1970-02-26

PRIVILEGE


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I rise on a question of privilege which affects the rights and privileges of all members of this House. On Tuesday last, February 24, as recorded at page 4008 of Hansard, the Minister of Energy, Mines and Resources said:
I reaffirm in the strongest possible terms that no water could be sold to the United States without the approval of the government of Canada. No contemplation of such approval is under consideration by the government.
At almost the same time the Prime Minister made a statement on the question of water export to the United States, as reported in the Toronto Star of February 25 under the byline of Mr. Gerald McDuff. The dateline is Ottawa. It reads in part:
Prime Minister Pierre Elliott Trudeau indicated last night he would be willing to consider selling some of Canada's oil, gas and water resources if studies show they are surplus to Canadian needs.
It is also stated in the article:
Trudeau told the students there is a "danger of being too possessive" about natural resources.
It goes on to say:
Trudeau said it's obvious that Canada can't use all of its pure water.
Then, one other quotation from this report: Trudeau said the government has a good estimate of oil reserves but only a slight idea of its water resources. The government is studying Canada's water potential, he said.
"I don't want to be a dog in the manger about this. But if people are not going to use it, can't we sell it for good hard cash?"
Here we have two statements, one by the Minister of Energy, Mines and Resources in the House in which he said there will be no export of water without the approval of the government and that the government has no intention of giving such approval, and the other by the Prime Minister, who stated at
the same time outside the House that we have more pure water than we can possibly use and that we should be prepared to sell the surplus water for hard cash. I submit, Mr. Speaker, this is contempt of Parliament.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: Either the Minister of Energy, Mines and Resources was misleading the House in what he said last Tuesday or the Prime Minister was seeking to mislead the people of Canada when he said we have surplus water and should be prepared to sell it. I do not believe the House should allow itself to be treated with such disdain.
e (2:10 p.m.)
If Your Honour finds that there is a prima facie case of privilege, I am prepared to move a motion that these conflicting statements regarding the export of water be referred to the Standing Committee on National Resources and Public Works so that the Prime Minister and the Minister of Energy, Mines and Resources can appear and outline what is the definitive water policy for Canada.


Mr. Speaker:: The hon. member has given the Chair notice of the question he proposed to raise at this time. I can assure him I have given the matter very serious thought in the meantime. It is always difficult to determine whether there is a question of privilege based on the precedents and practices of the House of Commons. The hon. member knows, as do all hon. members, that it is only in extreme cases that the Chair can rule that there is a prima facie case of privilege in that the privileges of an hon. member or of the House in general have been offended.
The circumstances to which the hon. member refers should, in my view, be interpreted as possibly a source of debate between two members of the government or perhaps between the government and the opposition. Personally, I doubt very much that the hon. member's grievance can be brought forth for consideration and for debate by way of a specific reference to the committee to which the hon. member referred in his statement. I think there might be other ways in which the
4110	COMMONS
Inquiries of the Ministry matter might be considered. In due course the committee might want to look into the matter, to study the whole question and to hear evidence, but I would hesitate to have the grievance raised by the hon. member for Nanaimo-Cowichan-The Islands referred to a committee by way of a question of privilege.
In the circumstances I hope the hon. member will find some other way to have the matter considered by the House or by the committee in due course.



ROUTINE PROCEEDINGS


[Stage Direction]
First report of Standing Committee on National Resources and Public Works-Mr. Hopkins.

[Stage Direction]
First report of Standing Committee on Regional Development-Mr. Morison.
tEditor's Note: For text of above reports see today's Votes and Proceedings.]


Hon. George Hees (Prince Edward-Has-tings):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Would he advise the House what is the position which the government intends to take or has decided to take regarding the statement by the United States government yesterday on the law of the sea when it announced that if other countries adopt the same position it would accept the 12-mile limit, with certain reservations regarding fishing rights beyond that limit?


Hon. Mitchell Sharp (Secretary of Stale for External Affairs):: The Canadian government recognizes the need to reach solutions on these questions and thus we agree to the principle of the 12-mile limit for the territorial sea. With respect to the proposals relating to freedom of passage in international straits, and the exploitation of fisheries resources beyond 12 miles, these proposals raise questions of principle for Canada which
[Mr. Speaker.)
DEBATES	February 26, 1970
are under discussion with other countries, including the United States. As these discussions are continuing, I do not think it would be appropriate for me to make any further comment.


George Harris Hees: A supplementary question. In view of the fact that other important maritime nations are now stating their positions with regard to the law of the sea, and in view of the difference between the minister's statement in reply to a question put by myself in this House last Thursday regarding northern sovereignty and the statement made in answer to a question at Carleton University by the Prime Minister a few nights ago on this same subject, does the minister not consider it is high time the government should make a clearcut statement that all other maritime nations can understand regarding our position?


Mr. Speaker:: Order. It seems to me the hon. member is repeating substantially the first question. That is hardly a supplementary.


George Harris Hees: On a point of order, Mr. Speaker, I am asking the minister if he does not consider that Canada should make a clear-cut declaration that people can understand, because the people of Canada and of other countries round the world do not know where the government stands on this important matter.



FISHERIES


Mr. Frank Howard (Skeena):: Mr. Speaker, I would like to ask a question supplementary to that just asked by the new leader of the opposition.


An hon. Member:: The old leader of the opposition.


Frank Howard: What progress is being made on ratification or otherwise of the draft agreement with respect to reciprocity in regard to fishing rights?


Mitchell William Sharp: Mr. Speaker, the draft agreement has not yet come before cabinet.


EXTERNAL AFFAIRS
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the Secretary of State for External Affairs a question
February 26, 1970	COMMONS DEBATES	4111
following his answers yesterday with respect to the report which has appeared in the press that there will be a second underground test on Amchitka Island in the Aleutians? The minister said yesterday that he had received no notification from the government of the United States. Does he intend to make inquiries of the United States when such an underground test will be undertaken and what the strength will be, and on the basis of that evidence will the government then decide whether or not to make representations to the United States, along with other countries which I understand are protesting?


Mitchell William Sharp: Mr. Speaker, I think the hon. gentleman has misunderstood what I said yesterday. I did not say that we did not know approximately when the next tests would take place. We had been told they were approximately a couple of years off, and some indication was then given of when they would be held. What we have not yet received is information on the first test, upon which we could base any protest we might think it was suitable for us to make. It should also be understood that the Canadian government is opposed to underground tests, whether by the United States, the Soviet Union or China.


Thomas Clement (Tommy) Douglas: A supplementary question. In view of the concern of the people living on the Pacific coast, both in Canada and the United States, is the minister urging the government of the United States to supply him with the necessary data cei the last test so that the Canadian government will be in a position to make an intelligent appraisal of the situation and register its protest if the test is of such magnitude as to constitute a danger to the people living on the Pacific coast?


Mitchell William Sharp: Mr. Speaker, I have already indicated to the House on several occasions that we have inquiries with the United States government now.



CANADIAN SOVEREIGNTY


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I have a question for the Secretary of State for External Affairs.
Inquiries of the Ministry
Could he tell us whether he is aware of protests made by the American government concerning the issue of permits for developing underwater natural gas and oil wells in the Gulf of Maine?


Mitchell William Sharp: Yes, Mr. Speaker. I think the House knows that there is an unsettled question concerning the line of demarcation on the continental shelf between Canada and the United States in that area. These discussions are continuing and the United States has made a formal statement of its position, just as we have.


Léonel Beaudoin: Mr. Speaker, I have a supplementary question for the minister.
Did the Canadian government make sure that these permits have been issued for explorations within Canadian waters?


Mitchell William Sharp: Mr. Speaker, we have issued permits in waters that we claim are Canadian waters but the provisions regarding the line demarcating the continental shelf between the two countries are subject to agreement between the two countries. If agreement is not reached it is assumed that the equidistant line is the correct line, and we are issuing permits on that basis now.



POST OFFICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Postmaster General concerning the mail hold-up still afflicting the people of Montreal and the tangled web of contradictions as to the responsibility for the deplorable condition of the mail service. Can the minister advise if anyone is talking to anyone else about improving this situation, and what are his predictions as to success?


Hon. Eric W. Kierans (Postmaster General and Minister of Communications):: Mr. Speaker, as I have said earlier I was in contact with the Secretary of the CSN on Saturday and, as he knows, I am always at his disposition to continue the talks further.


An hon. Member:: Is anyone listening?


Heath Nelson Macquarrie: Mr. Speaker, I have a supplementary question. Considering the obvious
February 26, 1970

Inquiries of the Ministry non-success of these non-conversations, may I ask if the minister is considering asking the Minister of Labour now to bail him out?


Eric William Kierans: Mr. Speaker, I think I could explain it this way, that the Minister of Labour has a conciliatory role between employees and employers and he is always prepared to carry out that function.


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I should like to ask the Minister of Labour whether he has officially or unofficially intervened in that conflict and if he can give us some information in that connection.


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, I think I should state in reply that I fully support the Postmaster General in his purpose of dividing the city of Montreal into five postal zones for the purpose of making tenders more meaningful. Having said this, the minister recognizes that the relationship between the new employers and employees will eventually be a problem of the Department of Labour. My department has agreed, at the suggestion of the Postmaster General, to act as mediator in this conflict.


Mr. Roch La Salle (Jolietie):: Mr. Speaker, I should like to put a supplementary question to the Minister of Labour.
Does he want employees with some 20 to 25 years of service to be dismissed while he remains indifferent to their fate?
[English 1


Bryce Stuart Mackasey: Mr. Speaker, I think the first thing that the unions must learn is that violence and slowdowns are hardly conducive to the proper attitude needed to arrive at a settlement-


Some hon. Members:: Hear, hear.


Bryce Stuart Mackasey: When the unions realize this it will make my role and that of my department a little easier in taking into consideration the 25 years of service that many of these people already have.



FISHERIES


Mr. Ambrose Hubert Peddle (Grand Falls-While Bay-Labrador):: My question is directed


to the Minister of Fisheries and Foresty, Mr. Speaker. Did the minister receive communications today from a number of locals representing Newfoundland fishermen containing protests against the new sealing regulations as they affect landsmen? If so, what action has been or will be taken?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, I hope the hon. member will help us to clarify the position in their minds. They can take adult seals, seals of the 1969 year class or older.


Mr. John Lundrigan (Gander-Twillingaie):: A supplementary question, Mr. Speaker. In view of the representations made, would the minister be kind enough to prepare and make a statement clarifying the department's position in detail at a very early date so that hon. members and the sealers affected will be aware of the situation?


John (Jack) Davis: Mr. Speaker, I think generally speaking the sealers are aware. It is some of these people on the shore who go out individually who have not been fully apprised of the situation. We are doing everything we can to make sure they are informed.



NON-PRODUCTION OF WHEAT-REQUEST FOR STATEMENT ON ACREAGE PAYMENTS POLICY

Mr. A. P. Gleave (Saskaloon-Biggar):: Mr. Speaker, my question is directed to the Minister without Portfolio in charge of the Wheat Board. Is it the minister's intention to make a statement on a policy of acreage payments to induce farmers to take wheat acreage out of production and, if so, when does he intend to make such a statement?


Hon. Otto E. Lang (Minister without Portfolio):: Mr. Speaker, I have made some comments about this problem in discussions with prairie farmers. When there is a policy statement on behalf of the government to be announced, it will be announced.


Alfred Pullen Gleave: A supplementary question, Mr. Speaker. Is the minister also considering reducing the rates of payment on storage to grain elevators which drew $73 million last year in income?


Otto Emil Lang: Mr. Speaker, I have no intention of making a statement on the subject of storage in the near future.
February 26. 1970	COMMONS


Mr. S. J. Korchinski (Mackenzie):: A supplementary question, Mr. Speaker. In view of a Canadian Press report that an announcement is imminent, have other countries been consulted about the reduction of their acreage also, and what has been their reaction?


Otto Emil Lang: Mr. Speaker, this is one of the subjects I discussed in Washington. I think exporting nations with surpluses have realized for some time that this problem must be taken in hand. I am sure that international co-operation is going to be important in this area.



ACTION TO IMPLEMENT DONATION OF WHEAT BY FARMERS TO FEED METIS

Stanley James Korchinski: Mr. Speaker, may I direct a supplementary question to the Minister of National Health and Welfare. Has the minister consulted with the three prairie premiers or his counterparts in the three prairie provinces on the question of granting assistance to people who need it even though the effect of the policies of some of the prairie governments is that all able-bodied people will not be given assistance?


Hon. John C. Munro (Minister of National Health and Welfare):: No, Mr. Speaker. I have not had conversations with three prairie ministers on this point.



WHEAT-REPORTED POSSIBLE SALE TO ROUMANIA

Mr. A. B. Douglas (Assiniboia):: Mr. Speaker, may I direct a supplementary question to the minister in charge of the Wheat Board. Has the Wheat Board investigated the report of a possible sale of 200 million bushels of wheat to Roumania. If so, what was the result?


Otto Emil Lang: I have noted the press statements today concerning the proposal to sell Canadian wheat to Roumania for resale to other countries at prices significantly below present market prices. The interest by Roumania in the purchase of Canadian wheat has been investigated fully by the trade commissioner and during a recent visit of two commissioners of the Canadian Wheat Board to eastern Europe. I must say, Mr. Speaker, that I am dismayed at some of the comments in the press that support a proposal that would lower the price of wheat by up to 50 cents a bushel without in any way increasing sales. I fully support the Canadian Wheat Board's 21701-50i
DEBATES	4113
Inquiries of the Ministry rejection of such a proposal and I am confir dent that those supporting orderly marketing will share my views. As the minister responsible to Parliament for the operation of the Canadian Wheat Board, I am particularly annoyed at the suggestion that they are sitting in their offices rather than actively pursuing sales opportunities.


Mr. Speaker:: Order, please. I would think, if the minister wishes to make a statement, that it should be made on motions.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, may I direct a supplementary question to the minister, to which the answer I am sure can be very brief. In order to counteract the growing feeling of frustration and alienation in western Canada, will the minister ensure that the statement he makes includes a measure of substantial aid in a wide variety of fields for the depressed agricultural industry of the west?


Otto Emil Lang: Mr. Speaker, as we have indicated before, all aspects of the problem are being taken into consideration and I will certainly hope to include the entire problems of the agricultural industry in any statements which we propose to make.



WHEAT-RESPONSIBILITY FOR BOXCAR DISTRIBUTION-APPOINTMENT OF CONTROLLER

Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, may I direct a supplementary question to the Minister without Portfolio in charge of the Wheat Board. Since the minister has indicated that the allocation of boxcars to certain delivery points is the responsibility of the elevator companies and, in one particular case, the responsibility of the Saskatchewan Wheat Pool, will the minister tell the House who has the authority with respect to the distribution of boxcars at the present time? Is it the minister's department, the Canadian Wheat Board, the railways, the elevator companies or other bodies? At the same time will the minister indicate whether he is now prepared to appoint an over-all transport controller in order to alleviate this hodge-podge of confusion?


Otto Emil Lang: Mr. Speaker, the allocation of boxcars under the block system operates on a co-operative basis. A person on the staff of the Wheat Board is in charge of the directing, When cars are allocated to a particular block or to particular elevator company blocks it is
February 26, 1970

Inquiries of the Ministry the responsibility of the elevator company to decide at which delivery points these cars will be placed within that block.



HEALTH AND WELFARE


Mr. A. C. Cadieu (Meadow Lake):: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. Would the minister inform the House as to what criteria were used by members of the delegation his department sent to northern Saskatchewan to assess the need of Metis people for food? I ask this question, Mr. Speaker, in view of the fact that the delegation reported no cases of dire want despite the fact that one of the families visited, a family of five, had total provisions of two and a half loaves of bread, a bit of lard, some potatoes and seven eggs when visited later by a member of the National Farmers Union?


John Carr Munro: Mr. Speaker, what the people who went from the federal government found was precisely what the Metis leaders in the constituency found, that there was no starvation. There is no doubt they did not talk about abundance. There is no question that there are many people in need there, but there was no starvation. I think that was made clear by the leaders. If there was the type of deprivation and starvation that has been talked about, I think it would constitute grounds for emergency welfare that could override provincial jurisdiction which is paramount in this particular area.


Albert C. (Bert) Cadieu: In view of the evident problems in assessing the degree of direness of the want of these people, would the minister consider making public a detailed report of the circumstances found by the delegation during their visit?


John Carr Munro: Mr. Speaker, I will be pleased to bring the findings of the members of the delegation together and make them public.



ACTION TO IMPLEMENT DONATION OF WHEAT BY FARMERS TO FEED METIS

Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the statement made by the Minister of National Health and Welfare, may I direct a supplementary to the Minister without Portfolio in charge of the Wheat Board? In light of the
IMr. Lang.]

need of the Metis people that was described by the Minister of National Health and Welfare, is the minister now prepared to undertake to have the Wheat Board regulations amended sufficiently to enable groups of farmers who desire to do so to take some of their wheat and have it milled into flour for distribution to these families on a voluntary basis?


Otto Emil Lang: As I indicated the other day, Mr. Speaker, there are various ways in which farmers can, quite apart from the Wheat Board agents, have wheat milled into flour in a particular province. The problem with the Wheat Board agencies being used relates to the total problem of pricing of wheat in the area and the problem of supervision when wheat of different prices is going into the milling process. For some time the hon. member has urged that a two-price system be used in connection with wheat. A two-price system is in effect now and it would be practically impossible-


Mr. Speaker:: Order, please. I think this is debate.



USING OF FISHERIES PRODUCTS TO FEED METIS

Frank Howard: I would like to direct a supplementary question on this matter to the Minister of Fisheries who is not impeded by any organization such as the Wheat Board. Will the minister undertake to make an investigation with regard to surplus or even non-surplus fisheries products to see whether through the aegis of his department these products, which are high in protein, might be made available to the people in that area of Saskatchewan?


John (Jack) Davis: We will certainly look into this, Mr. Speaker.
,[Translation]



POST OFFICE


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I have a question for the Postmaster General and Minister of Communications.
Does he still believe that in the end he will have to request the Canadian armed forces to carry out the postal service in Montreal?
February 26, 1970	COMMONS


Eric William Kierans: I have never said anything like that, Mr. Speaker.


Mr. Andre Fortin (Loibiniere):: Mr. Speaker, I wish to ask a supplementary question.
Since somebody from the office of the Postmaster General and Minister of Communications said a few hours ago that the minister intended to seek the intervention of the Canadian armed forces in the postal conflict, would the minister indicate whether that possibility is being considered?


Eric William Kierans: Mr. Speaker, first of all, I would like to check the allegation of the hon. member for Lotbiniere.


EXTERNAL AFFAIRS
Mr. Bruce Howard (Okanagan Boundary):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Did the government make any new commitments to the Secretary General of the Organization for Economic Co-operation and Development during his visit to Ottawa on Tuesday and Wednesday regarding Canadian trade concessions to developing nations?


Mitchell William Sharp: No, Mr. Speaker. It was not
necessary to make any commitments to Mr. Van Lennep, the Secretary General of OECD, when he was here. We have already made a very substantial offer of concessions to developing countries in order to promote their trade.


Bruce Andrew Thomas Howard: I have a supplementary question for the Minister of Industry, Trade and Commerce. What are the so-called sensitive items that Canada is intending to withhold from proposed concessions at the May 21 meeting of the OECD representatives ?


Mr. Speaker:: Order, please. I think this is information of a general nature which normally ought to be given on motions by the minister.


Mr. Eldon M. Woolliams (Calgary North):: wish to direct this question either to the minister in charge of the Wheat Board or the
DEBATES	4115
Inquiries of the Ministry Minister of Justice. In view of the decision by a magistrate's court that the Wheat Board regulations in reference to quotas are unconstitutional, is the Department of Justice considering appealing this decision? If the minister is not prepared today, will he report to the House later on this decision which affects the whole jurisdiction of the Canadian Wheat Board?


Hon. John N. Turner (Minister of Justice):: Mr. Speaker, I have not yet received a copy of the judgment of the magistrate in the case of the Queen against Victor Jorgenson, to which I believe the hon. member for Calgary North is referring. The point at issue is of such importance that an appeal is being instituted immediately. In these circumstances I do not think it is proper for me to say anything more at this time.


Eldon Mattison Woolliams: A supplementary question, Mr. Speaker. In view of the fact this is a constitutional question affecting the whole economics of agriculture, would the minister be prepared to have his department pay for solicitors for the farmers and producers who will have to argue a difficult constitutional question before the high courts?


John Napier Turner: I think the Attorney General of Canada has an interest in preserving the validity of that legislation as well.


Eldon Mattison Woolliams: A further supplementary. I wonder if the minister would answer the question? I appreciate that the government will be represented, but is the minister prepared to recommend, because of the plight of the farmers and producers, that his department pay for counsel so their position will be put fairly and squarely before the courts?



LABOUR CONDITIONS


Mr. Gordon Ritchie (Dauphin):: I wish to direct a question to the Minister of Industry, Trade and Commerce. Can the minister tell the House whether the recent heavy lay-offs of workers in the Canadian automobile industry were in the same ratio or proportion as those in the United States?


Mr. Speaker:: It seems that the hon.
member is asking for statistical information. I doubt that the question is in order.
February 26, 1970
4H6	COMMONS
Inquiries of the Ministry THE CANADIAN ECONOMY
: INFLATION-IMPOSITION OF POSTPONED RAILWAY FREIGHT RATE INCREASE


Mr. David Lewis (York South):: Mr. Speaker, I wish to direct a question to the Minister of Consumer and Corporate Affairs arising out of an announcement that the railways will institute a postponed freight rate increase on March 1. In view of the fact the postponement of that increase was one of many which were made at the express request of the government, will the minister take steps to persuade the railways not to institute the increase at this stage in that it would create a very dangerous precedent?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I will have discussions with my colleague, the Minister of Transport. What we are concerned with is that any increase should be within the terms of the pricing criteria of the Prices and Incomes Commission.


David Lewis: A supplementary question, Mr. Speaker. In view of the fact that these increases are going to be implemented on March 1, only a few days from now, and there will not be any opportunity for studying whether they are justified by alleged cost increases, what steps will the minister take to get a further postponement in order to assure himself that the price increases are justified?


Stanley Ronald Basford: Mr. Speaker, it would have to be the Minister of Transport who would answer that question.



HEALTH AND WELFARE


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Some days ago I posed the following question, notice of which was taken by his Parliamentary Secretary:
Now that a consensus has been reached among the provinces regarding optometric services, can the minister advise when these services will be acceptable for cost-sharing payments under the national health plan?


John Carr Munro: I am not prepared to accept the terms of the hon. member's question that there is the kind of consensus that he alleges. In any event, at the last federal-


provincial meeting of health ministers it Was indicated that it is very doubtful as far as the federal government is concerned whether we can entertain any extensions until all the provinces are in medicare, which is not the case yet. We expect hopefully that by the end of this year they all will be.


Robert Muir: supplementary question. I suggest that if the minister would check with the provincial ministers of health who were at that conference they would advise him there was a consensus. May I also ask whether it is the intention of the minister and the government to make these services available to the people who reside in the provinces which are now in the national health plan?


John Carr Munro: No, Mr. Speaker. No decision has been made in that regard for the reasons I have indicated. The position of the federal government was made known to the provincial ministers: until all the provinces were in medicare under the original provisions of the bill we would not be prepared to consider extensions.


Robert Muir: May
I inquire as to the reasons behind the thinking of the minister and the government that all the provinces must be in the health plan before supplementary services can be made available?


John Carr Munro: It is our view-it is certainly my view-that the entrance of all the provinces in medicare would be greatly enhanced if we kept to the original concept before diluting it with other considerations which are of a controversial nature in some provinces.


Mr. Speaker:: Order. Before this develops into a debate I suggest we turn to another subject.



FORESTRY


Mr. Ralph Siewart (Cochrane):: I have a question for the Minister of Fisheries and Forestry. In consideration of the growing problems in the forestry industry which are reaching critical proportions, particularly in northern Ontario, due to an ever-descending price structure, is the government planning to establish a marketing board for lumber?
February 26, 1970	COMMONS DEBATES	4117
Inquiries of the Ministry


John (Jack) Davis: The answer is no. We are, how- Saskatchewan as requested by the premier of ever, looking into and, indeed, endeavouring that province, and are any other regions of to assist in the establishment of a future the country under consideration for designa-market for lumber in this country.	tion?



REGIONAL ECONOMIC EXPANSION


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion.
On March 18 next, the Chamber of Commerce of the Province of Quebec will hold a symposium on the development of northern Quebec. Could the Minister of Regional Economic Expansion tell the House whether he intends to attend this symposium or to delegate to it one or more officials of his department in order to become acquainted with the studies that will be carried out?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: First of all, Mr. Speaker, I will check to see whether I was invited; then I will see if time allows me to attend.



SAINT-HYACINTHE-ESTABLISHMENT AS DESIGNATED AREA

Hon. Theogene Ricard (Saint-Hyacinthe):: In
turn I would like to address a question to the Minister of Regional Economic Expansion.
In view of the high and rising unemployment rate in the St. Hyacinthe region, could the minister tell the House whether he has decided to set it up as a designated area?


Jean Marchand: No, not yet, Mr. Speaker.


J.-H.-Théogène Ricard: I wish to ask a supplementary question, Mr. Speaker.
About what date can we expect to have a decision in the matter?


Jean Marchand: Mr. Speaker, I am not yet thinking of any particular date.



DESIGNATION OF OTHER AREAS IN SASKATCHEWAN AND ELSEWHERE

Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a related question for the Minister of Regional Economic Expansion. Has the government yet reached a decision


Jean Marchand: We have not reached any decisions yet in this connection.


An hon. Member:: Will you ever?



UNEMPLOYMENT INSURANCE


Mr. P. B. Rynard (Simcoe North):: May I
ask the Minister of Labour whether he has received a telegram from the United Electrical Workers of Barrie complaining about the lack of action and the delay in connection with unemployment insurance claims?


Bryce Stuart Mackasey: Yes, Mr. Speaker, and due to the courtesy of the hon. member for Simcoe North I am able to report that all these claims have been dealt with, and those people who are entitled to retroactive payments have received them. In addition, I have asked for a full report in order to ascertain who is responsible-whether it is the officials of the Unemployment Insurance Commission, in which case disciplinary action will be taken, or whether it is the employers, as I suspect may have been the case, because their total records were not available at the proper time.


An hon. Member:: That is a good answer.



INDUSTRY


Roch La Salle: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce.
In view of the present difficult situation faced by the textile industry and knowing that thousand of workers of that industry are to organize a march on Ottawa to meet the minister, can he can tell us whether he will soon announce the policy of limitation of textile exports, which would benefit Canadian industry?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I am doing my very best to do so.
February 28, 1970

Inquiries oj the Ministry



SURCHARGE ON MEXICAN TEXTILES-EMBARGO ON CANADIAN NEWSPRINT

Ambrose Hubert Peddle: I have a question for
the Minister of Industry, Trade and Commerce. Will the minister advise us whether negotiations have been resumed between his officials and officials of the government of the Republic of Mexico in connection with the imposition of a surcharge on Mexican textile materials entering Canada and the placing by the Mexican government, in retaliation, of an embargo on all Canadian newsprint?


Jean-Luc Pepin: If these negotiations have not been resumed today I have great hopes they will be resumed very soon. The problem is a very difficult one. As hon. members know, the Mexicans last year increased their export of cotton yarns to Canada by about ten times. We had to act. We imposed the surtax in November last and the Mexicans have formed a very low opinion of our move in this instance. We feel we were justified, though, and we are trying to come to terms with them now.


Ambrose Hubert Peddle: Will the minister agree to make a statement in the House as soon as negotiations are resumed?


Jean-Luc Pepin: I will keep the House informed. [Later;]


Mr. David Anderson (Esquimall-Saanich):: My question is supplementary to the one dealing with restraint on textile imports. It is directed to the Minister of Industry, Trade and Commerce. What steps have been taken to make sure that the interest of the Canadian consumer is being represented at these negotiations with foreign governments?



HOUSING


Mr. John Gilbert (Broadview):: This question is addressed to the minister in charge of housing, Mr. Speaker. Having regard to the hon. gentleman's recent statement that he is encountering difficulties when it comes to talking to representatives of the municipalities on the subject of housing and urban affairs, may I ask whether it is the intention CMr. Pepin.]

to set up a national council on housing and urban affairs in an attempt to overcome these difficulties?


Hon. Robert K. Andras (Minister without Portfolio):: Once again the hon. member's premise is inaccurate. I think the statement to which the hon. member referred was simply an explanation on my part that the federal government was willing to talk to anyone with expertise and advice to offer in the field of housing and urban affairs.



HALIFAX-RELUCTANCE OF FEDERAL EMPLOYEES TO ANSWER QUESTIONS

['Orders of the day.']
Mr. Lincoln M. Alexander (Hamilton West):: This is a related question, Mr. Speaker. It has to do with a project of particular concern to the Halifax and Dartmouth area known as the Encounter on Urban Environment. Having regard to reports which indicate that federal civil servants were reluctant to answer questions addressed to them with regard to housing from people interested in this project, will the minister look into this matter with particular reference to the lack of co-operation shown?


Robert Knight Andras: I saw the press report, too. It was interesting, and I am trying to find out what happened in Halifax.



Mr. W. B. Nesbitt (Oxford):: I have a question for the Minister of Veterans affairs, Mr. Speaker. Bearing in mind recent announcements by the government that there will be a large budgetary surplus amounting to several hundred million dollars this year, would the minister be prepared to make an announcement as soon as possible that an interim payment will be made to those receiving war veterans allowances and pensions prior to a final adjustment based on the recommendation of the Committee on Veterans Affairs? I realize it will take some time, because of the lengthy discussion of the Woods report-


Mr. Speaker:: Order. The question has been asked and perhaps the minister would like to reply.


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: These pensions were increased
February 26, 1970	COMMONS
in 1964 by 10 per cent, in 1966 by 15 per cent and again in 1968 by 15 per cent. So our past is a guarantee for the future.


Some hon. Members:: Hear, hear.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I have a supplementary question. Perhaps the minister did not understand my question. I was asking whether he would be prepared, in view of the large budgetary surplus, to make an interim payment prior to final government decision on the matter? A great many of these veterans are quite likely to die before they get any increase, at the rate things are going now.


Jean-Eudes Dubé: Mr. Speaker, all of these possibilities are always under consideration and the government of Canada will always stand behind the veterans.


FINANCE
Georges-J. Valade: Mr. Speaker, I would like to ask the Prime Minister a question relating to a statement by the new leader of the Liberal party of the province of Quebec to the effect that if he is elected premier, he could get back the $200 million now levied by the federal government for the medicare scheme. Has the prime minister given this assurance to the new Liberal leader of the province of Quebec, and if so, can he tell the House when we can expect this policy to be implemented?


Mr. Speaker:: I entertain serious doubts as to whether the question of the hon. member is in order.


QUEBEC-EFFECTS OF FEDERAL GOVERNMENT REFUSAL TO REFUND $200 MILLION
Gilbert F. Rondeau: Mr. Speaker, I should like to direct a question to the Prime Minister.
In view of the serious financial problems now facing Quebec and of the statement made yesterday by the Quebec Minister of Finance to the effect that Quebec would become independent in 1974 if the federal government does not make any concession regarding the $200 million claimed by Quebec, does not the Prime Minister think
DEBATES	4119
Inquiries of the Ministry that he could serve the separatists' cause by refusing to make any concession or offer any alternative solution to Quebec?


Mr. Speaker:: Order. I feel that the comment I have just made for the previous question applies also in this case.


POLLUTION
Mr. J. M. Forrestall (Darimouih-Halifax East):: I should like to direct a question to the Minister of Fisheries. Has his department undertaken a survey of the potential damage from oil in the Cape Breton area and, if so, has the department arrived at a decision as to how it will approach the question of compensation? Will it be similar to or along the same lines followed in treating the problem in Placentia Bay?


John (Jack) Davis: Mr. Speaker, our officials are working closely with Dr. McTaggart-Cowan and the government task force's approach to this problem. They are endeavouring to assess the damage which has already occurred and which may occur as a result of oil spill from the Arrow.
Once the extent of the damage has been determined we will be in a better position to decide on the nature of the compensation.


SOUTH COAST OF NEWFOUNDLAND-ACTION TO MINIMIZE EFFECTS
John Howard Lundrigan: Mr. Speaker, my question is supplementary. Can the Minister of Fisheries say whether any action at all is being taken by the government to minimize the effect of the oil pollution on the south coast of Newfoundland and on the bird population in that area which is being threatened by extinction, according to reports.


John (Jack) Davis: No direct action is being taken at the moment, Mr. Speaker.


THE CANADIAN ECONOMY
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, several weeks ago as a result of an appeal by the government the producers of

February 26, 1970
Business of the House copper, after announcing a sharp increase in the price, agreed to postpone that increase until March 1. The minister said a week or so ago he would make an announcement before March 1 about a further postponement. I wonder whether he has something to report today?


Jean-Luc Pepin: Mr. Speaker, the deadline is the first of March. I expect to be in a position to make an announcement before then.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE

Gerald William Baldwin: Mr. Speaker,. I rise on a point of order. May I ask the President of the Privy Council, as Government House Leader, about the business of the House this week and next, and in particular whether item No. 74, which seems to be of such great interest to members on both sides of the House, is likely to be brought forward?


Mr. Macdonald (Rosedale):: Mr. Speaker, we propose for tomorrow item No. 71, Bill S-19, to amend the Parole Act, to be followed by No. 55, Bill S-12, with regard to the Quarantine Act. On Monday next we will call item No. 72, Bill S-20, in regard to textile marketing, to be followed by item No. 70, Bill C-187, in respect of northern inland waters. On Tuesday next the first item will be No. 29, the bill with regard to national parks, to be followed by item No. 49, amendments to the Oil and Gas Production and Conservation Act.
Wednesday next will be an opposition day. On Thursday we will call item No. 47, Bill C-163 regarding a Standards Council of Canada. Our view of the matter of the motion to concur in the Agriculture committee report is that after the very extensive debate that took place I believe a week ago today on the subject matter of the dairy policy we should continue with the rest of the legislative program.


Gerald William Baldwin: Could I ask a supplementary question? Can the minister indicate when the government intends to bring forward in this House a proposal to implement the report of the Special Committee on Statutory Instruments which contains one antidote to the spreading poison of executive domination?


Donald Stovel Macdonald: I would not expect to see that proposal before Easter.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to ask a question with regard to the announcement concerning House business just made by the Government House Leader. Can he now tell the House when the supplementary pensions benefits bill will be introduced and given first reading? I believe this is the title of the bill which has to do with increases in the pensions of federal superannuates.


Donald Stovel Macdonald: Yes, Mr. Speaker. I would hope the bill will be ready by about the middle of next week. Very possibly, with the consent of the House it can be given first reading next Tuesday or Wednesday.


Stanley James Korchinski: Mr. Speaker, may I ask the Government House Leader when he intends to introduce the Canada Grain Act amendments so they can be considered, since they may have an effect on the decision made by the agricultural committee on the question they are presently considering?


Donald Stovel Macdonald: This is on the agenda for before Easter and I expect to be able to meet that timetable. I am afraid I cannot say the exact date at the moment. I believe the bill is ready in draft form but has yet to receive final consideration.


Gilbert F. Rondeau: Mr. Speaker, I should like to put a question the government House leader.
Is he of the opinion that the report of the Committee on Agriculture presented last week in the House will be considered before the Easter recess?


Donald Stovel Macdonald: Mr. Speaker, as I said the debate that took place on this subject seven days ago was most interesting, but I doubt if we will have the opportunity to go on with it in the near future.


André-Gilles Fortin: If I understood correctly, Mr. Speaker, does this mean that the motion introduced by the Progressive Conservative party and the amendment that I moved are automatically allowed to stand and that we retain the privilege to make them consistent with Standing Orders?


Donald Stovel Macdonald: Mr. Speaker, it rests with you alone to make rulings concerning points of order.
February 26, 1970

[DOT] (3:00 D.m.)



GOVERNMENT ORDERS


Hon. Herb Gray (for the Minister of Finance) moved: that Bill S-8, to amend the Trust Companies Act, as reported (with an amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Herbert Eser (Herb) Gray: that the bill be read the third time and do pass.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my remarks will be very brief at this stage. The committee considered the amendment proposed by the government at some length. We heard from the Superintendent of Insurance who has responsibility for the surveillance of this Act. The committee as a whole was satisfied with the proposal. The companies affected by this proposal were represented before the committee and their representatives indicated their satisfaction with the legislation. As far as the official opposition is concerned, we are generally satisfied with this amendment.
There is yet, shall we say, one point that gives me some concern. That appears to be the degree of competition between the trust companies and banks with regard to the rates of interest they will pay on savings of the public. I think this gives us all a degree of worry. Certainly, the committee was concerned about the question of interest rates and their effect on inflation. I see that two provincially incorporated trust companies this very week have again raised their interest rates on long-term certificates. It would seem to me they are engaging in a nonsensical race, because if it is a case of one side moving up merely to pay more money to the depositors and then turning around and charging higher rates of interest to the borrowers because they have had to pay higher rates to the lenders to the trust companies, then this is merely a case of running around in a circle like a dog chasing its own tail. I think the House generally must watch this point very carefully.
Trust Companies Act
We have no power now to impose restrictions upon these companies. There is no statutory power at the present time or any body to check on these interest rates, but I should like to make this observation at this time because interest rates were raised just when we were considering this legislation. I believe one or two of my colleagues may have some brief remarks to make with regard to this bill. I, personally, have no other objection to these finance bills which are going through. Mind you, there are a number of the provisions which really have no great application. The trust companies have no objection to them. Four bills are coming forward in a parallel stream. I do not know why it was felt that all the amendments had to be applied to all of these Acts. Personally, I am not persuaded about this, but in any event I do not know that there will be any great damage or any great profit from this. We do not know. I think experience will have to tell us. We will have to check with the Superintendent of Insurance as the experience develops under these amendments.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, I should like to ask this House not to pass Bill S-8 and in order to assist the House I wish to move an amendment seconded by Mr. Knowles (Winnipeg North Centre). I move:
That the word "now" be left out, and that the words "this day six months hence" be added at the end of the question.
I should also like to ask my friend, the hon. member for Edmonton West (Mr. Lambert), to support this amendment, particularly in the light of the words he used in describing what is going on now in respect of the trust companies. I think his words were "a nonsensical race".


Marcel Joseph Aimé Lambert: But this will not affect it one way or the other.


Max Saltsman: Mr. Speaker, if this bill passes this entire process will be accelerated because one purpose of the bill is to give additional powers to the trust companies to attract to themselves more funds with the same amount of capitalization. If the hon. member for Edmonton West thinks the race is now nonsensical, wait until the legislation is passed and the trust companies start competing for money with the other institutions. The interest rates of these companies will rise and I submit the effect of this can be nothing but ill because it will cause interest rates generally in Canada to rise very substantially.

February 26, 1970
Trust Companies Act
When the bill was first brought before the House we heard from the President of the Privy Council (Mr. Macdonald) that this bill was needed in order to make more mortgage money available. He seems to have toned down that aspect, because we do not hear it too often any more although it was raised in the committee by the hon. member for Windsor (Mr. Gray). However, I think it is an entirely discredited argument, particularly in view of some of the statements emerging from the trust companies, as they anxiously await the passage of this bill, which indicate to their investors and depositors that they will now have increased opportunities in more lucrative fields than mortgages.
I suggest that this bill will not increase the amount of money available for mortgages in this country by one iota. To the extent that it increases the amount at all, it will be at substantially higher interest rates than now exist. So I cannot see why the government is so determined to have this bill moved through the House and receive approval. I suspect there is a reason for the government's concern; that is, that the future of the trust companies is not very secure under the present legislation. The trust companies are finding it very difficult to compete against the hanks as a result of the increased powers which came to the banks under the new Bank Act and are seeking new avenues for investment and new ways to increase the leverage of their existing capital. I can understand that the trust companies are anxious to have this legislation go through. They are running a business and are anxious to see it do as well as possible.
Our responsibility, however, is something else. Certainly, we are not opposed to anyone in society doing as well as possible. However, we are also here to represent the public interest and to ask ourselves whether the passage of this particular measure, as beneficial as it may be to the trust companies, is really in the national interest. I submit it is not in the national interest and therefore that this bill should not be passed.
There is another reason this bill should not be passed. A complete examination is needed into the role of the financial institutions in our society. This is long overdue. Yes, we did have hearings in committee and we did look at the legislation but all that went on there was a tinkering around, a little change here and there and an examination of things as they are. It is really necessary to go much beyond this tinkering with the financial insti-
tutions. We must ask ourselves whether the time has come when the way in which we look at our savings, the way in which we gather our savings and the uses to which we put them, should not be changed. We must ask ourselves whether these institutions fit into a modern society and its needs.
Whatever value these institutions may have had in the past I think has been outgrown or our society has outgrown them. Certainly, in the past they provided a place in which to put savings safely because the reputation of our financial institutions in that regard has been quite high. It is true we have subsidized some of these institutions in the past, such as the life insurance companies, which have grown at the expense of the public purse. The way we looked upon it in the past was that private goods were the sort of be-all and end-all of the activities of our society. But again, it is quite apparent now that there is far more to our society than just facilitating the exchange of private goods. There was a time when the market was less rigid than it is now, a time when the market responded to investors and savers. That is no longer the case. We have gigantic institutions today which tend to dominate and distort market decisions. Therefore, another look must be taken at the way these institutions operate in our society. No one will say there is not a continuing role for private institutions.
[DOT] (3:10 p.m.)
I think there is a continuing role for the trust companies and the insurance companies, but certainly not as the major determinant of policies in the market place. I think that they will perform useful and specialized functions. But I do not think that the present powers of the trust companies should be enlarged, certainly not until there is a complete re-examination and evaluation of the role that all the financial institutions are playing in our society. Insurance companies gather a tremendous amount of savings which, I suggest, could be better gathered by governments of various kinds. They could be more efficiently gathered and allocated. If insurance companies want to insure the exotic, like Marlene Dietrich's legs, that is all right for them; but when we are talking about insuring the basic needs of people, what sense do these hundreds of competing companies make any more?
What is wrong with the institutions as they now stand? First of all, they do not respond as effectively as they should to fiscal and
February 26, 1970

monetary policies. We have very little control over their pattern of investment, and I think we should have more control over it. We have very little control over their pattern of spending. It is a gratuitous insult when, in appearances before the committee, these spokemen are asked what they intend to do about curtailing their spending-particularly after they have just made a statement about the iniquity of government spending and about how restraint has to be exercised-and they say it is not their job; they do not really know what you are talking about. Restraint is something that should only apply to the goverment and to public policies, but hands off private policies; there should be no restraints in the private sector, they say. I do not want to be too hard on them, and I think that they honestly cannot see the point.
These companies think they have an absolute chartered right to do as they please regardless of the effect on the rest of society. If there is to be restraint, it is not their responsibility and it should always be in the public sector. Their responsibility is to make money for their shareholders. This is a kind of responsibility, and perhaps we should not quarrel with it if it is carried on to a limited extent, but when these trust companies and other financial institutions are the chief gatherers of funds in our society, the chief gatherers of the savings of the Canadian people, then the responsibility has to go beyond the making of profit for these institutions.
The banks respond to monetary policies through the Bank of Canada, through changes in the reserve, and through moral suasion. The government does have a considerable say in how banks operate in this country. This is less true of trust and other financial institutions. It is true that the trust companies have to be responsive to the Superintendent of Insurance, but his responsibility is mostly in the area of ensuring the safety of investors and depositors and of ensuring that these institutions are solvent. He has no terms of reference regarding the public interest, and yet such terms of reference should exist. At the very least, every financial institution in this country should be as responsive to the monetary and fiscal policy of the government as are the banks. Perhaps they should be made to be responsive through the Bank of Canada or, if not through the Bank of Canada, then through another suitable instrument. Those instruments do not exist at present, and therefore this bill should not pass.
Trust Companies Act
It may be argued that this bill only enlarges their powers. It does not diminish their powers in any way, so by not passing it we will not have diminished their powers. Some attention should be given to this argument. It is true that if this bill does not pass, the trust companies will still be doing the things they have always done. But I suggest that by passing it we simply throw more fuel on the fire and make the situation even worse than it is now. Surely, there can be no argument in favour of compounding a bad situation. We should remove the existing situation, but until we have an opportunity to do that the least that should be done is to ensure that it is not made any worse, particularly when the government is calling for restraint.
If we look around at our society and ask ourselves what are the real needs of our society and what are the pressing priorities facing the Canadian people, the answer is pretty obvious. We do not have sufficient housing for the low income people. There is no shortage of housing for the rich in this country. Those who have adequate money will find a house. But there is a shortage of housing for those with limited incomes, and passing this legislation will not make any more money available to those who need housing but find themselves with limited resources. The only way of dealing effectively with this kind of problem, if we are serious about any notion of a just society, is to take some of the money from the private sector, put it into the public sector, and make housing available to people who need it because they do not have the means of getting housing. Only public responsibility can ensure that housing will be available for all our people.
We cannot go on ignoring the housing needs of 20 per cent, 30 per cent or 40 per cent of our population. It is unconscionable in a modern and so-called affluent society to see increasing numbers of our people-and it is no longer the poor alone, some of them are supposed to be better off than the poor-unable to finance housing or, if they can raise the down payment, unable to pay the kind of interest rates that prevail in the market. To ask them to approve a piece of legislation that will only compound and worsen their situation is not right. They would want me, as their representative, to stand in this House and say the things I am saying to you, Mr. Speaker.

February 26, 1970
Trust Companies Act
The government of course is not looking at the cities at all; it does not even know the cities exist. However, if we look at our cities we find some cities where the quality of life is deteriorating, where things that could be beautiful and exciting are collapsing from vulgarities, from inadequacies in transportation and planning. The private sector will not correct these ills. It is the private sector that created them. If the cities are to have adequate public transportation, if there is to be redevelopment, then it is only through the work of the municipal, provincial and federal governments that this will be accomplished.
Sometimes the justification for all these hundreds of competing institutions is that competition is a good thing. It has been demonstrated that whatever these institutions do w.th each other, it certainly does not conform to the classic concept of competition.
[DOT] (3:20 p.m.)
One trust company raises its rate and it is only a matter of days, sometimes only a matter of hours, until the others follow suit. They are all paying the same amount for the same kinds of things and charging the same amount for the same kinds of things. If you ask them they will say, "That is competition; we have responded to competition." But I have always found it difficult to understand why, when responding to competition, everybody ends up with the same price. It seems to me that the rule of competition is to provide alternatives in price, but the new rules of competition mean that everybody will end up with the same price. If everybody will be at the same price what is the use of having these institutions duplicating each other's services, and having separate offices on almost every street corner in our cities? We should be more effective in the use of our resources than that. If you go to one and it is out of money, the chances are that the others will be out of money also.
When you come to the insurance companies, you find they are all working off the same mortality tables. One has a $25,000 package with certain kinds of options, and another has a different $25,000 package with other options, but if you examine them you find they are basically the same thing. We have a lot of talented people as insurance salesmen. I know a lot of them, but they are chasing each other around trying to persuade people that this deal is better than that deal. The person who buys hasn't an idea which is better, because the insurance agent's job is to

sell insurance and not to inform people any more than is necessary in order to sell insurance.
When I looked at this legislation, my first impulse was to seek ways of devising amendments that would make these institutions more responsive to public policy, and have them act in a way that would be more in line with the needs of society. I drafted a number of amendments along this line, then looked at the legislation again and gave up the amendments. I think the situation is really too hopeless to tinker with these institutions any more. We need a thorough going examination of the role of our financial institutions.
All things being equal, I for one like to see a lot of things remain in the private sector. I am always reluctant to advocate that some things be moved from the private sector to the public sector unless a good case can be made for it. But I think in this particular instance of the trust companies, the insurance companies and the finance companies-people who gather the savings of this country-we have to start thinking in terms of bringing a lot of their functions under public management, but leaving them with some of their functions that do not involve the public interest to the same extent.
The question is often asked, can you trust your government. It is as though the government were some foreign country. I would suggest, Mr. Speaker, that if you cannot trust your government you cannot trust anyone. Governments at least can be replaced if they do not behave properly or do not have the approval of the people. It is a little more difficult to do that with institutions over which you have no control.
Government has a good record in the field of insurance. We, in Canada, have been pathfinders, if you will, in this direction. I can think of no better example to bring to your attention, Mr. Speaker, than the automobile insurance program in Saskatchewan. I would not dare to repeat the names it was called, when it was first suggested, among the very people who sit in office today in Saskatchewan. Yet, they have continued this program and would not dare do away with it because it has proven its value. Other provinces are now looking at it, and before long every province in Canada will have a form of automobile insurance along the lines pioneered in Saskatchewan. It is a matter of great regret that the federal government does not take some initiative in this area and work with the provinces to bring in a comprehen-
February 26. 1970

sive national plan of automobile insurance. There are not many voices raised any more against that form of insurance. Even its greatest detractors now accept its value.
There is another area of insurance, and again this was pioneered in that much-maligned province of Saskatchewan, hospital insurance. There is not a province in Canada that does not have it, and I doubt whether there is 5 per cent of the population of the country who would do without it any more. It has proven its value over and over again, and it is a great example of the kind of thing that we have been able to do in the field of insurance through public involvement.
During one election campaign when I was knocking on doors and talking to people about the issues, a man came out quite angrily, waving his finger at me, and telling me about the dreadful hospital insurance program. This was in the early days before people got used to it. He was telling me how terrible it was, how disastrous it would be, and how costly it would be. He said that everything the government touches costs more money, rates go up, and the whole thing becomes more inefficient. He said that when this scheme was in private hands it was very efficient. I did not really know the answer to his particular complaint, but I had a chance to find out. I wrote to the Ontario Hospital Commission to ask what their costs of administration were. Their costs were less than 2J per cent. Some 974 cents out of every dollar they collected went for actual hospital insurance, for helping people who were ill. I also looked up the figures of the cost when a private hospital insurance company operated in the province of Ontario. It ran from between 27 cents to 37 cents out of every dollar collected, which is a most compelling reason for the kind of public program that developed.
I am not going to say that just because the government took over that this insurance program it was more effective. Perhaps we could have accomplished the same thing by giving a monopoly to a private insurance company. The real reason for the inefficiency of the private carriers was that senseless, idiotic competition of their's, of which they were so proud. If we had selected a responsible private insurance carrier, and there are a lot of them, and said, "Here is a monopoly. You take charge, except for two things"-if there is going to be a monopoly, then it should be the government that has-
Trust Companies Act


Mr. Speaker:: Order. The hon. member might allow me to interrupt him for just a moment. I have some misgivings as to whether the hon. member is not getting away to some extent from the principle of the bill before us. He has been speaking for the last few moments about automobile insurance and health insurance. I appreciate there is a relationship with the bill, but the relationship seems to be a bit distant. The hon. member may want eventually, to return to what appears to be closer to what ought to be discussed on this bill.
[DOT] (3:30 p.m.)


Max Saltsman: As I pointed out in my opening remarks, we had two objections to the legislation. The first one was that the passage of this bill would be inflationary and the second one was that we needed to examine the interrelationship and the role of the finan-c al institution in our society. I shall try not to stray too far from those two points that we wish to make.
It is not my intention, Mr. Speaker, to retract these remarks. We have spoken on this subject before and we have said some of these things before. It is, however, a last opportunity for us and it is for this reason that my colleagues and I wish to speak. It is the last opportunity in the sense that no longer will it be possible for us to examine these bills relating to financial institutions in private members' hour. Whatever the difficulties may have been with the private members' hour procedure, whatever the criticism may have been, at least it provided an opportunity to take a look at some of these matters.
If we look back over the history of these trust companies, we can see that many of the things we now accept and approve were raised in private members' hour. Now, these bills will not come to private members' hour any more. The minister can approve these changes in financial institutions without recourse to Parliament. I do not know when it will be that Parliament will again have an opportunity to examine this legislation, and some of the other legislation affecting other financial institutions. Therefore, in closing, I would urge hon. members to support the amendment we have before the House. If this bill is passed, I am very certain that it will not be of help to the general policy of restraint; it will be inflationary and in the long run will work against finding a more reasonable and rational approach to the organization of the financial institutions of this country.

February 26, 1970
Trust Companies Act [Translation]


Léonel Beaudoin: Mr. Speaker, I should like to comment briefly on Bill S-8, An Act to amend the Trust Companies Act.
As it was explained, the aim of this bill is to give additional investment powers to trust companies, set stricter control over those which are in a precarious position, extend investment restrictions in cases of conflict of interests and, finally, establish a system of letters patent for incorporating new trust companies and amending the charters of existing companies.
It is known that under the present act, a trust company can hold and invest trust funds, act as executor or security transfer agent, administer and invest cash deposits, or hold and administer real estate.
Those functions are important, because in Canada there are nine federally incorporated trust companies coming under the federal Superintendent of Insurance, while there are ten provincially incorporated trust companies also coming under the Superintendent of Insurance. Those trust companies alone are administering more than $3.5 billion,, while some 40 trust companies coming under provincial jurisdiction are administering assets amounting to almost $11 billion.
Those companies have a great influence on the economy as a whole, because they can invest their assets, their reserve funds, their social capital and their deposits. Most of the investments of trust companies are guaranteed by the Canada Deposit Insurance Corporation Act.
As has been done for Canadian and British insurance companies through recommendations in bills S-6, and S-7, from now on trust companies will be able to make mortgage loans up to 75 per cent of the real estate value, provided the surplus of the loans be guaranteed by a government agency or an insurance company.
Mr. Speaker, we support the legislation which makes more money available to the public while giving it a better protection.
As in the case of insurance companies, Bill S-8 also enables trust companies to establish subsidiaries which will be able to manage mutual funds or mortgage loans companies.
The proposed amendments to the act provide stricter conditions regarding loans to directors, administrators and other important shareholders.

I believe this is a very reasonable guarantee for the protection of the public.
With a view to ensuring even greater protection to the public, the proposed amendments will enable the Superintendent of Insurance, on advice from the Minister of Finance (Mr. Benson), to better control the operations of these companies, especially when they are in financial difficulties, when they exceed their borrowing powers or when their liabilities surpass their assets. In such cases, the Superintendent of Insurance may cancel their permits.
We are in favour of these provisions as well as the one calling for the yearly renewal of the permits.
Among other substantial changes that we approve of, I would like to mention the obligation for these companies to publish a quarterly statement of their liquidity position and a half-yearly statement of their investments and loans.
As I said earlier, new trust companies are incorporated under letters patent. However, contrary to what was being done, that is, with respect to the joint stock capital, when each case was considered on his own merits, which led to some kind of favoritism or discrimination, the proposed amendment to the act, which we support, will have the effect of doing away with those anomalies, because, from now on, every trust company, in order to start in business, will have to have a minimum capital of $1 million.
We therefore support the provisions of Bill S-8.


Mr. Steven Otto (York East):: Mr. Speaker, I was amazed, and I am sure all the banks would be amazed, to know that the defence of their monopolistic position comes from the hon. member for Waterloo (Mr. Saltsman) who has just spoken. He seemed to indicate that there was nothing wrong with allowing the banks to have almost a monopoly in the area of finance, but he seemed to think that there was something very wrong with this bill. May I just take a moment to put him straight by saying that the moral suasion that he speaks about that we, the Canadian people, have on the banks or that the government has, is a myth. Consider that banks have practically relegated to the lowest priority their real purpose of financing commerce and trade, and have gone helter-skelter into the good old usury market of Chargex, Scotiacards and whatnot. At 34 per cent a
February 26, 1970

year, why not? Where is this money that is supposed to be helping business and industry? Where is the government pressure that is supposed to be exerted on these banks? With all due respect to the hon. member, I would say that any bill which broadens the role of a financial institution to make it closer that of the banks is very much in the interest of Canada.
I think the hon. member misses the real point of this bill, that it is no longer necessary to go through the whole parliamentary system to incorporate these trust companies. It can now be done, under this bill, under letters patent. We hope to see a great many trust companies getting closer and closer to the role of a bank, because if the banks have just thrown away their prime purpose somebody has to absorb it. It is true that trust companies originally were what their name suggests. People deposited moneys on trust and their signature was required for every investment outlay made by that trust company. In short, the companies administered trusts. Today, this has all changed. Trust companies are becoming more and more like banks. I do not share the apprehensions expressed by the hon. member who felt we ought to move carefully because trust companies are becoming more and more like banks. I think this is good and cannot see how anyone can support the amendment put forward.
[DOT] (3:40 p.m.)
The hon. gentleman spoke about mortgage money, and suggested it would be in short supply. He is right. Banks are not entering the mortgage market and neither are the insurance companies. Insurance companies and mutual companies have to invest in equities. They have diverted money from the mortgage market because even at current rates of interest they do not find it attractive. Trust companies may follow suit. On the other hand, with passage of this bill we shall broaden the scope of trust companies and they may be able to alleviate some of the shortage of money in the mortgage field.
May I bring to the minister's attention two clauses that will have an important bearing on the future of trust companies. One of those is clause 24, which says that trust companies shall not lend more than three quarters of the value of any property on a mortgage. Having been involved in the business of construction over many years and having seen how trust companies operate, I cannot see why there should be legislation to limit the amount of a
Trust Companies Act
mortgage loan. Most businesses lending money on mortgages govern their lending by considering possible losses. For instance, if the potential loss on any loan, or the risk of loss on any loan, is 10 per cent of the value of the property, the loan will be up to a maximum of 90 per cent of the full value of that property. Is the minister saying that mortgage losses are reaching proportions like 25 per cent of equity in real estate? In other words, is he saying that property values have dropped so much that it is absolutely essential, for the protection of depositors, to limit mortgage loans to 75 per cent of the real estate value? Surely, he does not mean that.
Let me elaborate further. This clause will pervert the market, if I may use that term, because mortgages will be made available at rates of interest higher than those current in the market. Why do I say that? For example, Mr. Speaker, a mortgage company may say, "I am sorry, much though we may want to give you a bigger mortgage for your project, we are limited by law to lending you up to 75 per cent of the real estate value. However, you can borrow another 15 per cent of that value from someone else on a second mortgage, and we will lend you money on that mortgage." You see, Mr. Speaker, the only difference is that the second mortgage costs the borrower 16 or 18 per cent. The trust company is entitled to lend money on a note, because after all the mortgage is guaranteed by a note. So, the trust company can say, ''We are not putting any mortgage money out but merely guaranteeing a note, which we have the right to do." The trust company makes the profit on the mortgage, that is true. But it is not the depositors who benefit; it is the shareholders.
In the meantime, because of this provision in the bill restricting mortgage loans to 75 per cent of value, the borrower has had to borrow second mortgage funds at 16 or 18 per cent. We ought to hear some rational explanation as to why that limit has been included in the bill. After all, for the last 25 years lenders have lost practically nothing on mortgages. I think the CMHC experience shows that not more than 1.7 per cent of funds lent are lost. Why should mortgages, then, be limited to 75 per cent of value? I think the minister ought to review this. If this bill is not amended, perhaps there ought to be an amending bill.
May I also deal with clause 68 which gives the trust companies the right to hold land. Theoretically, of course, there is nothing wrong with that. After all, trust companies

February 26, 1970
Trust Companies Act
should be able to hold land for their shareholders. Let me tell the minister what actually happens. The trust company which is to put up mortgage money says to the builder, "Look here, we will give you mortgage money at 10.5 per cent, 11 per cent or 12 per cent, as the case may be, but before giving you this mortgage money we want you to promise us a 50 per cent equity in your project." You see, Mr. Speaker, insurance companies are doing this all the time. Today, when apartment buildings are erected in Toronto and most other centres in Canada, the lending institution putting up the mortgage money demands 50 per cent of the equity in the building. Consequently, over the next 25 years these companies will pile up millions and millions of dollars. In the case of insurance companies, the money will go to policyholders. Most insurance companies are mutual insurance companies. But in the case of trust companies the profits will not go to the depositors who put up the money, but to the shareholders.


An hon. Member:: The hon. member should support the amendment.


Steven Otto: Consequently, in a very short time such trust companies will wind up with fantastic holdings, all at the expense of those who rent the offices or apartments. I should like to see a clause included in the bill to the effect that the equity in any property acquired in this matter shall be the property of the depositors. In other words, if the competition for mortgage funds is so fierce that builders or owners are willing to give lenders a 50 per cent share in the new building, it is the depositors who put up the necessary money in the first place who ought to benefit and not the shareholders.
Many things about this bill are not perfect though by and large I welcome it because it will open new avenues. Trust companies must be adequately regulated. Competition has been the great regulator of the money market. It is competition that ultimately will determine whether those who deposit money with trust companies or banks shall benefit more; but there must be some sort of sense and order to all this, and that is why I welcome this bill which provides that trust companies will not be incorporated as a result of bills passed by the House of Commons but through letters patent. In time, as a result of competition, I hope the trust companies will be able to play a beneficial role.


William Gordon Ritchie: Mr. Speaker, may I say a few words on this bill which I

have found quite complicated. I read the proceedings in the Senate with some interest as well as the explanations given by the Minister without Portfolio (Mr. Gray) and the officials before the committee. This bill is a companion to four bills being brought up to date as a result of changes in our economy that have taken place since those acts were first put into effect a considerable number of years ago. This particular bill seems to be divided into two main areas. The first is to make the act more workable, to make the companies more efficient and to improve control by the government agents on any inclination to fraud or mismanagement within the companies concerned. The second, hopefully, is to provide more mortgage money in the future and more money for housing especially.
[DOT] (3:50 p.m.)
The liabilities of trust companies have grown from 4.4 per cent for chartered banks after the war to over 15 per cent now. They have been prevented by the Bank Act from competing directly with the banks in many fields.
The Porter Commission, many of whose recommendations were incorporated in the Bank Act, had recommended that the trust companies be allowed to enter the unsecured personal and business loan field; that they be given direct access to the clearance system, and be required to hold reserves with the Bank of Canada. These recommendations have not been put into effect. If they were, there would seem to be little to differentiate them from the banks. However, some trust companies, even if there were changes to make them more competitive with banks, would still likely specialize in estate and trust management and avoid the highly competitive banking business. The record of reasonable success of trust companies would indicate they have been giving competition to the banks. They have demonstrated that the Bank Act was probably overly restrictive previously, and that banking services were not adequately developed.
With regard to the proposed amendment, the suggestion to incorporate these companies by letters patent seems to be a reasonable one, as is the broadening of investment powers. Permitting companies to make mortgage loans in excess of 75 per cent of the value of the real estate, where the excess is insured, seems to be reasonable. Also the Provision to permit companies to make investments at their own discretion up to a
February 26, 1970

maximum of 7 per cent, the so-called basket provision, seems useful. Of course companies will be empowered to make loans guaranteed under the Canada Student Loans Act, the Farm Improvement Loans Act, the Fisheries Improvement Loans Act and the Small Businesses Loans Act. This seems a good idea.
I now wish to comment on the amendments that would permit investment outside of Canada if the companies are doing business outside of Canada, provided the assets retained in Canada would also cover liabilities in Canada. I think this is a reasonable amendment. It indicates that Canada is not in a financial vacuum. There is much foreign money in Canada and the flow of money is a two-way street. This provision will be adequately protected by the Orders in Council that govern this amendment.
I now wish to deal with the possibility of more money being made available for housing. Although the government is hopeful, there is no real indication that this will necessarily be so. The trust company officials indicated to the committee that they were running on a pretty thin line and that competition was quite intense. We do not know if this change will increase the amount of funds flowing into the mortgage market, especially in the residential field. The bill does permit the companies to expand their investment in this area, but does not guarantee that they will do so. Whether companies will be induced to put more funds into mortgages will depend on the rate of return they can expect to receive, relative to the return on other investments.
The government's hope that this bill will provide important sources of funds for housing is all very well but it will not ensure, as the government thinks, an expansion of their lending activities. If the companies do put funds into medium term securities that are considerably more liquid and offer a competitive rate, there will be no incentive to tie up more long-term money. The bill gives the insurance companies, the conventional lenders, and trust companies, further latitude but it does not guarantee they will take advantage of the new provisions. Also, the record of the life insurance companies in the mortgage field has not been particularly exciting.
In addition to making money available for housing through the Trust Companies Act and companion bills, we also have to consider whether housing is a social problem and whether it should be treated somewhat more directly in a social light. I suggest the govern-
Trust Companies Act
ment should take a good look at the experience in Germany in the mortgage lending field for housing. It is true in every country that the demand for housing varies a great deal depending on the growth of the population, the growth of cities, the moving around of people and the expense of building. However, the present system of mortgaging houses in Canada is not adequate. Possibly we can learn from the experience of Germany which provided a minimum loan at a minimum rate for prospective home owners.
With this in mind I wish to say that, while I support the bill, I have some reservations about its real effect on providing more mortgage money for housing. If this is the only means whereby the government is studying the problem and providing money for houses for Canadians, it is a sad commentary on their effectiveness.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I was very interested in hearing the government member a few minutes ago mention the fact that apparently there was no inclination on this side to give the trust companies the same powers as the banking institutions. This may be partly true, but not entirely.
I remember with a great deal of regret that in Canada we used to have a law limiting the banks to a 6 per cent interest rate. We had that through thick and thin, in the periods when the banks were not doing too well and subsequently when they were doing very well. The fact that we had in the Bank Act a fixed interest rate had a great effect on what was done by trust and loan companies as well. I am not opposed to having the same strong controls on the trust companies as we have on the banks. I believe we must have them, but I do not think there is any need for proliferation of all these institutions. Competition, Mr. Speaker, is non-existent.
I think it is safe to say the only difference between the trust companies is whether this week one is giving away stainless steelware, while another is giving an electric blanket, a coin set or whatever may appeal to the manager. I hope the merchandise they are giving away is being purchased at wholesale prices because the trust companies may now be getting into a totally new field, that of merchandising. Most of us when we walk into a bank to deposit our cheque, small or large, know that all this really means is that this money is being put into the bank. A couple of days later we issue cheques for the amount of money deposited. All the banks have done is

February 26, 1970
Trust Companies Act
distribute our wealth. All we really do is look around to see how many people are in the bank or in the trust company. When I see dozens and dozens of people employed there-I know they are underpaid but even if they get two for the price of one it amounts to the same thing-I realize there is a lot of monkey business going on in the operation which does not involve my deposit or my withdrawal, I am sure.
[DOT] (4:00 p.m.)
The need for more than one or two banks is not very apparent to most people. I can understand that sometimes a customer may not like the bank manager or a particular teller, or somebody else on the staff. These are personal matters. Some of the staff in one bank may be more attractive than in another. The personalities may be different, but the function is the same. I believe that when my farmer friends go into a bank or trust company and ask the accountant for a loan for a certain purpose, and get their requests turned down, they are unlikely to meet with better success if they go across the street and try again. This is because the circumstances are identical. They can play around with different people and use different words, they can even use a different language, but the conditions are identical and as a result there is no real competition. If 1 wanted to be facetious I might say this was true of all the churches, too. They are dealing in the same merchandise; they have the same product to sell; the only difference is in the surroundings and in the methods used. No one would want to put them all into the same box, I grant that, but merely increasing the number would not lead to any advantage.
The hon. member who spoke before me said this legislation was being brought in because changes were taking place. That is not true. That is not why this bill is before us. It is before us today because two or three Members of Parliament delayed the business of these private companies for a long time. They were the victims of a set of circumstances. They were being used, and it was difficult to pass these bills. That is why the present proposals are being made. While I am sure many changes could be made in the way in which we deal with this legislation, I am by no means sure that the method now advocated is the right way of doing it. I am not convinced that sufficient consideration has been given to some of the criticisms which have been advanced in the past.

Surely the department dealing with insurance, the department administering the trust and loan companies, must be concerned about the proliferation of these companies. It is my impression that if three or four of us here were as smart as the Senators we could get together, chip in some money, and set up a trust or loan company of our own. It is possible that we would need time for contemplation, though-something we do not have in this part of the building. I have an idea that if we did we could become rich in a very short time. It is not difficult to see upon reflection that a very small amount of money, relatively, is invested by those who form these companies. To be a Senator, of course, one has to be wealthy. A man can get into the House of Commons if the seat is out of his pants or if he does not have a penny in his pockets, but to get into the other place a man has to have visible means. He has to have $5,000. With this amount of money he is able, eventually, to become a director of trust companies, loans companies and, sometimes, even of banks. It seems to me we in this House should have more time for contemplation or a little more affluence. We could probably set up our own trust and loan companies and become well off.
Upon further consideration, though, it occurs to me that this is not really the reason I was sent here. It is not really the reason any of us were sent here. I do not seriously imagine, therefore, that I shall ever embark on the establishment of a loan or trust company. I think most hon. members here would agree that they do not come to Parliament for that purpose, either. So they will probably concentrate on the legislative rather than on the economic side of these bills.
Looking at this measure I find no way of limiting the number of companies. If we were concerned with other kinds of business I am sure we would ask why there should be more of them, or, at any rate, why there should be more than a certain number of them. Why, for instance, should we allow more than three companies to exist? In the case of the banks we have decided that six is the proper number, together with two fringe banks, banks without full privileges-one is limited as to its expansion and the other is limited as to its jurisdiction. We have limited the number, and this has created no hardship.
Even the farmers do not complain-and farmers talk a good deal about their grievances. I have never heard a farmer say: After the fifth bank refused me a loan I got it from
February 26, 1970

the sixth. Mr. Speaker, if he has not got a loan from the second bank he will probably never get it. I think this is true of trust companies also. Expansion beyond five or six will do no good as far as members of the public Eire concerned.
We have not laid down what function the trust and loan companies will perform. Surely, they are not being established merely in order that a man can go in and cash a cheque in the evenings or at other times when the normal banks are closed. Is the minister really of the opinion that it is in our interest to establish more near-banks? Why has the decision been taken to expand the jurisdiction of these companies and the role which they are permitted to play? We are making them into something very near banks, yet we have not placed any limitation on the rates they may charge for mortgage money; we have placed no restriction on the direction in which they can place their loans. We have laid down no conditions on behalf of the Canadian people. And I am sure the minister could not care less. He has been told by others, I am sure, that this is what must be done. That is his interest.
The Canadian people, on the other hand, are concerned to see that some types of mortgages are made available at reasonable rates. I believe the guarantees provided in this bill make it possible for the companies concerned to borrow money and lend it at lower rates than those presently charged. For these reasons I am very much in favour of giving this measure a six months hoist and looking at the whole subject again. This time, we should consider it from the point of view of the Canadian public rather than of certain rich financial institutions.
[DOT] (4:10 p.m.)
I support the six months' hoist and I hope other hon. members of the House will consider it. Having regard to the statement made by the previous hon. member regarding changing of conditions, I say they have not changed except that it was decided Parliament was not the place to handle petitions for incorporation but that they could be handled much easier under the Canada Corporation Act. I agree with the hon. member for Waterloo (Mr. Saltsman) that this may be the last time we will be able to look at this subject, and six months consideration is not too much.


Herbert Eser (Herb) Gray: Mr. Speaker, I thought it might be useful if I attempted to deal with some of the
Trust Companies Act
points made by other speakers at this time. The hon. member for Waterloo (Mr. Saltsman) attempted to claim that the proposed amendments would have an inflationary effect. I responded to a similar argument by the hon. member when this legislation was being studied by the finance committee. I said to him that on the basis of a further examination of this point I felt his contention was not correct, although he is entitled to his opinion, of course, even though it may not be a correct one.
I pointed out to the finance committee when this question came up that it was not considered that the proposed amendments to the Trust Companies Act or the Loan Companies Act would be inconsistent with the government's anti-inflationary policy or policies along these lines being followed by the Bank of Canada.
I went on to say that these proposed amendments did not offer any threat to the Canadian inflationary policy of the government. To the extent that new funds are drawn from new savings, the legislation positively contributes to the control of inflation. To the extent that new funds are diverted from other uses, there is no new addition to savings but a new allocation of funds within the economy may well have the effect of being less inflationary if they bring about such things as a switch from bank lending to housing mortgages. I remind the House that the major part of the lending activity of trust and loan companies is in the field of mortgage lending with some important emphasis on lending for residential purposes.
The hon. member for Waterloo went on to repeat the doubt that he expressed in the past that the proposed amendments would actually bring about any increase in lending by trust and loan companies for mortgage purposes. I would again remind the hon. member that if trust companies cannot accept more deposits from the public they certainly will not be able to increase their mortgage loans.
As I have said, an important part of such lending is in the residential field. If they reach the ceiling or the limit provided for under the provisions of the existing legislation they cannot accept more deposits. I submit through increasing or raising the ceiling trust companies would be able to receive more deposits, if people are interested and willing to place their deposits with them, and in this way they would be in the position to increase the amount they have available for lending for mortgage purposes.

February 26, 1970
Trust Companies Act
I am surprised at the hon. member, on the one hand, seeming to be concerned about the lack of sufficient housing in the country and, at the same time, proposing an amendment which would have the effect of killing the bill, one of whose principal purposes is to enable trust companies, a major sector in the mortgage lending field, to continue and hopefully to increase lending for housing purposes.
The hon. member also said something in a critical way about the increased authority the amendments would give to trust companies to provide more services, but these are likely to be principally to their customers, those who place their savings with these trust companies. This authority would have the effect of enabling the trust companies to meet the requests of those customers and thereby maintain an opportunity for obtaining a reasonable share of the savings of Canadians- savings which, as I have said, the trust companies more than almost any other institution invest in mortgages, again with an important emphasis on residential housing.
One should not forget that trust and loan companies in total have several millions of depositors. Obviously a lot of them are Canadians in the more moderate income classes. Trust companies, from the statistics I have seen, do not cater only to the people of the so-called wealthier group.
The hon. member for Waterloo suggested that the trust companies are somehow less under the control of the Bank of Canada in respect of monetary policy than the banks. The Governor of the Bank of Canada, in his testimony before the finance committee several years ago when the massive amendments to the Bank Act were under study, certainly felt then that trust companies were sufficiently subject to the operation of monetary policy as carried out by the Bank of Canada.
It might be useful to place on the record at this time something the governor said when this question came up before the finance committee on November 1, 1966. I am quoting from page 165 of the proceedings of the committee. The governor stated:
I am not particularly conscious at the present time that the existence of near banks has prevented us from pursuing a credit policy which has produced a type of credit conditions which we consider to be appropriate in all the circumstances.
Therefore the short summary of the answer I have given to your question is that, on the side of the monetary policy, though the initial impulse is transmitted through the chartered banking system, that provides a sufficiently broad base to assure the central bank that it can exercise the desired control-the desired influence-over credit conditions.

One would certainly want to give all due weight to opinions expressed by the hon. member for Waterloo about financial matters, but it would seem to me when it comes to a question as to whether or not monetary policy does in fact apply in an adequate way to one class of financial institution or another in the country, hon. members might reasonably feel they should give greater weight to the opinion of the Governor of the Bank of Canada.
The hon. member for Waterloo commented about the change proposed in handling of incorporations under this act, inasmuch as charters for new trust companies would be issued by the Minister of Consumer and Corporate Affairs (Mr. Basford) if there is concurrence by the Minister of Finance (Mr. Benson). I would again like to say there would continue to be prior investigation of the application by the Superintendent of Insurance in the same way this takes place at present. The ministers will certainly be responsible to Parliament for their actions in making decisions to issue charters. In doing so, they will be exercising the authority given to them by Parliament if it approves the proposed amendments.
I want to assure hon. members that members of this House will continue to have a number of forums in which to discuss the policy matters of considerable importance to which the hon. member made reference. For example, there will be a regular opportunity for doing so every year when the estimates of the Department of Finance and the Department of Insurance are before the Finance Committee and the House. There will be other opportunities during the consideration of such things as the budget, the throne speech and during special debates on opposition days. Of course, there will continue to be opportunities to discuss particular matters of policy when the government of the day presents amendments in future to these measures, as the government is doing at the present time and as other governments have done in the past.
The hon. member for York East (Mr. Otto) made some interesting comments about some of the clauses of the bill. I think one of the points he raised is likely to be taken care of by an amendment to paragraph 2 of section 64 of the Act because this proposed change is to enable the company to invest trust funds on real estate or leaseholds where the investment exceeds 75 per cent of the value of the real estate, provided that the excess is insured under a policy of mortgage insurance
February 26, 1970

issued by a registered insurance company. At present, as the House will recall, companies can make such excess mortgages only if the excess is insured through a government agency. The proposed amendments obviously will broaden this to authorize such loans if the excess is insured by a registered insurance company.
[DOT] (4:20 p.m.)
The hon. member also made an interesting comment about the ability of trust companies to take equity positions in various types of projects. I might mention that I think the legislation states there would have to be overall limits on the total amounts of investments by trust companies in various types of investments including equity, although the question he has raised certainly is one which can be given some further study as the situation develops.
The hon. member for Dauphin (Mr. Ritchie) also made some interesting comments. I should like to remind the House that while it is felt the proposed amendments will be of assistance in providing an adequate supply of mortgage funds for residential purposes, certainly it is not correct to claim that this is the sole effort of the government in this area. Other efforts I might mention are, for example, the amendments last year to the National Housing Act, which have also been approved by the House, and which are having a positive effect on the supply of houses and funds for housing in this country.
The hon. member expressed some doubt as to the degree of effort on the part of the trust and loan companies in the field of lending for residential purposes. I would remind the House that when this matter was being discussed in the Finance, Trade and Economic Affairs Committee I put on the record some information which had been provided on this point. I said that I think it is of some interest that trust companies have been investing some 71 per cent of their guaranteed trust funds in mortgages. Loan companies have been investing some 81 per cent in mortgages, and in the first nine months of 1969 I am informed that 85 per cent of mortgage loans approved by trust companies were not only in mortgages but in fact in residential mortgages. I went on to say I was also informed that of the three largest trust companies more than 80 per cent of their present mortgage portfolio is in mortgages for residences.
The hon. member for Timiskaming (Mr. Peters) made some reference to the amount required to apply for a charter under the
Trust Companies Act
present legislation for a new trust company. This point I think is dealt with to some extent in the proposed amendments, since they will provide specifically for the first time that there has to be a minimum capital of $1 million for an application to be considered. I should also like to clarify something else the hon. member said. I think he is mistaken when he suggests there is some limitation in the Bank Act concerning the number of banks which can be created. The Bank Act has no such limitation. One would presume that if one applied for a bank charter and met the requirements of the legislation and of Parliament, he would be in a position to obtain such a charter. The hon. member asked what the trust companies are authorized to do. There was some mention in his remarks about the powers of trust companies. I should also point out that what the trust companies can do happens to be spelled out in a rather detailed way in legislation governing their operations, amendments to which are being studied at this time.
To conclude I should again like to summarize, as I did in the finance committee, the basic purposes of the legislation as a whole which I consider to be primarily the following. First, to create a greater degree of protection for the depositors and investors in federally incorporated and supervised trust companies. I think this will help ensure that situations of the British Mortgage and Prudential Finance type will not take place with regard to institutions under federal charter and supervision. As you will recall, British Mortgage and Prudential Finance fortunately were not under federal charter and supervision. Second, to increase the ability of federally incorporated trust companies and loan companies to compete with other financial institutions, and as a result to help create opportunities to extend and improve the quality and nature of services available to the public from financial institutions generally. Third, to improve the ability of federally incorporated trust companies and loan companies to attract deposits and as a result to have more funds available for what has been their primary lending activity-mortgage lending, including emphasis on lending for residential purposes.
It is with the hope and expectation of accomplishing these purposes that these bills have been presented by the government for the consideration of Parliament and I, therefore, ask the House to reject the amendment and support the third reading of this bill.

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Trust Companies Act


John Gilbert: Mr. Speaker, I did not intend to participate in this debate until I heard the remarks of the Minister without Portfolio (Mr. Gray). I am surprised that the minister, coming from an industrial town like Windsor, would be an apologist for the trust companies. I have heard him at different times talk about the serious housing shortage in Windsor. He is aware of the serious housing shortage in Toronto and in other parts of Canada. It is quite a shock when he becomes an apologist for the trust companies.


Herbert Eser (Herb) Gray: I rise on a question of privilege, Mr. Speaker. The hon. member is misstating my position. I did not speak as an apologist for any group, but in support of legislation which I hope will bring about an increase in housing in this country. This was my primary aim when I entered this House and still is my primary aim. I am surprised, therefore, that the hon. member does not support these amendments which are being offered for this purpose.


John Gilbert: Mr. Speaker, I am glad I alerted the Minister without Portfolio, because I inferred from his remarks that he was speaking as a spokesman for the trust companies across Canada. I am sure he is concerned about the shortage of houses in Canada and wants the people to obtain homes. But I would remind the minister that there has been a serious downgrading by the trust companies in respect of their mortgage investments. The minister mentioned that 80 per cent of their investment money was being applied to housing. I recall that when the present member for Trinity (Mr. Hellyer) was in charge of housing in 1968 he had to call together the insurance and trust companies in the summertime to plead with them to put more money into housing. He did not succeed. He had to allocate moneys earmarked for public housing to the private housing field.
I would remind the minister of the feeble effort the trust companies have made in respect of putting moneys into condominium housing, which is one of the key ways builders have developed in order to provide housing for Canadians. I was rather shocked when I heard the minister attempt to praise the trust companies for their excellent effort in the housing field. The directors and officers of the trust companies are heartily waiting for this legislation to pass because they know it will give them the opportunity, not to invest

moneys in housing, but to direct moneys to other fields such as the equity field. If the minister had read the speeches in the other place, he would be aware that these companies are waiting not to invest money in Canada but in the United States and in the Bahamas. Even a former minister of finance in the Conservative government was down in the Bahamas as the general manager of one of the trust companies. We should realize that the moneys to be made available to the trust companies, as a result of these amendments, will not go into housing but will go into equity shares and not in Canada but in the United States and elsewhere.
We heard the eloquent remarks of the hon. member for Waterloo (Mr. Saltsman), in which he said that we should have more time to study the total framework of the financial institutions. I am sure that the present Secretary of State for External Affairs (Mr. Sharp), who has had a wide experience in the field of finance, would more than agree that he had his hands full with the financial problems across Canada and throughout the world. It is about time that we stopped diddling and fiddling to accommodate owners and shareholders of trust companies, and had a full discussion about the framework of the financial institutions in Canada. It is about time that we directed their investment policies to serve all Canadians, instead of making amendments such as these to benefit only a few shareholders of these companies.
* (4:30 p.m.)
I have no hesitation in supporting the amendment to this bill.


Mr. Deputy Speaker:: Is the House ready for the question? The question is on the amendment of the hon. member for Waterloo (Mr. Saltsman). All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will
please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my view the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.
February 26, 1970


Mr. Speaker:: I declare the amendment lost.	
Is the House ready for the question on the main motion? Is it the pleasure of the House to adopt the said motion?
An hon. Members On division.


Mr. Speaker:: Carried on division.


[Stage Direction]
Motion agreed to, bill read the third t.im* and passed.
Stanley Howard Knowles: Cinq heures.


Mr. Speaker:: Order, please. It being five o'clock, the House will now proceed to consideration of private members' business as listed on today's Order Paper.



PRIVILEGE


Wallace Bickford (Wally) Nesbitt: Your Honour, I rise on a question of privilege which affects all members of the House who do not have direct long distance dialing service to their constituencies. This is the first appropriate opportunity I have had to bring the matter to the attention of this House. As of this afternoon, Your Honour, it would appear that there
February 26, 1970

Long Distance Telephone Service is a complete breakdown of long distance telephone services from the government switchboard. As a matter of fact, I sat by my telephone trying to obtain a number. After dialing the usual number, 151, I waited for 37 minutes and there was no reply. Hon. members of the House have come to rely on this service which has been provided, and our constituents have also come to rely on it.
May I request the government to use its good offices, perhaps through the genial Minister of Labour, to try to persuade the Bell Telephone Company and its slowing operators who are engaged in a slow down-they have come to a complete stop from what I can see-to settle their differences or at least provide some sort of service between the government switchboard and the constituencies. This is a matter of great public inconvenience. It is an essential public service for our constituents. In the alternative, since this is a matter of very great urgency to most hon. members and it may take some days to affect a settlement in the dispute, perhaps the government would give consideration to making appropriate arrangements during this interim period for hon. members who may be obliged to make essential, I repeat, essential, long distance telephone calls to their constituencies.


Some hon. Members:: Come on, Bryce.


Bryce Stuart Mackasey: Mr. Speaker,-


Some hon. Members:: Hear, hear.


Bryce Stuart Mackasey: -in speaking on the point of privilege raised by the hon. member, may I say that if a slow-down in the telephone service has been causing any inconvenience, I think all of us should be quite prepared to put up with it.


Wallace Bickford (Wally) Nesbitt: What!


Some hon. Members:: Oh, oh.


An hon. Member:: Why?


Bryce Stuart Mackasey: Well, Mr. Speaker, I cannot help it if hon. members opposite have an anti-labour slant.


Some hon. Members:: Oh, oh.


Some hon. Members:: Shame.


Bryce Stuart Mackasey: Hon. members opposite
ought to realize that there may be some labour unrest in the telephone company. I feel very sorry for these operators. They are probably working to rule, which is unfortunate,

but that is not against the law of the land. It appears that the dispute could be resolved easily between the Bell Telephone Company of Canada and the lovely young ladies. If hon. members opposite have any argument with the operators, they should telephone them and say so. In the meantime, we shall have to live with the slow-down for the next few hours.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I rise on a point of privilege. I can only assume the Minister of Labour did not hear my original question. I say that because I do not think any member should have his remarks twisted and distorted by the Minister of Labour.


Some hon. Members:: Hear, hear.


Wallace Bickford (Wally) Nesbitt: I, therefore, assume the minister did not hear what was said. I am requesting the minister to use his good offices, go to the two groups and ask them to provide a service.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order, please. The hon.
member for Oxford has made his representation. I doubt whether it is a question of privilege. In any event, he has raised a very important point which is of concern to hon. members and, I am sure, to the minister. May I remind the hon. member that the commissioners of internal economy will be interested in an aspect of his statement. That will be looked into forthwith.


Wallace Bickford (Wally) Nesbitt: This is an example of cheap politics on the part of the minister.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. Unless there is another issue to be raised, it seems to me that I may tell the hon. member who has made his representation that an aspect of the matter he has raised is of concern to the House directly, to the Speaker and the Commissioners of Internal Economy, who will be looking into the matter forthwith.


Mr. Maclnnis:: Mr. Speaker, I rise on a separate question of privilege. I take strong exception to the remarks made by the Minister of Labour who, on speaking to the original question of privilege, tried to leave the impression that he was protecting the unionized workers in the Bell Telephone Company. Well, let me say something else. That did not seem to be the minister's position earlier this afternoon when discussing the
February 26, 1970

Private Bills
union situation in Montreal. When referring I speak for all members of the Progressive to the Montreal unions, he said that they will Conservative Party when I say we are not have to learn.	anti-labour.


Some hon. Members:: Hear, hear.


Donald MacInnis: Let him answer that one.


An hon. Member:: Send him back to the mines.


Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, may I speak on the original question of privilege, although in a more peaceful manner. The matter is important to this House and I should like the minister to pay heed to what I am saying. Will he make clear to this House whether the operators who answer when we dial 151 are employees of the Government of Canada or the Bell Telephone company.


Bryce Stuart Mackasey: I think that question had better be addressed to Mr. Speaker. I am not sure.


Some hon. Members:: Oh, oh.


J.-H.-Théogène Ricard: Sit down, then.


Mr. Speaker:: Order, please. I think we ought to go on with our business. I can assure hon. members the operators are not employees of the Speaker.


Thomas Speakman Barnett: Mr. Speaker, as I understand it, the exchange is a Government of Canada exchange and not an exchange of the House of Commons. I submit, therefore, that the minister should answer on behalf of the government and not hide behind Your Honour.


Bryce Stuart Mackasey: When hon. members dial 151, I think they will find that they are in contact with an automatic switchboard. So, it is hard to blame the operators. In any event, I will find out about this matter.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. It seems to me that there is much more confusion now than before. Perhaps the minister could look into the matter and make a statement to the House tomorrow.


Robert Muir: Mr. Speaker, I rise on a question of privilege relating to a comment made by the Minister of Labour who cast aspersions on hon. members on this side of the House by alleging they are anti-labour. I happen to sit on this side of the House and belong to the Progressive Conservative Party, but I am sure
21701-51J


Some hon. Members:: Hear, hear.


Robert Muir: The
minister, of all people, does not have the entire sympathy of the labour movement. For many years some of us who sit on this side of the House participated in the labour movement, and we are sympathetic to it. I do not think it is appropriate, therefore, for the minister to cast aspersions on hon. members of this party who are sympathetic towards labour. This is what occurred, and I suggest that the minister's tactics should not be looked on lightly.


Some hon. Members:: Hear, hear.
[DOT] (5:10 p.m.)


Mr. Speaker:: Now that the question of privilege has been resolved, we will proceed with the business before the House which I believe is Bill S-10.



PRIVATE BILLS


Mr. J. A. Jerome (Sudbury) moved: that Bill S-10, to incorporate Pitts Insurance Company, as reported (with an amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
James Alexander Jerome: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.



PITTS LIFE INSURANCE COMPANY

James Alexander Jerome: that Bill S-ll, to incorporate Pitts Life Insurance Company, as reported (without amendment from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
James Alexander Jerome: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.

February 26, 1970
Private Bills



McOUAT INVESTMENTS LIMITED

James Alexander Jerome: that Bill S-15, respecting McOuat Investments Limited, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
James Alexander Jerome: that the bill be read the third time and do pass.


William Arnold Peters: Mr. Speaker, I did not want to speak on this bill because I think it is a very sad business. The reason I am rising to speak is that we have another bill on the Order Paper respecting the Brunner Corporation which I presume fits into the same category. The problem with these bills is that, over the years, we have passed several pieces of legislation demanding that companies make certain information available to the government. Some of these demands were enforced and some were not.
Certain limited reports have been demanded from these companies. The companies are asked for simple things like the names of the executive officers of the company, the address of the company and the directors of the company. That is about the extent of the information they are asked for under the Corporations Act. Because this information was not provided, the company lost its charter. The government went through all the rigamarole of asking this company to provide the information. They even used the machinery of the courts, but at no time did they make a telephone call and state, if you do not get in your report with the changes in directors, you are going to lose your charter. My guess is that this failure to comply has cost this company $5,000, and that is all it has done.
According to the officials who attended the committee hearings, the indication is that the address and list of officials given seven or eight years ago is still the actual address and list of the board of directors. Through some stupid arrangement, we have forced this and a number of other companies to be in this position.
I damn well think that the officials in that department should be highly chastized for that operation. It has been indicated that 3,000 companies are involved. If all we are doing is costing these companies $5,000 or $6,000 to get their charters back, we are wasting our time and the officials are mis-spend-ing their time. I am surprised they did not
[Mr. Jerome.)
even bother to extend the courtesy of a telephone call, although some of the officials seemed to have personal knowledge of the people who were the original directors of the company and, in fact, are still the directors.
In this particular case, it was pointed out that the officials, through some inefficiency in their office set-up, were not aware of the problem. I do not see much sense in this operation, Mr. Speaker. If there had been a justifiable reason for this type of action, which has a punitive effect on the company, such as a refusal to do something which was of prime importance, I think we could probably approve of this type of action. However, I think this was a useless exercise because of the limited type of the information requested.
This was not a financial statement that was not filed or was filed some place else. The only failure was to file the address of the head office of the company and the names of the board of directors, with their current addresses. This seems to be a pretty silly exercise for us to be going through. We have two companies in identical circumstances, and we now have another one on the Order Paper. Representatives of the minister should have at least phoned, visited or somehow got in touch with these people to ascertain whether the company was still in operation and asked if there was legitimate reason why the limited information could not be provided.
It is this kind of exercise that burns up every small businessman in the country. They have to fill in forms and documents that do not seem to serve any useful purpose. If they do not, then this kind of action can be taken against them. I give warning to the corporations branch that I, personally, am not very interested in the processing of a number of these bills in the future if the reason for them is similar to this one. When the officials come before the committee, they better have good reason why they are forcing a company to go through an operation that will cost $5,000 to provide the corporations branch with the address of the company and the names of the directors. If this is the only reason, they better have a good explanation or they will receive a great deal of criticism at the committee hearings. Common sense must be used by the department, such as getting in touch with these people and asking why they are dropping their charter and informing them of the results if they do not make this type of return. If they do not make that kind of
February 26, 1970	COMMONS
personal contact with these small companies with respect to their federal charter, I think they are going to be in difficulty.
Motion agreed to and bill read the third time and passed.
[DOT] (5:20 p.m.)



BUCCANEER INDUSTRIES LIMITED

James Alexander Jerome: That Bill S-16, respecting Buccaneer Industries Limited, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


William Arnold Peters: One of my friends has just pointed out to me-


The Acting Speaker (Mr. Bechard):: Order.
I understand there is no debate on the report stage.


[Stage Direction]
Motion agreed to.
James Alexander Jerome: that the bill be read the third time and do pass.


William Arnold Peters: One of
my hon. friends has just pointed out that it is ironic, bearing in mind all the things we say about companies of this type, that we should be defending them. But the same remarks apply to this company as applied to the previous one; the same type of situation developed and the same kind of inconvenience arose.
Motion agreed to and bill read the third time and passed.


The Acting Speaker (Mr. Bechard):: Shall I call it six o'clock?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Bechard):: It being six o'clock, I do now leave the chair until eight o'clock tonight.
At 5.25 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


Herbert Eser (Herb) Gray: that Bill S-9, to amend the
DEBATES	4139
Loan Companies Act
Loan Companies Act, as reported (with an amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Herbert Eser (Herb) Gray: that the bill be read the third time and do pass.


Marcel Joseph Aimé Lambert: Mr. Speaker, this bill is parallel in many ways to Bill S-8, which was passed this afternoon. After all, many of these companies are operated in tandem and therefore the provision would be the same. I am not going to repeat what I said in respect of the other measure. We in the opposition have no objection to the proposed changes in the act which primarily provide for an alternative method of incorporation and changes in existing charters. The bill contains, also, many housekeeping matters with regard to the operations of the companies and necessary changes to sections of the act which are of no great import in so far as questions of principle are applicable.
The powers of investment are somewhat widened to allow the companies to invest in certain securities of an external nature in which the government of Canada, of course, has some interest. For instance, it has an interest in bonds and securities guaranteed by municipal corporations in Canada, by the Inter-American Development Bank, the Asian Development Bank, the government of the country in which the company is carrying on business or the government of the province in which the company is carrying on business. This, of course, is all straightforward.
[DOT] (8:10 p.m.)
There are other provisions within the province of Quebec in respect of particular circumstances applicable in that province. We have made the comments we want to make on second reading and in committee and would ask that the House approve the changes to this act.


William Arnold Peters: Mr. Speaker, I do not have very much to say on this bill. I should like to relate some of the remarks I shall make to remarks I made earlier in relation to a previous bill. Some time ago Canadians in general were very concerned about the loan companies in Canada and the interest rates charged by them. There was also concern about the fact that the rates were not generally known to the borrower.

February 26, 1970
Loan Companies Act
Some changes have been made. I think, however, it behooves everyone to consider whether those changes are sufficient to warrant supporting an increase in the number of loan companies such as will occur with the passage of this legislation. If a company wishes to be incorporated, all it will have to do is appear before the Companies Branch with an application for letters patent. Whether it is true or not, most Canadian workers believe that owning a loan company is almost synonymous with having the right to print money. They believe that loan companies charge such unreasonably high rates of interest that this is a very lucrative business.
Many Canadians borrow money as freely as they buy commodities, without knowing what the cost will be. It is very nice to hear finance companies say-


Marcel Joseph Aimé Lambert: This is not a finance company. 'This is the Huron and Erie and Canada Permanent Mortgage Corporation.


William Arnold Peters: Well, they lend money. The point I am making is that one company says, "Never borrow money needlessly; borrow when you must". This is a very good suggestion but it is one that not many Canadians take. The companies which operate under the Loan Companies Act, as has been stated, are involved mainly in mortgage financing. This is a field in which most people today are involved, either through buying a mortgage or trying to arrange one. We should take a look at some of the banking institutions of this country and their interest rates. While the finance companies have a normal rate of about 28 per cent plus, some of the automobile companies have rates which are considerably higher because of other charges.
Mortgage companies have a set interest rate over a long period. Take the example of a young couple who borrow mortgage money for a house. The price of the home may be $25,000 or $30,000. They probably would be paying an interest rate of anywhere between 9 per cent and 14 per cent. I think it would be safe to say that 11 or 12 years would go by before they would begin to pay a cent off the principal.
If we can project this situation over a 25 or 30-year period, that is fine. But what will happen to the person who was in this field three years ago, projected the payments he would have to make, borrowed a large amount of mortgage money at from 9 per

cent to 12 per cent over a period of 25 or 30 years, then found himself out of a job, and instead of the cost of our gross national product rising at the predicted rate, it decreased? While the cost of living may have gone up, his ability to pay may have decreased very rapidly.
In many sectors where the economy was stable, it is no longer stable. One of these is the automobile industry. I wonder whether it would be to everybody's advantage to have a provision written into the loan companies legislation whereby a change could be made in the situation wherein an individual may have left the category he was in originally, or remained in that category and found himself in a position where it was impossible for him to meet his obligations.
This has happened before. I remember a situation which occurred when I was a small boy. I was not directly involved, but I remember my father buying a farm for about a third of the amount of the mortgage on that farm. The people who had the farm were good farmers. They also had a large bush operation and were doing very well. They borrowed a reasonable amount of money, considering the assets they owned. Because of the depression they did not have a chance in Hades of paying even the interest on the mortgage.
It seems to me that such protection has never been provided in this legislation. This is a real problem in western Canada. I understand that in some provinces of western Canada there is legislation which provides some safeguard; but nothing has been done at the federal level. I understand that in most areas of western Canada there is provincial legislation in respect of safeguarding a home, a farm, a quarter section or whatever it might be. I am not too familiar with how they apply this to federal mortgages, and I presume they do not. If they do not, obviously the responsibility is ours.
[DOT] (8:20 p.m.)
I see no reason why this legislation should not be reconsidered. Therefore I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles);
That the word "now" be left out and that the words "this day six months hence" be added at the end of the question.


Steven Otto: Mr. Speaker, despite the amendment may I say a few words on the way in which this bill could become a very effective vehicle for raising
February 26, 1970

mortgage funds. I am glad to see the minister in charge of housing here tonight, because although I sent him a brief on this subject I am sure he did not read it, even though he sent me a letter saying he did.


Stanley Howard Knowles: You
Liberals know each other.


Steven Otto: There is much daydreaming going on about our getting mortgage funds, and that the insurance companies-which historically have been lenders of mortgage moneys-will just keep on lending money. However, we do not realize the complete change that has taken place in the insurance business. Many insurance companies continue to sell policies which will pay $25,000 when you reach the age of 60. Who knows what the $25,000 will be worth at that time?
In the United States the Occidental Life Company and 17 other companies are selling life insurance policies which will pay $25,000 in real value. This may be $110,000 in 25 years' time. If this is the case, it is obvious that the other insurance companies must compete. They cannot keep putting out money at a fixed rate of interest if they have to pay their policyholders in real value. They have to acquire equity. So these mortgage funds will dry up.
The president of the Sun Life Company said this two years ago, and the president of the Manufacturers Life Company said it a year ago, but people keep thinking the companies will continue to advance money. They will not. Banks are not mortgage money lenders. It would be wrong to expect them to go into the mortgage business except on a shortterm basis. Banks are short-term money lenders. One does not put one's deposit in a bank for, say, 25 years. If you want to take your deposit out at five minutes' notice, you can do so.
Banks cannot be mortgage money lenders, nor can trust companies. As the minister said, they put a great deal of money into mortgages, but it is usually on a five-year basis, because trust certificates are bought on a five-year basis. Where will the money come from? I suggest that we have to forget the old idea that it must come from a certain segment of the business world such as the insurance companies. In fact, it will come from the people involved in the housing business. People who supply materials will have to take payment in part in bonds on mortgages. CMHC will take out part of that payment in long-term certificates, so will builders and developers and, most particularly, people who buy homes.
Loan Companies Act
When the same problem existed in the United Kingdom, this is what loan societies did: A person purchasing a home would borrow a down payment of, say, $5,000 from the loan society. St. Andrew's was a perfect example of that. The purchaser paid back the $5,000 in mortgage terms, but there was a gimmick attached to it. He had to deposit a further $4,000 or $5,000. In other words, having the advantage of being able to borrow the money for their down payment at a low interest rate after having paid off their loan, the purchasers had to keep depositing money with the loan society so as to enable other people to purchase homes at the same low interest.
For the money which they deposited they received interest as well as a participating share in life insurance, fire insurance and many other enterprises in the home-owning field in which the company was involved. As a result, over a period of time the problem of financing homes was solved and the loan societies, on which this act is based, fell into disuse.
The loan societies will have to have power under this bill to demand payment of the moneys which they lent, as well as a deposit of more money from people who are taking out loans. I venture to say that if amendments were introduced, many building and development companies would use loan societies as a supplement to their normal course of operation and make them into almost non-profit organizations in order to enable people to buy houses. This would require the co-operation of the provinces under the terms of the mortgage acts in many cases.
However, I believe the bill before us should contain a provision for the inclusion of loan and home societies or loan associations. I have heard comments from people who were involved with loan societies which might consider such action. Therefore, to say that this bill will not be effective in any way is not true. I think it could be very effective. I hope the minister will in time introduce amendments which will allow these companies to enter the mortgage field in the way that I have mentioned. I believe that through such activities of the loan societies we will have a chance of solving our mortgage money crisis.


Mr. Deputy Speaker:: Is the House ready for the question? The question is on the amendment of the hon. member for Timiskaming (Mr. Peters). All those in favour of the amendment will please say yea.
4142	COMMONS
Canadian and British Insurance Act


Some hon. Members:: Yea.


Mr. Deputy Speaker:: Those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my view the nays have it.


Stanley Howard Knowles: On
division.
Amendment (Mr. Peters) negatived.


Mr. Deputy Speaker:: Is the House ready for the question on the main motion?


Some hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?
Motion agreed to and bill read the third time and passed.



CANADIAN AND BRITISH INSURANCE COMPANIES ACT


Herbert Eser (Herb) Gray: that Bill S-6, to amend the Canadian and British Insurance Companies Act and other statutory provisions related to the subject matter of certain of those amendments, as reported (with an amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Herbert Eser (Herb) Gray: that the bill be read the third time and do pass.
[DOT] (8:30 p.m.)


Max Saltsman: Mr. Speaker, perhaps the most appropriate way in which I could start my comments would be to read from a Toronto Star editorial of February 14, 1967, in which the question "Are insurance companies really doing their job?" is asked. The editorial reads as follows:
Life insurance, with its sidelines of annuity plans and sickness insurance, is a form of social security which Canadians have embraced so readily that we are the most heavily insured people in the world.
The odd thing is that successive governments have never shown the slightest interest in discovering whether life insurance, as social security, gives people good value for their money ($1.17 billion in premiums paid in 1964).

DEBATES	February 26, 1970
Instead the federal department of insurance has been charged only with seeing that the insurance companies remain solvent, and in a position to meet their contract obligations.
Come depressions, war, peace, boom or recession, the money keeps rolling into the treasuries of the life insurance companies. Their assets have tripled since 1950, from $4 billion to $12 billion, which makes them second only to the banks as managers of other people's money in Canada.
That makes it a fine business to be on the top side of, but how does it work out for the policyholders?
Despite the persistance and the ubiquity of the salesmen, one-fourth of the population remains wholly unprotected by life insurance, even in this insurance-happy country.
What's more, the figures on lapse and surrender suggest that many people become dissatisfied with their insurance, or cannot afford to carry it. In 1964, policies with a total face value of $2.5 billion lapsed or were surrendered in Canada-which was over six times the face value of policies that terminated by death, maturity, disability, and expiry.
The editorial concludes:
But their real reason for existence is their social security function, which has never been officially assessed, except from the narrow actuarial standpoint of the insurance department. This would be a big, worth while job for a parliamentary committee.
It has been our purpose in speaking on this bill and others to point out the need for examining the entire structure of the financial institutions, including insurance companies. We think that in a modern society there is a need for modern approaches, not the kind of anarchy that now prevails in the insurance industry which does not benefit anyone and is more appropriate to a society that does not have automation, that does not have computers and does not live in an age where men are going to the moon. While inventions are soaring ahead, our financial institutions are back in the Dark Ages. They have not changed very much over the years.
Another comment on the present system was made in the Canadian Consumer January-February, 1968, issue, and I quote from page 129:
Our whole security marketing system is still geared to selling-
This includes some of the activities of the insurance companies.
-rather than counselling. Canadians have been conditioned by the practices of insurance and mutual fund companies to buying family security and retirement benefits from door-to-door salesmen.
The existing system is designed to thrive on customer ignorance and confusion. The agent is hired and trained by companies, primarily to sell
February 26, 1970	COMMONS
their particular products. The company training provided is basically indoctrination in company policy.
Again we have to ask how effectively and how well are the insurance companies meeting the needs of people in our society. Earlier this afternoon I spoke about some of the public insurance programs that have been developed. I talked about automobile insurance in Saskatchewan, which has proven so valuable and which will be adopted by the other provinces in this country before very long. I spoke about hospital insurance and of the great benefits it has brought to the people of Canada. After I had concluded my earlier remarks, in which I said that the cost of administration of the Ontario hospital insurance program was 2.5 per cent in contrast with a figure that went as high as 37 per cent when it was in private operation, I had a chance to re-examine those figures and I understand it is even less than 2.5 per cent; it has gone as low as 1.5 per cent. This is a phenomenal figure with a meaning that cannot escape anyone. It means that virtually all the moneys collected for this purpose are used to provide health services for sick people instead of being wasted on distribution and spurious practices-


Mr. Alkenbrack:: On a point of order, Mr. Speaker, may I ask the hon. member a question?


Mr. Deputy Speaker:: I would point out that this is not a point of order, but the hon. member can certainly try to ask a question.


Almonte Douglas Alkenbrack: With respect to the gist of his speech, has the hon. member ever heard of a chartered Canadian life insurance company ever beating one policyholder out of a dollar?


Max Saltsman: Mr. Speaker, I appreciate the question put to me by the hon. member. This is not what I was saying. No one disputes that life insurance companies in Canada are solvent. I would point out to the hon. member that one of the reasons they are solvent is that they are supervised by the federal government. We have an outstanding supervisory arrangement; we have an outstanding Superintendent of Insurance. This is one of the essential reasons that these companies have not, in the sense put by the hon. member, defrauded anyone.
I am not suggesting-I hope the hon. member will pay attention to this-that they have done it consciously and deliberately.
DEBATES	4143
Canadian and British Insurance Act This is the nature of the game; it is the kind of position they are in. Even with the best intentions the insurance companies cannot do anything about it. It is the structure that creates all this waste. I would not for one minute wish to leave the impression that the people in the insurance industry are not reliable or trustworthy in a certain sense. I am suggesting that the entire industry is not doing the job and that the practices that have grown up in the industry, the need to compete and make a profit, have not worked to the advantage of the people of this country. There must be a more sane and sensible way to serve the needs of the people rather than the archaic system that now prevails.
We brought in medical insurance in Canada. Despite all the efforts of the Prime Minister of Ontario to scupper and ruin the plan, it will succeed. He will have to change his attitude toward it. Other provinces are working with the federal government and doing an effective job of providing medical insurance for their people. The one province that is being dragged, kicking and screaming, into the twentieth century will have to change its ways before the next election or another party will replace it in the provincial house.
We have an insurance program covering exports from Canada. The government undertakes this function. In this particular case, probably the private insurance companies do not want to get involved in it because there is a risk connected with it. I make this point and draw your attention to it, Mr. Speaker, to point out that there are ample precedents for public involvement in the insurance field. I could point to CMHC insurance, the reason for which is the reduction of certain rates. Many governments undertake their own insurance when it comes to their buildings and properties simply because it is a cheaper and more effective way of doing it.
The old age security plan is an insurance program to which all Canadians contribute through their taxes and receive benefits upon retirement. I think the old age security plan, despite its inadequacies and despite the great job my hon. friend from Winnipeg North Center (Mr. Knowles) is doing in trying to convince those stick-in-the-muds across the way of the need for public justice, of the need to increase payments under the plan, basically is a very worth-while program. All Canadians could be proud of it if we increased the old age security pension.
February 26, 1970
4144	COMMONS
Canadian and British Insurance Act
Recently we introduced the Canada Pension Plan. Despite all the cries that went up from the ranks of the Official Opposition, it has been widely accepted in Canada and its merits are very well understood. There is a suggestion 1 should like to put to members of the House on the question of the Canada Pension Plan. The plan should be enlarged. It could do a much better job than it is doing now.
[DOT] (8:40 p.m.)
I listened earlier to the remarks of the hon. member for York East (Mr. Otto)-I regret he is not in the House at the moment-who pointed out the difficulty that would develop in the future regarding mortgages. I should like to point out another great difficulty which will develop in the future, that is, most Canadian governments will not be able to finance their needs. This is true of the federal government, the provincial governments and municipal governments. The reason is quite obvious: the basic method of financing, except by raising taxes, is in long-term bonds. From everything we can see, long-term bonds will never again be an important source of financing for government or corporations.
There are measures we can take to abate inflation, and those measures should be taken; but the indications are that there will be inflation in the foreseeable future. The effect of inflation will be to work against long-term bonds of all kinds. If some of the proposals in the white paper are implemented to favour equity financing over debt financing, the situation will be made even worse. We cannot cling to the faint hope that the capital market will return to its former position. That day is over. I see very little possibility of the capital market being able to meet the long-term needs of government.
This means there are two reasons for increasing the Canada Pension Plan fund. I think it is a good thing in itself. People in Canada would benefit immeasurably by being able to get higher benefits, and it would provide a source of funds for governments. There are people in this chamber who might be pleased at the prospect that the government will not be able to get any money in future, because they think this is a very good thing; they think any spending the government does is bad and should be curtailed. I am not one of those. I can look around and see some of the things we have in this country because governments were willing to spend money and develop the nation. I can see things that only public expenditures will

available to those in desperate need of housing, those with low incomes even though good jobs who simply cannot afford the price of housing at present day prices.
The implication for the future, Mr. Speaker, is that if we are to adequately house our people it will not be done in the private sector and only an expanded public sector, only a diversion of funds from the private to the public sector can help us accomplish this primary social objective. It is unthinkable that in a society such as ours there should be hundreds of thousands of people without adequate housing. In a society that can buy all kinds of gadgets, that can create pollution problems, we cannot do a simple, fundamental thing like providing housing for our people. This is certainly not through lack of timber, cement, workmen or any kind of resource. The only thing that stands in the way of our people being adequately housed is our housing system and the way we use money for housing purposes. This system must be corrected before we can hold our head up high and aspire in a minor way to call ourselves a just society.
I suggest that an enlargement of the Canada Pension Plan, increasing benefits and increasing contributions, would enable a large pool of capital to be collected which could be used for social priorities from which everyone would benefit. In the long run the cost to the people in this country would be less, the insurance program would be more adequate and we would have the funds with which to meet the social needs of our society.
We have spoken on these financial bills. They are very much alike; they are designed to increase the powers of financial institutions and to make worse a situation that is already bad. What is needed is not to pass this kind of legislation but to set it aside and say to the government and its advisers, "Look at this financial structure. It is not serving the needs of the Canadian people. Change the way in which you accumulate funds and the way of establishing our social and financial priorities".
It is this matter, Mr. Speaker, that I wish the House to consider. To help hon. members in their consideration I move, seconded by Mr. Knowles (Winnipeg North Centre), the following amendment to Bill S-6:
, That the word "now" be left out, and that the words "this day six months hence" be added at the end of the question.
21701-52J
Canadian and British Insurance Act [Translation]


Léonel Beaudoin: Mr. Speaker, I shall make only a few remarks to give my views on the bill now before the house, namely Bill S-6.
I shall also make a few comments on the speech of the previous speaker whom I deeply respect but some of whose opinions with regard to insurance agents I do not agree with.
Contrary to what he thinks, I feel that insurance companies, especially life insurance companies, have fulfilled their role very well in covering various risks. To my mind, they have helped tremendously through the investments they make in real estate, especially with regard to widows and large families that have had the misfortune of losing someone near and dear.
The hon. member said, among other things, that insurance was sold by people who often peddled their wares from door to door quite prepared to brainwash people in order to sell insurance policies. I say to him, that as one who has been an insurance agent for several years, I was a door to door salesman without ever brainwashing anyone.
As Bills S-6 and S-7 are almost identical, I feel my remarks on Bill S-6 can also apply to Bill S-7.
Bill S-6 would amend the Canadian and British Insurance Companies Act and other statutory provisions related to the subject matter of certain of those amendments, while Bill S-7 would amend the Foreign Insurance Companies Act.
[DOT] (8:50 p.m.)
On May 6,	1969, the Department of
Finance, in a press release, availed itself of the introduction of Bills S-35 and S-36 in the Senate to explain that the purpose of those pieces of legislation was to grant the federal Superintendent of Insurance greater authority over companies in financial difficulties.
Among other things, the new provisions in the Canadian and British Insurance Companies Act as well as in the Foreign Insurance Companies Act, enabled the Superintendent to take certain steps so as to help an insurance company in a difficult position to get back on its feet.
We are in favour of the passage of Bill S-6, as its purpose is to protect the public.
Mr. Speaker, we know that Canadian insurance companies are among the most important holders of savings and assets in Canada.
February 26, 1970
4146	COMMONS
Canadian and British Insurance Act Indeed, in the field of life insurance alone, the Canadians who had some $16 billion worth of life insurance in 1950 had five times more in 1967 that is $90 billion.
These figures show that the insurance salesmen who go from door to door so that the economy may operate, really attain their objective.
It is therefore important that the savings and investments be well protected. The government, through the Superintendent of Insurance, is quite justified in seeing that they are.
Bill S-6 includes three main amendments to the Canadian and British Insurance Acts. The first one deals with the constitution of insurance companies and with changes in the charters of those companies. The object of the bill is to provide incorporation through letters patent, a quicker method than the old one which required amendments to the special act adopted by the government. From now on, the Department of Consumer and Corporate Affairs will issue such letters patent. It is also provided that insurance companies under provincial charters will continue to be recognized federally, subject to the approval of the province in which they were incorporated.
The bill also provides for the inclusion in the letters patent of a requirement making it compulsory for a new life insurance company to have a paid-up capital of $2 million, and of $1.5 million if it is a fire or comprehensive insurance company.
Among the other provisions that we support are the ones enbling the Minister of Finance (Mr. Benson) to instruct the Superintendent of Insurance to take control of the assets of insurance companies likely to become insolvent or which will have diverted funds.
Many financial undertakings have gone bankrupt these last few years. They have swallowed up millions of dollars saved by Canadians and quite often by low and average income citizens, by those who could not afford to lose their savings in that way, because they were not sufficiently protected. We do not believe that swindling will in future be impossible because of changes made in the act.
However, Canadian savings will be better protected. If previously insurance companies or financial institutions took exception to the fact that the government laid new obligations on them, they now accept, I know, new regulations which restrict their freedom. In fact, the new laws aim at protecting the public.


Companies are aware of it. Their enactment leads the same public to have more confidence in the financial institutions.
The third major change deals with the prohibition to make loans or investments whenever conflicts of interest occur. For instance, the important shareholders, that is, those who are in a position to impose their views when the time comes to formulate a loan policy, will not be able to secure loans.
Another major change is the one that enables insurance companies to set up branches that will have the same powers as the parent company and will be able to invade the field of mutual funds.
We are also in favour of the provisions dealing with transfer of blocks of shares exceeding 10 per cent of the total number of shares and those that will compel insurance companies to report such transfers to the Superintendent of Insurance.
We are also in favour of the provisions enabling from now on insurance companies to make loans exceeding 75 per cent of the estate value, provided that anything over 75 per cent be insured by government agencies such as the Central Mortgage and Housing Corporation or by Canadian or foreign financial institutions. The purpose of this legislation is to increase the funds which may be made available to borrowers while protecting the savings made by the customers of insurance companies.
In short, we, from the Ralliement Credi-tiste, are favourable to the principles contained in Bill S-6.


William Arnold Peters: Mr. Speaker, I was just reminiscing with my colleague about some of the changes that have taken place in Parliament. We now oppose insurance companies and the like being incorporated in the way spelled out in the bill, but only nine or ten years ago we supported the view-I suppose because very little interest was displayed in this House in the subject- that insurance companies should not be incorporated by bills coming before the House but by letters patent and legal procedures outside the House. That was our position for quite a time.
It is interesting to note that at that time Conservatives and Liberals were in favour of bringing such incorporation bills into the House for discussion. Oddly enough, in a few minutes we shall vote against this bill which provides that companies like these shall be
February 26, 1970

incorporated by procedures which take place outside the House. Liberal members will vote to support the bill, and thus support our former position. Is it not interesting to see how positions here change?


Marcel Joseph Aimé Lambert: They could still come before the House.


William Arnold Peters: The hon. member for Edmonton West (Mr. Lambert) indicates that these companies could still come before the House. It is my guess that nobody will bring such incorporations before this House when it is much easier to obtain letters patent and avoid public exposure.
I also think many hon. members are unaware of the responsibility they are placing on the shoulders of the Superintendent of Insurance. The Superintendent of Insurance will have to do a policing job, not only with respect to existing companies but companies which may be incorporated later. His responsibility to the minister will be to ensure that these are the kind of companies we wish to incorporate.
[DOT] (9:00 p.m.)
We are also asking the Superintendent of Insurance to provide some supervision in the field of provincial jurisdiction. Considerable responsibility is being placed on the office of the Superintendent of Insurance. I hope we will provide him with adequate assistance, because he has a grave responsibility. As one member mentioned a few minutes ago, the Canadian public demands almost an exactitude in the supervision of insurance. That is not possible in most countries of the world. Canadians can be very proud of the operation of our insurance companies under federal jurisdiction. There has been very little suggestion of impropriety in any of their operations.
My colleague referred to the Canada Pension Plan. I am sure hon. members who have anything to do with provincial welfare programs are aware that we have now arrived at the stage where Canadians are assisted by the Canada Assistance Plan; the Canada Pension Plan and the Old Age Security Plan. A widow with two children is not in too bad a position if her husband did not leave anything when he died. In some cases she can receive the widow's allowance, mother's allowance, disability pension, assistance from the Canada Assistance Plan through various pieces of provincial legislation plus, if she is the right age, a payment from the Old Age Security
Canadian and British Insurance Act Plan which is supplemented by a guaranteed annual increase. A man with no money who dies and leaves a widow 65 years of age, leaves her in not too serious a situation. If she is 60 years of age she will receive the widow's allowance.
I wish to deal with the situation of a man who saved at a time when a dollar was worth a dollar and bought an insurance policy with a benefit of $2,000 or $5,000. After this man dies, a month or so goes by before the insurance company gets around to paying the small insurance benefit to the widow. The widow knows how much it costs to operate her household, she knows what her expenses will be and she is terrified because she knows the money will not go very far. When she tries to get assistance through the Canada Assistance Plan, it is not available because it is operated through provincial plans which apply only when the widow has no money. She is forced to scrimp and save. This widow would find herself in very dire straits before spending the last of the insurance money and applying for assistance.
I have not heard of any insurance agent advising people not to buy insurance. They are selling endowment plans; they are selling insurance plans that really do not take into consideration the developments of the last few years. When my father was a young lad, he bought an insurance policy. I do not know the value of it-possibly $2,000. He carried that insurance through the depression when money was very hard to come by. He denied himself many of the necessities of life in order to pay the premium every month. He made sacrifices for his family. When $2,000 is received years later, it is worth only $300 or $400; that will be its purchasing power. In my opinion it was a bad investment. If it was a bad investment 30 years ago, it is a much more doubtful investment now.
I think there has to be insurance: I am not arguing that there should not be. But the whole role of insurance has changed. In the last 20 years it has certainly changed in relation to fire and automobile insurance. In some cases it is a necessity to carry basic term insurance, insurance that will provide the biggest return for the least expenditure over a long period of time. I believe the federal government will soon have to consider the expansion of insurance schemes in the public sector. This would mean the Superintendent of Insurance would be running a national
4148	COMMONS
Canadian and British Insurance Act insurance company, one that would provide basic advantages under the social security plan that we have developed.
The other day I attended a Transport Committee hearing and listened to a discussion on safety matters. The old bugaboo about provincial rights was raised, but the minister was able to say in relation to the provinces that they had reached agreement in this and that field. Matters of safety affecting automobiles has become a responsibility of the federal government and will probably affect our importation of cars and the direction the Department of Transport takes in regard to safety regulations.
Why should we not also apply a reasonable level of insurance, if not for first party or second party at least for third party liability? Why should not government-type insurance be available? It has often been said that automobile insurance should be provincial. However, I feel the automobile is an interprovincial vehicle: it travels back and forth across provincial boundaries. I am sure half the cars in the Ottawa area this evening travel across the interprovincial boundary regularly. A federal insurance plan could provide basic coverage.
We should also consider expanding the Canada Pension Plan. I think most people will agree the old age pension should be extended to provide a better standard of living for the elderly people. Although some people say it is, Mr. Speaker, it is not a handout. The money belongs to them because they pay their 4 per cent regularly to accumulate it. I suggest more money should be put into this plan. It may be the wish of the Canadian public to put more money in the plan and less in insurance companies.
There are hundreds of insurance companies, Mr. Speaker. I do not feel they do much good. As one hon. member pointed out, the costs of administration are very high. I was surprised to hear that some life insurance companies work on the basis of hiring a young fellow to sell life insurance and pay him a fee for several months while he sells insurance to his relatives and friends. As soon as he has sold insurance to all his relatives and close friends, he finds it very difficult to sell it to people he does not know and he is soon out of business. The initial sale of an insurance policy may earn a salesman a commission as high as 35 per cent. This is drained off entirely from the insurance principal. If the plan were conducted by a federal agency,
IMr. Peters.]
DEBATES	February 26, 1970
a much greater portion of the insurance money would go back to the individual purchasing the policy.
[DOT] (9:10 p.m.)
It is still the desire of most of us to prepare in one way or another for the years in which it is more difficult for us to earn our living and cover our expenses. Look at the thousands of insurance companies! When I go into the office of an insurance agent I am always impressed by the fact that he has rows and rows of companies on his list. He follows an unwritten rule under which he picks the companies in order and thus shares the business around. The price is the same, the commission is the same. There is no reason for him to be involved with one particular company or group. Therefore, it seems to me we are not doing much at this time to solve the insurance problems facing Canadians, particularly in the field of life insurance.
I see cases of hardship every day. It really is sad to see how people end up after spending their lives building up a small insurance policy. I will mention one example, a man I had known for years. Badly crippled all his life, he and his wife worked on a small farm. When they sold the farm they had $1,500 in the bank. They could not get any assistance under social security measures because they had too much money in the bank; yet their cupboard was completely bare. I have been to his place when it looked as though they were living in the Meadow Lake constituency. The $1,500 was to be used to bury them. All they had worked for all their lives was a burial fund. Hon. members over there may not think this is sad, but it is.
One cannot suddenly change the pattern of existence of these people. They set money aside for a particular purpose. Unfortunately, this couple had to die to collect it. They were willing to do that, and one of them has since died. Those who have struggled to save a small amount of money through insurance policies have to spend it before they can take advantage of the social assistance schemes available.
The minister responsible for this bill is dishonest if he does not consider this aspect of the insurance picture. We are allowing people to sell insurance in exactly the same manner as before, yet the game has changed. The situation is really not the same as it was. The social security system of the nation has changed and, with it, the need for insurance. It behooves the government to consider entering the insurance field on its own account.
February 26, 1970	COMMONS
Another matter I wish to raise relates to a point of view we have been putting forward for years. I have in mind the treatment of insurance companies which are Canadian and in respect of which no machinery is provided for ensuring that they remain Canadian. If ownership should change, their administration would fall within the provisions of a different act of Parliament. But that act provides no machinery for the encouragement of Canadian ownership. In fact, in the case of large institutions a limitation is imposed upon the extent of Canadian ownership.
I am thinking, now, about ten or twelve of the large companies or groups involved in the insurance business in Canada. These companies are doing $12 billion worth of business in Canada. This sum represents a large proportion of the expenditure of the nation. Indeed, it would take the federal government, with its huge tax structure, a year to raise that amount of money. The responsibility these companies owe to the nation ought to be a matter of paramount importance to us and should be dealt with in this bill. In my opinion it is not adequately covered.
The day will come when the people will demand that the government become more deeply involved in the insurance field and provide them with basic coverage-coverage which can be augmented by the insurance companies if desired. The accumulation of large sums of this kind ought to be in the hands of the government so that the expenditure of the money would be much more in the interest of the nation than it is in the case of insurance companies.
We have been very fortunate in the two Superintendents of Insurance whom I have known. They have done an admirable job with a very small staff. The fact that we have never experienced an incident in the insurance field such as has been experienced in some of the provinces is mainly due to the competence of the people engaged in the Department of Insurance. We are now throwing on the shoulders of these people a much larger responsibility, one which the Canadian government would be well advised to consider more seriously before this step is finally taken, bearing in mind the needs of the Canadian public over the next 20 years.


The Acting Speaker (Mr. Bechard):: Order, please. If the minister speaks at this time, he will close the debate.


Stanley Howard Knowles: On
a point of order, Mr. Speaker, there is an
DEBATES	4149
Canadian and British Insurance Act amendment, so the minister is free to speak without closing the debate.


John Gilbert: Mr. Speaker, when I spoke this afternoon on the Trust Companies Act, the Minister without Portfolio (Mr. Gray) appeared quite sensitive when I said he was an apologist for the trust companies. I infer this from the remarks he made. I drew attention to the practice of trust companies with regard to their investment in housing. This evening I see in this chamber the Minister without Portfolio in charge of housing (Mr. Andras). I recall the problems he had when he was Minister without Portfolio assisting the Department of Indian Affairs. Here is a minister who is a sincere and dedicated man. He attempted to devote his time and efforts to the problems of Indians. However, he ran into a very strong stone wall in the form of the Prime Minister (Mr. Trudeau) and other ministers. As a result, he was given new responsibilities as minister in charge of housing.
Back in 1938 I drew attention to the difficulties encountered by the then minister of housing, the hon. member for Trinity (Mr. Hellyer) in connection with the amount of money put into housing by insurance companies. In the summer of 1968 he invited the insurance and trust companies to put moneys into housing because of the building slowdown across Canada. There was a refusal by these companies to inject moneys into the housing market. The minister then had to allocate moneys which were earmarked for federal housing into the private housing market.
[DOT] (9:20 p.m.)
I am sure the minister now in charge of housing is experiencing a repetition of some of these problems in respect of insurance companies directing part of their investment moneys into the field of housing. Last year there was a serious decline in investment by insurance companies in the housing market. Insurance companies have become quite brazen and outspoken on this matter. They say they are going to direct a good share of their investment moneys into equity. This appears to be their present trend, with a minimum amount directed into housing. When they do direct moneys into housing, they usually direct it into government-insured loans, which means they take no risk whatsoever in respect of money directed into housing.
February 26, 1970
4150	COMMONS
Canadian and British Insurance Act
Surely the time has come, in respect of the investment policies of the government, to direct that a certain percentage of the money accumulated by trust and insurance companies be put into some of the social fields, more especially housing. I am sure the Minister without Portfolio was shocked when he read in the newspapers two weeks ago that in Toronto alone there are 17,000 families who need public housing, and you can probably add another 35,000 if you take into account the members of those families.
Surely the insurance and trust companies have a social conscience in respect of the problem of housing. When thinking of the 1930s we realize that social conscience was absent in respect of insurance companies. Many of them had no provision for paid-up policies, cash surrender value or automatic premium loans. The result was that many of the fathers and mothers of hon. members who had insurance policies in the 1930s did not have the advantage of premium loans on contributions made to those policies.
As a result of government action we have injected a social conscience into insurance companies. We now have provisions in respect of insurance policies so that when people are not able to pay they can elect to take a paid-up policy, the cash surrender value or convert it to a term policy. This is the result of legislation to develop a social conscience in insurance companies. Surely the minister in charge of housing wants to see a social conscience developed. He can do so by having a percentage of the accumulated savings of Canadians collected by insurance companies directed into the field of housing. At the moment housing represents a strong, persuasive power.
I give the minister credit for being a man of sincerity and ability, and I am sure he is anxious to solve our housing problems. He could solve them more easily and effectively if we gave him the power to direct a percentage of the investment moneys of insurance and trust companies into good social programs, especially in the field of housing. I notice that the minister appears to agree with what I have said. I am happy he has indicated such agreement.
Another matter which annoys me to no end is that the government wants money for public housing, yet through CMHC the government could go into the public market and borrow money for its operation. I think for the year 1970 it has borrowed between $800 million and $900 million. It did this by


making loans or selling bonds to banks, insurance and trust companies. The result is that the government must pay anywhere from 6 per cent to 7 per cent interest on these bonds. This is part of government financing. I am sure the minister in charge of housing would like to see the day when he, through CMHC, could go to the Bank of Canada and have it undertake the financing in respect of housing in Canada. This would result in a substantial saving of interest, which is a very important consideration.
When people buy houses these days they pay interest rates ranging from 10 per cent on a first mortgage to 12 per cent or 15 per cent on a second mortgage. This makes the purchase of a house almost prohibitive. The average cost of a house in the city of Toronto is $42,000, which indicates that you must have a very substantial mortgage and make a substantial down payment to buy a home.
One of the keys to the solution of the housing problem is low interest rates on mortgages. I ask the minister in charge of housing to investigate the possibility of using Central Mortgage and Housing Corporation, rather than insurance and trust companies, to sell bonds. In this way purchasers of houses would not have to pay heavy interest rates to insurance and trust companies. Perhaps we could provide effective legislation so these people could go to the Bank of Canada to obtain loans at low interest rates. There would in this way be a substantial saving in respect of future housing. The saving on $900 million at 7 per cent would be in the area of $63 million. This is one of the ways we could inject a social conscience into the insurance companies.
Insurance companies have indicated by their actions and attitudes that they are no longer interested in housing. If they are interested, they are usually interested in apartments with large mortgages. I notice that the hon. member for York East (Mr. Otto) is here tonight. I am sure he agrees with me. When these companies place mortgages with builders of large apartment dwellings they acquire security through the mortgage and obtain an equity in the building. In other words, they have it both ways. They get interest on the mortgage and interest through equity participation. This is the attitude of insurance companies. They are not really interested in financing homes for the average individual; they are interested in very large mortgages and equity participation.
February 26, 1970

The time has come when we should take immediate and effective action so the Bank of Canada can participate in financing mortgages throughout the country. I would be happy if I thought the legislation before us would have this result. I think the only result it will have is less participation in mortgage financing across the country and more participation in equity, which will be of no assistance in grappling with the social problems we face today.
[DOT] (9:30 p.m.)


Herbert Eser (Herb) Gray: Mr. Speaker, the hon. member for Waterloo (Mr. Saltsman) covered a lot of ground in his remarks, as did the hon. member for Timiskaming (Mr. Peters), who did so both on this bill and on the previous bill. The hon. member for Waterloo had a lot to say about a whole array of new roles for the Canada Pension Plan. As I said, the hon. member for Timiskaming in the debate on this particular bill touched on a wide range of topics, as he did on the previous bill.
On the previous bill he placed on record some comments about companies in the consumer loans business even though the bill before the House dealt with mortgage loan companies other than consumer loan companies. The hon. member for Timiskaming on this piece of legislation, as on the previous bill, made some comments about interest rates and the payment of interest. He commented on what would happen if interest rates changed when speaking on the previous bill. Of course, if interest rates dropped the borrower could arrange a new mortgage at the lower rates by paying off the old mortgage. This would put mortgage, loan, insurance and other similar companies in the position where they would more or less have to renegotiate the mortgage if interest rates fell.
The hon. member made an interesting and useful comment in praising the Superintendent of Insurance and his officials. This praise is well founded. What he had to say underscored the fact that we now rely primarily on the report of the Superintendent of Insurance as a basis for making decisions in respect of the incorporation of companies under the act. The Superintendent of Insurance will continue to play this type of role if the House approves the amendments before it. The hon. member for Timiskaming also had some interesting comments about the methods used by life insurance salesmen. I am informed that the licences of agents, and therefore I
DEBATES	4151
Canadian and British Insurance Act would presume the methods they are able to use in trying to sell life insurance, to a large degree are a matter of provincial law.
The hon. member for Broadview (Mr. Gilbert) also covered quite a wide area. He seemed to return to a tack he was on in an earlier debate in which he appeared to have great sympathy for Social Credit monetary theories. I will say, to his credit, that he seems to be espousing Social Credit because he wants to make it possible for more housing to be built. I am glad to see that in wanting more housing he is of the same mind as I and most members of this House. It is worth while to remind the hon. member that the government has greatly increased the amount it is making available this year for the financing of the construction of public housing.
The hon. member directed his remarks through you, Mr. Speaker, to my colleague the Minister without Portfolio in charge of housing. I should remind the House, as I indicated earlier in the debate on the bills we dealt with previously, that the Minister without Portfolio in charge of housing has indicated to me his interest in seeing the provisions in the trust companies and loan companies legislation with which we have just dealt, and in this legislation as well if I am not mistaken, adopted, because I gather he feels this would make it easier for him to persuade the financial institutions in question to make money available for mortgage lending purposes.
The hon. member for Waterloo made some interesting suggestions with far-reaching implications. There are those who would consider them to be rather controversial. However, this bill has certain specific provisions which although more limited I submit are still necessary and important. The hon. member for Waterloo in moving his amendment asks that the bill be set aside. I submit that situations could arise in the future, although 1 hope they will not, which could not be set aside if the House decided to support his amendment, something I hope it will not do.
For example, there are situations which would require action by the Superintendent of Insurance in exercising control over companies which are in financial difficulty. He could not take action of this kind if this bill were not passed, because the authority to do so does not exist in the present legislation. Another example would be situations calling for amendments which would convey authority which should be available immediately, or
February 26, 1970
4152	COMMONS DEBATES
Canadian and British Insurance Act
certainly in the near future, in respect of expanding the existing prohibition with regard to the making of loans to people who would not be considered at arm's length and where there are conflicts of interest.
One amendment creates a legislative requirement for the first time in respect of auditors for insurance companies and then-reports. Another important amendment is one Which would authorize companies to make mortgages in excess of the present limit of 75 per cent of the value of the real estate where the excess is insured by a registered mortgage insurance company.
In summary, one could say that the broad purposes and intents of these bills are, first to expand the power of the supervisory authority, the Superintendent of Insurance, to deal with companies which might get into financial difficulty with the aim of increasing the protection available for policyholders and the general public. This is also the intention of the expanded provisions that will prohibit investments and loans where there may be a conflict of interest.
Of course, the widening of the powers of insurance companies with regard to the type of investments they can make, and the ability to have subsidiaries, is aimed at putting them in a better competitive position in relation to other financial institutions which are seeking to attract savings from the public and therefore improve their ability to serve the public generally.
Therefore, I submit that the amendment to give this bill a six months' hoist should be defeated. I submit that no useful purpose will be served by doing this and in fact just the opposite will happen. These amendments are needed on the statute books so that they will be available at a time when they could well be required in the public interest.


Max Saltsman: Mr. Speaker, would the minister without Portfolio (Mr. Gray) permit a question.


Herbert Eser (Herb) Gray: Certainly.


Max Saltsman: In view of the minister's urging this chamber to pass this measure, and his expressed concern over the possible failure of an insurance company and the necessity to take action in such a case, would he indicate how many insurance companies have been in financial danger since this federally-incorporated act was placed on the statute books?


Herbert Eser (Herb) Gray: Perhaps I might quote from the proceedings of the Committee on Finance, Trade and Economic Affairs, volume 20 of February 12, where the Superintendent of Insurance replied to a similar question from an hon. member in reference to companies which would be covered by the Investment Companies Act. He said:
-X was not aware of any companies of the type that would be covered by the Investment Companies Act that had got into difficulty where such companies were federally incorporated.
Unfortunately I cannot say that about insurance companies because as a consequence of the failure of the Prudential Financial Company a few years ago, one of the companies that was dragged down with that failure was a small federally incorporated insurance company transacting automobile, fire and casualty insurance. We were swept into that collapse with respect to this one company.
Our experience in that particular circumstance led to the recommendations for changes in the supervisory tools that would be available should a company get into difficulty. I should add that that particular company was the first failure that had occurred in a federally incorporated insurance company in more than 40 years, and there have never been any losses in connection with failures of federally incorporated life insurance companies.
I am sure that all members of this House would want to be certain there are the necessary provisions in the legislation to regulate insurance companies under federal jurisdiction to ensure that this good record continues.
[DOT] (9:40 p.m.)


Max Saltsman: I wonder whether the minister would accept a further question. I know he has quoted quite extensively, but in short what he said is that there has not been a failure of a federally-incorporated insurance company. Frankly, I do not see that there exists any real danger in the future and I see no great necessity for passing this legislation.


Herbert Eser (Herb) Gray: I do not think the hon. member heard completely what I quoted. I indicated there had been a failure of a small federally-incorporated insurance company in the general field.


Max Saltsman: What was the date?


Herbert Eser (Herb) Gray: It is in committee proceedings No. 20 of February 12, 1970.


Max Saltsman: I mean the date of the failure?


Herbert Eser (Herb) Gray: I think it was during the Prudential Finance crisis. If I may complete my answer to my hon. friend, I believe at one
February 26, 1970

stage in the debate he praised, in well deserved terms, the Superintendent of Insurance, his efforts, his reputation and his ability. This same gentleman whom he praised in such fullsome terms has recommended to the Finance Committee, to the government and therefore to his House, that the amendments before us to give him further powers to take certain additional action which he cannot take under the present legislation are both needed and necessary. I suggest that the hon. member for Waterloo should be willing to rely in this case at least on the opinion of a gentleman whom he praised so fully and whom he indicated deserved his respect and admiration.


David Lewis: That is a non sequitur.


John Gilbert: Mr. Speaker, may I ask the minister a question? I ask if he thinks the insurance companies will invest more money in mortgages as a result of changes in this legislation, taking into account the wider powers that they will have in equity participation and the indication that they will also participate in mutual funds. Does he think that insurance companies will invest as much, or more, money in housing?


Herbert Eser (Herb) Gray: When I was dealing with what was said by the hon. member for Broadview I was referring in general to the four bills that we have been studying: first, the two with regard to trust and loan companies and also the two bills, the first of which is before us now, dealing with insurance companies. I think there are things in the bill before us which could encourage insurance companies to make more money available for mortgage lending; for example, the proposed amendment which would not limit them to making mortgage loans limited to 75 per cent of the value of the property provided they have the excess insured with a registered mortgage insurance company.


The Acting Speaker (Mr. Bechard):: Is the
House ready for the question? The question is on the amendment of the hon. member for Waterloo (Mr. Saltsman). All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Bechard):: those opposed will please say nay.


Some hon. Members:: Nay.
Division


The Acting Speaker (Mr. Bechard):: In my
opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Bechard):: Call in
the members.


The Acting Speaker (Mr. Bechard):: I declare the amendment lost.


Donald Stovel Macdonald: Mr. Speaker, I wonder if there might be consent, notwithstanding the hour, to give this bill third reading now.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Bechard):: The
question is on the main motion. Is it the pleasure of the House to adopt the said motion?


An hon. Member:: On division.
Motion agreed to and bill read the third time and passed.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, there has been some discussion with regard to the appointment of the Special Committee on the Constitution. I wonder if I could have the consent of the House to revert to motions and put to the House the motion to appoint the membership of the committee.


The Acting Speaker (Mr. Bechard):: Does the House agree to revert to motions?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: That the members of the House of Commons on the Special Joint Parliamentary Committee on the Constitution of Canada be Messrs. Alexander. All-
[The Acting Speaker (Mr. Bechard).]
mand, Asselin, Baldwin, Breau, Brewin, Dinsdale, Fortin, Gibson, Hogarth, Hopkins, Lachance, Lewis, MacGuigan, Marceau, McQuaid, Osier, Ouellet, Roberts and Woolliams:
And that a message be sent to the Senate to acquaint Their Honours thereof.
That is an all-star cast, Mr. Speaker.


William Arnold Peters: God save the Constitution!


[Stage Direction]
Motion agreed to.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, there have been consultations between the minister and myself and I have accordingly agreed to postpone my presentation.



FISHERIES AND FORESTRY-TREATMENT OF SURPLUS EMPLOYEES-USE OF PUBLIC SERVICE COMMISSION REVIEW PROCEDURES

David Orlikow: Mr. Speaker, on February 20, in the absence of the Minister of Fisheries and Forestry (Mr. 'Davis), I directed a question to the Prime Minister.


The Acting Speaker (Mr. Bechard):: Order, please. Could we have order in the chamber, please?


David Orlikow: I asked whether in view of the large numbers of lay-offs of highly qualified scientists in the Department of Forestry and the government's inability to find alternative employment, the government even at that late date would consider following the procedure suggested to all departments by the Public Service Commission and establish an adequate review procedure so as to protect the rights of employees. The Parliamentary Secretary to the minister replied that he did not think this was necessary because the department felt it had established the most complete and competent review procedures possible and employees have the right to appeal decisions made with regard to lay-offs.
It is indeed a deplorable situation we find in our Department of Forestry. I had thought that the No. 1 Scrooge in this government
February 26, 1970

was the President of the Treasury Board (Mr. Drury). Everything I find reprehensible, I find in the President of the Treasury Board whose attitude is a perfect example of that to be found in one of the richest constituencies in the country. Now I think the Minister of Fisheries and Forestry occupies the No. 1 spot. His department has dismissed a large number of very highly qualified people who have been in the government service for many years. They have reached the age of 50 or more and are therefore unable to find alternative employment.
Let me put on record several of these cases. In Victoria the affected men are Dr. Lome Ebeh, a tree physiologist; Dr. Ajai Mansigh, an entomologist; Dr. Joe Baker, a soil scientist; Dr. Donald Edwards, an entomologist; and Vernon Phelps, a research director. In Winnipeg, my city, the affected men are Dr. G. A. Bradley, a highly specialized insect taxonomist who is 57 years old and has served the government for 30 years, and Dr. R. J. Heron, a physiologist, aged 50 who has served 25 years in the public service.
I have mentioned seven cases. These are all men who have sacrificed the possibility of higher pay in industry for the security they expected in a public service careers. They have given most of their productive lives to the public service of Canada and have served this country well. They have not only been dismissed but classified, quite obviously, as deadwood.
[DOT] (10:10 p.m.)
What does their dismissal mean, Mr. Speaker? Some of them have worked a number of years for the department. They cannot find new work. What happens? Their retirement pensions are affected very adversely. Their pensions, as with all civil service pensions, are based on 2 per cent of their best six years in the service. Only in the last few years have salaries increased quickly. These employees will not get six of the best years at the high salary; their pensions will be computed on a much lower salary scale. In addition, since they will not have a full 35 years' service, their pension will be smaller than it should be. Because they have to draw their pensions early, the pensions will be prorated, making them even less valuable than the 2 per cent of the best six years which employees have a right to expect.
Proceedings on Adjournment Motion
The chairman of the Public Service Commission in a communique to all department said the commission feels that the absence of a review process in this situation-meaning dismissals-is inconsistent with the philosophy of the Public Service Employment Act and regulations. For this reason the commission feels that each deputy head should establish an administrative review procedure to which an employee who has been declared a lay-off may have access.
Under that procedure an outside person should be a member of the review committee. The minister says we have a good review procedure, one can appeal to the deputy minister of the department who has already considered the personnel of the department and decided, on the basis of the minister's statement, who is deadwood and should be given a notice of dismissal. You can appeal, but the deputy minister and the other stooges of this minister will be judge, jury and executioner. That is the kind of just society the minister and this government proposes.
I do not think it is to the credit of the minister that there have been more complaints by employees of this department than any other-possibly more than all departments of government combined. This minister is trying to gain some points in the eyes of the Prime Minister (Mr. Trudeau) because he is the most aggressive minister in implementing the austerity program which the Prime Minister has called for on the part of the civil service.
If the minister is going to be as stubborn and stupid as he has been up until now with regard to dismissals, the least he can do is take the advice of the chairman of the Public Service Commission, who knows a good deal more about employer-employee relations than this minister will ever know, and set up the kind of review procedure which will mean that qualified employees who are being dismissed will at least have the feeling they have had a fair hearing-not the kind of kangaroo court which the minister and his department set up for them.


John (Jack) Davis: Mr. Speaker, perhaps I could outline very briefly what our problem has been. We are endeavouring in the Fisheries and Forestry Department to operate within the same budget as we had, not just last year but the year before. In other words, for three years in a row, running into next year, we
4156	COMMONS
Proceedings on Adjournment Motion will have had the same number of dollars with which to meet principally operating costs.
In the case of the forestry service, which is almost exclusively salaries and wages, we have the same number of dollars. Clearly, with a 20 per cent increase in salaries to be digested over a period of 20 months, we have a problem in respect of personnel. I might also add that in the forestry service there was a remarkable increase in employment between the early sixties and 1968, so many of the people in the forestry service are relatively young and are new recruits.
With this stringency in respect of budgets which was decided in July of last year, we moved immediately to look at and pare away some of the programs. Priorities were struck in close consultation with the universities and with industry and a number of programs were scheduled for elimination during this winter and in the coming year. Individuals were not the subject of this review; programs were the subject of the review. When the programs concerned certain people who were engaged in them, and they were highly specialized in the work, they were, unfortunately, caught in a situation which was none of their making.
The executive director of the Professional Institute made inquiries recently as to our review procedure. I replied to him in a letter which was sent on February 24, 1970, which read as follows:
Once the financial guidelines for 1970-71 were made known, an intensive review was undertaken in the Forestry Service of methods by which the guidelines could be adhered to. This review started in June and the initial stage was concluded in late November. All establishment directors and senior management personnel at headquarters were intimately and continuously involved in the exhaustive review process. Every attempt was made to retain the more important programs and as many of the employees of the Forestry Service as the financial situation would permit.
It is because all senior management staff were involved in the intensive review of programs, priorities and professional personnel, that the suggestion of the Public Service Commission re establishment of an "administrative review procedure" does not meet the situation in the Forestry Service. This has been explained to representatives of the Professional Institute. Nevertheless, if it would be helpful to you, Dr. Prebble, Assistant Deputy Minister (Forestry), could meet with you and a representative of the Public Service Commission-


The Acting Speaker (Mr. Bechard):: Order. The hon. member for Champlain (Mr. Matte).
f -Mr. Davis.]
DEBATES	February 26, 1970



SPORTS-GRANT TO THE QUEBEC AMATEUR HOCKEY ASSOCIATION

Mr. Rene Matte (Champlain):: Mr. Speaker, a few days ago I asked a question concerning sports and, more specifically, hockey.
There is in Canada a sacrosanct principle: sports and language do not mix; there must be no nationalism in sports.
Mr. Speaker, I take the liberty of disregarding this warning and not respecting this principle. Under the pretense of fair play, good will and sportsmanship, it seems that a great many young Quebecers are treated injustly.
I could make a detailed account of all anomalies which exist in the field of sports and which prejudice French-Canadians. We represent about 30 per cent of the population and when one or two of my fellow citizens manage, for example, to get on the Canadian teams sent abroad, we can say we are lucky. This could be justified in many ways.
However, as for hockey, it would be somewhat difficult to explain how the province which has the best hockey players in the world-I am referring to the Montreal Canadiens-can be for all practical purposes neglected when a national team is recruited?
Why is it that for so long-and that still holds true today-we have allowed our young players of the Junior A league to emigrate to Ontario cities? One will answer that in that province the standing of players is higher and this is not surprising considering the raids made in Quebec.
All this to come to the question which I asked the minister a few days ago, that is if complaints had been made to the minister by the Quebec Amateur Hockey Association concerning the allotment of funds by the Canadian Amateur Hockey Association.
According to newspaper reports, this agency is granting only $9,000 to the Quebec Association as against $27,000 to the Ontario one. Yet, there would be twice as many teams in Quebec as in Ontario.


Mr. Stanley Haidasz (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, according to information available to me, we have not received any direct complaint from the Quebec Amateur Hockey Association regarding grants from the Canadian Amateur Hockey Association.
February 26. 1970	COMMONS
The grant money in question was not given by our department but through a development fund as part of the agreement with the National Hockey League.
It is my understanding that resolutions re distribution of this type of fund will be dealt
DEBATES	4157
Proceedings on Adjournment Motion with at the next annual meeting of the Canadian Amateur Hockey Association in May, this year.

Motion agreed to and the House adjourned at 10.23 p.m.

Friday, February 27, 1970