrative units. I would not pretend that these have progressed as far as we would like, but I do know that we are advancing with energy and enthusiasm.
Refitting of HMCS "Bonaventure"
Finally, let me say something about the changes we have introduced in our approach to planning and budgeting. In our work in this field we have been guided by the proposition that an expenditure budget is nothing more or less than a bundle of programs and a bundle of administration for executing those programs. If we have the best combination of programs for achieving the government's goals, and the most efficient administration for executing the programs, we will have given the taxpayer the best return for his dollar.
The job of reviewing programs and administration must be done, of course, both by the government and by this House. It can only be done in the light of the objectives of the government. It is for this reason that our first reforms were to introduce a more meaningful classification of expenditures in the estimates and to incorporate into the estimates statements of objectives. Then, to ensure that this chamber would be better able to examine the expenditures budget, the government proposed referring the departmental estimates in every case to a Standing Committee equipped by its nature to examine these estimates in detail.
These were our first steps. Our next ones were designed to improve the reviews within the government of the efficiency and effectiveness of public expenditures. This is not something that is achieved in the short span of weeks during which expenditure budgets are produced. In that interval we are seeking to achieve more limited objectives, to review our programs with a view to ensuring that there are sufficient resources available to accomplish high priority objectives even if this means eliminating some of the low priority programs. We also endeavour to make sure that only those resources which are essential to the implementation of the government's programs are allocated to departments.
We have been prepared to be rigorous in our allocation of resources to ongoing programs, as hon. members discovered last year when we cut both expenditures and the numbers of civil servants. Our rigour was such, indeed, that the opposition complained that we were harsh and heartless. Put rather blandly, hon. members opposite have not always supported our efforts to protect the taxpayers of Canada.
The evaluation of the highest and the lowest priorities and the annual allocation of resources does not, however, complete the
7860	COMMONS
Refitting of HMCS "Bonaventure" process of evaluating program effectiveness and administrative efficiency in government. What is required, and what has been lacking, is a continuing program of evaluation. This we have started to do in an orderly way. We have begun, as X have said, the evaluation of administrative efficiency generally and we have adopted new approaches to the evaluation o:f administrative and personnel management.
In addition, we have begun systematically to review in a fundamental way some major areas of policy. Certain of the major policy reviews are now in the public domain, such as the reviews of defence policy, of external policy and of income tax policy. Others, such as income security, are still under internal analysis. But in addition to all these major reviews we are beginning in an embryonic way systematically to examine the effectiveness of individual programs. We are not sure how successful we will be. So far we are sure only that new techniques are required and that old habits of thinking will have to be re-examined. But I am confident that only in this way will governments be forced to review the costliest element of public administration, the programs themselves.
[DOT] (5 -.50 p.m.)
I hope, Mr. Speaker, that this will give hon. members an overview of the measures we have adopted for improving effectiveness and efficiency in the government of Canada. I am sure that to most it will have seemed a technical, indeed a less than absorbing review. But if you want to debate efficiency in public administration, you have to be prepared to get right down to the measures which are required to achieve it.
It is, of course, much more spectacular to make general and unsupported charges. One can wax eloquent and use extravagant prose in a case of this kind. But the job of this House, I suggest, is like the job o:f this government: to examine seriously, carefully and rigorously the operations of departments to ensure that they are performing their duties effectively and efficiently. It is not spectacular work. It rarely makes headlines. But it lies at the heart of protecting the taxpayers, as the hon. member who proposed this motion put it, "from waste, extravagance and other abuses in the spending of government money."


Thomas Miller Bell: Mr. Speaker, would the minister permit a question? I ask the minister if he is going to leave these public servants, the two
[Mr. Drury. 1
DEBATES	June 8, 1970
deputy ministers and the other senior civil servants, undefended and blackened across the country in the eyes of the public.


Charles Mills (Bud) Drury: The answer to that, Mr. Speaker, is an emphatic no. As I mentioned at the outset of my remarks, this task will be done by the ministers having administrative responsibility for the departments in which these officials are performing their duties.


J. Michael Forrestall: Mr. Speaker, before the hon. gentleman leaves the chamber for his dinner I must say that never before have I seen a situation where a man-I suppose one might as well be frank-who has one way or another been seriously charged by events, has stood up in the House of Commons to address himself to it and has dismissed it as lightly as we witnessed within the last 15 or 20 minutes. As a matter of fact, I am rather stunned-even appalled-that the minister would treat so lightly the overhaul and repair of the Bonaventure and still think that the House and the people of the country are going to accept his walking away from it that easily. In connection with that, and because of the minister's remarks, before I finish my intention in this debate I am going to move an amendment to the motion that is now before the House and I hope we will debate its merits before the day is over.
The history of this matter is pretty clear. It has been dealt with by the mover of the motion, the hon. member for Saint John-Lan-caster (Mr. Bell). My entry into the debate is occasioned by a very real concern for the situation that has developed, in which the inference is quite clear from the question just asked of the minister with respect to individuals whom the committee in the performance of its duties saw fit to name. The minister cannot blithely walk away with a lecture to this House on administration. He cannot walk away from his responsibilities in this matter. Indeed, had it been my responsibility, the motion would have been much stronger and I have no hesitation in advising the minister that my contribution to the debate will be strong.
The motion seems to have struck the minister in such a way that he felt a simple lecture to the House on the discharge of responsibility would meet the occasion. Again, so that the remarks I intend to direct to this matter will be clearly understood, I say at the outset that I welcome the non-partisan way in which the committee approached the overhaul of the
June 8, 1970

Bonaventure. In a sense it is regrettable that committees have to look at matters so long after they occur, so that in the final analysis all they can do is make a little noise about whether moneys were spent properly. If committees were able to examine programs in the course of implementation, they might save the public a great many dollars and cents. The committee's report was presented in a non-partisan way. While I personally regret that the committee saw fit to single out individuals, my great regret is that the President of the Treasury Board (Mr. Drury)-who was the minister responsible at that time-did not take steps that would have prevented or precluded a committee of this House finding it necessary to remove from the minister this function of, I suppose you might use the phrase the reward for good, or discipline for indifferent, action. Mr. Speaker, might I call it six o'clock?
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
J. Michael Forrestall: Mr. Speaker, at six o'clock this evening many in this chamber were regretting, and members of the public in the galleries were chuckling at, what I can only describe as the blatant arrogance of the President of the Treasury Board, I am sorry he has not reappeared this evening. Before dealing with an amendment which I wish to propose, if the President of the Treasury Board feels he will escape responsibility for the necessity of this motion by acting in a casual and offhanded manner, I suggest he is wrong.
The context of my intervention in the debate on the motion is based in large part on the acceptance of responsibility by ministers of the Crown. I see the minister has come back to us. Perhaps, after all, the government does take the motion seriously, Mr. Speaker, because I see the Government House Leader (Mr. Macdonald) has not left the chamber although I am sure a game of tennis or something like that would have attracted him more. If we are to take a lesson from the President of the Treasury Board-


An hon. Member:: You forgot the Minister of Communications (Mr. Kierans).


J. Michael Forrestall: I think this is his night to be in attendance.
Refitting of HMCS "Bonaventure"


Mr. Kierans:: It is the attraction of the speaker that entices me.


J. Michael Forrestall: I will pass that remark on to the merry monk. To return to my earlier remarks, Mr. Speaker, I regret that the President of the Treasury Board, in his capacity two or three years ago of Minister of Defence Production, permitted the situation to develop which culminated in a committee of this House viewing the matter so seriously as to name names. Whilst I regret this, the responsibility for the situation must strongly attach to the President of the Treasury Board. I regret equally, as indeed must the people of this country, that the government has not yet concluded an investigation into the procedures followed in the repair of the Bonaventure.
[DOT] (8:10 p.m.)
It is particularly regrettable, as the hon. member for Saint John-Lancaster said, that the minister did not ask for an exhaustive investigation, particularly since there was evidence to show that not only were costs for this contract to go up but there was no way of knowing by how much they would go up. Indeed, when the work began we were told in different ways that the costs would increase, and it must have been evident to the minister that costs were almost out of hand, particularly at the end of the seventh and eighth months of the overhaul program.
Answering the allegations of the motion, the minister this afternoon spoke in a manner that quite frankly I do not find acceptable because he shrugged off his responsibilities on to his colleagues. The President of the Treasury Board smiles. I suggest he is perfectly aware of the serious act of omission he committed, and he will not be able to hide behind the collective responsibilities of his colleagues in cabinet. The tradition that individual ministers were responsible for the acts of their subordinates goes back, if my history is correct, to precedents set in the 1850's and 1860's in Great Britain. At that time, admittedly, a minister could be expected to keep a very close watch on the actions of those who served under him.
This is not the situation today and I do not think that is really what we are talking about. We are not concerned about it today. Circumstances change. Ministers must be as much concerned with events in front of them as with events behind them. We on this side of the House recognize that. But the minister has not changed over the years, as was made
7862	COMMONS
Refitting of HMCS "Bonaventure" clear in his intervention in the debate this afternoon. This is the ultimate responsibility for the acts of those who served under him. Having acquired knowledge of this matter, the minister failed to act appropriately and failed to institute inquiries into the procedures being followed. I think he is perfectly aware of what I am talking about. The tradition of ministers accepting responsibility for the acts of their subordinates is clear. I could refer Your Honour, for example, to the debates which brought about the establishment, in large measure, of the civil service as we understand it.
I will not allude to what happened in 1909 and the debates that led up to the formation of the modern civil service because I am sure that in his reading the minister has come across them. I am sure he is aware of the traditions and practices of the British House. What is important here is that having been made aware of the situation, the minister failed to do anything about it. Since then the government has failed to correct the situation. The minister in no way this afternoon addressed himself to his omission. He in no way lent the traditional protection to those who served under him. He owes them that protection. In no way did he do anything to protect or reassure senior civil service officials that they would not be casually "docked" if someone bothered to look at their records.
An examination of this particular case reveals some pretty glaring misadventures. I have no sympathy for those who act wrongly while in the service of others. When such people are in positions of high trust, the offence is all the more glaring. As I say, I have no sympathy for such people, although I have sympathy for those who in certain circumstances might be charged with wrongful acts but are completely innocent.
Whether the minister wants to accept responsibility is neither here nor there. The minister has failed to give people who must work in the service day after day an opportunity to defend themselves against the direct or implied charges that have arisen from the report of the Standing Committee. The committee urged the government to take immediate action. It has been suggested that an inquiry is now in process. It may or may not be in process. The minister did not answer that question this afternoon, but left it hanging. Not only did he leave it hanging; he saw fit to treat in a callous and casual way another minister by implying that the Minister of National Defence (Mr. Cadieux) is the minis-

DEBATES	June 8, 1970
ter who knows most about this matter. If that is so, perhaps the former Minister of National Defence ought to share the responsibility for what has happened.
At any rate, the President of the Treasury Board casually said this afternoon, "I did not have anything to do with this, really. The present minister will have to answer." I do not see either of those ministers or their representatives here this evening. Perhaps they are here and we shaU obtain some answers. This motion is not directed against the Minister of Supply and Services (Mr. Richardson) or the Minister of National Defence.
The President of the Treasury Board cannot avoid his direct responsibilities in this matter, as he tried to do this afternoon. He cannot say that he was not responsible for acting in connection with something that happened a few years ago. He did nothing. Indeed, he chose to leave the matter to a committee of this House which after a fairly thorough investigation found it necessary to be highly critical of procedures followed by public servants who were instrumental in awarding contracts under which tax moneys of the Canadian people were spent. I therefore wish to move an amendment to the motion, seconded by the hon. member for Cumberland-Colchester North (Mr. Coates). I should like to address myself to argument in support of this amendment. First may I read the motion and then discuss it. I move-


Mr. Speaker:: Order, please. Before the hon. member proposes to amend the motion I must bring to the attention of the House that the hon. member is the seconder of the motion and obviously cannot amend his own motion unless he has the unanimous agreement of the House, which apparently is not forthcoming.


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


Mr. Speaker:: The hon. member cannot amend his own motion. The hon. member will have to request one of his colleagues to move it, if the amendment is to be moved later this evening in the course of debate.
[DOT] (8:20 p.m.)


J. Michael Forrestall: I accept that ruling, Mr. Speaker. I say that with deference to Your Honour. I do not know which rule of the House states that I cannot move an amendment to a motion which I have seconded. Undoubtedly there is such a rule. I have no hesitation in accepting Your Honour's ruling.
June 8, 1970

In the few moments I have left I wish to state that as long as the President of the Treasury Board has responsibility for the expending of public funds, the minister cannot expect other than condemnation by this House. My own condemnation is very strong. As long as the minister fails to act on the situation as it now exists, he cannot expect to be rid of that condemnation. In the public realm six senior civil servants have been charged. They have no recourse to defence and no recourse to a forum to which they can present their side of the situation.
I think it is regrettable that the President of the Treasury Board allowed this situation to develop. It is a matter of even deeper regret that he allowed it to continue once it became known. I think it is deplorable and unforgivable that the minister has not seen fit to take a public position either of discipline or of defence. The fact that time has passed and the minister has now assumed other responsibilities does not mitigate his responsibility. Indeed, the office which the minister now holds as President of the Treasury Board ties him closer to his initial failure to act in this regard.


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, I rise on behalf of my colleague the Minister of National Defence (Mr. Cadieux) who could not be in the House today for this debate because he is attending a meeting of the NATO nuclear planning group of which Canada again this year became a member on rotation. This group normally meets twice a year. The current meeting is being held in Venice today and tomorrow. My colleague will then proceed to Brussels to the spring meeting of the Defence Planning Committee of NATO on June 11. In his absence today on this important item of public business he has asked me to speak with regard to his responsibilities as Minister of National Defence. I welcome the opportunity to speak this evening and to set forth on his behalf his response, which I make clear I am pleased to support.
There are two points to be made before dealing with the details of the committee- report two assertions of the hon. member for Dartmouth-Halifax East (Mr. Forrestall) which should be contested. I got the impression from the hon. member for Dartmouth-Halifax East and the hon. member for Saint John-Lancaster (Mr. Bell) that there is an element of personal vendetta in then-presenting this motion. The hon. member for Dartmouth-Halifax East suggested that
Refitting of HMCS "Bonaventure" in some way the President of the Treasury Board could have gone into other departments to discipline employees who are not his direct responsibility. The rules of public administration are clear; they have been clear for a long time. Ministerial responsibility attaches to the specific office, the person occupying it from time to time, and not to any individual. It is the minister currently holding the office in question who answers to the House for the acts and omissions of his public officials. The matter in issue refers to acts and omissions which have occurred in the past as well as the present.
It is improper for the hon. member to say that the President of the Treasury Board is evading his duly in failing to discipline the employees of the Department of National Defence, for which department I am responding this evening, or those of the Department of Supply and Services for which my colleague will respond.


Thomas Miller Bell: If that is the theory, you change departments if you get into trouble!


Donald Stovel Macdonald: Perhaps the hon. member was in trouble with his own party by putting this motion which appears in his name. Perhaps the hon. member for Wellington (Mr. Hales) will agree that the position of the hon. member for Saint John-Lancaster should be changed.


Thomas Miller Bell: We do not call for resignations in our party.


Donald Stovel Macdonald: It would be improper for the President of the Treasury Board to deal with this part of the motion. It was absurd for the hon. member for Dartmouth-Halifax East to suggest that the President of the Treasury Board should go into other departments for which he does not have responsibility and engage in the disciplining of employees.
Secondly, the hon. member for Saint John-Lancaster, the hon. member for Dartmouth-Halifax East and other members commended the committee on its work in this regard. They then condemned the censuring of a number of public servants including several serving officers of the Maritime arm of the Canadian armed forces. I suggest they cannot have it both ways. If they did not wish specific individuals to be named, they could have prevented it. This committee, unlike other Standing Committees of the House, does not have a government majority.
June 8, 1970

Refitting of HMCS "Bonaventure"


Thomas Miller Bell: There is a man who has it both ways.


Donald Stovel Macdonald: The chairman of that committee is not a government member.


George Harris Hees: The Liberal party has a majority.


Donald Stovel Macdonald: The government does not have a majority. The number of opposition members and the number of government members is equal.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: The chairman of that committee is a member of the opposition. If the member for Dartmouth-Halifax East is going to censure someone in this regard, he should censure the presiding officer of that committee. I do not intend to do so. I say on behalf of my colleagues that we regret this procedure of making specific attacks on individual public servants. The President of the Treasury Board set out the theory in this regard, to which we adhere. Public servants do not respond to Parliament; they respond to the minister responsible. That is the position on behalf of the government in this regard. I hope other committees of the House will not indulge in the same practice which was condoned by the hon. member for Wellington in allowing an attack on individual public servants.
The Standing Committee on Public Accounts is a very important and essential committee of this House. The third report of that committee, which has been presented to the House, refers extensively to the Bonaventure refit. The report to which I have referred deals with the midlife improvement and refit of the Bonaventure. Construction of the Bonaventure commenced in the United Kingdom in 1942 during World War II. The ship was not completed in time to see service in World War II and work was suspended shortly thereafter. The hull was acquired for the Royal Canadian Navy in July, 1952. The ship was completed in a United Kingdom shipyard and commissioned by the Royal Canadian Navy in 1957. Prior to the refit the ship had been in service continuously except for periods of minor refit and repair.
The refit, which began in 1966, was its first major refit and the project included improvements and replacements of certain systems to maintain its reliability and operational capability. At that time it was expected that the ship would remain in service until 1975, if not longer. However, it was decided last year to


retire the ship from service in 1970. This decision, with a number of other changes, resulted from the recent defence review and the need to restrict defence expenditures to the 1969 budget level for the following three years.
It was a difficult decision to make, but it was a forces-wide reduction. After a searching re-examination of Maritime Command's operational commitments, it became a choice between taking the Bonaventure out of commission or reducing the fleet by a number of destroyer escorts. It was decided that it was preferable to retain the destroyers. By taking the Bonaventure out of commission the department was able to free $10 million to $12 million annually for these other needs.
[DOT] (8:30 p.m.)
The proceedings of the committee leading to this report and the report itself have received a great deal of public attention. The report refers by name or position to certain officers of both departments and implies that they were deficient in the performance of their duties to the degree that disciplinary action may be required. The principles are clear. Disciplinary procedures have been established in accordance with the law of the Parliament of Canada for both the public service and the armed forces.


Mr. Woolliams:: What about the minister?


Donald Stovel Macdonald: These are designed to ensure the protection of the individual from injustice as well as to protect the interests of the public. Parliament has been diligent in its protection of these rights, even though an hon. member opposite may be facetious about them. The Minister of National Defence is responsible in his department to ensure that discipline is administered in accordance with the procedures established by the law of this Parliament. In view of the allegations contained in this report, which reflect on certain officers of his department, he considered it essential to deal with these matters today, and I do so on his behalf.
The report states, on page 775, paragraph 6, under "General Conclusions and Recommendations":
The committee fails to understand why the Deputy Ministers of National Defence and Defence Production, realizing that the cost of the refit of the Bonaventure was, month by month, getting out of control, did not order an "on the job" investigation.
The Minister of National Defence and I have been unable to find any evidence before
June 8, 1970	COMMONS
the committee which would support such a statement. Regular production meetings were held at the shipyard. The two deputy ministers arranged to have a monitoring committee composed of officials of the Department of National Defence, the Department of Defence Production and Treasury Board review costs on a continuing basis. A review was made in the shipyard by officials from both departments and Treasury Board staff before the principal increase in the estimates for the project, amounting to $3,770,000, was approved on December 1, 1966, by Treasury Board. A further increase of $800,000 was subsequently reported to Treasury Board in June, 1967, bringing the original $8,000,000 estimate to $12,570,000. I think it will be clear that every effort was made to keep the costs under control.
At page 788 of the report, in the section on item X-427, the committee states:
It is inconceivable to the committee that representatives of the Department of National Defence and Defence Production would present as facts such false testimony regarding details surrounding the movement of briefing-room chairs.
I wish to deal with this aspect in so far as it relates to National Defence employees. Captain T. W. Maxwell, Maritime Systems Engineering Section of the Department of National Defence, who was not involved in the Bonaventure refit beyond the preparation of certain specifications relating to conversion of systems, endeavoured to obtain information for the sub-committee from various sources in the department. The information he gave the subcommittee on the briefing-room chairs was given in good faith and during the course of subcommittee hearings conducted informally and of which no minutes were kept.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: I am glad to see we are winning the support of hon. members opposite.


J. Michael Forrestall: You are winning nothing. We shamed you into it.


Donald Stovel Macdonald: There are the hon. members who commended the committee for attacking this serving officer.


J. Michael Forrestall: Who attacked a serving officer?


Donald Stovel Macdonald: Captain Maxwell sincerely regretted that he had given the committee incorrect information, and when 22478-8
DEBATES	7865
Refitting of HMCS "Bonaventure" he became aware of his error he reported it to the committee.


Eldon Mattison Woolliams: You are confessing your own weakness.


Donald Stovel Macdonald: Is the hon. member referring to this serving officer as having confessed? I think that is shameful. Reference is made to this on page 532 of the proceedings of the main committee. Further, on page 794, under the item X-1237, the committee reports that evidence was given by Captain Maxwell and Mr. R. D. Wallace that this contract was largely required because of the need to secure lockers in position on board ship. The report goes on to say:
The committee, when visiting the Bonaventure, discovered that this information was inaccurate and, in fact, many of the lockers were not secured to their frames and those that were had not been secured in the manner described.
According to the evidence on page 603 of the proceedings, Mr. Wallace did not provide the information referred to in the report. The evidence on pages 603 and 604 given by Captain Maxwell was that part of the reason for X-1237 was to bolt lockers aboard ship. Captain Maxwell stated specifically, and I quote from the proceedings: "I do not think that I ever implied that the locker work was a large proportion of X-1237." The necessity to fasten lockers aboard a sea-going warship should be self-evident notwithstanding the fact that some were temporarily unsecured when the committee visited the ship some two years later in Halifax following its return from a lengthy operational trip.
The minister advises me that he has looked into this very carefully and he is convinced that Captain Maxwell did his best to assist the subcommittee in its investigations. Captain Maxwell did not have personal knowledge of all the detailed items in which the subcommittee was interested. He obtained information as quickly as possible from various sources in the department, and in these circumstances there is always some possibility of error in dealing with detailed questions some two or three years after the work was done.
The report on page 792 made some criticism of Captain Lynch concerning the detailed records on furniture repairs. Captain Lynch was responsible for overseeing the whole refit and in the matter of furniture repair he concerned himself with the over-all operation rather than the details. The committee reports that Captain Lynch cancelled
June 8, 1970

Refitting of HMCS "Bonaventure" item X-337 which would have required an expenditure of $550,499 for the repair of furniture. This was replaced by items X-782 and X-784, totalling $206,861. There were comprehensive specifications covering the refinishing of furniture. The work orders were supplemented with diagrammatic and oral instructions. The evidence before the committee indicates that these were adequate for those concerned with the work. It would appear that the committee's criticism of Captain Lynch relates to the fact that the work orders for furniture repairs were not amended in writing to include the supplemental instructions so that they could be readily audited by the committee. I can understand the committee's concern in this matter. This raises the general question of records adequate to the job and those satisfactory for a later, detailed investigation.
We appreciate the need when dealing with public moneys to keep records in sufficient detail to satisfy a subsequent review of the expenditures involved. In this particular instance it is agreed the detailed record available to the committee was difficult to follow. Every effort will be made to provide better records to the fullest extent possible. My colleague, the Minister of National Defence, was deeply disturbed that the report reflected unfavourably on some of his departmental officials who appeared as witnesses before the committee. He carefully reviewed the evidence and the performance of the officials concerned. He has satisfied himself that there are no grounds for disciplinary action against the personnel involved, and asked me to say this today.
I wish to turn, now, to some other aspects of this report. I would like to comment on the estimated cost of this refit. The committee, in its report, recognized that the Bonaventure refit was the first of its kind in Canada and was of such unprecedented magnitude that it would pose some difficulties to the Defence Department. It was also one of the early contracts using a new system of awarding such contracts by competitive tender. The committee, however, believes that a large number of obvious items could have been included before the tendering process and that greater efforts should have been made to determine and define the amount of work to be undertaken before seeking public tenders.
I agree that the effectiveness of competitive bidding is enhanced when as much work as possible is defined before seeking tenders. The two departments, before receiving the


report, had gone into this question and had worked out revised procedures which will improve performance in this respect. None the less, there is no practicable way prior to opening the ship, particularly a ship of this size, of determining in full the precise nature and scope of the work to be done. So an allowance has to be made for "work arising" or "unknown work" in the tendering process. The allowance for this in the tender call was 200,000 hours of labour and 10,000 hours of drawing office time. The departmental estimators used their best judgment, but in the absence of previous experience or historical data to assist them their estimate was conced-edly too low.
[DOT] (3:40 p.m.)
As for the new work introduced after the tender call, it was decided in the course of the refit to do additional painting, based on surveys as the work proceeded-certain work which would improve living conditions and some improvements to safety and operating features. We became convinced of the advisability of doing this work only as the refit proceeded. These deliberate decisions were based on defence priorities at the time, as any additional costs of the refit had to be met by transfers from other items within the total defence budget and were not in addition to it.
Estimates on repair and refit contracts on destroyers and smaller ships, with which there has been long experience, have been good. On some 45 repair and refit contracts in the last two years, contract prices were well within the estimates.
The original Bonaventure refit estimate of $8 million was based, firstly, on the procurement of government-supplied material, secondly on known shipyard work, and thirdly on provision for refit work arising. The completed program costs consist of $10,290,090.74, the contract price as shown on page 778 of the report, and the items "direct cost of government-supplied materials by naval stores, $2,068,000.00" and "freight and sales tax, $150,000" included in the table of figures on page 779, giving a total of $12,508,090,74.
If indirect costs are to be added, as they were added by the committee in arriving at the total amount, such as the $1,074,000 estimate for crew salaries, as they are on page 779, they should also surely be added to the original $8 million estimate. The converse of that would have been the suggestion that serving crews should have been discharged for the interval. Moreover, a tabulation of this kind, to be consistent, should deduct the
June 8. 1970

estimated ship operating costs for the 16-month refit period when she was not operating, which would more than offset the indirect costs attributed in the table.
I appreciate the need for committee examination of public expenditures. I share the concern of the committee over procedures. We keep these under continuous review with the object of incorporating improvements which experience reveals to be desirable. I think it is fair to say that the energy demonstrated by the committee in this particular case will undoubtedly result in closer scrutiny of refit operations in the future, indeed of all government procurement operations.
In closing, may I repeat my statement that I hope we will not again see the naming of specific members of the public service or members of the armed forces as was done in this particular case. After all, the minister responsible, on whose behalf I am speaking tonight, takes full responsibility for those officers and I give my support for the efforts that they made, using their best judgment in the circumstances, in making this refit. As I say, I hope such naming will not occur again in the committee's work.


Douglas Scott Harkness: Mr. Speaker, I came into the chamber after the President of the Privy Council (Mr. Macdonald) had commenced to read this well prepared speech made up for him by someone, I think I probably know who. Thus, I am not in a position to comment upon it from its beginning. In any event, I have not risen tonight to deal with the bits and pieces of the Bonaventure affair or of any of the other numerous instances brought to the attention of the House of Commons by the Auditor General of extravagance, of wasteful expenditure, of bad administration and so on during the past several years. As a matter of fact, I think what is involved here is a much more important question of principle, namely the principle of ministerial responsibility for what goes on in any department of the government.


Some hon. Members:: Hear, hear!


Douglas Scott Harkness: I will come back to this point in a moment, but it is the main reason I have risen to my feet tonight and the chief subject about which I am going to speak.
I think there has been a deliberate effort on the part of the government to shift their responsibility on to members of the civil service at various levels. This is something I resent quite strongly, having myself been a 2247a-81
Refitting of HMCS "Bonaventure" minister of three departments. When I was minister of a department I was prepared in every case to take the responsibility for anything that any of my officials did. Apparently the present government is not prepared to take that responsibility. In my view this is the real principle at issue as far as this motion is concerned.
Before I deal with this matter I should like to say that in my view the escalation in cost of the Bonaventure refit is very much less than the escalation in cost of a number of other projects initiated by the present government. As an ex-minister of defence, I resent to a considerable extent the fact that the general public thinks that perhaps the worst example of bad administration, of expenditure of public funds on useless purposes, has been the case of the Bonaventure. As a matter of fact, in the Finance, Trade and Economic Affairs Committee last year I personally insisted on going into the affairs of Expo, which is a far worse example of what I am talking about than the Bonaventure. In this particular case the total commitment of the federal government to begin with was $40 million. In the Committee on Finance, Trade and Economic Affairs we were never able to find out what the final cost of Expo was, but it ended up that the federal government had to pay somewhere around $300 million. This is an escalation that is far higher than that in the case of the Bonaventure, one which the Canadian people should keep in mind.
Then there is the case of the Arts Centre. I recall quite well when this project was first presented to the House of Commons that it was supposed to cost in the neighbourhood of $9 million. Then when all the estimates, and so on, came in the government said it was going to cost $18 million. It ended up costing $45 to $50 million, an escalation of five times or more. One of the examples that hurts me most is that of the hydrofoil. When I was Minister of National Defence I was very loath indeed to authorize a start on the experimentation and construction of the hydrofoil, and did so only after I had been assured that the cost would not exceed, under any circumstances, $11 million to $12 million. That was to be the absolute maximum. The cost has now risen to some $50 million odd. The only conclusion I can draw is that the present government has been extremely lax in seeing that the people's money is spent in a reasonable way. The people responsible for this are not the deputy ministers and the various other people down the line. The people responsible are those who sit on the treasury
7868	COMMONS
Refitting of HMCS "Bonaventure" benches at the present time and the people who have sat on those treasury benches by and large ever since 1963.
[DOT] (8:50 p.m.)
At this point I should like to pay a tribute to the members of the Public Accounts Committee. I have not been a member of that committee for the last 2J years, but I was a member before that and for most of the period between 1945 and 1957. The Public Accounts Committee, above all others, is the committee which performs a great service for this Parliament and the people of Canada in examining the accounts of the government. We might say it acts as a brake on excessive expenditures by the administration and things along that line. I believe the Public Accounts Committee has rendered a great service to the people of Canada in presenting its report in this regard. I do not want anyone to think that my ideas are any different in that respect. However, I think the Public Accounts Committee in recommendation No. 6, which appears at the bottom of page 775 of Votes and Proceedings for May 13, pointed the finger in the wrong direction. Recommendation No. 6 states:
The committee fails to understand why the Deputy Ministers of National Defence and Defence Production, realizing that the cost of the refit of the Bonaventure was, month by month, getting out of control, did not order an "on-the-job" investigation.
The people who should have ordered that investigation were the then Minister of Defence Production, now President of the Treasury Board (Mr. Drury) and the hon. member for Trinity (Mr. Hellyer) who at that time was Minister of National Defence. They should have ordered the investigation. As a matter of fact, on the basis of my experience of about six years as a cabinet minister I know that none of my deputy ministers at any time could have ordered such an investigation unless I told him to do so.
This is the great difficulty so far as this question is concerned. I know it probably is beyond the bounds of possibility to accept that in this present Parliament the government members on the Public Accounts Committee would agree to a unanimous report which condemned their own ministers. I recognize that this probably is the situation. Nevertheless, this is what the Public Accounts Committee should have done. The Public Accounts Committee at that time should have condemned the then Minister of National

DEBATES	June 8, 1970
Defence, the then Minister of Defence Production and Industry, and so on, because they were the people responsible for this situation.


Some hon. Members:: Hear, hear.


Douglas Scott Harkness: If any on-the-spot investigation was to be made, it would have had to be ordered by the ministers. No deputy minister could on his own order an investigation of that kind. It is nonsense to think along such lines. The fact that these investigations did not take place and the costs escalated to the extent they did is the direct responsibility of the minister, now President of the Treasury Board, who at that time was in charge of defence production and industry, and the hon. member for Trinity who at that time was Minister of National Defence.
That is where the responsibility lies, and not on the deputy ministers. I take great exception to an attempt being made to place on deputy ministers and other lesser officials in the Departments of National Defence and Defence Production the blame for the mess in respect of the Bonaventure. The people responsible for this situation are the ministers. They should stand up and accept that responsibility. I heard a good deal of the speech the President of the Privy Council (Mr. Macdonald) read in respect of this matter. I think I have a fairly good idea who prepared it for him, and so on. Perhaps he was speaking for the Minister of National Defence of that time. As a matter of fact, the present Minister of National Defence (Mr. Cadieux) shares some responsibility because while he was not in charge of the department he was the associate minister for a good part of that period. The President of the Privy Council should have said that the ministers of this government are responsible for the mess and that they are sorry for it. Instead of that, ever since the Auditor General's report came out people have been trying to place the responsibility on the deputy ministers and other officials of these two departments.


Some hon. Members:: Shame!


Mr.   Kees@: Resign!


Douglas Scott Harkness: I take a great deal of exception to that. As was pointed out by the hon. member for Saint John-Lancaster (Mr. Bell) when this debate was instituted, there is no question about ministerial responsibility in our system. He read some excerpts from Mr. MacGregor Dawson's book. I have some quotations here but I shall not take the time of
June 8, 1970	COMMONS
the House to read them. The hon. member also referred to some excerpts from the Glassco Commission report. I shall take time to read only one excerpt from the Glassco Commission report in order to demonstrate the fact that the principle of ministerial responsibility is completely entrenched in our parliamentary system. If we do not continue with a system of parliamentary responsibility, and if ministers try to slough off responsibility to deputy ministers or officials, our system will fall to the ground and we will be left with practically nothing. This is my great objection to the position of the government to this date. I have really heard nothing in this debate in respect of ministers saying, "I will take the responsibility".


Howard Russell MacEwan: They haven't got the guts.


Donald Stovel Macdonald: How can the
hon. member say he has heard nothing in this debate, when he accepts that he has been absent for most of it?


Douglas Scott Harkness: I did not hear what the minister said.


George Harris Hees: He had an attack of wind.


Douglas Scott Harkness: I shall return to the Glassco Commission report in respect of the conduct of government in this country, under the heading "Political Accountability of the Executive Branch". I shall quote from page 32.


Donald Stovel Macdonald: What volume?


Douglas Scott Harkness: Volume 1. You do not need to think that I do not know what I am talking about.


George Harris Hees: He is beginning to realize that you know very well what you are talking about.


Douglas Scott Harkness: The Glassco Commission report states:
Concurrently with the development of the "public" service concept, it has become established that direct accountability to Parliament and to the public is imposed only on ministers.
I repeat, "only on ministers".
Public servants continue to be answerable for their honesty and competence to their ministers, through the ascending scale of their departments, but they bear none of the political consequences of their acts.
They also do not bear any of the financial consequences of their acts. In other words, under our system the ministers are responsi-
DEBATES	7869
Refitting of HMCS "Bonaventure" ble for all the mistakes made by members of their departments. If they are honest about it, they must come into the House of Commons and accept that responsibility. As a matter of fact, if the situation is bad enough they should resign.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: What did you do in 1963?


Lloyd Roseville Crouse: At least he had integrity.
[DOT] (9:00 p.m.)


Douglas Scott Harkness: I followed my furrow in 1963, and I only wish that a lot of members of the present government had done the same thing subsequently. But they have not.


George Harris Hees: Thanks for the straight line.


Lloyd Roseville Crouse: There is no integrity on that side of the House.


Douglas Scott Harkness: Undoubtedly the general situation is this, that an attempt has been made, so far as the government is concerned in this case, to shuffle off their responsibility to deputy ministers and to other lesser civil servants, serving officers and people along that line. I do not think that this is going to wash with the Canadian public, nor do I think it has washed with this Parliament. The government has a subservient majority. I have no doubt that if this matter came to a vote-as it happens it is not going to come to a vote because today does not happen to be a voting day-the government side would carry the vote. There is no question about that because, as I say, they have a subservient majority. But if the people constituting the members of this assembly were asked, on a sort of secret ballot, to indicate what they thought in connection with this matter, I have not the slightest doubt what the verdict would be. I do not expect the Liberal members supporting the present government to get up-as they would if they were independent in their views, but they are not-and condemn the government. As I said earlier, it would be too much to expect that to be the case.


Eldon Mattison Woolliams: They only do that in caucus.


Mr. McKinley:: Once a month, for three minutes.


Douglas Scott Harkness: Nevertheless, the basic issue in this whole matter is ministerial responsibility. I am very much afraid that if the
June 8, 1970

Refitting of HMCS "Bonaventure" present government continues to evade what should be their responsibility in connection with every executive act of the government, our present system of government will disappear. I do not know what will supplant it, but I am sure it will be much poorer.
The reason I am so concerned about this matter is that, as I said, the basic principle of ministerial responsibility is being evaded in this case. I do not think it should be evaded. I think that of the ministers who are responsible for these departments the only one who is still on the treasury benches is the President of the Treasury Board. The hon. member for Trinity has left the government. There is no question in my mind whatever that the present minister, who is an old friend of mine- we served together in the war, and so forth and so on-


Charles Mills (Bud) Drury: Especially "and so on."


Douglas Scott Harkness: -and had a very pleasant time, but he is still in my view, in spite of all, evading his responsibility.


Howard Russell MacEwan: Resign!


Douglas Scott Harkness: When I was interrupted by the President of the Privy Council I was going to say that the greatest example of this in recent times was the Crichel Down case in Great Britain, in 1954. I will explain later how I happen to know something about it. In any event, here was a case where a piece of land had been taken by the RAF for war purposes and when the RAF had no more use for it, the department of agriculture, a great bureaucratic organization, particularly in the U.K. at that time, thought they could run it better than the former owner. He kept on trying to get back control of the land, without success during the time the Labour government was in office.
Then the Labour government was defeated and the Conservatives came in. He went on for another two or three years trying to get it back. Eventually he raised so much hell that the matter became a big question in Parliament. Sir Thomas Dugdale, who was the minister of agriculture, although he really knew nothing about what had been going on because he had been given bad advice by his officials-this came out in the public inquiry which was held-was not really personally responsible. But in that Parliament the idea of ministerial responsibility was so firmly ingrained that Sir Thomas Dugdale insisted on resigning, and he did. As a matter of fact, this is what should happen in this Parliament.


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


Some hon. Members:: Continue.


The Acting Speaker (Mr. Bechard):: Does the House give unanimous consent to allowing the hon. member to continue?


Some hon. Members:: Agreed.


Douglas Scott Harkness: I thank hon. members for their indulgence. I will not keep them very much longer. As I was saying, the Crichel Down case is the outstanding example in recent times of a minister who really did not know what his officials were doing and who nevertheless took the responsibility and resigned as a result of it. As I started to say earlier, the reason I know something about the case is that the minister's successor came over to visit me. He was minister of agriculture when I held the same office here in 1957. I got a whole rundown on the case.
If we are going to continue parliamentary government, of which the basic ingredient is the responsibility of the executive to the Members of Parliament, then ministers will have to accept responsibility for what their officials do, whether or not they know anything about it. In fact, it does not make a bit of difference whether or not the officials have done something without the minister's knowledge, the minister still has to take responsibility for it. If he is not pleased, it is his job to fire the official who has not done a good job, or transfer him somewhere else. But so far as Parliament is concerned and so far as the people of Canada are concerned, the minister must take the responsibility. If he does not do so, our system is going to disappear. As I said, that is why I feel so strongly about this matter.
I will conclude by saying that I think the only good effect that can come from this debate and from the Standing Committee's public investigation of the matter would be for an effective measure to be taken. I put it to the government that they must take effective action to prevent the waste of public money, which has been apparent in this case and which has been apparent in a number of the other cases I have mentioned. If this is not done, the whole idea of trying to give more life to members of the House of Commons and to the House of Commons as a whole will come to nothing.
The only way in which the members of the House of Commons can exert any real influ-
June 8, 1970	COMMONS
ence on administrative actions of any kind by the government is through committees. The Public Accounts Committee is a good example of this. If attention is not paid to the reports of committees, if they are just filed and nothing happens in regard to them, there will be less and less interest among members in this House and less and less interest of the public in the operations of this Parliament; and our responsible, parliamentary system of government will go down the hill.


Some hon. Members:: Hear, hear!
[DOT] (9:10 p.m.)


Hon. James Richardson (Minister of Supply and Services):: Mr. Speaker, in response to the motion which is before the House, and in response to several of the remarks that were just made by the hon. member for Calgary Centre (Mr. Harkness), I welcome this opportunity to bring to the attention of the House some of the cost-saving practices and some of the improved, and I might say improving procedures that are now being implemented in my department. I would like not only the House but also the Canadian public to know that the procedures we have instituted are designed to protect the public treasury. What is of even more importance, Mr. Speaker, is that some of the results we have achieved have in fact protected that treasury and have saved the taxpayer's dollar.
Also, as the refit of the Bonaventure was referred to specifically in the motion before us, I would like to speak about a number of matters raised in the third report of the Standing Committee on Public Accounts which is, of course, their report on that refit. I think at the outset it would be useful for all of us to put the Bonaventure refit into what might be called historic perspective.


Mr. Dinsdale:: Hysteric perspective.


James Armstrong Richardson: The methods and the procedures which the Canadian government has used to handle major ship repairs have been evolving and changing, and I believe improving, over many years. In the post-war years before the Bonaventure refit there was no competitive bidding; in other words, there were no firm contracts. Prior to the Bonaventure refit it was the practice of the Canadian government to negotiate the price and to rely in those days only upon cost-plus arrangements. Because of these unbusinesslike procedures that were in use prior to the Bonaventure refit it was decided to introduce
DEBATES	7871
Refitting of HMCS "Bonaventure" competitive bidding and the writing of firm contracts between the government and the successful bidder.
The Bonaventure was the first major refit in which there was competitive bidding and a firm contract, and because of this-because it was the first-I would say that it is understandable that government personnel may have lacked experience regarding estimating the total amount of work on a project of that size. However, the change to competitive bidding and to a firm contract was a step in the right direction and, as I will point out, the government's contracting procedures have continued to improve right up to the present day.
I have indicated in these remarks, Mr. Speaker, that I am responsible for a department that is vitally concerned with the efficiency of government, and I welcome the interest shown by members of the opposition and by the Standing Committee in improved procedures and cost-saving practices. I am pleased to be able to say that some of the recommendations made by the Standing Committee for improving the government's contracting procedures are already in effect in my department and this, I believe, is the answer to what the hon. member for Calgary Centre was speaking about a moment ago. For example the first general conclusion and recommendation made by the Standing Committee is:
That greater efforts should have been taken to determine and define the amount of work to be undertaken in the refit, prior to the seeking of public tenders.
Quite apart from the hearing on the refit of the Bonaventure, I established last fall, now some time ago, an interdepartmental study group to press on with our program of procedure improvements so as to prevent, or at least to minimize cost overruns on ship conversions, repairs or refits, and to ensure that all work that could be indentified was put in the specifications for the original tender call. This task force studied cases where cost overruns had occurred. They established the causes for such overruns and then developed a working procedure to reduce or eliminate these overrun difficulties.
The final report of this task force was given to me last March. It is several pages in length and covers in detail the procedures to be followed to achieve time, cost and performance objectives in the carrying out of refits, repairs and emergency docking of naval vessels. The Department of National Defence and
7872	COMMONS
Refitting of HMCS "Bonaventure" my department reached agreement on implementation of the proposals contained in the report and these proposals are now in effect in my department. I believe that members of the opposition and the Standing Committee on Public Accounts would be interested in this report. In fact, if they would read it I think that they would be encouraged by it because it is, I believe, a clear indication that within the Department of Supply and Services we have in some respects been thinking along the same lines as the Standing Committee. We have been trying to improve our contracting procedures in a manner fully consistent with some of the recommendations of that committee.
At the time of the Bonaventure refit when we were introducing competitive firm price contracting for ship construction and repair, it was found that in many ways my department, the user departments and the contractors were not fully experienced in working within the rigid conditions laid down in the contracts. Since that time we and the other concerned parties have gained considerable experience and have developed techniques that enable us now to have these contracts completed successfully, on time and within budget.
As evidence of that statement, Mr. Speaker, in the last three years, of 33 ships purchased for civil departments all but one were delivered on schedule or ahead of time. The actual shipyard costs amounted to $14,079,000 against a budgeted cost of $14,505,000. As another illustration of how we are continually improving our estimating and programming practices, the Department of National Defence and the Department of Supply and Services handled 25 naval ship refit and repair contracts during the fiscal year 1968-69. The total budgeted figure for all 25 contracts was $4,668,000. The total final contract price was $3,755,000. This means that owing to detailed cost estimating and tight negotiation the contract prices were some 20 per cent below our budgeted figures. In 1969-70 the total budgeted figure for 20 refit and repair contracts was $3,495,000, with a total final contract price of $2,959,000. The contract prices for that year were some 15 per cent below our budgeted figures.
The examples I have just given are mainly in the area of ship construction and repair but are illustrative of the results of our system improvement program. There are many other examples that could be given where changes and improvements are provid-
[Mr. Richardson.l
DEBATES	June 8. 1970
ing better estimates and substantial savings in the cost of the goods and services which the government buys. I hope, Mr. Speaker, that my remarks up to this point have established that the system improvements in the area of government procurement are in a continual process of improvement.
[DOT] (9:20 p.m.)
Turning now specifically to the Bonaventure, the contract-as do all refit and repair contracts-provided for a fixed price for the known work and a firm chargeout rate for labour and overhead. The committee expressed concern that the chargeout rate for labour and overhead was renegotiated. However, Davie Shipbuilding Limited was not obligated to deliver more than 200,000 hours of "work arising" at the original rate of $3.95 an hour. In view of the committee's concern I have consulted the Department of Justice, who have fully confirmed the legality of the department's action in this matter. Perhaps I should add that the new rate was not unreasonable. It was, as shown in the committee's report, only a few cents higher than the rate bid by the two competing yards for the first 200,000 hours of "work arising". The average chargeout rate by Davie was thus well below the rates originally bid by the competing yards.
I would like to point out, Mr. Speaker, that in its extensive report the committee did not mention what seems to me to be an important fact. At no place did the committee indicate that an over-all audit of the total contract with Davie Shipbuilding Limited was carried out by the audit service branch and that it was determined by that audit that the overall profit before taxes was below 10 per cent of the cost.


Eldon Mattison Woolliams: Mr. Speaker, would the minister permit a question?


James Armstrong Richardson: Gladly.


Eldon Mattison Woolliams: I take it from his argument that the minister is trying to evade ministerial responsibility. But apart even from the overexpenditure can you, as a minister of the Crown with a lot of say, particularly in western Canada, say that the government was right in stating, "Spend all this money, and when we get through we will either sell it or scrap it"?


James Armstrong Richardson: Mr. Speaker, we are talking of two separate matters.


Eldon Mattison Woolliams: Well, answer that question.
June 8, 1970	COMMONS


James Armstrong Richardson: At the point in time when the refit was undertaken there was a plan to keep the Bonaventure in service for a much longer period of time. Then we had a full defence review in which expenditures were held back, and one of those was the Bonaventure. It is a very logical and progressive conclusion. That is the answer to the question.


Walter Gilbert Dinsdale: There is not much logic there.


James Armstrong Richardson: I wanted to say, Mr. Speaker, that the total profit as determined under audit was under 10 per cent. In other words, the over-all profit was not unreasonable for a fixed price contract. My colleague, the President of the Privy Council (Mr. Macdonald), has spoken of officials in the Department of National Defence, and part of what he has said also applies to officials in the former department of defence production. In particular he has dealt with the committee's general conclusion No. 6, in which the committee indicated that it failed to understand why the Deputy Minister of National Defence and the Deputy Minister of Defence Production did not order an on the job investigation. My colleague has pointed out that the two deputy ministers discharged their responsibility in this respect by having the project monitored closely by an interdepartmental committee and by having a special on the spot review of the project undertaken at the time of the request for additional funds in the fall of 1966. Surely this is the answer to the charge made just a few minutes ago by the hon. member for Calgary Centre.
Two other officials of the former department of defence production who are mentioned specifically in the report are Mr. R. D. Wallace and Mr. L. E. St. Laurent. Mr. St. Laurent's estimating has been criticized, but in appearances before the standing committee he has pointed out that his final estimating work was in the category of summaries and not in the itemized figures. Mr. Wallace was the division chief responsible for the contract with Davie Shipbuilding, and the committee report indicates that he misled the committee in respect to the manner in which lockers and briefing-room chairs were secured on the ship. My information is that Mr. Wallace was one of a group of officials who met with a subcommittee of the Public Accounts Committee and was present when certain explanations were advanced by officials for the cost of removing these furniture items. Mr. Wallace was not, however, the person who gave the' explanation to which the committee later
DEBATES	7873
Refitting of HMCS "Bonaventure" objected, and subsequent testimony of other government officials before the committee clearly exonerates Mr. Wallace in this
respect.
With these comments, Mr. Speaker, I wish to assure the House that I intend to continue to give most serious consideration to the matters raised by the Standing Committee and to any of the constructive observations made on both sides of the House in the debate today. As I have pointed out, some of the committee recommendations have already been implemented.
I would welcome a further opportunity either in the House or before a committee of the House to give additional information. In particular, I would be glad to provide more information on the improved procedures and cost-saving practices which have been put into effect and which are continuously being put into effect by the Department of Supply and Services.


Robert Carman Coates: Mr. Speaker, we have really been honoured in this debate as a party because we have seen three cabinet ministers participate. That is almost unique in this Parliament. But there is a reason why these three cabinet ministers have participated-it is because they are in trouble and they know it.


Some hon. Members:: Hear, hear!


Robert Carman Coates: Mr. Speaker, Hoot Gibson is over there and he is hooting, hooting, hooting. Owls go out and sit in trees. If hon. members opposite want to participate in the debate they should stand up; and if they do not, they should shut up.
Mr. Speaker, a former president of the United States, Mr. Harry Truman, had a sign on his desk and that sign is what the opposition is talking about: it said, "The buck stops here". That is what we say: the buck stops with the President of the Treasury Board (Mr. Drury) and nowhere else. The President of the Treasury Board was desperately concerned about the civil servants named by the Public Accounts Committee. Apparently the committee did a terrible thing to these people. But, Mr. Speaker, the reason they were named by the Public Accounts Committee was because those gentlemen did not do their job. There is no other reason. Had there not been incompetence in government, $17 million would not have been spent on the Bonaventure and no public servant in Canada would have been named in any Public Accounts
June 8, 1970

Refitting of HMCS "Bonaventure" Committee or in any Auditor General's report. Their names are there because the President of the Treasury Board did not do his job.
[DOT] (9:30 p.m.)


Some hon. Members:: Hear, hear!


Robert Carman Coates: And because he did not do his job, he should no longer be President of the Treasury Board. The President of the Privy Council (Mr. Macdonald) says we are carrying on a vendetta. Yes, we are carrying on a vendetta, but not against the public service of Canada: it is against the incompetent cabinet ministers sitting on the treasury benches of this House.


Some hon. Members:: Hear, hear!


Robert Carman Coates: Our vendetta is aimed at the squandering of $17 million of the taxpayers' money on the Bonaventure. We are carrying on a vendetta against a government unwilling to face its responsibilities. They are playing musical chairs by suggesting today that since the President of the Treasury Board is no longer the Minister of Defence Production, he should not be blamed for what happened, or that since the Minister of National Defence was at that time the associate minister of national defence, he ought not to be blamed. I say these men are responsible, and if they had accepted their responsibilities they would have submitted their resignations to the Prime Minister.
I listened to the Minister of Supply and Services (Mr. Richardson). He is a man who should be keenly interested in protecting the taxpayers' dollar, as should the President of the Treasury Board. As a matter of fact, his department more than any other can assure the taxpayer that tax money will be spent properly. I suggest that when a man like that comes into the chamber and categorizes $17 million misspent on the Bonaventure as "historic perspective," he ridicules his position has gives little or no guarantee to the public of Canada that that mistake will not be repeated again and again. That is what worries me.


Some hon. Members:: Hear, hear!


Robert Carman Coates: It is not historic perspective that we want, Mr. Speaker: it is action.


Walter Gilbert Dinsdale: History repeats itself.


Robert Carman Coates: We want guarantees for the taxpayers of this nation that we shall not see
[Mr. Coates.l

one Bonaventure misadventure after another. There is no guarantee in the type of statement made by the Minister of Supply and Services. We heard the tripe and gob-bledegook spoken by the President of the Privy Council, but we did not hear anything about such a guarantee.


Mr. Gibson:: The hon. member is
wandering.


Robert Carman Coates: There goes the hoot again. It goes hoot, hoot, hoot. You can anticipate his hooting. Every once in a while you hear a hoot like an owl's. They say the owl is old and wise. Perhaps the hon. member for Hamilton-Wentworth (Mr. Gibson) is a wise old owl, because he hoots all the time. We are not interested in owls; we are interested in the taxpayer and the way tax dollars are spent.	-


Walter Gilbert Dinsdale: The government does not give a hoot about taxes.


Robert Carman Coates: We hope the government will give more of a hoot, in the days ahead, for the Canadian tax dollar than it has in the past. A new program was proposed to the provincial premiers in Winnipeg over the weekend. I am wondering whether we can obtain some kind of guarantee that the government will peg wasteful government expenditure at 6 per cent for the next year. If we obtained that kind of guarantee from the government we would need less and less in the way of guarantees from labour in this country.


Colin David Gibson: What chapter is that?


An hon. Member:: Hoot, hoot!


Robert Carman Coates: If the hon. member could read, I would give him the chapter and verse. But all he can do is hoot, hoot, hoot.


An hon. Member:: Like an empty vessel.


Walter Gilbert Dinsdale: An empty vessel makes the most sound.


Robert Carman Coates: We face a national strike in the postal service and the government refuses to budge from its fixed position. It is said that the government's proposal to the postmen would cost an extra $41.5 million over 30 months, and that the union proposal would cost $51 million over 24 months. How long would it take the government to meet the union proposals, in terms of the money it has wasted? For starters we can look at the misadventure of the Bonaventure. Altogether $17
June 8, 1970	COMMONS
million has been paid out on a ship that is now up lor sale and is likely to wind up her days as a floating crap game.


Colin David Gibson: What page is that?


Robert Carman Coates: Is it not time that the minister or ministers responsible were keelhauled or scuttled? Let us take a look at another government spending fiasco. An estimated $18 million National Arts Centre winds up costing $46 million. Here we have a $46 million chunk of culture, with prices out of reach of the working man in Ottawa and performances out of reach, through sheer distance, for millions of Canadians from coast to coast. Let us take a look at the $16 million spent on the beginnings of the P.E.I. Causeway.


An hon. Member:: That was a shocking waste.


Robert Carman Coates: Anybody who visits Prince Edward Island should look at the area where they built railway tracks to Northumberland Strait. Indeed, we have been told that although we wasted $17 million on the Bona-venture, we can reclaim $500,000 if we sell the ship as scrap. I wonder how much these rails, which cost us between $16 million and $17 million, on the edge of the Northumberland Strait would fetch if they were torn up. I walked down that railway line. I thought I might as well. As a taxpayer I thought I might as well walk along those tracks to see how $16 million of my money had been spent. Well, I did not get my share of enjoyment out of that $16 million. Unfortunately, the people of British Columbia do not even have a chance to see the rails.


Walter Gilbert Dinsdale: Neither do the people of the Prairies.


Robert Carman Coates: That is all you can see; there are two rails leading to Northumberland Strait. The government did not sink New Brunswick and it has not succeeded in sinking Prince Edward Island.


An hon. Member:: Perhaps the present Premier will sink it.


Robert Carman Coates: Yes, perhaps the present Premier will sink it. He is driving the province very hard. But he has had a tremendous amount of assistance from our friends across the way.


Walter Gilbert Dinsdale: Birds of a feather.


Robert Carman Coates: Who are all hooting together.
DEBATES	7875
Refitting of HMCS "Bonaventure"


Some hon. Members:: Hear, hear!


Robert Carman Coates: Those are only a couple of reported items. I wonder how many cents an hour they would represent to a postal worker who feels he is being short-changed by this government. Next year's report by the Auditor General will probably have a special chapter on the Montreal mail trucking farce in which the Post Office set out to save money but has had to pay out more then $2 million in buying trucks, settling broken contracts, paying for extra security and so on.
So I ask again: Is the government going to peg its expenditure wastes at 6 per cent, or might it be that the minister responsible for the Bonaventure in the area of defence production or for government spending in general will, after we have looked at the grim, total picture, be given their marching orders? It would be mighty good news for Canada if that were done, but I doubt if it will be.
I should like to refer to a CBC program entitled "Encounter" on which the President of the Treasury Board appeared on April 11. He was interviewed by Ron Collister, Charles Lynch and Pierre O'Neil. What I like about this program is that the minister talked of a tight ship. The way the expenditures on the Bonaventure went, I think the only fellow who was tight was the President of the Treasury Board.	*
[DOT] (9:40 p.m.)


Walter Gilbert Dinsdale: He was spending money like a drunken sailor.


Robert Carman Coates: There could be no doubt about that. When talking about this tight ship, the minister said:
The government is turning rather more attention to what I would call effectiveness as distinct from efficiency-
I do not argue with that.
-that is making sure that what we are doing is producing the result that is really needed-
I do not argue with that. Apparently the main result the government wants is unemployment. They are doing it with an effectiveness that beyond a doubt is better than has been done by any government in Canadian history.


Some hon. Members:: Hear, hear!


Robert Carman Coates: At the present time 550,000 Canadians are unemployed. If unemployment is the main goal of the government, they are both effective and efficient. This seems to be
June 8, 1970

Refitting of HMCS "Bonaventure" their main goal. In this interview the President of the Treasury Board referred to the Auditor General. Although the minister thinks the Auditor General is a great fellow, he thinks he would be a lot better if he wrote with invisible ink in an invisible pen. That is really what the minister wants. The minister thinks if the Auditor General used invisible ink in his invisible pen he would have the kind of report that is required. In this interview he said to Mr. Lynch:
I wonder myself whether the Auditor General should cast himself in this role, or whether we should look for really another kind of person to be Auditor General-
I know the kind of person the President of the Treasury Board would like as Auditor General. There used to be a radio program called "The Shadow Knows". That is the fellow he wants to be Auditor General.


An hon. Member:: The Green Hornet.


Robert Carman Coates: No, not the Green Hornet. He wants "The Shadow" and he wants him with an invisible pen with invisible ink so that no one in this country can find out about the misadventure of the Bonaventure. I wish to refer to an editorial which appeared in the Cape Breton Post. This refers to another stage in the career of the President of the Treasury Board. I quote:
One example is the suggestion by Hon. C. M. Drury, Minister of Industry, in a Montreal speech that the government should print its own newspaper and insert its own programs into the CBC. This sounds incredible, coming from a man of Mr. Drury's presumed intelligence.
That, Mr. Speaker, would be the fantasy of all fantasies. I would love to see the programs that the President of the Treasury Board would prepare for the CBC. Alec Guinness starred in a tremendous movie entitled "Tight Little Island". I think the minister would keep repeating that movie on the CBC so no one would ever find out about the Bonaventure. The movie was about a ship that sank with a cargo of scotch. The men of the island went out in rowboats to get the scotch from the ship. They had quite a party.


Stanley Howard Knowles: Never on a Sunday!


Robert Carman Coates: I do not know whether there was any scotch aboard the Bonaventure, but a lot of people had a mighty big party at the expense of the taxpayers.


Some hon. Members:: Hear, hear!


Robert Carman Coates: I would like to say more, Mr. Speaker, but one of the members of the NDP has been trying to get the floor. I will let him take over.


Mr. Arnold Peters (Timiskam'ing):: Mr. Speaker, I appreciate the offer of the hon. member. I appreciate it more because it was not offered by the previous speaker.
This is really a sad state of affairs. After meeting for a number of months the committee prepared a very detailed report on a very large expenditure. It is sad that opposition members have to raise this subject on their day rather than having the committee report presented in the ordinary way. The President of the Privy Council (Mr. Macdonald) defended this action. He would have had this same opportunity had he allowed the committee report to be presented in the normal fashion. All opposition members are concerned about our inability to supervise the estimates and expenditures of this House. Some hon. members will remember the days of the old type of estimates when we could understand exactly what was happening. I must admit this was not true when I came to this House; it was more complicated then. The new system of estimates is even more confusing. One of our responsibilities in an economic sense is to scrutinize all expenditures. After a great deal of time and effort the committee unanimously presented a report. The government covered up that report.
I was not impressed by the speech of the President of the Privy Council because I am aware that he was reading someone else's document. He was not giving his own point of view or that of the Minister of National Defence (Mr. Cadieux). I was shocked at the speech of the President of the Treasury Board (Mr. Drury). This man has had it both ways. He was a senior civil servant. I am sure he remembers the Currie report. It may be true that somebody took the blame for him at that time. I do not know whether he had the responsibility or whether it was the responsibility of someone under him. I am sure he was able to transmit to those responsible the difficulty that developed at that time. I am sure he did something about it.
Although this is a democratic process, I do not entirely agree that the minister has to take the responsibility. This only works when the minister is willing to do something to those responsible for the neglect that occurs. It is all right for the minister to stand in this House and say, "I take full responsibility". There was an expenditure of $17 million on
June 8, 1970	COMMONS
the refit of the Bonaventure. It did not need to be refitted; it would not have sunk with an additional three years' service. What does it mean to the Canadian people when the minister makes such a statement? Does it assure them that the same situation will not occur in the future?
The President of the Treasury Board did not say anything. It was interesting to watch his officials in the gallery. They were amused.
I am not sure what they were amused about. They may have been very pleased with the speech they had written for the minister, they may have thought he was doing very well, or perhaps they were laughing at Parliament or its members. Then again, though I do not suggest this very seriously, they may have been laughing at the minister himself.
[DOT] (9:50 p.m.)
The minister has a responsibility for considering the average Joe who is getting damn poor results from the expenditures we are making under the tender system. The work on the West Block was another wonderful example of underruns and overruns. Every time the contractor got an underrun he put the money in his pocket, and whenever he got an overrun the government paid. We all remember the Arts Centre. The estimated cost was $9 million. In the end it exceeded $47 million. Expo was supposed to have cost $40 million. In fact, it turned out to be $300 million. Would anybody like to guess how much it will cost us to hold the 1976 Olympics that are not supposed to cost us anything. My guess is that $50 million will be very cheap.
The Minister of Supply and Services (Mr. Richardson), who is new in his department, did tell us he was giving some consideration to this problem, and I am sincerely grateful for that. People are making estimates in connection with government contracts without having the faintest notion of what they are doing. They are not competent. Every major estimate has proved to be so far out that it might as well not have been made. The minister sought to tell us we were not doing badly on the basis of 10 per cent plus cost. That may be the opinion of some people but it does not seem to me we should be counting on overruns at 10 per cent plus cost. It reminds me of the days when the country had to depend on operations of that kind. Surely that is not the case today.
This country is not getting full dollar value for the work we are contracting out. The Postmaster General (Mr. Kierans) has found this out. His tender system was so bad that
DEBATES	7877
Refitting of HMCS "Bonaventure" the man who already owned the trucks and operated under a contract refused to tender on it again. It seems to me that if anyone was in an advantageous position to tender, this operator should have been. He did not wish to be involved in the tender system. In my opinion the tender system is not honest, it is not competently managed and the government should come up with a new one.
The cost of refitting the Bonaventure was estimated at $8 million. Then somebody came along and made an offer of $4.5 million. There were other tenders of $5 million and $7.5 million. Mr. Speaker, in these circumstances the only bid worth considering was the $7.5 million bid; otherwise one has to assume that those preparing the estimate were stupid or that the man who volunteered to do it for $4.5 million was stupid. Nobody in his senses would grant a tender for an amount which is just half of the estimate. Today, the real facts are available. The estimate was $8 million but the cost turned out to be $17 million. Where does this leave a government which accepted a $4.5 million bid?
I have seen this happen both ways. There is another facet to this question which has not been discussed. I can remember the end of the Arrow program and the decision by the Department of National Defence that it could no longer pursue this national endeavour. I know many people who were very proud of the fact that Canada had one aircraft carrier. I am also aware that there are many pilots in the air force today flying the CF-105 who realize that this plane, with a 200-mile radius, cannot go anywhere unless it has an aircraft carrier to support it. It has no value unless it is flying around in Canada close to a gas station.
Many people still do not like to see the end of "The Bonnie" The Canadian public are fairly generous and they have shown this quality on many occasions, even when they have not been asked. I am sure that if we asked them to agree to give the Bonaventure as a gesture, to Australia-which might be able to use it, since Australia already has a ship of the same type-they would willingly give consent. It would be a gift worth making to a sister dominion. I strongly urge the government to consider this proposal rather than letting the ship go to some art dealer in Toronto who would take it through the Seaway. The government would probably have to spend another $50 million to widen the Seaway for that purpose.
7878	COMMONS
Refitting of HMCS "Bonaventure"


Stanley Howard Knowles: Don't put ideas into their heads.


William Arnold Peters: The committee worked very hard. Every member gave of his time and effort to the fullest extent. The report is a good report. For his part, the Auditor General was most diligent in helping to assess the accounts with the staff he had available. The government appears, sometimes, to be very stupid. Let them not be encouraged by the fact that they have a majority which will clap for them no matter what they do. Let them take the advice of the Minister of Supply and Services tonight and redesign the whole tender system so that we do not continually get into trouble of this kind.
There must be a way of arriving at a better tender system to ensure that this kind of thing will not happen again. From this point of view the lesson of the Bonaventure is one
DEBATES	June 8, 1970
well worth learning. If we are capable of designing new methods of estimating expenditures in advance and of controlling expenditures so that they remain within the estimate, if we are willing to eliminate the practice of allowing business people to decide for us how much we should pay for whatever we are buying, we shall be able in the end to say "Thank you" to the Public Accounts Committee and to the Auditor General. Moreover, many people will appreciate the efforts of a government which, having made a bad mistake shows us it is willing to change the whole of its procedures to ensure that the same mistake is not repeated again as it has been repeated hundreds of times in the past.


Some hon. Members:: Hear, hear!
At ten o'clock the House adjourned, without question put, pursuant to Standing Order.
June 8, 1970



APPENDIX


[Stage Direction]
The North Atlantic Council, meeting in ministerial session in Rome on 26th-27th May, 1970, reaffirmed that the alliance remains indispensable to the security of its members and makes possible their common search for progress towards a more stable relationship between east and west in which outstanding issues dividing Europe can be resolved.
2.	Ministers again stated their determination to resolve these problems through a process of negotiation. They recognized that for their part, this search for peace must rest upon a spirit of genuine partnership, the maintenance of the defensive strength of the alliance, and the practice of full and timely consultation.
3.	Ministers agreed that it will not be enough to talk of European security in the abstract. The causes of insecurity in Europe are specific, they are deeply rooted in conflicting perceptions of state interests, and their elimination will require patient endeavour. However, the allies, for their part, remain willing to negotiate, in any suitable forum, those concrete issues whose resolution would enhance the security of Europe. The success of efforts to pursue genuine relaxation of tension will be a test of the willingness of all interested countries to deal meaningfully with real issues of security.
4.	Ministers affirmed that to endure, peace must rest upon universal respect of the sovereign equality, political independence and territorial integrity of each European state, regardless of its political or social system, and for the right of its peoples to shape their own destinies, free of the threat of external intervention, coercion or constraint.
5.	Ministers, recalling their earlier statements on the subject, examined and approved a report on the situation in the Mediterranean, prepared by the Council in Permanent Session which they had requested in their meeting of December 1969. Having regard to the conclusions presented in this report, they found reason to reiterate their concern with regard to the situation in the area. They stressed again the importance of full and frequent consultation among the
allies on this question and the necessity for continued vigilance. They instructed the Council in Permanent Session to continue their close review of the developing situation in the Mediterranean and to report fully thereon to ministers.
6.	At their April 1969 meeting in Washington, ministers agreed to explore with the Soviet Union and the other countries of eastern Europe which concrete issues best lend themselves to fruitful negotiations in order to reduce tension and promote co-operation in Europe and to take constructive actions to this end. The council thereafter conducted a detailed study of those issues, and at their meeting in December 1969, ministers declared that allied governments would continue and intensify their contacts, discussions or negotiations through all appropriate channels, bilateral or multilateral, and that they remained receptive to signs of willingness on the part of the Soviet Union and other eastern European countries to engage in such discussions. Progress, they said, in these discussions and negotiations would help to ensure the success of any eventual conference, in which, of course, the North American members of the alliance would participate, to discuss and negotiate substantial problems of cooperation and security in Europe.
7.	Ministers expressed satisfaction over the launching or continuation of the whole range of talks and negotiations, initiated by members of the alliance, which they have been actively promoting during the six months since December 1969. At the same time, numerous other east-west contacts have been pursued. The allies have consulted and will continue to consult closely on all these initiatives and contacts.
8.	With the support and understanding of its allies, the Federal Republic of Germany has initiated talks with the Soviet Union, Poland and the GDR in order to improve the situation in central Europe. The allies consider this to be encouraging. They express the hope that these talks will yield results and will not be compromised by the presentation of unacceptable demands. The efforts being made to solve outstanding problems and to achieve a modus vivendi in Germany which
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would take account of the special features of the German situation, represent an important contribution to security and co-operation in Europe. The ministers express the hope that all governments desiring to contribute to a policy of relaxation of tension in Europe will, to the extent possible, facilitate a negotiated settlement of the relationship between the two parts of Germany and the development of communications between the populations.
9.	The ministers noted with satisfaction that the four powers, in the framework of their rights and responsibilities for Berlin and Germany as a whole, began discussions on 26th March about improving the situation with regard to Berlin and free access to the city. They express the hope that the difficulties which exist at this especially sensitive area of the east-west relationship could be overcome by practical measures and that Berlin would be enabled to make its full contribution to economic and cultural exchanges.
10.	The conversations between the United States and the Soviet Union aiming at the limitation of strategic armaments, which began last November at Helsinki, have been continued at Vienna in April. Ministers welcome these talks, the outcome of which is so important for the security of Europe and the future of humanity.
11.	On the occasion of the coming into force of the Non-Proliferation Treaty, ministers reemphasized the importance they attach to limiting the spread of nuclear weapons as well as to measures for genuine nuclear disarmament. They noted with interest the efforts now under way to exclude mass destruction weapons from the sea-bed and to deal with the problem of control of biological and chemical weapons. They expressed the hope that further progress on disarmament measures, with appropriate safeguards can reduce the arms burdens borne by all.
12.	The members of the North Atlantic Alliance have, over a number of years, proclaimed their interest in arms control and disarmament measures which facilitate a gradual elimination of the military confrontation in Europe. Ministers recalled the declarations issued at Reykjavik in 1968, and at Brussels in 1969. They noted that up to now these declarations had led to no meaningful reply.
13.	The allies have nevertheless carried out intensive studies on mutual force reductions in accordance with the directions given by ministers in December 1969. Ministers examined the detailed report presented to them by the North Atlantic Council in Permanent Session. This has been of great value in clarifying the complex issues involved. Ministers gave instructions for further relevant studies which would guide policies and explorations in this field.
14.	Ministers, having examined all these developments, both positive and negative, and having taken note of the report on the procedures for negotiation which they had commissioned from the Permanent Council, stated that they were ready to multiply exploratory conversations with all interested parties on all questions affecting peace.
15.	In so far as progress is recorded as a result of these talks and in the ongoing talks -in particular on Germany and Berlin-the allied governments state that they would be ready to enter into multilateral contacts with all interested governments. One of the main purposes of such contacts would be to explore when it will be possible to convene a conference, or a series of conferences on European security and co-operation. The establishment of a permanent body could be envisaged as one means, among others, of embarking upon multilateral negotiations in due course.
16.	Among the subjects to be explored, affecting security and co-operation in Europe, are included in particular:
(a)	the principles which should govern relations between states, including the renunciation of force;
(b)	the development of international relations with a view to contributing to the freer movement of people, ideas and information and to developing co-operation in the cultural, economic, technical and scientific fields as well as in the field of human environment.
17.	In addition, ministers representing countries participating in NATO's integrated defence programme attach particular importance to further exploration with other interested parties of the possibility of mutual and balanced force reductions and have therefore issued a declaration on this subject.
18.	As a first step, Ministers requested the Foreign Minister of Italy to transmit this communique on their behalf through diplomatic channels to all other interested parties including neutral and non-aligned governments. They further agreed that member governments would seek reactions of other governments to the initiation of the
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comprehensive programme of exploration and negotiation which they envisage.
19.	Ministers reviewed the first report from NATO's Committee on the Challenges of Modern Society and welcomed the progress made in the six months since the committee was established as a demonstration of the value of allied co-operation on the urgent problems of human environment. Intensive studies now in progress will contribute to national and international action on a broad range of environmental issues, including such pressing concerns as air and water pollution.
20.	Minister reaffirmed the view that the benefit of the alliance's work in mankind's environment particularly could become a basis for broader co-operation between east and west in this field of ever-increasing importance. They considered that this could be ensured either through existing international organizations providing a useful framework for enhanced co-operation or by any other appropriate method.
21.	The next ministerial session of the North Atlantic Council will be held in Brussels in December, 1970.

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1.	Meeting at Rome on 26th and 27th May, 1970, the ministers representing countries participating in NATO's integrated defence programme recall and reaffirm the commitment of their nations to pursue effective policies directed towards a greater relaxation of tensions in their continuing search for a just and durable peace. They recall, in particular, the invitation they have previously addressed to the Soviet Union and other countries of eastern Europe to join them in discussing the possibility of mutual and balanced force reductions.
2.	The objective of the work on which their representatives have been engaged has been to prepare a realistic basis for active exploration between the interested parties at an early date and thereby to establish whether it could serve as a starting point for fruitful negotiation. Such exploratory talks would assist those concerned in developing in detail criteria and objectives for substantive negotiations to follow at the appropriate stage in a forum to be determined. They would also provide tangible evidence of the readiness to build confidence between east and west.
3.	Ministers invite interested states to hold exploratory talks on mutual and balanced force reductions in Europe, with special reference to the central region. They agree that in such talks the allies would put forward the following considerations:
(a)	mutual force reductions should be compatible with the vital security interests of the alliance and should not operate to the military disadvantage of either side having regard for the differences arising from geographical and other considerations;
(b)	reductions should be on a basis of reciprocity, and phased and balanced as to their scope and timing;
(c)	reductions should include stationed and indigenous forces and their weapons systems in the area concerned;
(d)	there must be adequate verification and controls to ensure the observance of agreements on mutual and balanced force reductions.
4.	As a first step ministers requested the Foreign Minister of Italy to transmit this declaration on their behalf through diplomatic channels to all other interested parties, including neutral and non-aligned governments. They further agreed that in the course of their normal bilateral and other contacts member governments would seek to obtain the responses and reactions of other governments. Members of the alliance will consult further regarding the outcome of their soundings with a view to enabling the alliance to determine what further individual or joint exploration might be useful.
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Tuesday, June 9, 1970