1970-02-12

ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Standing Committee on Broadcasting, Films and Assistance to the Arts, in both official languages-Mr. Leblanc (for Mr. Reid).

[Stage Direction]
First report of Standing Committee on Public Accounts-Mr. Hales.
[Editor's Note: For text of above reports, see today's Votes and Proceedings.]


Hon. Eric W. Kierans (Minister of Communications):: Mr. Speaker, I would like to inform hon. members of the following decision regarding radio relay licences.
The government of Canada, using the power vested in the Minister of Communications to grant licences to operators of radio-relay systems, is implementing an interim policy regarding the establishment of new communications services using microwave relays. This policy will apply pending possible changes to be recommended by the Telecommission.
In recent years licences for such systems have been granted mainly on technical grounds. However, the growing social and economic importance of this form of telecommunications requires that more attention be placed on other criteria if we are to assure an orderly growth of the Canadian communications system which will assure maximum social benefits and minimum of wasteful duplication of investment.
The use of a systems approach in the granting of licences for microwave relays implies that applicants will have to demonstrate:
That there is some public interest and need to be served by the creation of the new facility;
That existing communications facilities cannot properly satisfy this interest and need;
That the applicant will conform to the standards of service and the technical requirements of the existing network so that the most effective and economical use of the radio spectrum is assured.
[DOT] (2:10 p.m.)
This means that licences will not be granted until applicants have submitted a detailed economic-commercial brief that will permit the department to assess the system and make a decision based on these criteria. The applicant will also be required to submit an equally detailed engineering brief so that the department may determine if the proposed facility meets technical performance standards set out by the Department of Communications. Furthermore, the department will not consider itself bound by financial or commercial commitments made by the applicant before a licence has been granted.
The primary objective of these new procedures is to provide for the planning of the efficient and orderly growth of the Canadian telecommunications network in the social and economic interests of Canadians in all parts of Canada. It will allow the Minister of Communications, in the granting of new licences for microwave relays, to determine that the new facilities will provide significant advantages over existing facilities in terms of cost, convenience and quality of service.
The new microwave licensing approach should make it easier for the federal government to perform more effectively its function of co-ordinating national telecommunications policy with provincial requirements and programs of provincial development.
The principles outlined in this statement in no way prejudge the recommendations which may be made to the government as a result of the Telecommission. Consequently this policy

February 12, 1970
Radio Relay Licences
is to be regarded as one that is subject to review in the government's over-all study of Canadian communications needs.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I sincerely thank the minister tor giving me a copy of this statement well in advance of the time of delivery. I appreciate this very much. However, this brings me to the end of the nice things I can say about the minister and the statement. I quite understand why the minister would want to take off the rather battered steel helmet he wears as Postmaster General and put on the more modern efficient hat of Minister of Communications. I think the House would appreciate a few more statements in the House by him as Postmaster General about the efficiency of the Post Office. This may be irrelevant so I shall not say more about it.
The fact is that when one looks at this statement, as is the case in respect of some other statements-I am not trying to drive ministers away from making essential statements-one wonders whether it was really necessary. I shall just read one sentence from part of the statement:
However, the growing social and economic importance of this form of telecommunications requires that more attention be placed on other criteria if we are to assure an orderly growth of the Canadian communications system which will assure maximum social benefits and minimum of wasteful duplication of investment.
The minister stopped there but the statement I have goes on to say, "In a field where resources are both scarce and essential for the development of the full potential of all segments of Canadian society."
These are stirring words for the Canadian people. If the minister means that in his program he will take into account the public interest, that is all that needed to be said. We would have thought that all government departments would have done this and would continue to do it, although we have some doubts about some government departments at the present time. Consequently I cannot really bubble over with enthusiasm about this statement. There is one part which I do think is different and needs some further comment:
That there is some public interest and need to be served by the creation of the new facility.
One wonders how this should be read in light of what has been said by the Chairman of the CRTC in connection with microwave facilities for cablevision. I know that a large percentage of Canadians in the large metropolitan areas of southern Canada are

already polluted by the television and radio broadcasts coming into Canada from the United States, but it is the poor people of central and northern Canada who continue to be the objects of the forced infusion of Canadian culture by the authority who should be allowed to decide whether they should have Canadian culture particularly or whether or not they ultimately would like to have it with some variety. When there is a conflict of interest as to how well the public interest is served by the creation of the new facility between the Minister and the CRTC and then-interpretation of the Broadcasting Act, one wonders with whom the decision will lie and what will be the result. This is a question which should be answered, particularly in light of what we heard this morning from Mr. Juneau, the chairman of CRTC.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, it was good of the minister to send us this morning the text of his statement. Fortunately he sent it by messenger rather than by mail because, judging by the way the mail is coming and going in my home town of Winnipeg, if he had sent it by mail it would not be here until next week.
I believe we all agree with the basic principles which the minister enunciated as the policy of the government. We can support the idea that not only the commercial and technical aspects of applications will be considered but also the whole question of the public interest. This we can endorse. We will, of course, be watching very carefully how the minister and the department interpret this principle in the actual granting of applications.
One thing which is of concern to us and which we think has not been resolved is that the making of decisions with regard to applications for facilities of this kind seems to be divided among the Department of Communications, the Department of Transport and the CRTC. We think this is not a good thing. We think the government should clear up the grey area and specify who has the responsibility because until that is done it will be very difficult to assess who has made the mistake, if one has been made.



POST OFFICE DEPARTMENT


Mr. Georges Valade (Sainie-Marie):: Mr. Speaker, I solicit the indulgence of the House
February 12, 1970



to raise at this time an urgent question of national interest related to the dire situation of mail transportation in Montreal. Under Standing Order 43, I seek unanimous consent of the House to put forward, seconded by the hon. member for Lambton-Kent, the following motion:
That the matter of mail transportation employees in Montreal be immediately referred to the appropriate committee of the House, with instructions to review the cause of the conflict, ways and means of bringing it to an end, accusations brought by the minister against the union and vice versa and all other related questions.
Mr. Speaker, if the House will allow me to give some explanations-


Mr. Speaker:: Order, please. Standing Orders do not allow the hon. member to give explanations. If he refers to them, he will see that he can comment on the urgency of the motion that he is bringing in.
It should never be forgotten that we have to differentiate between Standing Order 26 and Standing Order 43 and I have already taken the liberty to suggest that Standing Order 26 having been modified, we should not place ourselves in a situation where we disregard the decision taken by the House to change the procedure as regards urgent matters.
Under Standing Order 43, the hon. member is free to indicate to the House the urgency of the matter that he is moving for consideration under his motion.


Georges-J. Valade: I thank you, Mr. Speaker. I intended to explain to the House the urgency of the matter and then to state why it is urgent.
A disastrous situation prevails, affecting the whole economy of Canada, both economically and socially. In fact, as reported in Hansard on February 10, the minister stated, and I quote:
I may say that we are quite disturbed and I intend to go down to Montreal tonight. We are concerned about the violence and also the threats by the union to disclose various public activities that have been engaged in in recent years.
Those words spoken by the minister clearly indicate that the question is urgent and of national importance. The whole postal system is presently disrupted.
Welfare recipients no longer receive in due time, as they should, their allowances. The stability of businesses is threatened, since the collection of bills is slowed down. It is a problem which affects the whole Canadian economy and especially the metropolis.
21701-12J
Canadian Citizenship Act
The minister promised the House that he would take the necessary steps to settle that conflict. Up to now, conditions have worsened, and each time the minister intervenes in the conflict, the situation gets worse. The minister must tell us what measures he intends to take to settle that conflict. I am asking the House, if the minister is unable to reply to my question, to agree that the matter be referred to the committee concerned.


Mr. Speaker:: The House has heard the motion put forward by the hon. member for Sainte-Marie.
Pursuant to Standing Order 43, the motion cannot be formally introduced to the House without unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. Therefore, the motion cannot be introduced.



CANADIAN CITIZENSHIP ACT


Mr. Hubert Badanai (Fort William) moved: for leave to introduce Bill C-185, to amend the Canadian Citizenship Act.


Some hon. Members:: Explain.


Hubert Badanai: Mr. Speaker, the purpose of this bill is to allow the granting of citizenship to persons to whom citizenship has been denied because of membership in organizations considered subversive, who have not been involved in subversive activities, have no criminal record against them, and can qualify for citizenship in every other respect.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: Oral questions.



ORAL QUESTION PERIOD

Mr. Alexander:: On a point of order, Mr. Speaker, if my information is correct, last night the Prime Minister had a little supper with several mayors and reeves, and I thought he would make a statement this afternoon with respect to the many matters discussed-the constitution, urban renewal and a
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February 12, 1970

Inquiries of the Ministry tri-level conference. I would hope the Speaker the House what course of action the govern-would allow the House to revert to motions so ment intends to follow with regard to that the Prime Minister can make a statement. consensus?


Mr. Speaker:: Order, please. The Chair is always prepared to allow the House to go back to motions, but the hon. member might raise this matter as a question in due course. It is not a point of order.



THE CANADIAN ECONOMY


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to ask the Minister of Consumer and Corporate Affairs whether it is the intention of the government to seek stand-by powers to regulate the terms of consumer credit, particularly down payments and length of time for payments?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I think the practice is that if the government is going to introduce legislation, it is announced in due course when the legislation is introduced.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Consumer and Corporate Affairs whether it is his intention to give serious consideration to the recommendation of the Standing Committee on Finance, Trade and Economic Affairs with regard to the creation of stand-by powers to regulate the terms of consumer credit?


Stanley Ronald Basford: Mr. Speaker, naturally that committee's report is receiving and will receive very careful consideration but any statement on consumer credit or change in the government's financial policy should come from my colleague, the Minister of Finance.



INFLATION-CONSENSUS REACHED BY NATIONAL CONFERENCE ON PRICE STABILITY-ACTION BY GOVERNMENT

Robert Lorne Stanfield: Mr. Speaker, may I ask the Minister of Consumer and Corporate Affairs whether he is in a position today, which he apparently was not yesterday, to tell the House what the plans cf the government are with regard to the consensus reached on Monday and Tuesday in the matter of restraints? Is the minister in a position to tell


Stanley Ronald Basford: Well, I thought, Mr. Speaker, that in my very full answer yesterday I made it clear that we intended discussing the statement by the National Conference on Price Stability with the provincial premiers on Monday.


Gerald William Baldwin: A supplementary question, Mr. Speaker. In the desirable objective of the government to set an example in the problem of inflation, does the government intend industry to follow its example of a 9 per cent increase in costs during the year?


Stanley Ronald Basford: If we had followed the example we received from members opposite the increase would have been very much greater than it has been.



INFLATION-ACTION TO SEEK CO-OPERATION OF UNIONS

Hon. George Hees (Prince Edward-Has-iings):: Mr. Speaker, I have a supplementary question. In view of the widespread scepticism expressed yesterday by leaders of organized labour regarding the results obtained at the conference in Ottawa on Monday and Tuesday, would the minister take the first opportunity on motions to explain the full scope of these results and what role the government is going to ask organized labour to play in this national campaign to curtail inflation?


Stanley Ronald Basford: Mr. Speaker, I believe that opportunity will arise this afternoon and this evening when the House will be debating the motion to be considered today, and I intend to speak on that motion.


Robert Lorne Stanfield: Oh, you are going to tell us then, are you?


George Harris Hees: Mr. Speaker, does the House have the assurance of the minister that he will answer that question specifically in the debate this afternoon? Yes or no?


Mr. Speaker:: Order, please. The hon.
member for Athabasca on a supplementary.


George Harris Hees: Get on your feet.


Robert Lorne Stanfield: The minister of evasion.
February 12, 1970


George Harris Hees: He won't say one word about it.


Mr. Trudeau:: Would you?


George Harris Hees: You stick around for the debate and I will tell you a few things this afternoon that will do you a lot of good.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I would like to put a supplementary question to the Prime Minister-


Mr. Speaker:: Order, please. The hon.
member for Athabasca now has the floor.


Paul Yewchuk: A supplementary question to the Prime Minister, Mr. Speaker. Will he be prepared to answer questions today or is he going to sit and pout throughout the question period as he did yesterday?


Some hon. Members:: Oh, oh!



LABOUR CONDITIONS


Mr. J. Edward Broadbent (Oshawa-Whii-by):: Mr. Speaker, I have a question for the Prime Minister if I can get his attention. In view of the very significant increase in unemployment among young single Canadians between the ages of 14 and 19 and also young married people between the ages of 20 and 34, is the government considering special emergency measures for dealing with unemployment among the younger members of Canada's labour force?


Hon. Allan J. MacEachen (Minister of Manpower and Immigration):: Mr. Speaker, if I may answer that question, may I remind my hon. friend that the seasonally adjusted unemployment rate has dropped consistently since last October.


George Harris Hees: It has not.


Some hon. Members:: Oh, oh!


George Harris Hees: It is up this month and will go up.


An hon. Member:: The minister should be accurate.


George Harris Hees: He knows that perfectly well.


Allan Joseph MacEachen: Mr. Speaker, I hope the hon. member will do a little research before he makes his speech this afternoon.


George Harris Hees: My research was done for me by the Dominion Bureau of Statistics. I saw a
Inquiries of the Ministry report this morning and I hope the minister will also look at it.


Mr. Speaker:: Order, please. It is my understanding that a question was asked by the hon. member for Oshawa-Whitby. Perhaps the reply should be directed to that hon. member. I also understand that the minister had not quite finished replying to the question. I ought to remind hon. members that we have an opposition motion for consideration later today and it will to some extent, I gather, cover much of the ground now being investigated by questions which have been asked and answers given. Perhaps we should exercise some restraint now in this regard and hold our fire for later in the day.


John Edward Broadbent: On a point of order, Mr. Speaker, I thought the minister was about to conclude his answer.


Allan Joseph MacEachen: Mr. Speaker, I was about to put the. unemployment and employment situation in perspective by saying that the seasonally adjusted unemployment rate, which stands at 4.5 per cent, has experienced a monthly reduction since last October. I think that is important to remember. I think it also important to state that the unemployment rate in Quebec and the Atlantic provinces today is lower than it was a year ago and that the unemployment situation in various parts of the country has to be considered.


George Harris Hees: What about Ontario?


Allan Joseph MacEachen: May I reply directly to the question of the hon. member for Oshawa-Whitby. We are constantly attempting to ensure the entry of young people into the Canadian labour force. Just a few days ago I made a statement about our program for students. We intend to continue it in the forthcoming year. However, there is no plan at the moment to introduce any emergency program along the lines suggested.


John Edward Broadbent: A supplementary question, Mr. Speaker. As usual, the minister's answer had nothing to do with the question asked. Since the minister said on January 15, in replying to a question of the hon. member for York South, that his department would consider changes in the rules for manpower retraining as they affect young people, is he now in a position to announce to the House what his decision is in this regard?


Allan Joseph MacEachen: No, Mr. Speaker. That examination of the rules under the Canada Manpower training program is under consid-
February 12, 1970

Inquiries of the Ministry eration both by the National Advisory Council on Manpower and Immigration and by the committee of deputy ministers. The change proposed is of great significance and we are not sure at the moment that we have all the facts in order to make a proper judgment.


Mr. H. Russell MacEwan (Central Nova):: supplementary question, Mr. Speaker. Does the minister consider that a 10 per cent unemployment rate in the Atlantic provinces constitutes an improvement over last year when the rate was 10.1 per cent?


An hon. Member:: Try to adjust that one.


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


Allan Joseph MacEachen: Mr. Speaker, there is-


Mr. Speaker:: Order, please. The Chair has recognized the hon. member for Saskatoon-Biggar.


Mr. A. P. Gleave (Saskaioon-Biggar):: Mr. Speaker, may I ask a supplementary question about this pattern of dropping unemployment. Since the unemployment rate in Saskatchewan has "dropped" to the highest level in ten years, will the minister tell us what programs will be undertaken in that province?


Mr. Speaker:: Order, please. I must once again remind hon. members that it is obviously against the practice of the House and against the rules, citations, Standing Orders and other authorities to discuss during the question period as extensively as we are doing now a subject which will be considered later today. I remind hon. members that perhaps these questions might be asked tomorrow, but at present we have before us an order, of which hon. members have notice, which will permit some hon. members to submit their representations. I hope that we shall give those other hon. members who have other important matters to raise an opportunity to do so. Again, I understand the importance of the matter and do not want to cut off hon. members who have questions to ask about this situation. I ask the cooperation of all hon. members so that we may go to another subject as soon as possible.



EXPEDITING OF REGIONAL DEVELOPMENT POLICIES UNDER STUDY

Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I direct a related question to the Minister of Regional Economic Expansion. Notwithstanding what his colleague, the
[Mr. MacEachen.)
Minister of Manpower and Immigration, had to say about this matter and in view of the very alarming growth of unemployment in certain pockets in the regionally disadvantaged areas of the country-I am thinking here of the Atlantic provinces and of Quebec especially-is the minister prepared to expedite some of the regional development policies currently under study?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I shall reply to the hon. member that under the new program the loans granted to industry are about four times what they were last year, and the amount increased from $200 million to about $530 million. The same applies to the number of jobs created and I think this program of industrial incentives is meeting the objectives we had set. Next year there will probably be a much greater increase.


James Aloysius McGrath: A supplementary question, Mr. Speaker. Is the minister prepared to cope with the very serious pockets of unemployment in certain regions of the country, including his own province, Quebec, the Atlantic provinces and western Canada, in a special way?


Jean Marchand: Mr. Speaker, this is exactly what we are doing now.


Some hon. Members:: Oh, oh!


An hon. Member:: Heaven help us.


Pierre Elliott Trudeau: You people don't know what is going on.



EFFECT OF ENTRY OF GREAT BRITAIN INTO COMMON MARKET ON CANADIAN AGRICULTURAL PRODUCTS

Mr. Bernard Dumont (Frontenac):: Mr. Speaker, I have a question for the Prime Minister.
After the introduction of a white paper in the British House of Commons, would ftie Prime Minister tell us what the Canadian government intends to do with regard to farm product exports, which will likely stop, and what proposals it intends to make to Great Britain or the Common Market in order that such exports continue?
February 12, 1970	COMMONS


Mr. Speaker:: I would suggest to the hon. member that his question is very general and that the information he seeks would be better suited to a statement on motions by the minister. Perhaps the hon. member might so rephrase his question.


Bernard Dumont: Ten o'clock, Mr. Speaker.



CANADIAN SOVEREIGNTY


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker,
I have a question for the Secretary of State for External Affairs. Is the minister or any person in his department or in any other department at present negotiating or carrying on discussions with the United States of America about the degree of sovereignty Canada will be permitted to exercise over those Arctic waters immediately adjacent to the north coast of mainland Canada, usually known as the Northwest Passage?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, unlike the hon. gentleman, I do not think we require the permission of any country in the world to assert our sovereignty.


Gerald William Baldwin: Why don't you do it, then?


Wallace Bickford (Wally) Nesbitt: I shall excuse the minister's flippant remark, Mr. Speaker. Will the minister please answer my question? Are discussions or negotiations going on with the government of the United States over the question of sovereignty in this area?


Mitchell William Sharp: Mr. Speaker, we do not negotiate our sovereignty with anyone.


Some hon. Members:: Hear, hear!


Wallace Bickford (Wally) Nesbitt: A supplementary question, Mr. Speaker. I will put the question in such form that even the minister can understand it. Are discussions going on with the United States government concerning the Arctic waters immediately adjacent to the north coast of the Canadian mainland? In particular, are discussions going on about the passage of United States ships through those waters and the right to that passage?


Mitchell William Sharp: Mr. Speaker, I think the only part of the question that I can answer directly, because I do not understand the first part of the question, is the second part-
DEBATES	3509
Inquiries of the Ministry


Wallace Bickford (Wally) Nesbitt: Come off it!


Mitchell William Sharp: With regard to the second part, we are not having any discussions with the United States government regarding the passage of any vessel through our waters.


Gerald William Baldwin: A supplementary question, Mr. Speaker. Will the minister discuss with his colleague, the President of the Privy Council, bringing back to the House for discussion the motion in the name of the hon. member for Athabasca so that members on both sides of the House can express their views on the vacillating and wishy-washy attitude of the Prime Minister on this issue?


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, this seems to be the day of the Secretary of State for External Affairs. Today is a particularly important anniversary. It was a year ago today that the Canadian government decided to carry on negotiations, if I can use that expression, with Communist China regarding recognition. Will the minister say whether negotiations are going on? Have there been any meetings in recent days in Stockholm? Can the minister make a statement which will not approach in optimism that which he made nine months ago when he said that recognition was just around the comer?


Mitchell William Sharp: Mr. Speaker, if I may answer the questions in order, yes, negotiations are going on. We have had recent meetings and we expect to have others very soon. Never at any time did I say anything except that I thought the negotiations would be long, difficult and, I hoped, successful.


John George Diefenbaker: Does the minister intend to continue these negotiations of servile futility-


Mr. Speaker:: Order, please.


Mr. Eldon M. Woolliams (Calgary North):: supplementary question, Mr. Speaker. In view of the fact it is now suggested that Communist China has promised military aid to the Arab side in the conflict in the Middle East, I ask the Secretary of State for External Affairs whether that has changed Canada's attitude concerning its recognition of Communist China?
February 12, 1970

Inquiries of the Ministry


Mitchell William Sharp: No, Mr. Speaker. I am not sure about the attitude of the hon. member and his colleagues, but on this point the government is absolutely clear. If we can, we intend to move to recognition of the Peking regime, which in our opinion will greatly advance the cause of world peace.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: A further supplementary question, Mr. Speaker. Does that place the Canadian government on the side of the Arab nations in the difficulty in the Middle East?


Mitchell William Sharp: The answer to that is no. In this particular dispute we remain dedicated only to the attainment of peace. I hope that is also the attitude of the hon. member.



FISHERIES


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I will let the Secretary of State for External Affairs rest for a moment and direct my question to the President of the Privy Council. I ask this question not only on my own behalf but on behalf of the hon. member for Nanaimo-Cowiehan-The Islands who would have asked it yesterday if he had not been called out of the House. Will the minister agree to make immediate arrangements for a reference to the Standing Committee on Fisheries and Forestry of the question of commercial salmon fishing licences on the Pacific coast of Canada? I might say this is a matter of urgency, Mr. Speaker, and the Minister of Fisheries has indicated his willingness to have this done.


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


Thomas Speakman Barnett: Perhaps the President of the Privy Council did not hear my question.


Mr. Speaker:: Perhaps the hon. member would repeat his question.


Thomas Speakman Barnett: I asked the President of the Privy Council if he would agree to an immediate reference of the question of commercial salmon fishing licences on the Pacific coast to the standing committee. I pointed out that the Minister of Fisheries has already indicated his willingness to agree to such action.


Hon. Donald S. Macdonald (President of the Privy Council):: I apologize to the hon.
member for not having attended to his question the first time. Since we will be making an immediate reference to the committee of the estimates for the coming fiscal year, it seems that this would be the best opportunity to raise this question. At the moment the committee system is very heavily involved in legislation and estimates. I think we should do everything possible to make sure they can focus on those responsibilities rather than adding additional orders of reference.


Thomas Speakman Barnett: A further supplementary
question. Because of the fact that referral of the estimates to committees involves a very wide scope, and in view of the fact that if this proposal is to be dealt with by the committee it must be done by April 1 in order to provide a specific opportunity for west coast fishermen to be heard if they so desire, will the Minister reconsider his position and discuss with the Minister of Fisheries a specific reference of this subject?


Mr. Speaker:: Order, please. The hon.
member has now made his representation.



SEALS-DECISION ON REQUEST FOR COMPROMISE IN DATES OF HUNT

Mr. John Lundrigan (Gander-Twillingate):: have a question for the Parliamentary Secretary to the Minister of Fisheries. Can the Parliamentary Secretary answer the question which was taken as notice on February 5 regarding the unlicensing of some people on the east coast of Newfoundland?


Mr. E. F. Whelan (Parliamentary Secretary to Minister of Fisheries and Forestry):: Mr. Speaker, the hon. member asked if we would consider changing the dates for seal fishing which have been set from March 22 to April 29. These dates have been negotiated with Norwegian government officials and we have no intention of renegotiating. These dates have been set and they will stay that way.


John Howard Lundrigan: In view of the representations which have been made to the minister and members representing the east coast, is the government planning to announce a program shortly which will compensate these people for their loss of income as a result of the elimination of the present seal fishery?


Eugene Whelan: Mr. Speaker, we are perfectly aware of this. We have discussed the problem of the loss of income these people will suffer.
February 12, 1970	COMMONS
We have also discussed the possibility of changing these dates. Our scientists have advised us that because of conservation measures it would not be proper to change the dates. The programs we have initiated over the last year have been beneficial to the fishermen, more so than in any year in the past. We hope our programs will continue to benefit the fishermen this year, too.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Gander-Twillingate is rising on a question of privilege.


John Howard Lundrigan: I think the minister's Parliamentary Secretary has misled the House in not answering the question I raised and by giving the impression that the government does have a program. The government does not have a program, and false information has been given to the House regarding a program of the Department of Fisheries which hon. members have just applauded. This kind of misrepresentation is certainly not in keeping with the attitude of the minister-


Mr. Speaker:: Order, please.



IMMIGRATION


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
Is he aware that 500 young Americans are passing through Canada on their way to Cuba? Can he tell us if the governments of Cuba and Canada have reached an agreement whereby the transfer of these American immigrants to Cuba has been authorized?


Allan Joseph MacEachen: Mr. Speaker, there is no such agreement. These people have been treated in the normal way as persons seeking transit through Canada to the United States and vice versa.



POLLUTION


Mr. J. P. Nowlan (Annapolis Valley):: My
question is to the Minister of Transport. I
DEBATES	3511
Inquiries of the Ministry am glad to see him in the House today although, according to the roster system, he is not due to be here. In view of the fact, as reported this morning, that the stern of the Arrow has now sunk in Chedabucto Bay, can the minister make a statement as to what the government plans to do to try to abate and restrict the pollution of the water from the sunken stern?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I anticipated that there might be some questions on this important matter; hence my reason for being here.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: It is a fact that as a result of the extremely severe weather experienced yesterday in the area of the wreck, the stern portion of the vessel slipped even farther off the ledge on which it was impaled. As a result, all of the vessel but the funnel is under water. This sinking did not result in any large additional expulsion of oil, but it does mean that a larger amount is seeping out of the vessel, apparently as a result of the extra rupture in the stem section.
If hon. members opposite are interested in the details of this matter, then they might at least give me the courtesy of remaining quiet while I try to answer the question.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: The present position is that we are now trying to examine means through which we can burn the oil in the forward part of the ship, and do the same thing with the stern section in its present location since we cannot attempt to move it away from where it is on the bottom of the ocean.


Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration. Since the efforts of the Minister of Transport have been ineffective in dealing with this problem, and since the problem has arisen in the minister's own constituency, may I ask him whether he will impress upon his cabinet colleagues-


Mr. Speaker:: Order, please. The hon.
member knows that he cannot ask a question in those terms.



REQUEST FOR LISTING OF PHOSPHATE CONTENT OF DETERGENTS ON CONTAINERS

Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a question for the
February 12, 1970

Inquiries of the Ministry Minister of Consumer and Corporate Affairs. Pending legislation to outlaw phosphate detergents, will the minister assist concerned consumers to prevent water pollution by requiring detergent manufacturers to list the phosphate content on all detergent containers sold to the public?


Stanley Ronald Basford: Mr. Speaker, I replied the other day that all efforts in this regard were co-ordinated by my colleague, the Minister of Energy, Mines and Resources. I think the question should properly be directed to him. There is at the moment no law at the federal level to make such labelling mandatory.


Winona Grace MacInnis: Mr. Speaker, I must follow through with a supplementary. The reason I turned to the minister was that his colleague thought that women were too stupid to make use of such labelling and that they would go ahead and buy the high phosphate detergents anyway. Since the minister realizes that all women are not stupid in this matter, would he try them out-


Some hon. Members:: Oh, oh!


Winona Grace MacInnis: Mr. Speaker, with certain ministers I would be afraid of the risk to their home life, but I am not a bit afraid in this case. Will the minister in his wisdom please give women the opportunity to be informed of the phosphate content of detergents and to behave like the responsible citizens which most of them are?


Mr. Speaker:: As a result of the hon. member's representations, I am sure there will be a dialogue between the two ministers concerned.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I had intended to ask this question of the Minister of Energy, Mines and Resources but since he is not in the House today I should like to direct it to the Minister of Consumer and Corporate Affairs. Would the minister consult with the Minister of Energy, Mines and Resources on whether a statement can be made shortly with respect to whether or not the minister is going to take federal action to ban phosphates in detergents?


Stanley Ronald Basford: Mr. Speaker, after the previous question I think I had better consult first with my wife.



SHIPPING


John Howard Lundrigan: Mr. Speaker, I have a very urgent question related to the previous line of questioning to the Minister of Transport. Can the minister indicate whether he has received a report about another disabled tanker, this time off the south coast of Newfoundland? If so, can he give the House the assurance that the situation has been contained and that we will not suffer another tragedy of the kind we have just had?


Donald Campbell Jamieson: Mr. Speaker, early this morning there was a report that a small tanker owned by the Irving interests had a fire in the engine room while in the vicinity of Placentia Bay on the south coast of Newfoundland. The last report we have is that the fire is out. The motor vessel Petite Forte has taken the tanker in tow and is proceeding to Argentia.



WHEAT-REDUCTION OF ACREAGE BY OTHER COUNTRIES-CANADIAN REDUCTION-PAYMENT TO FARMERS

John George Diefenbaker: Mr. Speaker, I have a question for the genial member for Saskatoon-Humboldt in connection with the wheat situation, and in particular his visitation to Saskatchewan or western Canada yesterday. Will the minister say, first, whether any arrangements or agreements have been arrived at between other wheat growing exporters to reduce their respective cereal acreages this year? Second, will the minister say whether the government is now considering, in view of the interview he gave while in London, having some ten million acres taken out of cultivation over a period of two years, with the government paying some $20 an acre to farmers who are in the position of having to reduce their acreage?


Hon. Oito E. Lang (Minister without Portfolio):: Mr. Speaker, the answer to the first question is no. In answer to the second question may I say that the question contained a reference to certain figures which bear no relationship to anything that I did say. I should like to assure the right hon. member and other members that the government is very seriously looking at the problems of land
February 12, 1970	COMMONS
adjustment, resource adjustment and acreage adjustment in the prairie region in the hope of producing advice that will be meaningful to individual farmers in time for seeding this year.


John George Diefenbaker: I thank the minister for his answer, but I now ask him whether the government intends, whatever may be the acreage determined upon, to make a payment to western farmers who go out of the production of wheat pursuant to a direction given them by the government of Canada?


Otto Emil Lang: Mr. Speaker, this is a question about our intentions. We will be able to reply as soon as our minds are made up.


John George Diefenbaker: A further supplementary question. Is the minister in agreement with the statement that the Prime Minister made the other day, that western farmers who ride on $20,000 tractors and own land worth $100,000 to $200,000 do not need help?


Mr. Speaker:: Order, please. The hon.
member for Saskatoon-Biggar.


Mr. McIntosh:: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: Order. The hon. member for Swift Current-Maple Creek on a question of privilege.


John (Jack) McIntosh: Mr. Speaker, I regret to raise this question of privilege, but on Tuesday when the Minister without Portfolio responsible for the Wheat Board was in the House I rose to be recognized on a number of occasions. The question period expired without Your Honour having recognized me. During that time you had asked the hon. member for Saskatoon-Biggar whether he wanted to ask a question. He did not, but he passed on the opportunity to another colleague. Your Honour still failed to recognize me later in the period. I have been rising today ever since the question period started and you still have not recognized me. I do not mind taking my turn, but I do think Your Honour should recognize us in turn.


Mr. Speaker:: Order, please. If the hon. member looks around he will see that each day many members try to get recognition from the Chair. The Chair attempts to be as fair as possible, though perhaps I am not always successful in my attempts to satisfy all hon. members. The Chair will recognize the hon. member in just a moment, but I think I should first see the hon. member for
DEBATES	3513
Inquiries of the Ministry Saskatoon-Biggar who rose on a supplementary question. I will call on the hon. member immediately afterwards.


John (Jack) McIntosh: Mr. Speaker, in case you misunderstood my remarks, may I say we are quite prepared to wait our turn, but we do not think we should have to wait until someone else asks three questions.


Mr. Speaker:: That is a very good point.


Alfred Pullen Gleave: Mr. Speaker, I should like to ask the Minister without Portfolio in charge of the Wheat Board whether he can tell the House if the proposals he made when out west in regard to acreage reduction received favourable support from farm organizations in the western provinces?


Otto Emil Lang: Mr. Speaker, I was in western Canada yesterday meeting with a number of farm leaders to discuss a variety of ideas. The discussions were very good indeed, helpful me and to my thinking in regard to our programs. This was the purpose of this kind of meeting and I think it served its purpose very well.


Alfred Pullen Gleave: I have a further supplementary. Could the minister give the House any information as to when we may hope that grain will be shipped out of the west coast ports?


Otto Emil Lang: Mr. Speaker, I think hon. members know that a vote is taking place there. I hope that upon its successful conclusion grain will again begin to move very quickly.



FINAL PAYMENTS ON DURUM WHEAT-DEFERRED WHEAT DELIVERIES

John (Jack) McIntosh: Mr. Speaker, in order to avoid a series of oral questions, I should like to ask the Minister without Portfolio responsible for the Canadian Wheat Board whether he intends to accede to the request made on February 4 that he make a statement on motions regarding the Durum wheat account in order to explain the lack of final payment on that type of wheat and to clarify and update information respecting deferred wheat deliveries for the 1968-69 crop year?


Otto Emil Lang: Mr. Speaker, I should like to assure the hon. member that the hon. member for Assiniboia keeps this subject very close to my mind.
February 12, 1970

Inquiries of the Ministry


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John (Jack) McIntosh: Mr. Speaker, I should like to direct another question to the minister.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


John (Jack) McIntosh: Let me put a direct question to the minister. Does the department or the government intend to make a final payment to the Durum wheat producers?


Some hon. Members:: Order, order!


John (Jack) McIntosh: I might also add that the way the government leaked this information through the member for Assiniboia and a senator is not the way to inform the public. I ask the minister: Are you going to pay it or are you not going to pay it?


Otto Emil Lang: Mr. Speaker, I was not sure whether I had been left with a question or simply allegations. I should like to assure the hon. member that I have no way of knowing how something could leak which does not exist. That is something about which he is no doubt an expert. The whole question of payments is a very complex one involving final calculations before the pools can be closed, and that information on the final position is not available. Some information on the state of the law in this regard should be available to the hon. member as a result of the research staff that has so generously been made available to him.


John (Jack) McIntosh: I did not ask you about the pools, I asked you about the Durum wheat account. Is there a legal technicality involved in whether you can or cannot make this payment to the producers?


Mr. Speaker:: Order, please. The hon.
member should direct his question through the Chair, of course.


John (Jack) McIntosh: Mr. Speaker, I direct that question to the minister through the Chair.


Mr. Speaker:: I recognize the hon. member for Assiniboia.


Some hon. Members:: Hear, hear.


Mr. A. B. Douglas (Assiniboia):: Mr. Speaker, before I ask my supplementary I might point out that-


Some hon. Members:: Sit down! Order, order!


Mr. Speaker:: Order, please. We have not more than one minute before the end of the question period. The hon. member should ask his question quickly.


Albert B. Douglas: Mr. Speaker, I was about to advise that the minister-


Some hon. Members:: Order, order!


Mr. Speaker:: Order, please. The hon.
member is now down to 30 seconds.


Albert B. Douglas: Would the minister in charge of the Wheat Board assure the House that wheat will be moved through the west coast ports even though the government might have to revise the plans it put into effect so efficiently four months ago?


An hon. Member:: "Reviving", is the right word for the government.


Otto Emil Lang: Mr. Speaker, at the present time we are optimistic that all products may soon be moving again from the west coast. Obviously the movement of grain through that port, as through other ports, is a matter of very fundamental importance to us. That suggestion will have to be taken into consideration if the worst comes to the worst.


Mr. Speaker:: Orders of the day.


George Harris Hees: I rise on a question of privilege, Mr. Speaker. I should like to correct an error. I have done some further research since I corrected the Minister of Manpower and Immigration and I find that his figures are right.



BUSINESS OF THE HOUSE

Gerald William Baldwin: Mr. Speaker, I should like to ask the President of the Privy Council what business is proposed for the balance of this week and next week.


Donald Stovel Macdonald: Mr. Speaker, the business for Friday will be government order 49, that is the amendment to the Oil and Gas Production and Conservation Act, to be followed by government order 67, an amendment to the Agricultural Products Cooperative Marketing Act. On Monday next, the first item to be called will be government order 66, to amend the Supreme Court Act, to be followed by government order 68, the Shipping Conferences Bill. On Tuesday, we intend to resume the debate on government order 29 with regard to the National Parks Act, to be followed by the resumed debate on

February 12, 1970

government order 61 with regard to the Investment Companies Act. We will then deal with government order 36, the Canada-Swed-en tax convention. On Wednesday, the business will depend on the progress achieved to that point. On Thursday it has been suggested there might be an opposition day, the subject of which is to be discussed between house leaders.


James Aloysius McGrath: Mr. Speaker, I should like to ask the House Leader a question in respect of the order of the business. Will he tell the House when the government proposes to proceed with the report stage and third reading of Bill C-175, which has now completed the committee stage?


Donald Stovel Macdonald: Mr. Speaker, the hon. member will recognize the fact that it would be difficult to proceed with it in the House before it is reported back from the committee.


Georges-J. Valade: Mr. Speaker, on a point of order related to the motion I introduced earlier in the House.
I want to take this opportunity, when the Minister of Communications and Postmaster General is here, to ask him about the revolving postal strike at Montreal, in view of the fact that the minister is likely to leave for a few days.
Could not the House agree to revert to motions so that the minister could make a statement on this matter?


Mr. Speaker:: Order. The hon. member suggests that the minister should make a statement on motions. Unanimous consent of the House would, of course, be needed for us to revert to motions, to allow the minister to make that statement.

I have to ask the House whether there is unanimous agreement to revert to motions to allow the Minister of Communications to make a statement.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: I regret to say-


Georges-J. Valade: Mr. Speaker, on a question of
privilege.
Business of the House


Mr. Speaker:: Order. The hon. member can go on to his question of privilege when I am through with my remarks on his point of order.
As there is not unanimous consent, unfortunately, the minister will not be allowed to make the statement suggested by the hon. member who is now rising on a question of privilege.


Georges-J. Valade: Mr. Speaker, on a question of privilege.
On an issue of public interest or of national urgency, I believe that hon. members expect the government to inform the public, through its representatives, as regards the solutions it proposes. The prevailing national urgency affects 3 or 4 million people in the metropolis, and the minister refuses to make a statement today on motions. Therefore, I would ask him to tell us if he intends to make a statement tomorrow, or later on, because he is often away from the House.


Eric William Kierans: Mr. Speaker, I hope to be in a position to make a statement Monday, but we have taken some measures so far and we are getting ready to take others-


Mr. Speaker:: Order. I regret to interrupt the minister. He cannot of course make such a statement at this stage. I recognize with the hon. member that the matter he raised is important and urgent. As the House withheld unanimous consent, the statement cannot be made immediately.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, may I give a brief intimation in respect of today's business. This is an opposition day and we have had some discussion on the opposition side of the House as to whether we should make any change in the rules regarding the time of speeches. The consensus was that we should not do so and that the provisions of Standing Order 58(13) should apply. However, in order that the largest possible number of members might be able to take part, we hope there will be an understanding that no one will ask for an extension of time.
[DOT] (3:10 p.m.)


Mr. Speaker:: Is it so agreed?


Donald Stovel Macdonald: Mr. Speaker, I did not hear the last part of the hon. member's comments. Would he repeat the point?

February 12. 1970
Business of the House


Stanley Howard Knowles: My
suggestion is there be no change in the rule regarding the length of speeches today, but that there be an understanding no one would request an extension of time.


Donald Stovel Macdonald: That would seem to be reasonable.


Gerald William Baldwin: Yes, I think so, despite the fact that the Minister of Consumer and Corporate Adah's should need more than 20 minutes to deal with the question.


Albert B. Douglas: I rise on a question of privilege, Mr. Speaker. I should like to correct the impression that the hon. member attempted to leave a few minutes ago that I was leaking information for the government. Quite the opposite is true in this case. It was I who informed the minister of the danger in the situation with regard to Durum producers and the hon. member for Swift Current-Maple Creek based his question on information I provided to him.


John (Jack) McIntosh: Mr. Speaker, on the same question of privilege may I say that I think perhaps the hon. member for Assiniboia assumed too much. At least he does so far as I am concerned. Maybe the minister can speak for himself. I would never have mentioned anything about it if the minister had not suggested it was the hon. member for Assiniboia who was bringing him all this information. I said this information was leaked to the Durum producers and the people of western Canada by the minister through the Liberal senator from Assiniboia and the hon. member for Assiniboia. The minister would not answer the question. He has not yet answered whether the government intends to pay the Durum producers what is rightfully theirs.
I studied this problem long before the hon. member for Assiniboia-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The hon.
member has given his comments. I do not think there really is a question of privilege. In view of the fact that the hon. member had referred to the hon. member for Swift Current-Maple Creek, I thought that member should be allowed to say a word. Since we have recognized there is some urgency involved in allowing hon. members to participate in the very important debate, and that hon. members' contributions be restricted to

20 minutes, I suggest we should commence the debate which is the order of business for today as soon as possible.


John (Jack) McIntosh: I just want to put the record straight-


Mr. Speaker:: Order. I have ruled there is no question of privilege and I ask the Clerk to call the order of business for today.


John (Jack) McIntosh: Mr. Speaker, you allowed the hon. member to get his whole statement on the record-


Mr. Speaker:: Order, please. Orders of the day.



GOVERNMENT ORDERS


Mr. Lewis (for Mr. Saltsman) moved:: That this House condemns the Government's policies which have deliberately created unemployment up to a crisis level, thus placing the country in danger of a recession, but which have failed to stop the rapid and continuing increase in the cost of living, and this House therefore calls for the immediate implementation of full employment measures, and a comitment to a comprehensive prices and incomes policy.
He said: Mr. Speaker, I regret that the hon. member for Waterloo (Mr. Saltsman) unfortunately has a cold which has affected his voice so that he is unable to move his motion. My colleagues and I thought it would be valuable for this House to discuss the question now before it between the time of the conference which ended the other day and the time of the conference of first ministers which is to take place on Monday.
We place in the forefront of our concern, as I suggest should every member of this House, the unemployment figures which were released only this morning. I am sorry the Minister of Manpower and Immigration (Mr. MacEachen) is not here because I want to say to him that in explaining those figures he made the kind of statistical statement, undoubtedly in complete innocence, which misleads the House and the people of Canada. The fact of the matter is that, despite the gracious acknowledgement from the hon. member for Prince Edward-Hastings (Mr. Hees), if you look at the unemployment statistics the seasonally adjusted figure for January is almost always the lowest in the year
February 12, 1970	COMMONS
because of statistical reasons which I do not intend to go into. The minister is taking some consolation from the fact that there was a dip in the seasonal figure based on an entirely false understanding of the figures. This is misleading, apart from the gravity of the present situation.
We say that the government's policies have been deliberately designed to increase unemployment, to slow down the economy. I say to the members of the government that this is the only policy in which they have really succeeded, because unemployment has gone up and the economy has slowed down. The Prime Minister (Mr. Trudeau) is neither a prophet nor the son of a prophet so far as I know, but he certainly prophesied correctly when the other day he emphasized that he expected unemployment to go to 6 per cent. He has it. He has 6.1 per cent for January and I suspect, by looking at the unemployment figures for other years, that the unemployment rate now as I am addressing this House may well be closer to 6| per cent than to 6 per cent. But altogether more disturbing even than this figure itself, although it would be enough, is the fact that there is no indication the government is ready to call a halt to this continuing descent into recession.
The Prime Minister and his colleagues are so obsessed with the subject of inflation in a completely wrong context, and are so hidebound by traditional use of their doctrinaire orthodoxy, that they show little concern for the well-being of the Canadian people in the next year or two, particularly the working people who increasingly will be unemployed in this country. I say the unemployment figures are serious not only because the rate has gone up to 6 per cent nationally but because when you look at the figures you see results which are disturbing even more deeply than the over-all figure. One finds that the unemployment figures in the Atlantic provinces and in Quebec continue to be considerably higher than the national average. It is true that the unemployment figure in the Atlantic provinces has not gone up and is about the same as it was a year ago, but I submit it was high enough a year ago at 10 per cent and could hardly be expected to go any further without an even greater disaster for the people in that region. The same is true in respect of the province of Quebec, where the figure has remained about the same at about 8 per cent. I make the same comment in that regard.
DEBATES	3517
Control of Inflation and Unemployment
What is important to note from the point of view of the welfare of Canada's economy and Canadians across the country is that, for the first time in some years, the unemployment figures are increasing across the country. For the first time in some years the actual Ontario figure is as high as 4.2 per cent. The figure for the prairie provinces is as high as 4.6 per cent and the figure for British Columbia is as high as 7.3 per cent.
[DOT] (3:20 p.m.)
What that means is that right across this country, no longer limited to any particular regions, the unemployment figures have reached a dangerous point which indicates a definite recession in the economy of this country. I ask members of the House and the people of Canada to note the following fact about these figures, perhaps one of the most disturbing of all, that is that unemployment has affected and is affecting the young people of Canada considerably more than the middle aged and older members of Canada's work force. The largest increase is to be found in the group of 14 to 19 year olds. Canadians just leaving school are unemployed. The country cannot take care of them, and all the bitterness, alienation and resentment that that produces in the breasts of young people who are faced with this kind of situation is horrible to contemplate, having in mind the future of this country.
The next largest group of unemployed is to be found in the group aged between 20 and 34, which again means that young people who may have just married and have young families are hit the hardest by the scourge of unemployment which the government has deliberately produced in its alleged fight against inflation. This rich, affluent country about which the Prime Minister, the Minister of Finance (Mr. Benson) and every other minister boasts, is unable to give work to the young people leaving our schools and to the young people who have entered adulthood and are beginning to build a family life in this country.
Finally, I ask hon. members and I ask the people of Canada to note that this deliberate government policy of increasing unemployment is the greatest boon to Levesque and the separatists in Quebec and threatens the unity of Canada from coast to coast.


Some hon. Members:: Hear, hear.


David Lewis: The disaffection in the prairies, the disaffection in the province of Quebec, the feeling of injustice in all the regions of this
3518	COMMONS
Control of Inflation and Unemployment country which are disadvantaged, are justified once again by the government's policy of deliberately increasing unemployment. I keep on repeating and will continue to do so, that this increased unemployment is not an accident, is not the result of the workings of the economy left alone, but is the result of deliberate government intentions and deliberate government policies. If the rest of Canada is unhappy about the state of unemployment now, I am sure that the Prime Minister and his colleagues the Minister of Finance and the Minister of Consumer and Corporate Affairs (Mr. Basford) are gleeful about the fact that their intention to increase unemployment has in fact succeeded.
In our view this is a ruthless, inhuman policy. Any government that deliberately increases unemployment in the country is a ruthless and inhuman government. When the prime minister of a country stands up or sits down in front of a camera, no matter where, and coldly says: "I can take 6 per cent unemployment", he indicates he is a leader whose heart is suspended way up in the air somewhere and who has no sympathy for the victims of unemployment. That kind of leader of a country can only be condemned by every right thinking person.
Such a policy is not only ruthless and inhuman, it is self-defeating. The first result of such a policy is the tremendous loss of thousands of millions of dollars in the production of goods and services. To have 6 per cent of the work force unemployed at any given time means the loss of one twelfth-since it is one month we are talking about at the moment- of many billion dollars of wealth which those people would otherwise be producing for Canada and for the world.
It is self-defeating also because large unemployment means an increase in welfare costs and welfare rolls. I heard from my colleagues from Newfoundland the other day that, for example, in some of the constituencies they represent, 11,000, 18,000 and even 20,000 people are on the welfare rolls out of a total constituency population of about 60,000. All over the country, wherever unemployment hits, the result is more people on welfare. Not only does that mean the destruction of the dignity and self-respect of the people who are forced to be on welfare, but it also means the loading on the cities, towns and provinces of vastly increased costs in the welfare field, costs which neither the municipalities nor the provinces can possibly afford. What we have is higher unemployment deliberately induced

DEBATES	February 12, 1970
by government policy. We have resentment and disenchantment across the country as a result of this policy; we have the destruction of the dignity of thousands of Canadians who are put on the rolls, and we have the disappointment and bitterness of young people who cannot find jobs in their affluent country.
There has been no effect of that policy on the price level in this country. Prices have been steadily going up, and the rate of increase has hardly been affected by this ruthless and inhuman policy of the government. So that as a result of this policy unemployment has increased, with the effect which I have suggested, and there has been no effect at all-and I say this with emphasis-on the continuing and steady increase in prices for the housewife, for the pensioner and for all the people on fixed income in this country. I do not know of any policy that deserves condemnation more than this deliberate policy which results in increased unemployment and increased prices at the same time, walking side by side up the ladder of destruction of the wellbeing of the Canadian people. Why is that?
My colleagues and I suggest that the reason for the failure of this policy is that it fails to recognize the modern kind of economy in which we live, and the fact that prices in the basic industries no longer respond to the supply and demand of the market. We are suffering from managed and administered prices in the most important areas of the economy, and they no longer respond to the broad fiscal and monetary policy. Indeed, these large corporations fashion the market, fashion demand, and therefore the hope that if you reduce globally the total purchasing power in the hands of the people you will automatically have a drop in the price level has been proven wrong, because in analysis as well as in fact that is not the way in which the modern economy works.
That takes me to the conference which ended on Tuesday night. A certain euphoria has been created in this country by the announcement which emanated from that conference and its development has been aided by my good friends of the communications media in the press gallery and elsewhere. I hope that they are right. My colleagues and I will be delighted if in 1970 this conclusion of the conference will affect the lives of the Canadian people in some way. But I hope I do not sound merely negative when I say to the Minister of Finance and to the Minister of Consumer and Corporate
February 12, 1970	COMMONS
Affairs that I remain extremely sceptical of the alleged agreement which was reached.
[DOT] (3:30 p.m.)
I want to take a few minutes, Mr. Speaker, to deal in two or three places with that agreement. I must do so in order that we do not have any false illusions about what is likely to come. I read one of the so-called agreements, and it reads like this:
More specifically, where higher prices are needed to cover higher costs-
And listen to the following words:
-and market conditions make them feasible, business firms generally, if called upon to do so, would ensure that price increases were clearly less than the amount needed to cover the increases in costs at a normal volume of output and sales.
What does that mean, Mr. Speaker? What has business undertaken generally to do? It has said, "If I can make as much profit in 1970 as I did in 1969, if market conditions permit me, if the volume of my out-put and sales permit, if I do not suffer any reduction in my profits then by gad I am going to be generous enough not to increase my prices up to the level of the costs." What guarantee of lower prices is that? That is not a declaration of price stability; that is a declaration of profit maintenance, and nothing less than that.
Then, there is another statement, Mr. Speaker, a particularly generous and philanthropic offer from the banks, the trust companies and mortgage companies, one that only an ingrate like myself could find less than satisfactory. Just listen to the generosity of these people:
Specific commitments have already been given by the chartered banks for 1970 not to increase their existing schedule of service charges in Canada.
I hope, Mr. Speaker, that members of this House feel consoled by that fact. The banks in this country have increased their service charges to a point which is usurious, which is immoral, which has resulted in immense profits for the banks and now they say, "Boys, having gouged you sufficiently until now, you may sit there and I will not gouge you any more." That is supposed to help the people of Canada?
They have also undertaken not to increase Interest rates charged on Canadian dollar loans in Canada-
Listen to this, Mr. Speaker.
-except to the extent of any corresponding percentage point increase in the rates payable on Canadian dollar personal savings deposits.
DEBATES	3519
Control of Inflation and Unemployment
Despite the fact that the banks have had phenomenal profits, and despite the spread between the interest rates they pay depositors and the interest rates they gouge from the public when they make loans-that spread is large enough now-they are saying, "If we have to pay a quarter or a half percent more to the depositors, despite our great concern for Canada's economy, despite our bleeding hearts for the welfare of the Canadian people, despite the fact that it is our nature to be generous and philanthropic, if we have to pay that much more to our depositors you will have to pay a quarter or a half per cent more on the loans that we make to you." That is the kind of arrangement or agreement to which everybody in Canada is supposed to answer "Yes and amen", with the conviction that it will do something for the economy of Canada in 1970.
I shall quote from two other agreements, Mr. Speaker. One made by the general merchandise sector of the retail and wholesale trades reads:
The general merchandise sector of the retail and wholesale trades in determining pricing policies during 1970 would undertake not to increase initial markups on its various merchandise categories unless realized profit per dollar of sales would fall below that of the base period-
The base period being 1969 in most cases.
What kind of undertaking is that? It says in simple language, "If we can make the same profits in 1970 as in 1969 we will not increase the initial markups, but if our volume falls, or for some other reason our profits are affected, the markups will go up." I pause to interject that when you have 6.1 per cent unemployment across the country the likelihood is that in many areas of Canada the volume of sales will in fact fall, and the wholesale and retail outlets will not have as good a year as they had a year ago. The volume of their sales will probably fall off and, therefore, their prices will go up. And all this will be in accordance with the agreement which the minister hailed as valuable.
The same kind of thing applies to the grocery sector which undertook not to increase initial markups on the same qualification, namely, that there would be the same realized profit per dollar of sales. I am sceptical of the value of this document because as far as I can read it, and I think I can read, and as far as I heard the comments from some of those who attended the conference, I am confident there is no intention on the part of the business community to do anything for the price level unless their unnecessarily high
3520	COMMONS DEBATES	February 12, 1970
Control of Inflation and Unemployment profit level is maintained in 1970 as it was in 1969, and that is no consolation to the people of Canada. That is not going to roll back the cost of living in this country. It is going to keep it as high as it is, and probably continue to push it up.
In this statement there is some reference to the fact that nothing effective can be done for the control of inflation unless there is a comparable measure of restraint "by wage and salary earners." All I can say in response to that is that from my knowledge of the labour leaders in this country they would be just as ready, if they were willing to mislead the people of Canada, to sign an agreement about wage and salary restraints which contained all the weaselling qualifications that the alleged agreement of big business contains, and it would not mean anything.
Sure, the labour leaders would come tomorrow, if they were willing to mislead Parliament and the people, and would sign an agreement saying, "We will refrain from seeking wage increases if our standard of living is increased by X per cent just as it was in 1969 over 1968." They would sign that, and they would then be misleading Parliament and the people of Canada in the same way as, innocently, Mr. Speaker-I do not accuse anybody of bad faith-as innocently as those who have signed the document to which I have referred and from which I have quoted.
Despite this document, the result is that the government's policy in 1970 will again fail, as it failed in 1968 and in 1969. Canada will continue to face growing unemployment, or at least a high level of unemployment-even if it does not increase, it is high enough now- and a growing cost of living, or at least a high cost of living. Again, even if the cost of living does not increase any more, it is high enough now. This is why we felt this motion should be discussed today, between the conference that ended and the conference that is to take place. It was for this reason that, on behalf of my colleagues and myself, I condemned the government policies in the strong words that I have used, and I admit they were strong words.
[DOT] (3:40 p.m.)
I wish to spend the few minutes left to me in indicating what in our view might have been-and I say "might" because no one can be positive about these things-a successful policy in the fight against inflation. We say voluntary restraint is ineffective and ineffectual, and that the kind of declaration which

came out of the conference of business and professional people the other day is of little value, that all the ways in which the undertakings are hedged around mean they will not produce any effective or substantial or meaningful drop in the price spiral. The only way to deal with the situation in an economy such as ours is to impose a comprehensive prices and incomes policy with teeth, if necessary selective price controls and selective controls on all the other sources of income in this country-profits, interest, dividends, wages, salaries and the rest. Only when you have a comprehensive incomes policy, only when you have a genuine price control policy with teeth in it, has anyone in this House or anywhere else the right to ask the working people of this country, who are the majority after all, whether white collar or blue collar, to take less in wages than their bargaining power might obtain.
I would hope that if one had this kind of policy that the spokesmen for the organized work force in Canada and, so far as there is such a thing, the spokesmen for the unorganized part of the working force in Canada would agree to fit into such an over-all policy. They will always be morally obliged to ask that special consideration be given special groups because in fact too large a portion of the work force in Canada is at such a low level of income that it would be heartless to keep them there. There are regions in this country which have a much lower level of wages and salaries than other regions and it would be necessary to give special consideration to them.
Speaking for my own party and not for anyone else, within these human and socially desirable changes in the program, I would hope that the labour movement would agree to a wage and salary program. However, I am with them without qualification in rejecting such a program until such time as there is effective price control and a comprehensive incomes policy touching the rich as well as the working people in this country.
We have to do certain things immediately to recompense those groups hit hardest by inflation and a rise in the cost of living. We should have abolished long ago, and if the government had any social heart it would have done so, the idiotic 2 per cent ceiling on the cost of living adjustment for old age pension and supplementary benefits. The least that should be done for the old people in receipt of pensions and benefits is, to make srue that their dollar in 1970 buys the same
February 12, 1970	COMMONS
amount of goods as it bought several years ago. We ought to make the adjustment in the full cost of living increase and the same for welfare benefits and minimum wages.
I see by the clock that my time is up, Mr. Speaker. Some points that I have not dealt with will be taken up by other speakers from my party and other parties if they catch your eye. I want to conclude by saying to the government that neither I nor my colleagues particularly enjoy making strong declarations concerning unemployment and the rising cost of living and condemning the government for them. I would be a much happier member of Parliament if it were possible, conscientiously and honestly, to congratulate the government for having accomplished something for the people of Canada, but it is impossible to do so as the record of the government in this field has been abominable.


Some hon. Members:: Hear, hear.


David Lewis: It has been heartless and inhuman; it has resulted in a bad future for the country; it is unforgivable; it is out of date and we cannot but condemn it.


Robert Lorne Stanfield: Mr. Speaker, I had hoped to have the privilege of hearing whatever excuses the Minister of Finance (Mr. Benson) has to offer before speaking, but since he does not choose to take the floor I shall do so quite happily.
There can be no doubt but that it has been the policy of this government for some two years to create slack in the economy, and to deliberately create unemployment. I go back to the statement made by the former minister of finance, now the Secretary of State for External Affairs (Mr. Sharp), in the fall of 1967, in which he stated this: "I have taken the position consistently that as far as I am concerned and the party associated with me, I do not accept this as a civilized way of fighting inflation".
For some two years I have been advocating and suggesting to the government that it use a guidelines policy in order to reduce the necessity for fiscal and monetary austerity. Yesterday, if I heard him correctly, the Secretary of State for External Affairs asked me what my policy was. I have not had the slightest hesitation in the last two years in saying very clearly what the policy ought to be with regard to fighting inflation. The former minister of finance, the present Minister of Finance and the present Minister of Consumer and Corporate Affairs (Mr. Bas-
DEBATES	3521
Control of Inflation and Unemployment ford) have poured scorn on this approach and that is why I have been pressing the ministers in the last couple of days. I have been trying to find out what they really intend to do, what their policy is with regard to the consensus reached here on Monday and Tuesday last.
We have a statement made by the Prime Minister (Mr. Trudeau) that he is going to stick to austerity even if unemployment goes over 6 per cent. It has reached that figure, Mr. Speaker. I say again that it is not a question of what the Prime Minister or his ministers are prepared to stand for; it is a question of what the economy can stand.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I say without hesitation that we have to go back a long way to find the country in a worse position psychologically than it is today, partially at least as a result of the unfortunate fiscal, financial and economic policies pursued by this government. For these ministers to have set their faces stubbornly, and I say stupidly, against the kind of policy that for the last six months has been recommended by the Prices and Incomes Commission has been a gross dereliction of duty. They are allowing the Prices and Incomes Commission to go through the motions as if they were supporting a policy of guidelines at a time when it is very, very difficult to do this because of inflationary pressures which are so deeply built into the economy today.
I should like to ask the minister why this policy was not resorted to some time ago, rather than the policy of simply and deliberately creating unemployment. Mr. Speaker, we still do not know what the government's policy is with regard to these matters; we still have nothing but evasion from the responsible ministers and the Prime Minister as to their intentions; nothing but evasion and a refusal to state policy.
Now, Mr. Speaker, I do not know exactly what is meant in the motion by "a comprehensive program of incomes and prices policy". I do not know whether the sponsors of this motion envisaged a continuing system of price controls or something of this sort. To me, that is inconsistent with the type of economy we have in this country and anybody who looks at it must quickly come to the conclusion that if you are going to have a continued system of price controls then you
February 12, 1970
3522	COMMONS DEBATES
Control of Inflation and Unemployment are driven to the next step, and that is a thoroughly planned economy. This is not the policy I support.
[DOT] (3:50 p.m.)
From my observation, no country in the world has succeeded in developing a satisfactory planned economy as that relates to the manufacturing and distribution of consumer goods. What we are talking about surely, and this is what the Prices and Incomes Commission was talking about, is a method of breaking the inflationary psychology which will give us a chance to come back to an even keel and allow our traditional policies to have a chance, which they have not had during the last few years, of maintaining our affairs on an even keel. I do not hesitate for a moment to support the efforts of the Prices and Incomes Commission. Admittedly, the consensus that has been reached is far from perfect, but I am delighted with the progress that has been made and must say that the reliance of successive ministers of finance on tough fiscal policies which have done a great deal of damage to various parts of the country is, in my view, completely unjustified.
Successive ministers of finance have not succeeded in controlling inflation by these methods. Despite the minister's evasiveness, I hope the government will follow through the limited consensus which has been reached with a consistent, sensible and humane policy that is consistent not only with price stability but with the concept of justice in the country, a concept which has been totally lacking on the part of the Minister of Finance, the Minister of Consumer and Corporate Affairs and other ministers on the government side. It has been totally lacking.
Let us see what has happened. We have heard much about the cutbacks the government is to introduce in public service employment, yet when I examine the figures published in the book I hold I see that between September 30, 1968 and September 30, 1969 the number of employees in the government service has increased; the number projected for one year hence is higher than the number now employed. What then is all this talk about that we have heard since last summer about cutbacks in the numbers of government employees?


Mr. Dinsdale:: Propaganda.


Robert Lorne Stanfield: When one examines the government's own figures it is evident there has been no cutback. The number of employees

on strength as of September 30, 1968 was 236,000, and as at September 30, 1969 was
4.000	higher, at 240,000. The projected strength as at March 31, 1970 will climb to
248.000	employees.
If one looks at reports one will not see evidence of an expansion in government expenditures in slow growth areas of the country. For example, if you look at the public works' estimates, the public works have been used by humane and wise governments as a means of doing something useful and at the same time providing real relief, you will see that the estimates for this year are down for Newfoundland, Nova Scotia and New Brunswick. They do not even seem to exist for Prince Edward Island, although I know that they are included in the government's estimates. Public works estimates are also lower for Saskatchewan. At the same time you will see provision in the estimates for a new sort of overseas club to suit the ego, I suppose, of the Secretary of State for External Affairs. You will also find cutbacks in the defence expenditures, particularly across this country; at the same time the government intends to spend millions of dollars building a new defence headquarters. That just does not make any sense. What the government says just does not add up.
It seems to me that now it is almost impossible for the government to explain why it has stuck for the past two years to its policy of deliberately slowing down the economy, why it has been so low and unimaginative in seeking alternatives and why it stubbornly refused to accept approaches it now is gingerly allowing the Prices and Incomes Commission to venture into. I and others have made suggestions to the government about action in these areas for the past two years. I should like to hear the Minister of Finance explain why he pooh-poohed this type of approach and whether he now means to take action. Perhaps he does not mean to do anything about our present situation; perhaps the government is merely taking us through another charade.
We see high unemployment figures for slow growth areas of the country. I am concerned about those areas and about the people or workers in this country who are unorganized. To help these people we must use the tools available to us, and I say that a program of guidelines represents a tool that has been available to us for some two years. For a long time the government has refused to use it and we still don't know whether it is prepared to
February 12, 1970

use it. It is my hope that the people of this country, whether they are in business or in organized labour, will be sufficiently concerned about the lot of the poor, forgotten little Canadian who is not organized, does not work for big business and does not hold shares in any big business that, for a limited time at least, we may reach agreement as to guidelines that are clearly in the interest of the country and of Canadians who are not organized. We must protect such Canadians, and especially those who live in parts of the country where it is difficult to obtain adequate employment. I hope we can put aside charges that are hurled at big business and big labour and come to some consensus that is in everybody's interest.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: I say the government has been grossly derelict in its duty in this regard. I hope it has taken up the challenge, although it has not said clearly that it will. I fervently hope if the government has the temerity and the strength to be prepared to stick its neck out to this extent, that it will obtain the support of business, labour and all people in the country. There is not much risk in doing this for a limited period of time. We must escape from the vicious inflationary spiral. In approaching this matter let us keep in mind the ordinary Canadians, and there are millions of them, who do not belong to large organizations. They will not be protected unless Parliament and the government protects them, and God knows, the government has not done so yet.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I cannot accept the allegations contained in the motion put forward by the hon. member for Waterloo (Mr. Saltsman). I offer him my sympathy for not being able to be here today because of a cold. In fact, I suspect that the verbosity of the motion reflects the difficulty my hon. friend had in trying to pick holes in our policy. Our policy is a rounded comprehensive program to curb inflation without creating recession. It involves strong fiscal and monetary measures. It also involves enlisting the support of all Canadians in restraining their demands upon the economy.
[DOT] (4:00 p.m.)
The government is charged with deliberately creating unemployment. I will show that while unemployment continues to be a problem, the New Democratic Party is away off
DEBATES	3523
Control of Inflation and Unemployment the mark in the figures they have quoted. The government is charged with causing a recession. I will attempt to show that the economy is still strong and that our policies are flexible enough to ensure that this strength will continue. The government is asked to adopt full employment measures. The fact is, the thrust of our spending programs is directed at overcoming our real unemployment problems in our less developed regions in Canada. We are also asked to have a comprehensive prices and incomes policy. Our policy is comprehensive and we are making progress in arresting inflation.
I was pleased to see that what the NDP meant by a comprehensive prices and incomes policy was really price and wage controls. The hon. member said they would not work on a voluntary basis. We, as a government, do not agree with this. The Leader of the Opposition (Mr. Stanfield) said we should impose guidelines.


Robert Lorne Stanfield: I didn't say impose.


Edgar John Benson: He said we should set guidelines on prices and wages in the country. What good are guidelines unless one is going to enforce them? We have, through our policy, arrived at guidelines which are acceptable to the people who have to carry them out.
I am tempted to repeat the words of a famous U.S. economist, who, in replying to a questioner said, "Sir, I don't agree with the question." I am tempted to repeat these words because the government is being accused of deliberately creating unemployment up to a crisis level. The facts are that the rate of unemployment, after allowing for normal seasonal movements, has been declining for the past several months. From a seasonally adjusted rate of 5.1 per cent last October, the unemployment rate declined to 5.0 per cent in November, fell further to 4.8 per cent in December and, according to the Dominion Bureau of Statistics in a release issued this morning declined again to 4.5 per cent last month.
Lest one say in this period of the year unemployment always declines, I wish to put on record the seasonally adjusted unemployment rates over the past year. They are as follows: 1969, January 18, 4.4 per cent; February 15, 4,4 per cent; March 22, 4.3 per cent; April 19, 4.5 per cent; May 24, 4.8 per cent; June 21, 4.9 per cent; July 19, 4.7 per cent; August 23, 4.9 per cent; September 20, 5 per cent; October 18, 5.1 per cent; November 15, 5
3524	COMMONS DEBATES	February 12, 1970
Control of Inflation and Unemployment per cent; December 13, 4.8 per cent and January 17, 4.5 per cent. It is a fact of life in Canada that in January unemployment is typically higher than in the summer months. I will go back a few years to show what the January figures have been since 1959. 1959, 9.5 per cent; 1960, 8.8 per cent; 1961, under a Tory government, 10.8 per cent; 1962, 8.5 per cent; 1963, 8.3 per cent; 1964, 6.9 per cent; 1965, 5.9 per cent; 1966, 5.1 per cent; 1967, 5.2 per cent; 1968, 6.1 per cent; 1969, 5.9 per cent and 1970, 6.1 per cent.


David Lewis: Those Eire the unadjusted
figures.


Edgar John Benson: Those are the unadjusted figures, Mr. Speaker.


David Lewis: I am amazed you use the unadjusted figures.


George Harris Hees: You don't have the other figures?


Edgar John Benson: I am sure they were not as great as in January 1961.
Despite the fact that the motion before the House is based on wrong premises, I welcome the opportunity to speak on an issue which is greatly troubling Canadians, and about which the government is taking deliberate and positive action, the issue of inflation. At the beginning of next week the first ministers of the country will be meeting to discuss this issue, among others, and early next month I expect to bring down a budget which will give hon. members a further occasion to discuss fully the state of the Canadian economy. I would anticipate and hope for considerable debate on the problem of inflation. Today, I want to talk about what is causing inflation, what the government is doing about it, and what the issues are that confront us as responsible Canadians.
First, let me say that those who put the problem of inflation in the context of unemployment or inflation are putting the matter the wrong way. As Canadians we do not face the question of whether we want less unemployment and more inflation, as some have put the issue. Nor do we face the question of whether we want more unemployment and less inflation. We do not have either of these choices before us. Rather, the issue is how we are going to rid ourselves of the menace of inflation. We do not have a choice as to whether or not we are going to adapt to and live with inflation; the fact is, we cannot and will not live with the kind of inflation we have been experiencing these past few years.

If this country is to enjoy high levels of employment, steady economic growth and improvements in economic and social justice, then the first order of business is to rid ourselves of inflation. I need not recite figures to show that prices have been rising rapidly. Hon. members opposite will no doubt bring this forcibly to our attention in the course of this debate, and Canadians generally are too painfully aware of the high prices they have to pay for goods and services they buy, of the interest rates they have to pay for money they borrow, and of the shrinking value of savings they have accumulated during their lifetimes. If for no other reason than to protect those who are suffering because of inflation, and who cannot muster the strength or bargaining power to try to protect themselves, inflation must be beaten.
But there are other compelling reasons. Some people argue that inflation is inevitable, that it arises from outside of the country and that we should take our lumps by adjusting as best we can. Let me deal with this issue, since it has a number of aspects.
It is true that inflation is a world-wide phenomenon. As a matter of fact, if we look at the battle against inflation during 1969, we find that in our fight against inflation the cost of living rose less in Canada than in almost all other western countries, including the United States. However, this is little room for consolation. In our major trading partners, in particular in the United States, there exists today a high degree of inflation and we cannot escape that fact of life. But it is equally true that these same nations are taking determined steps to deal with the problem. As they succeed in beating inflation, as they surely will, we as Canadians will find international competition tough and indeed, unbearable, if we have not likewise succeeded. We need not be reminded that one dollar in every five that we earn comes directly from exports, and our earnings and jobs that flow directly and indirectly from exports come to more than that. In addition, of the value of everything we buy, one dollar in five represents goods and services produced abroad. If we are to compete in our own domestic markets, we need to defeat inflation.
[DOT] (4:10 p.m.)
But let us not take much comfort from the fact that others are doing no better in controlling inflation than we. If we are to protect our jobs and to improve our living standards, we need to be able to compete with others
February 12, 1970

both in foreign markets and in our own domestic markets. That is why those who believe that we can create more jobs for Canadians by adapting to inflation while others eradicate it are, I believe, living in a fool's paradise.
Secondly, we are advised by some to adjust to inflation by various devices to protect those who are unable to protect themselves. Admittedly, when injustices created by inflation become stark, it becomes necessary to find temporary palliatives. But I emphasize that the cure is only temporary. As a general proposition, attempts to adjust to inflation only worsen the disease and, ironically, the more successful one is in devising schemes, the more deep seated inflation becomes. Recent experience bears this out. The more people feel protected against inflation, the more they believe that inflation will continue. The more they act on the assumption that inflation will continue, the more inflation there actually is.
Worse still, some groups try to get ahead of the game by anticipating further inflation. They speed up their purchases; they demand income increases that more than offset past price rises; and as a consequence prices and costs rise even more. So-called adjustments for some become higher costs for others, and inflation becomes self-reinforcing.
Thirdly, attempts to adjust to inflation create difficulties in the capital markets. There is an extreme reluctance on the part of savers to commit their funds for long periods of time, except at very high rates of interest. It becomes more difficult for borrowers to sell long-term bonds, and governments in particular are forced to cut back on essential public investments and services, or raise taxes, or do both. Likewise, prospective homeowners needing mortgage funds are forced to pay record high interest rates, or cannot find the money at all. These then, Mr. Speaker, are some of the effects of trying to live with inflation: the unprotected get hurt, job opportunities are jeopardized and money is hard to come by for necessary social capital.
Let me turn for a moment to the causes of inflation before I outline the approach of the federal government to solving the problem. The root causes of inflation are to be found in attempts by Canadians to take more out of the economy than they were capable of putting into it. Demands of all kinds for goods and services, both public and private, were greater than our ability to satisfy them. The incomes generated by these demands of con-
DEBATES	3525
Control of Inflation and Unemployment sumers, business, governments and foreign purchasers of our products were greater than the flow of goods from our economy and prices inevitably rose.


David Lewis: I wonder whether the minister would permit a question. I observe the extensive notes he has, and I should like to ask him whether these statements are based on some research that members of Parliament will be able to see, or whether they are just assertions by the minister, to my knowledge completely out of date.


Edgar John Benson: I do not believe that they are out of date, Mr. Speaker, and I will stand on what I say in the House of Commons.


Robert Lorne Stanfield: Is the minister talking of the past or the present?


Edgar John Benson: The past and the present.


Robert Lorne Stanfield: If the minister will permit a question, is he taking the position that inflation today is due to excessive demand?


Edgar John Benson: I am saying that we have moved into inflation through excessive demand.


Robert Lorne Stanfield: That is why I asked the minister whether he was talking of the past or the present.


Edgar John Benson: We have inflation now.
Accordingly, Mr. Speaker, the higher incomes rose, the more prices increased. The whole exercise has, of course, proved frustrating, self-defeating and wasteful. The approach of the federal government has been to establish a program to restrain increases in demand to rates more in line with our underlying capacity to grow. At the same time, the government has been developing and enlarging programs to expand our capacity to produce, but this is essentially a long-term action.
In the immediate period, the main instruments available to the federal government are fiscal and monetary policy. During the past year these instruments have been employed in a way so as to restrain demands. In my budget of last June, I planned for a surplus as a means of fighting inflation. I have indicated that the surplus will be achieved; indeed, it will be somewhat larger than I anticipated. As a result, apart from Canada Savings Bonds the federal government has not been a net borrower this year. In fact, it has been a small net supplier of funds to the market.
February 12, 1970
3526	COMMONS DEBATES
Control of Inflation and Unemployment
At the same time, the Bank of Canada has been able to restrict the expansion of credit, and has been helped in this operation by the sharp reduction in borrowing requirements of the federal government. Provincial governments have been asked to co-operate in this fight against inflation. Where possible, the restraints of the federal authorities have been placed on those areas of the country where the inflationary pressures have been the greatest, so as to minimize the effect on the less fortunate parts of the country. In the coming year, the federal government is planning to continue its policy of restraint.
Yesterday my colleague, the President of the Treasury Board (Mr. Drury), tabled the estimates for the coming fiscal year. In these we have provided for items to which we and the other parties in this House attach high priority, such as support for underdeveloped regions of the country, support for Indians and Eskimos, manpower retraining programs and incentives to industry for technological developments. But in spite of these items and increases in costs of important shared programs which we do not directly control, we have reduced the rate of increase in government estimates.
I believe that the policy of restraint will work. By making it more difficult to act in an inflationary way and easily accede to cost or income increases, the rate of price increase will diminish. However, there may still be those who are counting on a continuation of inflation and who will continue to demand far more than the economy can produce. Against a background of general restraint on demand, to the extent these groups succeed the more the economy will generate inflation and the less it will generate real production and jobs. It is these groups who will be creating inflation and unemployment.
It was in order to minimize the effects on production and employment, and to speed the adjustment to stable economic growth without inflation, that the government established the Prices and Incomes Commission, so much derided by the Leader of the Opposition (Mr. Stanfield). My colleague the Minister of Consumer and Corporate Affairs (Mr. Basford) will say more about the commission in a few minutes.
The job of the commission is to convince those who exercise some power of decision that it is in their own self-interest to scale down their demands to levels that permit a quick return to non-inflationary growth. We were all gratified, except perhaps the deputy

leader of the New Democratic party, at the results of this week's conference where some groups indicated a willingness to participate in a voluntary exercise to restrain prices as an initial step in an over-all program. As members are aware, the chairman of the Prices and Incomes Commission will be reporting his results to the meeting of first ministers next week, where the problem of inflation will be discussed by the federal government and the provinces.
I firmly believe that this approach of seeking the co-operation of important decisionmaking groups in the country to reinforce and support the general policies of restraint of the federal government-and hopefully of all the provinces-is the best solution.


Robert Lorne Stanfield: Why wait until 1970?


Edgar John Benson: Our restraint programs started much earlier than that. As I have explained to my hon. friend, in our opinion it would have been useless for the government simply to establish guidelines unilaterally without taking further steps to reinforce them. I remind the hon. member that he said he would not be in favour of price and wage controls.


Robert Lorne Stanfield: That is right.


Edgar John Benson: What the hon. member wants is for the government to hope that people will do this or do that. It is a better policy to have people exercise restraint at their own particular level. The alternatives of either an even more restrictive fiscal and monetary policy, or a massive program of price and wage controls, would be more painful and disruptive than what has been accomplished. They cannot be ruled out entirely if things took a serious turn for the worse, but surely the country will suffer less if it can capitalize on the willingness of our important groups to help with the job by observing reasonable restraint in their demands.
9 (4:20 p.m.)
I would remind hon. members, particularly those in the party which moved this motion, that any system of price controls would necessarily involve wage controls, and wage controls would in a single stroke suspend the freedom to bargain collectively. This freedom, and the other practices of our market economy, should not be cast aside lightly. They have done a great deal to make this country grow. We are confident that as the year proceeds and a program of voluntary restraint
February 12. 1970	COMMONS
gets into place, we will make substantial progress in solving what we feel is our most important economic problem.


Mr. Real Caouetle (Temiscamingue):: Mr. Speaker, the Minister of Finance (Mr. Benson) has just talked about inflation, price controls and agreements between business men and government agencies to curb inflation.
We are considering a motion presented by the New Democratic party, which reads as follows:
-this House therefore calls for the immediate implementation of full employment measures, and a commitment to a comprehensive prices and incomes policy.
Mr. Speaker, the reason for the present high unemployment figure in Canada is precisely because we have a surplus of products.
The minister said earlier that we should increase productivity with a view to raising the standard of living. Another minister asserted the direct opposite, and the minister without portfolio responsible for the Canadian Wheat Board (Mr. Lang) said recently in a press release, and I quote-
The minister without portfolio repeated what he had said previously, that grain growers in the Prairies would do well to reduce substantially their output.
The same thing is asked of eastern milk producers. We have too much wheat, too much milk, too many clothes, too much lumber, too many foodstuffs, too many cars, too much furniture, too many TV sets, too much of everything!
And now the New Democratic party suggests a policy of full employment. But for what purpose? In order to produce more wheat, milk, TV sets, furniture, cars, food, while people lack adequate purchasing power to buy those products? That is the trouble, and yet, the Minister of Finance keeps mum an that matter. In his opinion, this bad situation is due to the fact that salaries are too high, to producers, to manufacturers, in short to everybody except the credit makers in Canada. We must not mention these people!
Smiling and with an air of triumph, the Chairman of the Incomes and Prices Commission, Mr. Young, accompanied by his ViceChairman, Mr. Paul Gerin-Lajoie, appeared on TV Tuesday, February 10, to announce that industrialists, businessmen, bankers and dealers attending the National Conference on Price Stability had agreed to unite in a 21701-13
DEBATES	3527
Control of Inflation and Unemployment common front against inflation and to accept restraints, with the blessings of the Minister of Finance, the Prime Minister (Mr. Trudeau), the Leader of the Opposition (Mr. Stanfield) and the Leader of the New Democratic party (Mr. Douglas).
This is a great day. Indeed, responsible men put chains on themselves lest the federal government find heavier ones for them.
After having increased interest rates and prices, it is agreed not to decide any further increase. This does not improve by one cent the buying power of the unemployed, of the welfare recipients, of our retired people and of the old. It is fine to agree not to increase prices but this will hurt the sale of goods. According to them, inflation is responsible for the increase in the cost of living. But, everybody agrees on that!
Prices are in excess of the families' buying power. Then what? Inflation must be stopped! Certainly and this is urgent. Moreover, the minister just said so. But if someone is sick or should have a limb cut off, the sickness should be cured and the sick limb should be cut off. If your toe has to be amputated, you will not have your arm cut off.
Prices must not be allowed to rise. Everybody agrees on that.
But are not prices set in line with costs? Logically, the stress should have been put on reducing production costs before lowering prices. But this has been ignored, and it is suggested that the fight should be against the consequences rather than against the causes of inflation, of price increases.
The Minister of Finance has just given the causes of inflation. I intend to give him others. Businessmen, men in politics, members of the Prices and Incomes Commission, are making fools of themselves by not tackling the causes of price rises. The opponents of Social Credit usually say that putting its theories in practice would lead to inflation.
The Liberals said it and they still repeat it occasionally. The Progressive Conservatives said it also and the economists have repeated it. Today Canada and the United States are faced with inflation, like almost all the nations of the western world. Who is responsible? Social Credit, which is not applied anywhere, or the present financial system?
The Creditistes know what inflation is, like the Liberals, the Progressive Conservatives and the socialists. I do not know whether they know it well but we do. Unlike the other political parties which are all in the service of
3528	COMMONS
Control of Inflation and Unemployment finance and do not want to get out of the system, the Creditistes know the solution to the problem of inflation.
It is said that inflation consists in a steady increase in prices or else in a too abundant supply of money in circulation when goods are scarce.
If a member or a minister, for instance, goes into a shop, a grocery store or a supermarket, he will not notice any scarcity of products. The shelves are chock full of goods of all kinds, newspapers carry pages and pages of advertising offering all that the Canadian consumer needs. What drives the consumers away from Morgan's, Simpsons-Sears' or Eaton's? It is not the shortage of products, but the lack of money.
Automobile manufacturers are forced at the present time to slow down their production in Detroit, Windsor and Ste. Therese. Why? Because of a shortage of iron, steel, bodies or specialized workers? No. Because there are not enough solvent buyers and consumers.
[DOT] (4:30 p.m.)
It is therefore clear that the inflation we are experiencing is not in accordance with the well known English definition of "Too much money chasing too few products". Why, then, are prices going up? For what reason would producers, dealers and retailers increase their prices if they cannot sell their products at current prices? If prices are increasing it is because production costs are rising.
Let us consider some items that go into production costs and into retail prices of finished products. We know that costs include the price of the raw material, capital costs of the plant and the cost of production itself.
Is it possible to cut down expenses? Is it possible to say to the farmer, the lumberjack, the miner, the fisherman that their income is too high and that prices will increase?
Will we tell the employees of the C.N.R. for example-which is granted every year funds to make up its deficit-that their wages push up transportation rates too much?
As for construction and maintenance costs of factories and equipment, are we going to say to construction workers, machinists and tool-makers that they must accept a cut in salary because the price of manufactured products is going up?
In the case of contractors and dealers, should profits be prohibited? If such is the case, it should be clearly stated and profit control should be established.
DEBATES	February 12, 1970
Are my colleagues of the opposition ready to suggest that school and municipal taxes or personal and corporate taxes be reduced? Are they willing to abolish the sales tax on building materials? Are they ready to tell the provinces: These are your taxation fields. We do not want them anymore, we do not want to impose anymore taxes. Come on, do something.
As for finished products, there are bank credits at almost each stage of production. For the purchase of raw materials processing, plant building, primary production, in a word, at every stage of manufacturing, banks grant credit. Credit is available to secondary businesses, wholesalers, retailers in short, to everybody. The whole production is financed by bank credit. Before a product is finished, a part of its cost was financed through bank loans. Are bankers willing to reduce the cost of making this credit? Are they ready to reduce the interest rates that are causing price increases, knowing that the interest adds up to the cost of all in-between production?
Much has been said about this problem during the meetings held in Ottawa, and the Minister of Finance has not mentioned it earlier. Yet, bankers attended the recent work sessions which lasted two days. Why has not the government asked them to reduce their interest rates?
Production of any kind needs credit. But if potatoes and wheat grow in fields, money does not grow either in fields, in plants, or in the taxpayers' pockets. And yet, money and credit are in circulation. Where do they come from?
Money appears when banks give credit to producers, manufacturers and to the government, and right from the beginning, money "claims its wages", and bankers, their interest. Then bankers compel industrialists, manufacturers, businessmen and retailers to squeeze the public by forcing them to set prices at a higher level than the amount of credit agreed upon. But with a little reflection it is realized that $1 million in credit has been given, an additional amount of $100,000 is claimed, which amount, in addition to being added to the price, creates a mathematical impossibility since how can more money than is distributed be received during a production cycle? We from the Ralliement creditiste are disturbed to find that people of good position, millionaires, captains of industries, bank chairmen and accountants are not aware of this mathematical impossibility.

February 12, 1970	COMMONS DEBATES	3529
The manufacturers, Mr. Speaker, are bound by the obligation to take out of the wallets of the consumers more money than they have distributed in the course of production.
Even if he were an angel, even if he abstained from food and gave up his profits, the manufacturer will always have to squeeze, through the prices, out of the public the money he has to return to the bankers and also the interest of that money.
If the Prices and Incomes Commission or the manufacturers who had a meeting do not know that, they would do better to go back to school and to study hard. If they did not find that in their political economy books, they would better throw them into the dustbin, because such books are incomplete or simply misleading.
Rising costs should be checked in order to allow consumers to meet their needs with the goods offered them in large quantities. But how? Through price controls set by some control boards? We have found that prices depend on costs. They are not decided by orders in council nor are they subject to a bureaucracy of inspectors.
Prices are set according to cost accounting and the government or the boards or the bureaucrats cannot distort it nor force the producer to ignore his own costs when marking his goods.
What must we do against rising costs? If the other political parties have solutions to suggest, let their members tell us about them. We shall analyze them and, should they prove effective, support them.
But as they have no solution to offer, let them accept the one proposed by the Cre-ditistes, namely, the setting of the adjusted price, the compensated price, the fair price. What is the fair price of an item? It is exactly what it costs to produce it. The actual cost of production is the cost of materials used, of labor, of the wear and tear of equipment, of food consumption and wear and tear of clothing worn by technicians and workers who contributed in any degree to the desired production.
The use of materials and the consumption of food in connection with the manufacturing of a table, for instance, will constitute the actual cost of the latter. As regards production, financial cost should also be taken into account. This cost is never passed down to the consumer but is included in the price of the finished product.
The only thing that remains to do is to allow the consumer to buy the production at 21701-13J
Control of Inflation and Unemployment its actual cost by making a price adjustment. If such statistics were established in Canada, it would soon be seen that the total price charged for the country's production, over a certain period, exceeds the total amount of consumption during the same period.
It would be seen, for example, that when consumption reaches $50 billion, production offered to consumers, i.e. the total of prices to consumers, reaches $60 billion. In order for consumers to purchase the total production, they would have to purchase $60 billion worth of production for $50 billion.
The proper solution would therefore be a $10 billion discount which would permit consumers to purchase the $60 billion worth of products for $50 billion. Who would be the loser? Nobody. If someone sells a $60 item for $50, he should receive a 10 per cent discount.
Where would this discount come from? From the nation's credit, from the Bank of Canada, the financial institution which belongs to the Canadian people and that the government can use. That form of credit is based on production which, when made equal to the purchasing power, could be sold. That is unlike the endless refrains or patter that we have heard so far in this debate. The Minister of Finance claims indeed that productivity must be increased, whereas another minister suggests that production must be cut down to fight inflation.
There is only one way to solve the problem of the high cost of living and high prices: the compensated discount of Social Credit. Otherwise, you have nothing but flounderings, clashes, wrongdoings and big failures.
[DOT] (4:40 p.m.)
Mr. Speaker, a while ago the Minister of Finance (Mr. Benson) spoke of balance between inflation and recession. We must avoid recession and fight inflation.
Indeed, we are lost in a system where inflation does affect prices. However, recession also affects the Canadian taxpayers.
An editorial, broadcast over a Quebec television station last January 7, dealt with the renowned economists Keynes and Friedman. Keynes is the favorite economist of the Minister of Finance and those who have studied political economy. Here is what the editorial said:
For over 20 years now, most of the western countries have substantially followed the economic and fiscal theories of one John Maynard Keynes, a famous English economist.
He was a success in England.
February 12, 1970
3530	COMMONS
Control of Inflation and Unemployment
But back to the quotation:
He convinced almost all politicians that through fiscal policy and public expenditures, and by acting on interest rates, efficient balance between inflation and recession could be reached.
That indeed is what the Minister of Finance said a while ago, as a good disciple of Keynes.
I quote again:
Now, since that time, the purchasing power of money has gone down steadily ... and this tendency has grown considerably in the last two or three years. It must be pointed out that that theory suited politicians singularly-
In fact, they juggle with interest rates, fiscal measures, the reorganization of fiscal structures, etc.
I go back to the editorial:
-because it allowed them to indulge in expenditures, of guaranteed electoral value, financed basically by the loss of purchasing power of the taxpayers. Just as certain evils die hard, so do certain theories. It seems obvious that the Keynes system does not work or, to say the least, that it leads to extremely serious problems; yet, there are many who only swear by him.
The Minister of Finance is one of those who swears only by him. Again I quote the editorial.
As long as some sort of consensus has not been reached at the level of the politicians as to the true causes of inflation ... it is difficult to see how such an evil can be cured. As long as certain provinces are charged with a special responsibility with regard to inflation-
This is exactly what happens. Alberta and British Columbia, two prosperous provinces are being asked to lower the standard of living of their citizens to that which prevails in poorer provinces instead of trying to raise the standard of living of the Canadians who live in poorer provinces to that of their fellow citizens in Alberta and British Columbia, the only two Creditiste provinces in Canada without a direct provincial debt. I continue with the quotation:
As long as we put the blame on the citizens unable to control their consumption; as long as we pass the buck here and there ... inflation will continue with renewed vigour.
It is certainly not Social Credit which creates inflation. As was said-


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


Edgar John Benson: Mr. Speaker, may I rise on a question of privilege. Some hon. members opposite asked for the unadjusted unemploy-


ment rate as of January 1, 1957. I said I would obtain it for them, and I have it now. It was 5.7 per cent in January, 1957. I might say that it was a lower percentage than in any January when the Tories were in power.


Stanley Ronald Basford: My colleague, the Minister of Finance (Mr. Benson), in his speech a few moments ago replied to the motion of the hon. member for Waterloo (Mr. Saltsman) that is before the House today. But I am glad to take this opportunity to review with you, Mr. Speaker, one of the steps that has been taken to introduce supplementary methods of dealing with the severe infla .ionary problems that we have in Canada today, namely a supplementary policy of appointing the Prices and Incomes Commission in order to reduce the effect of the general measures of the economic policy on employment, output and on the less prosperous regions of the country. I am amused at the fact that when the purpose of the Prices and Incomes Commission is to design and develop policies to avoid that which the deputy leader of the NDP said should be avoided, he and his party have done nothing for months and months but pour scorn on the Prices and Incomes Commission and the government's efforts to appoint and support it,
I wish to remind the House, as did the Minister of Finance, that the general measures which take the forms of fiscal and credit policies must have, as has been confirmed at the beginning of the week by the Standing Committee on Finance, Trade and Economic Affairs, a central place in the government's arsenal on any attack on inflation. The purpose of our supplementary approach through the Prices and Incomes Commission is to slow down inflation more quickly than those broad instruments can do and to permit us to take our foot off the brake more quickly than would otherwise be possible.
I was delighted to hear the speech made today by the Leader of the Opposition (Mr. Stanfield), who has obviously read a document that I had for some time assumed he had not read, namely the white paper on price stability that we tabled in the House over a year ago in which we outlined some of the undesirable side effects of tight fiscal and credit policies and how we were seeking ways to avoid those undesirable side effects.
Let me remind the House of some of the history behind the present situation. Hon. members will recall the fact that several years ago the Economic Council of Canada
February 12, 1970	COMMONS
was asked by the government to undertake a special study of the relationship between prices, costs, productivity and incomes, the problems of reconciling price stability with other economic goals, and the policies and experience of other countries in this regard. The Economic Council's report on that study stressed the importance of monetary and fiscal policies, on which the deputy leader of the NDP poured scorn today, and it recommended a number of long-term policies such as labour mobility and training programs, which the government is following. But on the matter of an incomes policy, the council defined such a policy as having three main components: a set of general guidelines for incomes and prices in the whole economy; a means of making those guidelines relevant for individual price and wage decisions; and a means of inducing conformity to the guidelines.
At that time the Council recommended against this approach for Canada, although it did not completely rule out under all circumstances the adoption of an incomes policy in this country. They recognized that there could be circumstances in which sufficient voluntary support might be rallied behind that program to make the policy effective for a temporary period. In December, 1968, I tabled in the House the white paper on price stability which analysed the inflationary problems facing Canada and gave notice of the government's intention to establish the Prices and Incomes Commission. Following publication of the white paper I held consultations with a large number of businessmen, leaders of the trade union movement, professional people, consumers and others. In those consultations we discussed the potential role of the commission and obtained a wide measure of support for the policies proposed in that document.
I would like to draw particular attention to one key sentence in that white paper. Speaking of the experience of other countries with incomes policies we pointed out:
-this experience has shown the critical importance of having broad acceptance of voluntary restraint.
As the House knows, the commission was appointed last July, and the Leader of the Opposition both before the appointment and since has been asking questions almost daily in the House, somewhat ridiculing me as the minister responsible for the commission and ridiculing the work of the commission. As I said today, I am delighted to see him solidly behind the program of the commission, and
DEBATES	3531
Control of Inflation and Unemployment delighted to discover that what he has been saying for the last year he really did not mean at all.
The commission began work immediately, and in August they began to explore a concerted program to bring about greater price stability with representatives of business, labour, the professions, and with the federal and provincial governments. The commission noted at that time that the governments of Canada and the United States were committed to bringing this inflation to an end, and, as the Minister of Finance confirmed today, that is our determination. We have adopted credit and fiscal policies designed to achieve this. But given the momentum and the pervasive nature of the inflationary forces, this will take time and might have undesirable side effects. It seemed to the commission, and it seems to me, that a smoother, shorter and less painful transition back to price stability could be achieved if some way were found to cut directly into the spiral of price and income increases to slow it down more quickly. If this could be done, it would be possible to moderate government policies of budgetary and credit restraint earlier and soften some of their most painful side effects.
The commission was told on October 17, after a series of meetings, that the leaders of the two major trade union federations rejected as impractical any approach that might involve an explicit formula limiting wage and salary increases. The commission then decided to explore with business leaders alone the possibility of working out a more limited set of commitments applicable to price decisions through 1970. The objective would be that price increases should not exceed what might be necessary to recover increases in cost, and should normally be clearly less than that.
[DOT] (4:50 p.m.)
Exploratory discussions with the business community were encouraging enough to justify the commission's proposing a national conference on price stability, the conference that was held on Monday and Tuesday of this week. Quoting briefly from a preliminary background statement of the commission I read:
The first step would be to try to work out, through informal consultation with business executives representative of various industries, specific criteria for business pricing policies during 1970 which, if widely observed, would result in fewer and smaller price increases than might occur otherwise. Such criteria would necessarily require of business firms a meaningful effort on their part to do as much to limit price increases as could rea-
3532	COMMONS
Control of Inflation and Unemployment
sonably be expected of them in the absence of corresponding restraints on wage, salary and other income increases.
If suitable criteria could be worked out at a national conference representative of all parts of the business community, the Commission would then ask business firms generally to observe such criteria in their pricing policies during 1970.
The results of that conference are known to all hon. members. I tabled in the House yesterday the statement of the National Conference on Price Stability. It has been referred to many times in this debate and I do believe it would be helpful for readers of Hansard if the statement tabled yesterday were to appear as an appendix to today's Hansard. I wonder, Mr. Speaker, is there agreement to that?


The Acting Speaker (Mr. Bechard):: Is this agreed?


Some hon. Members:: Agreed.


An hon. Member:: If we are to have the minister's speech we might as well have that also.
[Editor's Note: For document above referred to see appendix.]


Stanley Ronald Basford: Mr. Speaker, I am amused at the remark which has been made by a member of the opposition, particularly since the Leader of the Opposition supported the whole statement. The results of that conference, as now tabled and appended to Hansard, are consistent with what the commission was asking. I understand that in some respects, they are even more effective than the commission felt it could confidently expect. I might quote one section of the communique which reads:
There was broad agreement among those attending the Conference on the following:
(a)	Business firms generally, if called upon to do so, would reduce the number and size of price increases they would normally make in 1970.
(b)	More specifically, where higher prices are needed to cover higher costs, and market conditions make them feasible, business firms generally, if called upon to do so, would ensure that price increases were-
And I emphasize this.
-clearly less than the amount needed to cover the increases in costs at a normal volume of output and sales.
The deputy leader of the NDP has quite wrongly interpreted that statement to mean profit stability for the coming year. It clearly indicates there should be pressure on profits, a squeeze on profits, and the businessmen attending the conference understood that to be the case.
(Mr. Basford.]
DEBATES	February 12, 1970
I want to take this opportunity once again, as I did yesterday, to congratulate not only the Commission on their success but also all those who took part in the conference, for the consensus reached represents a most important offer by the business community as one step toward easing our inflationary problem. I am delighted that the Leader of the Opposition is now supporting that consensus. For our part, we are most impressed by what the conference achieved this week. We regard it as a most important initiative in what must be a continuing process in seeking restraint in all forms of prices and incomes. The Chairman of the commission, as he and I have both made clear, will be reporting the results of the conference next week to the federal-provincial meeting which is to be held in Ottawa. They, the commission, will be seeking the broadest possible support from provincial governments for the program of the commission and for a co-operative and co-ordinated approach to the problem of inflation.
In our own policies, and in support of the commission's program, the government of Canada will do whatever it can to help supplement our more general measures against inflation with this imaginative supplementary program of the Prices and Incomes Commission. The commission has developed its program with a combination of patience, skill and enthusiasm. It is in this spirit that the government approaches other elements in our society, others making price and wage and salary decisions, and other governments in the full hope and belief that we can achieve a sense of national purpose that will turn the tide and bring this inflation to an end.
As the conference stated in the first page of its communique:
While the groups represented at the Conference are prepared to take an initiative as a contribution to a broad program of restraint, they emphasize that an indispensable requirement for the control of inflation is a comparable measure of restraint by wage and salary earners, by governments at all levels and indeed by everyone.
We support that statement, Mr. Speaker, and we certainly will be following that statement in the hope that others will do so also.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Bechard):: Order. It is my duty, pursuant to Standing Order
February 12, 1970	COMMONS
40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows:

The hon. member for Halifax-East Hants (Mr. McCleave)-Pollution-Chedabucto Bay -Developments	following grounding of
tanker "Arrow"; the hon. member for Nickel Belt (Mr. Serre)-National Film Board-user charges; the hon. member for Winnipeg North (Mr. Orlikow)-Unemployment Insurance- Commission Advertisements Respecting Fraud.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion (Mr. Lewis for Mr. Saltsman):
That this House condemns the Government's policies which have deliberately created unemployment up to a crisis level, thus placing the country in danger of a recession, but which have failed to stop the rapid and continuing increase in the cost of living, and this House therefore calls for the immediate implementation of full employment measures, and a commitment to a comprehensive prices and incomes policy.
Mr. A. D. Hales (Wellington):: Mr. Speaker, as a member from Ontario I appreciate the opportunity of saying a few words on this motion which deals chiefly with unemployment. I am at a loss to know why the Minister of Manpower and Immigration (Mr. MacEachen), who is responsible for unemployment, is not in the House, and why he has not been here all afternoon. This motion deals with unemployment and with other matters directly affecting him.
So far as the lecture or speech of the Minister of Consumer and Corporate Affairs (Mr. Basford) is concerned, I would like to remind him of what Dr. Galbraith, noted American economist, told the Standing Committee on Finance, Trade and Economic Affairs. He was asked whether voluntary measures would be satisfactory in controlling inflation, and he said absolutely not, that voluntary methods were only a politician's way of hiding behind what he should be doing. He went on to say that the three factors which were responsible for inflation were, first, the great number of social benefits that had been brought into operation-he was dealing both with the
DEBATES	3533
Control of Inflation and Unemployment United States and Canada-and, second, it was a case of too many dollars chasing too few goods; third, it was because the multinational companies and unions could not agree.
He pointed out that a union would strike for months until finally the company in question would say, "We must operate, and so we will pay the increased wages." The increase was then tacked on to the price of the goods and finally found its way to the consumer, particularly to those who were not in the union group and who suffered the most. Despite all the things which the minister said about the great conference that was held this week I think time will prove it was nothing but an exercise in futility.
With regard to the Minister of Finance (Mr. Benson), who gave us a great line of statistics and a great raft of material, I say that whoever prepared that material should forget about all the statistics. He should return to the grass roots and ask the fellow who operates a small factory in his own town what is the cause of inflation and unemployment. That fellow will give the minister a lot of right-off-the-cuff facts of life which have been responsible for bringing about this unemployment. He will mention taxes. He will say, "You have taxed us to the point where we have to increase the cost of our product and now the white paper proposals indicate even more taxes. We have just about had it. This is the last straw and it is going to break the camel's back." Now, he is more interested in selling his factory than in running it.
[DOT] (5:00 p.m.)
The man who receives a pay cheque will tell you that the rise in the cost of unemployment insurance, the rise in income tax and the Canada Pension Plan deduction, all leave him with a take home pay less than it was before. He wants the same take home pay and, therefore, there is a demand for higher wages.
These are some of the facts you learn as you go around. Never mind all these statistics, all this theoretical material that is handed to members by these theorists we have. Let's get down to the facts of life, and what really causes this unemployment. As we know, the people in western Canada did not receive the money they should have received from the sale of wheat. Their purchasing power has been decreased and they cannot buy farm machinery. What about the
February 12, 1970
3534	COMMONS
Control of Inflation and Unemployment importation of boots and shoes, textiles, heavy technical equipment, freezers and appliances from other countries? All these factors have affected the consumer market to such an extent our factories have had to lay off people.
Ask your contractor, and he will tell you of people who have to pay interest rates of 10, 12 and 14 per cent to get a roof over their heads. What has this government done about putting any kind of control on interest rates? Not a thing! We have not had so much trouble since we lifted the ceiling on bank rates. I know the other side of the story too. If we had not allowed interest rates to rise, money would have flowed into other countries. Surely, however, Canada could have sat down with the United States and said, "Let's make a North American effort to see if some control cannot be put on interest rates". These are some of the things you learn when you talk to the manufacturer.
I would have liked to compliment the Minister of Manpower and Immigration on a couple of things as far as the manpower offices are concerned. In the Guelph-Kitchen-er-Galt area they have an excellent office which is doing a good job. I also wanted to thank him for the free telephone service instituted. However, there are also some things that are not working well and are indirectly related to this motion before us. The government is cutting down on staff in local offices which are being hamstrung by this fact. I would suggest that if staff is to be cut that should be done at head office rather than in the area where staff is needed the most. Next, I would mention the counselling service. I know of cases where people have been counselled to go into a line of work for which they are not suited or which is already overcrowded. These things should be looked at very carefully.
Now, I think the government has a moral responsibility with regard to companies which come into Canada and buy up existing Companies. A factory in my area which had been operating for 40 or 50 years was sold to a large American company which operated it for about a month and then closed it. About 300 or 400 people were put out of work. No attempt was made to try to relocate them in other employment. I maintain that when a foreign company comes into Canada and buys out one of our old, established companies there is a moral obligation to the people who have worked their whole life for the firm. However, these companies do not seem to agree; they just buy it, close it up and say,
[Mr. Hales.[

"See what you can do to find a job". I think this is a place where the government could help. I know of another company that is buying out a firm which has operated in our area for many years. The Guelph plant is to be closed and moved to another city.
We have mobility insurance which enables the department to pay travelling expenses for an unemployed person to go to another area. Would it not be more sensible to go to a firm which is contemplating moving "Continue to operate in this community and we will subsidize you to a certain extent." The department could use the money which would have been available to pay the transportation costs of the employees moving to other communities. It is very difficult for people to be transferred when they have obligations in their own community. I think the manpower department could have a talk with the new buyer. The firm I have in mind employs 400 people and if it is closed they will be out of work. The factory will be moved to an area 50 miles away. These are some of the factors the government should think about which cause unemployment.
I said, Mr. Speaker, I would not use statistics since that is all we have heard this afternoon. Let us talk some common sense about the effects of unemployment on these communities. In the Guelph area on February 3 there were 1,760 people unemployed, an increase of 1 per cent over January and I expect that the next report will show another increase of 1 per cent. Here we are in the golden horseshoe of Canada, the Guelph-Galt-Kitchener area-


An hon. Member:: And Stratford.


Alfred Dryden Hales: -and Stratford, a highly industrial area where we should be moving ahead and have the lowest unemployment of any part of the country, yet we have 4.9 per cent of the labour force registered for employment this month. If this is the situation in one of the greatest industrial areas of Canada, what is it going to be like in other areas? I am sure members from Quebec, Newfoundland and western Canada will dwell on this at great length.
So, Mr. Speaker, I am going to conclude by saying what I said at the beginning. The problem is one of taxation, taxation and more taxation to the point where the manufacturer is just about to say, "I have had it; come and buy my outfit. I do not care whether you are from the United States or any other country, buy me out. I cannot stand this taxation any
February 12, 1970	COMMONS
more." I hope the Minister of Manpower and Immigration will read the few suggestions I have made about his department. He will see that I appreciate what has happened in connection with the area office.
[DOT] (5:10 p.m.)


Mr. Steven Otto (York East):: Mr. Speaker, the subject matter under discussion is a serious one. I hoped it would be discussed in a nonpartisan way but, after seven years here, 1 have given up that hope. Of course, the opposition will lace into the government. We are expected to support government policies. This whole issue will probably disappear at ten o'clock this evening. I do not intend for one moment to criticize or support the government, but I have great criticism for established or conventional thinking and the conventional thinking that is behind our attempts to remedy the inflationary cycle. The clearest illustration of conventional thinking is to be found in thinking that says the earth is flat. There are still people who believe that. There is a flat world society, and its thinking probably epitomizes conventional thinking. I do not say that the conventional thinking of government advisers who try to solve our economic crisis goes quite that far; but their thinking does not make much sense.
For example, people say this about our unemployed, "Well, what about it if the man is out of work; if he is a carpenter, he can do something else-build a fence, or a boat, or work elsewhere. Let him take a little lower wage and eventually the whole thing will iron itself out." That may have held true 50 years ago. Today, a man unemployed is absolutely unemployed because all the trades are protected. The carpenter cannot pump gasoline or paint a fence. If he is a carpenter he must do carpentry or nothing. When a man is unemployed today he suffers most grievously and loses his sense of dignity and daring. For perhaps 25 or 30 years after being unemployed, he will be most cautious and careful and never dare to venture because the frightful consequences of unemployment today are most severe.
Although statisticians may tell us that 5.5, 4.8 or 4.9 per cent of the work force is unemployed, they do not really know anything about unemployment. It matters little to the unemployed man that there are 200,000 others in the same boat as he. Our conventional thinkers ought to realize that the consequences of unemployment for any one man are most severe.
DEBATES	3535
Control of Inflation and Unemployment
I came across another example of conventional thinking when talking to a senior official of a department. I asked, "Tell me sir, if you are to restrict credit and make money more expensive, how will that cure the inflationary cycle?" He said, "You see, what really happens is this: We raise the bank rate; that means that industries and entrepreneurs must pay more for the use of the money they borrow. Therefore they have to meet this extra cost by cutting costs." I said, "How does the entrepreneur cut his costs?". The reply was, "Of course, he must make his plant more productive and lower his wage costs." I then asked, "And how does he lower his wage costs? Will he go to his men and say, 'I will not pay you $3.70 an hour anymore but offer you $2.50 an hour to work for me.' " Of course, his workmen will not work for those wages, and therefore the idea that they will is nonsense. Yet the whole idea behind our tight money policies is that somehow wages will be brought down.
The officials also said, "Of course, the businessman would have to restrict his production." Anyone who knows anything about business knows that once you reach a certain level of production you cannot cut back without serious consequences. You have only one choice: Go ahead at any cost, no matter whether you have to borrow money more expensively, and try to produce more to stay in business or go bankrupt. You cannot reduce your production; it does not work. Everything is presold months ahead. Futures are sold; money is advanced; your machinery must be productive or you go bankrupt. Clearly, conventional thinking is wrong in this field and conventional ideas will not work in the fight against inflation.
Similarly, price and wage controls will not work either. We accepted them in wartime when we all felt patriotic. Besides, you could not take money out of the country, because the flow of money was restricted. Also, wage and price controls were designed to hold down production of civilian consumer goods and increase production that would go into the war effort. I have no doubt that business and labour will not support wage and price controls; even if they do, the controls will not work.
I will now talk about an issue most hon. members here have tiptoed around. I can understand the NDP not talking about this issue because, of course, they represent labour. We who are Liberals or Conservatives
3536	COMMONS
Control of Inflation and Unemployment have tiptoed around the issue of labour-management relations. It does not matter whether you follow the ideas of John Maynard Keynes, Galbraith, Friedman or any other economist, including the leader of the Social Credit Party. Inflation has a simple definition. If your gross national product, as in Canada's case, increases by 1.2 per cent and wages and prices by 7 per cent, you have 6 per cent of inflation no matter whose theories you subscribe to. The only answer is that we must increase our gross national product. Sooner or later we shall have to introduce legislation to keep wage increases proportional to increases in the gross national product or to productivity of industry; otherwise, we are bound to have continuing inflation.
I have great trust and respect for organized labour. It wants to see the country progress. It is time to consider methods other than work stoppages for solving labour-management disputes. We have had strikes for a hundred years and it is time we changed our system of solving labour-management disputes. Consider what happens. Labour and management argue about something, there is a strike and production stops. In addition, we have about 42 days a year for holidays, and thus our gross national product decreases. The unit costs of labour do not go down. Labour wants higher wages for its members. It is time we recognized labour as an entity in our society and abandoned ideas that it is a quasi-legal, half recognized and half unrecognized institution. Organized labour is and must be with us. It must be given responsibility as well as rights, but we must find some other method of solving our disputes than work stoppages. Unless we do this, we will get deeper and deeper into inflation.
[DOT] (5:20 p.m.)
My reason for participating in this debate is that over the last three or four years we have observed a repetition of examples of restriction. Don't do this; don't do that; curtail this project; curtail this mine; don't manufacture more, manufacture less. One would think we were discussing a country as old as Holland, Belgium, England or Scotland. But we are not. We are setting policies for Canada, a country of hope and promise. All Canadians should be daring. We should take great risks and accept great challenges. Why in the world are we telling ourselves: Hold back; don't go ahead.
I have talked to some new Canadians who are absolutely amazed at this attitude. I refer

DEBATES	February 12, 1970
not only to the federal government, but to the provincial governments, municipal governments and to some businesses. There is no confidence. Everybody says: Hold back, wait. Something might happen. Don't dare challenge anything. This is the wrong attitude, Mr. Speaker. Unless this government and all the people in Canada reverse their ideas and spend as much time and energy on new projects as they now spend on trying to restrict projects, we will not have more to enjoy nor can we look forward to a better future. This should be the thrust behind our financial departments and institutions.
I wish to make some specific recommendations to the government. How can all this be done? How can we get confidence back into our businessmen and young Canadians? First, we have to support new risks and challenges. The Canada Development Corporation would be a wonderful way of doing this. We have to amend most of our corporate or business laws. At the moment our laws merely encourage speculative-type ventures. There are no corporate laws in Canada which protect an investor or invite participation. This situation must be changed.
We would do well to follow the United States example where a participant in a small company is well protected. He has a voice in it. We do not have this protection in either our federal or provincial laws. Most important, money must be available to small businessmen, the keen, young men with hope. This money must come from the banks, whether they like it or not. The banks were not given a monopoly in the business of usury. They were not given the right to enter the consumer finance field with interest rates of 18 and 20 per cent as a marginal benefit to Canada. The business of the banks is commercial banking. That is their business. We have control. Whether the banks like it or not, they should be forced into this field and out of the consumer loan market. That is not their avenue. Despite all the protestations of the banks that they provide cheaper money for people to buy boats and luxury items because they charge only 18 per cent interest instead of 22 per cent, it is nonsense. The business of the banks is to support our industry and commerce. They should be told this without question.
I cannot emphasize too often, Mr. Speaker, that we must rid ourselves of our inferiority complex. We must eliminate these restrictions. We must go ahead. The only way we
February 12, 1970	COMMONS
are going to solve this inflationary cycle is to be more productive. This will ensure that our prices and wages keep in line.


Mr. John Burton (Regina East):: Mr. Speaker, the remarks delivered this afternoon by the Minister of Finance (Mr. Benson) were a curious combination of contradictions, distorted priorities and neanderthal economics. He suggested it is government policy to restrain inflation without unemployment. He then admitted that unemployment has become very serious. Later on, he tried to suggest it is really not so bad and he tried to leave the suggestion with us that things are getting better. Then, the minister went on to give his own definition of the current economic situation in Canada and suggested that the demand for goods is outstripping the supply. Later on he hedged on a question put to him as to whether the present inflationary situation was one of demand-pull inflation. The minister said that this is what started the present inflationary situation. He suggested the demand for goods is outstripping the supply in face of an admitted unemployment situation.
The minister went on to tell us that present policies were working, but then admitted that there was a very strong rate of price increases and noted that this would probably be pointed out during the debate. He gave no indication that there would be any change in these policies which obviously are not working.
The minister said that the government intends to continue with its present policies, policies which are obviously not working within the context of today's economy. He anticipated charges of a recession. He quoted two sets of unemployment figures at different times to try to prove different points. He suggested that the economy was strong and then went on to admit the government is taking action to help some very notable weak areas in the economy. He admitted there are unprotected people in the economy who have been seriously hurt as a result of government policies. The attitude of the Minister of Finance is that he is willing and prepared to do anything to fight and defeat inflation, even if it kills him and in the process kills the country as well.
We also heard this afternoon from the Minister of Consumer and Corporate Affairs (Mr. Basford). He correctly noted our scornful attitude toward the Prices and Incomes Commission. I hope the minister does not overlook the fact that our principal scorn is directed at the 21701-14 j
DEBATES	3537
Control of Inflation and Unemployment inadequacy of government policies and the framework within which this commission has to operate. The minister took solace from the report of the Standing Committee on Finance, Trade and Economic Affairs on rising interest rates. He interpreted this as support for the government's stand. The minister may be aware that there was another point of view expressed in that committee as well. He may be aware there was a minority report issued by the hon. member for Waterloo (Mr. Salts-man) and myself on behalf of the members of the New Democratic party. I recognize that this report cannot be officially tabled in the House, but just in case it has not come to the attention of the Minister of Consumer and Corporate Affairs, I would like to see that a copy is placed in his hands. I wish to have this copy taken across to his desk. I recommend it to him in order that he might learn that an alternate set of policies was put forward. I certainly commend the proposals put forward in this report.
The minister tried to defend an indefensible position. Certainly, it is his business if he wishes to defend the outline of price review procedure provided in the release issued after the meeting this week of the Prices and Incomes Commission. The review of prices would take place after increases had been made. It would take place in secret, behind closed doors with a totally inadequate procedure. It is the minister's business if he wishes to defend this sort of statement and to take solace in the statements contained in the release, such as one which reads as follows: Business firms generally, if called upon to do so, would reduce the number and size of price increases they would normally make in 1970.
My kids have a very short and to the point comment they make in response to a statement like that: Big deal. I do not think it is going to be a deal that will favour the Canadian people very much. I was happy that the minister asked to table the statement, and I understand it is now to be appended to Hansard. This will enable the readers of Hansard to see for themselves just how big a hoax this conference has been.
[DOT] (5:30 p.m.)
The classic definition of inflation, referred to this afternoon by the Minister of Finance, is that it is a case of too much money chasing too few goods. Let us ask ourselves the question: Is there too much money in our economy? I think that such a suggestion is very questionable. If one looks at the figures relating to money supply as compiled by the Bank
February 12, 1970
3538	COMMONS
Control of Inflation and Unemployment of Canada over the past year we see that the money supply in Canada has remained in a virtually stationary position for a number of months now.
Is it a case of there being too few goods? I do not think such a case can be made if we note that the industrial capacity of this country is continuing to grow. At the same time as we see growing unemployment and idle industrial capacity, inventories are increasing.
I do not think there are too few goods in this country. However, we do have growing unemployment. In introducing the motion today, my colleague from York South (Mr. Lewis) cited figures just released by the Dominion Bureau of Statistics. It seems to be the attitude of the government that it must rescue Canadians from their present plight by throwing many of them out of work. The government seems to suggest that unemployment is the cure for inflation; certainly that has been the thrust of their policies for many months now.
This policy of the government will not work. It seems to me there is ample evidence on which to reach the conclusion that it simply will not work. We have continuing price increases; at the same time we see growing unemployment, the current figure being above 6 per cent. In addition, we must regard unemployment in today's society as an unacceptable device for implementing government policy, whatever it might be. I think it is a case of sheer callousness on the part of a government that is prepared to tolerate unemployment and to implement its policy in face of the conditions which confront Canada today.
I should like to give an example of a case that came to my attention during the Christmas recess of the House of Commons. This example, which is only one of many in the country, illustrates the plight of many people as a result of the policies being followed by the government. In the city of Regina I happened to meet a policeman with whom I am acquainted. We had a short chat together, during the course of which he asked me, "What in hell is Trudeau doing when he says he is prepared to tolerate a 6 per cent level of unemployment?"
He then went on to give me an example of one effect of this type of policy. He told me about a young fellow who got into trouble in the city of Regina and as a result found himself in jail for a period of time. This policeman was successful in obtaining parole for the young man because he was married and


Mr. Barney Danson (York-North):: Mr. Speaker, I have enjoyed most of the debate this afternoon. Unfortunately, I had to miss some of it. It rather stuns me that there is so much acrimony and blame being attached in this respect, because the problem is so serious that everyone should take it seriously. I would rather we did not try to win debating points by blaming one another, particularly in view of the fact no one seems to have the real answer.
It has been my privilege to be a member of the Committee on Finance, Trade and Economic Affairs studying interest rates. This really turned into a study of inflation. The more we got into this question, the more complex we realized it was. Opposition members seemed to be terribly sure of the causes and answers, yet anyone who sat through those hearings knows that economists like Dr. Arthur Smith, Professor John Kenneth Galbraith and Professor E. P. Neufeld of the University of Toronto-men each with different points of view and highly regarded in their field, but without consistent answers- believe that we must approach this problem

DEBATES	February 12, 1970
in all sincerity and look at its many facets and technicalities in order to come to grips with it.
When constructive suggestions are made that is good. We must try many of them and study those we have not tried, to see whether they are feasible. I have heard about a comprehensive incomes policy but what this means is incomprehensible to me. This is a matter we should study and apply if it seems to have any hope of success.
There is another area which I think should be studied but which we did not have the opportunity to come to grips with in the committee. I have in mind the establishment of perhaps a new index or the expansion of existing indices such as the consumer price index which reflects increasing inflation. The problem today is that when we set interest rates, we must allow for the possibility or likelihood of inflation. When a landlord sets the rent he must take into account the inflationary factors and build them into the rent. The lender takes the inflationary factor or the expectation of inflation into consideration when fixing interest rates. The same thing applies to prices and wages.
If we could establish a suitable index or perhaps several indices that would reflect what is happening in certain segments of the economy, those people who set rents and interest rates, wages and prices could hopefully-I say "hopefully" because it is all hope and nobody has any real answers-set their interest rates, rents, wages and prices without allowing for the expectation of inflation. This would eliminate the effect of inflation which results from including the expectation of inflation. This is not simple, and I realize it does not involve an easy answer. We should study this matter. By leaving out a consideration of inflation expectation we might reduce inflationary pressure and to a certain extent help eliminate the inflationary expectation which might occur. If it does occur and it is reflected in this index, the effects on prices, rents, incomes and wages could be adjusted at intervals perhaps on a quarterly basis to compensate for the actual increase in inflation. I should like to see a great deal more study in this regard.
The report of the committee, which I think is a good report because it is many-faceted, looked at this matter realistically. It suggested many possible approaches and indicated many causes. It referred to the effects this has on the service sector of the economy. Great emphasis was put on this question and I
February 12, 1970	COMMONS
should like to re-emphasize it today. We do not know too much about it. The economists seem to te at variance as to how much of our gross national product is represented by the service sector. Af er some investiga ion, I am satisfied that some 50 per cent of our gross national product is represented by the service sector. Some say it is as high as 70 per cent. I believe, from information I have received from economists with whom I have spoken, this is inclusive of government. If the service sector of our economy is 70 per cent of the gross national product, I think it is evident that we must look at the situation much more seriously than in the past and obtain more information and facts. As there is more automation and cybernation leisure will become more end more prolonged-except in respect of Members of Parliament! We might have assistance by that time to help us look more deeply into this question.
[DOT] (5:50 p.m.)
High interest rates and unemployment, in my opinion, are not weapons used to fight inflation but are consequences of monetary and fiscal policies designed to combat inflation. If we can beat inflation we should be able to lessen increases in interest rates and unemployment. I believe this is just what the government is trying to do. The Prices and Incomes Commission, the Bank of Canada and the Economic Council of Canada are all trying to come to grips wi'h the situation. Many people criticize present measures, but I have yet to hear anyone express alternative solutions which have any credence. We are not sure about the consequences and must consider many facets in our approach to the fight.
The fight against inflation will not be won by individual action; it will take a broad approach by all sectors of our economy and society, each doing what they or he or she can do. The implementation of mandatory price and wage controls presents vast administrative problems and costs which, except as a very last resort, are unjustified or unnecessary in our generally buoyant and free economy. When we begin, we do not know where to stop. This system would permeate into every sector of our society and economy and bureaucracy would be overwhelming. I do not think this would help our economy. I do not think we have time to establish such a bureaucracy even if it were desirable. We have quite enough already. I
DEBATES	3541
Control of Inflation and Unemployment am hopeful that we would come solidly to grips with this problem before such action came into play.
The principal culprit is inflation psychology, or what some people call inflationary expectations. I referred to that in my suggestion in respect of an index. Whether we are management, labour or consumers-and we are all consumers-we believe that inflation will continue. People who have bet on this in the past have been right. We are so confident, as a result of our experience in recent years, that prices will continue to rise that we are prepared to buy anything now in the sure knowledge that it will be cheaper than delaying our purchase. Most, but not all, are confident that our incomes will be adjusted upward to compensate for price increases to which we so easily succumb.


An hon. Member:: What about MPs?


An hon. Member:: See Stanley Knowles.


Barnett Jerome Danson: Except for present company. What union negotiator in his right mind-


Stanley Howard Knowles: am in my right mind.


Barnett Jerome Danson: What union negotiator in his left mind-


Stanley Howard Knowles: Touche!


Barnett Jerome Danson: -would accept a settlement today that did not allow for inflation? On the other hand, this very expectation helps feed the fires of inflation by increasing costs. Let us look at the situation in respect of the steelworker who recently spent 80 days on the picket line for a wage settlement that will be largely dissipated by inflation before the contract expires. How do we end this spiralling chain reaction? I suggest we are now at a time when we can slow down and even reverse this spiral.
I think the meeting between the business leaders of Canada and the Prices and Incomes Commission is a good sign. Sure, the communique was vague, but I think there is a possibility of success if everyone comes to grips with the government's fiscal and monetary policy. High interest rates, unemployment and high taxes have started to make us think, and perhap worry. This is the first stage in combating the inflation psychology.
More than this however some segments of our economy perhaps as a result of subtle or not so subtle government persuasion have
February 12, 1970
3542	COMMONS DEBATES
Control of Inflation and Unemployment begun to react. The banks have agreed to hold back on announced interest rate increases and increased service charges. I wonder how many others have not as a result announced increases that would certainly have occurred. Some producers have announced a rollback and delay of price increases. Two of our major department store chains have withheld rate increases on credit accounts. By their actions, I am sure they have forced others to withhold increases. Even doctors and other professional groups are joining the fight and practising restraint.
There is a pyramiding effect to such action just as surely as there is a pyramiding effect to price increases. The timing of further action is critical because in each case the announced restraints are temporary. It is costing money to those practising restraint. They will only be willing to make restraints permanent if it pays them to do so. It will only pay off if the rest of the economy, including all of us as consumers, show equal determination to join them in anti-inflation efforts. If we do not, we might have to go through a long period of continuing, and perhaps crippling inflation before we have another opportunity comparable to that which we have today.
I believe when we see everyone beginning to pull together it is time for labour to cease to opt out; it is time for labour to stand up and be counted with the rest of Canada, with the businessman, the consumer and everyone else. I realize labour has been, unfairly, a whipping-boy in the past and I can understand its reluctance to become involved in some of the efforts to date. But I believe there has been enough good will shown in so many sectors that it is time for labour to opt in instead of out. It is time for labour to stop blaming others and saying this should have been done sooner, that it is too late to do it, or that it does not agree with what is being done.
I think the Leader of the Opposition (Mr. Stanfield) said it is time we all started pulling together. If labour would do this, I suggest that business would do something about profits. Profits do not always come into people's pockets; this only happens when they become dividends. I suggest business might very well consider a restriction on dividends. This could have a very great effect on our economy.
There are two types of investors. There are those who invest for growth and those who invest for return. Those who invest for return can find adequate return with mortgage rates as they are today. Those who invest for

growth should be delighted to see the dividends reinvested in businesses which create jobs. This would create growth and more jobs for labour, with ultimately better rates for everyone. Labour should at the same time accept its share of restraint in order to improve the economy. I should like to develop this theme further, Mr. Speaker, but I see my time is up. I should like to deal with it at another time in greater detail.


Howard Russell MacEwan: May I call it six o'clock, Mr. Speaker?
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Howard Russell MacEwan: Mr. Speaker, we have been treated to speeches this afternoon by a couple of cabinet ministers who were preaching the gospel of their doctrines and policies. Not being an economist, a member of the finance committee, or even particularly knowledgeable on this subject, I do not intent to deal with these matters. They are beyond me, and I believe they are also beyond the Canadian people.
In any event, this evening I want to talk about that part of the NDP motion pertaining to unemployment. We have heard it said- this has been confirmed by the Prime Minister (Mr. Trudeau) and is something we have long suspected-that this government can think of no alternative to a policy which imposes unemployment and hardship upon an increasing number of Canadians.
We heard the Prime Minister say at a press conference that even if unemployment reaches 6 per cent or more, he would not lose his nerve. There is not much question about his having to have nerve to make that statement. His ability and that of the Minister of Finance (Mr. Benson) to manage the economic policy should concern all Canadians. It is incredible to me, and indeed to many other people, that the government, which sought so eagerly to convey the impression that it was interested in new ideas and dedicated to a just society, should resort with such unconcern to one of the oldest, crudest and cruellest of economic policies, namely, creating unemployment. The government is deliberately creating unemployment to prevent increases in wages and prices.
I shall refer for a few moments to a local matter and the role of regional economic
February 12, 1970

expansion in the Atlantic area. Last week we had a debate on this matter. I do not intend to go into it at any length, and I did not take part in the debate. However, it is my belief that if the government means what it says, namely, that it wishes to help designated areas such as the Atlantic region, that is where the policy of regional economic expansion should be applied.
The minister, when speaking at various times in the House and outside and writing in various pamphlets, has pointed to all the jobs that have been made available by his department. He has also stated that the officials of his department have spoken to officials of the provinces, and he hopes that in this way agreements will be reached by April 1 of this year. I trust that this will be the case. We on this side will be waiting anxiously for April 1 because we want to see some benefits being derived from the Department of Regional Economic Expansion. There were bands marching, and a lot of fanfare at its inception; but we are interested in the old, green stuff-the money.


Some hon. Members:: Hear, hear!


Howard Russell MacEwan: That is what we want. Of course, it would mean increased employment in our area. This is one way of doing it. It has been said today by some hon. members on the other side that the unemploymeent rate has not increased very much; that in fact it has decreased. I pointed out, in a question to the Minister of Manpower and Immigration (Mr. MacEachen)-a minister from my area, a transplanted Cape Bretonner-that it is now at 10 per cent compared with 10.1 per cent at the same time last year. That is not much of an improvement.
[DOT] (3:10 p.m.)
In Quebec unemployment has risen to 8 per cent from 6.7 per cent. In Ontario it has risen to 4.2 per cent from 3.1 per cent in December. On the Prairies it is 4.6 per cent, up from 3.3 per cent in December and 4 per cent in January of last year. In British Columbia unemployment rose to 7.3 per cent of the labour force, up from 5.5 per cent in December. The matter of unemployment in the Atlantic area is very serious; it and Quebec are the hardest hit areas. I trust the new department will be able to improve the employment situation.
The eastern shore area of Guysborough, in my riding, is one in which this new department could do a lot, in co-operation with the province, to build tourist facilities and pave
DEBATES	3543
Control of Inflation and Unemployment roads. Such works would provide employment. We are waiting for April 1 to see some of the results from this department.


Mr. Muir (Cape Breion-The Sydneys):: April 1 is All Fools Day.


Howard Russell MacEwan: A lot of things happen on April 1. We will have to wait to see who are the fools. I hope it is not the Canadian people. The hon. member for Oshawa-Whitby (Mr. Broadbent) mentioned another matter which was referred to earlier in the session by the hon. member for York South (Mr. Lewis). That is the training of our younger people for employment. The hon. member for York South pointed out that the largest group of unemployed were in the 14 to 19 years age group, and the second largest comprised married men from the age of 20 to 34 years. Many complaints have been received by members of this House concerning the regulation which provides that in order to receive assistance under the manpower set-up, an applicant must be out of school for a year and have been in the labour market for three years. I maintain that this regulation is unfair.
In answer to a question which I asked last session, the minister said we have to train our older people first. But as pointed out by the hon. member for York South, the largest group of unemployed consists of younger people. The minister should re-examine this regulation. By training these people he could help alleviate the unemployment situation.
The withdrawal of the winter works program is also reflected in the unemployment rate of 6.1 per cent. Hon. members will recall that last session the government had a special committee set up to meet various people in industry, but it withdrew from the establishment of that committee. A winter works program could provide employment for many people in my area. The Minister of Manpower and Immigration says that this program has been replaced by a training program. But, Mr. Speaker, that program has not been adequate. The government should reconsider this matter.
Our great Minister of Communications (Mr. Kierans) has been closing post offices in my area and all over Canada. Coming from a city like Montreal-incidentally, it is a city I like to visit-perhaps he does not know that the local post office means a great deal to the small rural area, to the village or local community. Although he comes from Montreal, I believe the minister should know this because
3544	COMMONS DEBATES	February 12. 1970
Control of Inflation and Unemployment I am told that in his younger days he was a travelling salesman in the Atlantic area, selling flour or something of that sort. In a village there is perhaps one store and the post office. People look forward to getting their mail and buying their stamps. The minister has not looked at the human side of this matter.
When a post office is closed, it puts people out of work. A question was placed on the Order Paper and the answer, which I believe was given last Monday, showed that the amount to be saved by closing post offices is only $1 million. You might say that is a lot of money, but this step has taken the heart out of many small communities. Certainly it will not help the government when the next election comes around.
In the province of Nova Scotia public works are important; We need wharves, breakwaters and dredging operations. But we notice that in the estimates for the current year, running to the end of March, 1971, estimates for public works, for the province of Nova Scotia show a reduction of approximately one half. The amount in 1969 for this purpose was $5,655,000; for the current year it is $2,780,000. Apparently our minister from Nova Scotia has not had much sway with the cabinet. Public works in larger areas are not as important as they are in areas like mine. Fishermen require these facilities in order to do their work and look after their families. This is another instance of disregard by the government of something that is important to the Atlantic area.
In 1962 the government of the right hon. John Diefenbaker introduced a program of subsidies for shipbuilding in Canada. It has been cut back in successive years and will be practically abolished by the end of 1972. This step has also contributed to unemployment. The program was designed to give assistance to our shipyards and to enable them to be competitive with foreign shipyards. As we know, most other countries grant subsidies to their shipbuilders. We know that in connection with the shipbuilding program the government has set up a committee headed by Commodore Robertson. I trust that this committee will present a report before too long, and I hope that the government will reconsider its action in this respect.
Around this time of year the CNR can always be counted upon to do something to gladden the hearts of its workers. In my constituency, and also in the constituency of my colleague from Cape Breton-The Sydneys

(Mr. Muir), this year that "something" will be the laying-off of maintenance men as of April 1. The number of maintenance crews will be reduced, and I am worrying about the safety factor. Under the new set-up, one crew will cover 52 miles. This will cause more unemployment. I asked the Minister of Transport (Mr. Jamieson) to look into the matter. I do not know whether he has done so, but I repeat that this policy is creating unemployment in these areas.
Some time ago the hon. member for Calgary North (Mr. Woolliams) questioned the government about disabled veterans. It did not give me any satisfaction to hear the President of the Treasury Board (Mr. Drury) say that some veterans were being laid off. I asked the Minister of Veterans Affairs (Mr. Dube) about the matter, and he replied that they were not laying off many in the Department of Veterans Affairs. When I asked him about veterans in other departments, he replied that he could answer only for those in his department. That is the trouble. The Department of Veterans Affairs is going downhill because this minister from New Brunswick is not doing his work; he is not looking after the veterans of our country.
No matter what happens, Mr. Speaker, I am sure the Canadian people will not forgive a government that will put up with unemployment and will in fact cause unemployment. The Minister of Finance, sometimes referred to as Gentle Ben, has proven that with respect to the policies for which he and the Prime Minister are responsible, he is not so gentle. It is hard for a man wi'.hout work, out of a job, to go home and eat flower power; it just cannot be done.
[DOT] (8:20 p.m.)
At this time, Mr. Speaker, I would call on the Minister of Finance, who is here. Perhaps the Prime Minister will also enter this debate and tell us how the government will improve the unemployment situation in this country, a situation which should never have been allowed to occur. We ask how long the government can afford to ignore the spectre of mass unemployment that looms over the horizon. This government is accountable to the Canadian people in this matter-let us see them do something about it.


Mr. Alastair Gillespie (Etobicoke):: Mr. Speaker, I should like to address my first remarks to the wording of the motion before us. There is a peculiarly old-fashioned ring to the wording, "That this House condemns".
February 12. 1970	COMMONS
This is the language of the Oxford Union, the language of yesterday. It is a peculiarly unconstructive, unprogressive sort of language. It focuses on moral issues in the sense of moralizing. It does not come to terms with the real issue that should be before this House, the issue of the misery of those who are unemployed. Where is the concern on the part of those who have placed this motion before us to do something, to build, to share? Where is the spirit of wanting to help? Where is the spirit of those who wish to help the victims of inflation? There is no suggestion in the motion, no feeling for the utter helplessness of those who are unemployed and suffering defeat-


Mr. Deputy Speaker:: Order, please. The hon. member for Cape Breton-East Richmond (Mr. Maclnnis) is rising on a point of order.


Winona Grace MacInnis: I rise on a point of order at this time, Mr. Speaker, to draw your attention to the fact that the member now speaking is violating the rules by reading directly from a document.


Mr. Deputy Speaker:: On the point of order,
I would draw to the attention of the hon. member and all members of this House that there is a long-standing tradition that one does not read speeches. I shall exercise a certain degree of latitude, as has been the practice of the Chair heretofore, and invite the hon. member to refer to his notes in a general way.


Alastair William Gillespie: Mr. Speaker, let me assure you that what I have here are no more than notes; they are handwritten. It is not a prepared speech.


Winona Grace MacInnis: Try to get along without them.


Mr. Gibson:: He is doing all right.


Alastair William Gillespie: If hon. members opposite are interested in my remarks, I am prepared to continue. If they have made up their minds to close their ears-


Donald Stovel Macdonald: What minds?


An hon. Member:: Now, Donald, you have been a good boy today.


Alastair William Gillespie: There is no feeling for the suffering, for the personal sense of defeat of those who are unemployed and their families.


An hon. Member:: You missed a line.
DEBATES	3545
Control of Inflation and Unemployment


Alastair William Gillespie: I would have been more persuaded by the speeches if I had sensed the kind of understanding which this problem of inflation requires.


Winona Grace MacInnis: There are the notes again.


Alastair William Gillespie: Let me refer to three particular areas. First, I should like to preface my remarks by drawing to the attention of the House the fact that the House of Commons Committee on Finance, Trade and Economic Affairs tabled a report last Friday after some months of consideration. It is a substantial report and was fully reproduced in Votes and Proceedings of last Friday which all members found on their desks last Monday morning. One of the points the report made was that inflation is affected by a number of things, not least by the kind of activities that occur in key industries.
John Kenneth Galbraith, in evidence before the committee pointed out that the key industries, or what he called the industrial heartland, were a substantial part of the problem of inflation today. In the key industries he included the whole question of the housing or construction trades. Many members will recall the headlines of last summer regarding the construction trades, to the effect that carpenters will get $240 a week and more benefits, and that Metro's 4,500 carpenters in the commercial field will receive a wage and fringe benefits package of $1.97 J an hour over two years, an increase in the order of 30 per cent. Other articles pointed out that these increases would increase housing costs in the metropolitan Toronto area by approximately 12 per cent. That is to say, a house which had previously cost $20,000, not including land, would in future as a result of these increases cost $22,400. There is no suggestion in the motion put by the NDP that this sort of increase, which is well above any productivity increase by the economy, has an inflationary effect. They speak of a total incomes approach.
The government, on the other hand, has recognized in a major way the problem of housing in this area. Not long ago the Minister without Portfolio (Mr. Andras) drew to the attention of the House the importance of this whole area and presented a program which involved greater expenditure on public housing than on any other occasion in the past. I would suggest, Mr. Speaker, that this is one way of compensating for a situation which inflation has helped to disturb.
3546	COMMONS
Control of Inflation and Unemployment
What about regional unemployment? The government has produced programs under the department of Regional Economic Expansion which are aimed at the very problems we are all concerned with, unemployment and slow growth in the most disadvantaged parts of Canada. This is a selective government approach. Where have we heard a constructive suggestion? How does an incomes policy, undefined, help to develop income in areas of slow growth? Mr. Speaker, I cannot help sharing suspicion of many that some opposition members wish to score debating points on the misery of other people.


George Harris Hees: You are the third guy to say that. They had the same speechwriter.


Edgar John Benson: You guys could stand one.


Alastair William Gillespie: Mr. Speaker, there is some sensitivity here on the part of the opposition to a very legitimate point. After the report of the House of Commons Committee on Finance, Trade and Economic Affairs was presented, two of the opposition members of that committee submitted their own report to the press and they condemned the committee's report in much the same language as their motion. They said:
The majority report is a meagre document whose premises and conclusions we cannot accept. It is a compendium of unimaginative orthodoxy that is neither fair nor workable.
They used the word "orthodoxy" to suggest that in some ways it was old hat. I suggest that if they have new ways of dealing with the problems of inflation and unemployment', they should put them before the House. Those who at least read the report know that they were more concerned with wrapping the Canadian economy in a cocoon to insulate it from the world than in dealing with the realities of the world. They acknowledge the fact of interdependence but suggest in some way that we can legislate our own independence from world economic forces. I think all hon. members realize that the rate of inflation in Canada is more influenced by foreign factors than by domestic ones.
[DOT] (8:30 p.m.)
What is wrong with a program of restraint? The government has put forward an appeal to all Canadians in all parts of Canada-I say, to all Canadians and not just to the leaders of Canada-to show restraint. The meetings last week indicated that there is a significant body of opinion in Canada which is prepared to accept and work toward a progressive and

DEBATES	February 12, 1970
constructive approach to solving the problem of inflation through restraint in prices.
I think all hon. members of the House are waiting to hear how other members of the community are prepared to react. All of us, I think, are disappointed or perhaps saddened by the lack of sensitivity to a national problem evinced by a particular group. I would hope for and welcome any initiative the Canadian Labour Congress might make at this time to show that it, too, is on the side of restraint.
The Standing Committee on Finance, Trade and Economic Affairs in its tenth report made various recommendations. These recommendations were directed at the following:
(a)	Making management, labour and all sections of the economy more accountable to the public interest.
I say, let us hear from all sectors of the Canadian public and from all leaders of all sectors. The second set of recommendation was directed at:
(b)	Increasing the effectiveness of federal government fiscal, monetary and economic measures that may be applied to regulate the economy.
I commend to all hon. members the specific recommendations which follow in this regard. The third of the general class of recommendations is directed at:
(c)	Concerting the spending plans of the federal government, the provincial governments, and through the provincial governments, those of the municipalities.
Is this orthodoxy? If it is, I say we need more of it. I argue that the time is long overdue for the private sectors and governments of all levels to join together in a spirit of common purpose for a concerted approach to the problem of inflation. We should do this with the spirit of purpose which suggests the idea of sharing rather than condemning. This is the way we will deal with the problems of inflation; this is the way we will deal with the problems of unemployment.


Hon. Theogene Ricard (Saini-Hyacinihe):: Mr. Speaker, we are called upon to vote tonight on a motion from the New Democratic party condemning the government's policy which has deliberately created an increase in unemployment, and has failed to stop the cost of living from rising, thus causing worry and unease amongst the people.
Mr. Speaker, I intend to vote in favour of the motion, because there are now 485,000 unemployed in Canada, that is 6.1 per cent of
February 12, 1970	COMMONS
the labour force. In the province of Quebec alone, the unemployed number 178,000, or 8 per cent of the Quebec labour force and 36.7 per cent of the total number of unemployed in Canada. Montreal alone has 50,000 unemployed. If that is not enough to worry the government, will there ever be a situation serious enough to upset our country's administrators?
We have heard this afternoon a minister and some government members who apologized to us for the present situation. I had the opportunity to hear speeches by Liberal members during the sixties, when the Conservatives were sitting on the government side, and I find that today's speeches are quite different from what we used to hear then. You should have heard men like Mr. Martin, Mr. Pickersgill, Mr. Chevrier, shedding crocodile tears on the plight of those workers who were at that time unemployed. Well, today, the situation is exactly the same as then, and we no longer hear those lamentations from the government side. If we were to believe what those on the other side of the House tell us, the workers never had it so good. Yet, facts tell quite a different story.

A few moments ago I was listening to the hon. member for Etobicoke (Mr. Gillespie) saying, at the start of his remarks, where is the spirit that is needed to help those who are hurt by inflation and the high cost of living? May I say to the hon. gentleman that the Minister of Finance (Mr. Benson) understands this situation very well because he has suggested that a working man and family can do very well on $30 a week-that is enough for him to get along with. The hon. member also asked for some suggestions. Let me say here that none are so deaf as those who do not want to hear. Members on this side of the House have made suggestions which have always been rejected by those who sit on the treasury benches. So let us not be fooled by this kind of talk.


Alastair William Gillespie: Mr. Speaker, would the hon. member permit a question?


J.-H.-Théogène Ricard: I have only a short time to speak, and lots of ground to cover. I ask the hon. gentleman to wait until I have finished my remarks and then I shall be glad to answer his question. We have suggested time and again that if the government really wishes to help those who are unemployed, it should eliminate the 11 per cent sales tax on
DEBATES	3547
Control of Inflation and Unemployment construction materials. Has this been done? We have also begged the government not to impose for another year the 3 per cent surtax. What was done about that? That tax certainly hurts those who are unemployed. So let us not be fooled by that kind of talk, Mr. Speaker.
[DOT] (8:40 p.m.)

Mr. Speaker, I should also like to make a few suggestions. In my opinion, the government should bring back the winter works program because it used to help find work for those who were idle in wintertime.
In addition, construction of overpasses could contribute to eliminate railroad crossings. Such projects could get under way in early fall in order to provide winter employment for workers.
It is undeniable that in our economy we must take a more direct interest in the field of manufacturing. Much could be done indeed to boost the number of jobs if we were more concerned with everything related to manufacturing.
A great number of raw materials could be finished in Canada instead of being exported unprocessed.
I will speak briefly, in order to allow other members to take part in the debate, but I will surely not miss the opportunity to repeat that my constituency is really in a disastrous economic situation. Indeed, almost 15 per cent or 25,000 or 30,000 workers in the St. Hyacinthe area are unemployed. It is the highest level of unemployment ever registered in my area. The distress and the hardship due to unemployment are of great concern to me as well as to a number of families.
I should like to appeal once more to the minister of Regional Economic Expansion (Mr. Marchand) and urge him to make of the region of St. Hyacinthe a designated area. Several of our plants have closed their doors, several others are now operating part time and some have to lay off many workers. Such a situation cannot continue. If we wish to attract new plants in the region of St. Hyacinthe, we must give it the same advantages as are enjoyed by the neighbouring towns liable to compete with it. It is therefore imperative that this region be classified as a designated area.
Mr. Speaker, I shall not say anything further, but I would like to repeat that we must at all costs solve this problem since our work-
3548	COMMONS
Control of Inflation and Unemployment ers will not always be satisfied with promises only. Concrete measures must be taken to help them and as their spokesman, I ask the government to do them justice.


Alastair William Gillespie: Mr. Speaker, may I ask the hon. member a question?


The Deputy Speaker:: Order, please. The hon. member may ask his question only with the consent of the hon. member for Saint-Hyacinthe (Mr. Ricard).


J.-H.-Théogène Ricard: I will accept a question, Mr. Speaker.


Alastair William Gillespie: How would the elimination of the 3 per cent surtax help those who are unemployed? They are not taxpayers.


J.-H.-Théogène Ricard: I think the hon. member has had very little to do with unemployment. Before you can draw unemployment insurance you must have been an employee prior to becoming unemployed. When you are an employee receiving pay, the 3 per cent surtax affects you.


Winona Grace MacInnis: Mr. Speaker, the recent conference of business leaders which was held under the auspices of the Prices and Incomes Commission has been heralded by the government as a conference on price stability. We in this party, and many other people in this country, believe that is a misnomer. It should more correctly have been called a conference on profit maintenance, because according to the communique and everything else we have heard, this was not a conference on rolling back the cost of living to lower levels or ensuring that it will not go up. According to the communique, the business leaders agreed they would reduce the number and size of price increases they would normally have made in 1970, but they made no effort to say they would not make price increases. They said they would help in contributing to a broad program of restraint, on certain conditions. I quote from the communique:
-they emphasize that an indispensable requirement for the control of inflation is a comparable measure of restraint by wage and salary earners, by governments at all levels and indeed by everyone.
In other words, to put it in plain, simple English, they will not make as big profit increases this year as they normally would have done, provided everyone else does exactly the same in restraining any increases that

DEBATES	February 12, 1970
they might be seeking. If that is worth heralding with loud hosannas, I don't think the people of this country are going to believe it. It amounts to very little. Even this they hedged about when they said "if called upon to do so". We have not heard any loud and clear calls going out from the government asking them to do so. We do not believe this amounts to anything very real at this stage. What the people attending the conference said was that if everybody else in the country will restrain themselves, they will agree to make less profit than they would have expected to make in the normal course of events.
This afternoon the Minister of Consumer and Corporate Affairs	(Mr. Basford)
expressed surprise. He said that we in this party had long been demanding the line of income and price restraint that we are now getting. He was surprised that we were now heaping scorn on it. I wish to again point out the difference between what we in this party have been seeking and what we have got. We have always said that voluntary restraint and moral suasion will not work, that there must be a complete, over-all income policy and not one for just one section of the population. We have on our side in this issue the Economic Council of Canada. The council has said that wherever moral suasion guidelines have been tried, they have failed. They have warned that this policy will not work in this country. I do not see why the government has the Economic Council to advise it and then flies in the face of its advice.
We in this party have always said that there must be a prices review board. Manufacturers and other business concerns intending to make price increases would have to justify them before this board. But what we are told in the communique from the Prices and Incomes Commission is that businesses have agreed to a formula by which there is no necessity for them to advise the government before a price increase is made, but that there may be a possible review after the increase. That is not what we have been asking for, Mr. Speaker. We want to see a prices review board with teeth in it, which would ensure that price increases were justified before they were made.
We have over and over again said that these reviews should be made in public so that the public would know what was going on. Instead of that, this communique states that the businesses have agreed to having these reviews made in secret. We believe, and
February 12, 1970

have stated many times, that where the taxpayers of this country have paid their money into government coffers for the use of government services, the government has no business fencing those services off from the public and carrying on their operations in secrecy.
[DOT] (8:50 p.m.)
This simply means that the government does not trust the public, that the government wants to do things which the public will not approve. The government adopts a "take it or leave it" attitude by presenting the public with a fait accompli. These are the points on which we take quite a different approach to that of the Prices and Incomes Commission.
In the fourth place, we have always said that all forms of income must be included in a prices and incomes policy. Instead, the government adopts a piecemeal approach by proposing to deal with business and labour as though they were the only sectors of the community. The previous speaker but one, and others, could hardly restrain themselves in their desire to get at the throat of organized labour. They have misquoted organized labour over and over again, not only in this debate but on other occasions. I should like to put on the record the position of organized labour as presented by the Commonwealth Press Association in Ottawa on October 15 last:
Before labour will agree to any wage freeze it must be shown that the federal prices and incomes commission can halt rising prices, says Donald Macdonald, president of the Canadian Labour Congress-
"We've prepared to sit down at any time, with any group, agency, or individual and seriously discuss an incomes policy.
"But by an incomes policy we mean that all forms of incomes would have to be considered," he said.
These would include prices, profits, salaries, professional fees, rents, wages, interest rates and all other forms of income. I say, please, let this be the last time hon. members opposite are so anxious to go gunning for labour that they say wrong things about what labour has said. Organized labour has said it is willing to sit down and discuss an incomes policy, provided all forms of income are included in that discussion. But it is not prepared to be the whipping-boy of the government so that attacks can be made on wage increases gained by organized labour. Other sections of the community have secured far larger increases.
Fifth, we have always said that the government's piecemeal approach would not work, and we say so again. What does inflation
Control of Inflation and Unemployment mean in the lives of the majority of Canadians? We have been given what was described as the classic definition of inflation, but in the lives of the majority of ordinary Canadians inflation simply means that the cost of living is rising faster than their income to meet it. In far too many cases this condition is compounded by the utter disaster of unemployment which overtakes families.
We have been told in the past that in periods like this we have to choose between a rising level of unemployment and a rising cost of living. Under the gentle ministrations of this government we no longer have that choice: we have both conditions. We have a 6.1 per cent rise in unemployment, the highest level for two years, and the cost of living has been climbing at an accelerating rate for the past three years. In 1967 it climbed by 3.6 per cent; in 1968 it climbed by 4 per cent; in 1969 it climbed by 4.5 per cent; and it is still rising in 1970. Let me point out that during this period the government and its very similar predecessor government have been at the helm. Who are the victims of this inflation? They are the old, the ill, the people on low incomes and, yes, the low-paid employed.
Hon. members opposite have been telling us about the high fringe benefits received by some members of organized labour. I wonder whether they realize that the average gross income of workers in manufacturing industries in Canada, as of November, 1969, was only $5,723. I suggest that unless the income of hon. members opposite is comparable to $5,723, it ill behooves them to heave rocks at people who receive the fringe benefits they describe. No matter how many fringe benefits they receive, it would take between now and the millenium for them to come anywhere near in sight of the type of income enjoyed by many people in this country, those who have been complaining about inflation yet whom inflation does not hurt.
What is the position of our farmers today? They have unsold wheat on their hands. Even for what they can sell, cereal crop prices have dropped between 15 and 20 per cent during the last two years. While they are unable to sell their wheat, and the wheat that they can sell has dropped in price, the interest rates they have to pay have risen from 6 per cent to 9 and 10 per cent. The prices they have to pay for farm machinery have also risen steadily over the same period.
What has the government done to meet inflation at this time? Inflation did not begin yesterday, or the day before the Prices and
February 12, 1970
3550	COMMONS
Control of Inflation and Unemployment Incomes Commission held its conference of big business leaders. Let me tell the House a few of the things the government has done to beat inflation. They talked about voluntary wage and price restraints, but they did nothing when the Steel Company of Canada and other steel companies raised the price of steel by more than 20 per cent. The government was silent when International Nickel Company raised the price of nickel by 24 per cent. In fact, the government refused the demand of the United Steelworkers of America for a public investigation of these price increases.
Having established the automobile trade pact, the government still permits the automobile manufacturers of Canada to charge the Canadian automobile purchaser more than $200 per car over the U.S. price, even though the U.S. price includes additional shipping charges. At the same time, they handed a present of forgiveness to car manufacturers to the tune of $80 million worth of customs duties that the manufacturers should have paid. The new Transportation Act has given the railways greater freedom to increase freight rates, which have risen substantially. The banks have been freed of any restrictions and can now charge any interest rate they see fit. The sky is no longer the limit because interest rates have soared beyond the sky and into the stratosphere.
The government has also raised interest rates under the National Housing Act. Today's mortgage rates run from 9 to 12 per cent, a crushing burden on any worker who wishes to purchase a home. The government has taken no action to stop land speculators. Land costs in most metropolitan cities have risen over 100 per cent during the last decade. The cost of home ownership is beyond the reach of most hourly paid workers.
This is the record of the government up to this point in its fight against inflation in this country. Do you wonder, Mr. Speaker, that Canadians from coast to coast are sceptical about this gathering of senior business personnel who, in order to join in the fight against inflation, are willing to take a little less in the way of profit than they would had they not bowed moral suasion and restricted themselves? This is not fighting inflation. This is tokenism, and tokenism of the most revolting character in the eyes of the ordinary, decent-minded Canadian.
What are the proposals that the government should lay before the provinces next week? First of all, we say there is a need for
[Mrs. Maclnnis.l

a comprehensive prices and incomes policy, and that all sectors of the population should be represented. Has the government invited the people who are suffering from inflation to any conference to discuss what can be done to solve their problems? Not on your life! The only people who have been invited to conferences are those who suffer much less from inflation than the groups to which I have referred.
[DOT] (9:00 p.m.)
As I said earlier, forms of income should be considered in making prices and incomes policy. There has been objection to having control, selective or otherwise. Objections to controls come from the type of people and groups who say we are suffering from inflation. But these people are not concerned about individuals who suffer from inflation and who have seen the cost of living go up, up and up to the point where they are not able to live an ordinary and decent life.
In my city of Vancouver, during the Christmas recess I heard a welfare organization making representations to the city council. They asserted that the social welfare allowances were still at the level they were in May of 1965, while the cost of living had spiralled tremendously since that time. How can these people live? Injustice should not be frozen. Restraints should be placed on the increase in the cost of living. The 2 per cent ceiling on old age pensions must be replaced by an escalator clause. Why should old age pensioners be placed in a worsening position as a result of the cost of living today?
My colleague the hon. member for Regina East (Mr. Burton) pointed out, as far as he was able during the brief time at his disposal, what I want to mention very briefly at this time. We are not saying that these other forms of social benefit, including a guaranteed income, can be accomplished without an extension of the economic base. We have for years been urging that a Canada Development Corporation should co-ordinate and develop general economic policy in this country.
A few years ago the government was liber-ally-enough minded to believe that we might successfully introduce a policy of this kind. They talked about the establishment of a Canada Development Corporation for developing sources of income and revenue. But now the government says no more about establishing this agency. There are many things we could reduce in government spend-
February 12. 1970	COMMONS
ing. I cannot help remembering the expenditures made recently by this government, which were far from necessary. I cannot forget the Prime Minister's entourage of 17 people, at a cost of $306,165. When the former Prime Minister, Mr. Pearson, was in office he got by with seven people at an expenditure of just about half that amount, a total of $128,659. The Prime Minister before him, Mr. Diefenbaker, had three executive assistants, at a cost of less than $50,000.
If it is important that we curtail expenditures, we should begin here. The place to start restraints is right here in government. This has not taken place. As a matter of fact, if there had been restraint in this and other quarters we would not have had to spend $7 million on Information Canada this year, the agency for managing government propaganda so that the government will not receive all the lumps it would otherwise get, and deserves.
I have one more minute, Mr. Speaker. I have been watching the clock very carefully.
I feel these things should be said. The establishment of voluntary price restraints is not the way to go about solving this problem. We feel the minister should make an effort to place restrictions by law in the proper areas. We need legislation to control the cost of living, as we need it to control traffic, garbage collection and any other sectors of our living where the public needs service and protection.


Mr. Marlin P. O'Connell (Parliamentary Secretary to Minister of Regional Economic Expansion):: will equal the total Swedish labour force. The employment of these people is one of the major challenges this government and Parliament faces in devising economic policies that will enable us to establish policies of restraint without turning down the economy.
In the past, the tools we had in fiscal and monetary fields succeeded only by going to the extreme and turning down the economy. In my view, the only way we can successfully approach this question today is with a prices and incomes policy as suggested here-a comprehensive policy of prices and incomes restraint. That is the policy the government is attempting to adopt.
It is true that if a voluntary restraint system, which is the first step, does not succeed, we must take another step-adopt more direct controls and seek constitutional authority, because such a policy would require federal-provincial agreement. But as much as anything we want to be assured that no important economic interest in Canada will not be part of the effort to make the policy a success, because if we fail there will be very serious consequences to employment and economic growth in this country. That is all the more reason why the program and the policies of regional economic expansion must succeed.
[DOT] (9:20 p.m.)
I was very interested in the remarks of the hon. member for Saint-Hyacinthe (Mr. Ricard) and the hon. member for Yorkton-Melville (Mr. Nystrom), who asked that more regions be designated. That may not be the proper approach, but surely it is one approach we must consider very seriously. The direct approach to prices and incomes, rather than an excessive use of other tools, is an absolute necessity in solving the serious problems which face us.
In my view, this requires that organized labour review the position that some parts of it have taken already. I agree with the hon. member for Vancouver-Kingsway that it would be silly, and indeed tragic to try to isolate the important labour interests in this country. The contribution which labour has made to our economic growth is very great and its participation in a debate of these problems is essential.
To induce labour to join in these discussions will require good leadership by this government. I think that has been given. This is why I think the motion before us suggests
DEBATES	3553
Control oj Inflation and Unemployment on the whole a hollow and outmoded approach, in fact a stereotyped approach to the questions that we face, except for the part which speaks of the need for a comprehensive prices and incomes policy.
In summary, I oppose the main purpose of the motion. I think it takes too narrow an approach. I think the government is developing a more effective mixture of policies which will mean that we will not have an unemployment crisis and we will be able to maintain, over a reasonable and necessary period, effective policies of restraint. In my view the maintenance of these policies of restraint over an effective period will achieve greater success if we adopt a direct approach to the problems of prices and incomes.


John Howard Lundrigan: Mr. Speaker, I will take only about ten minutes because a number of hon. members wish to get their points across. Having listened to previous speakers across the way take part in the debate since early this afternoon, there is only one thing with which I have been impressed; that is, the insincerity of their remarks. I listened to the hon. member for Etobicoke (Mr. Gillespie) and to the remarks of the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. O'Connell), and I cannot understand how hon. members can stand in the House and make remarks about the employment situation with such conviction.
There is only one conclusion that I can draw, that is, that the quicker we allow television into the House to expose the hypocrisy which takes place here, the better off the Canadian nation will be and the more respect will be shown by members of this House for the electors in this nation.
I should like to speak for a minute about my reaction to the remarks of the Parliamentary Secretary to the Minister of Regional Economic Expansion. If I only say this, I will be satisfied that I have made a contribution to this debate. He spoke about the great programs under the Department of Regional Economic Expansion which will create employment in Canada. For example, he indicated that we should not worry too much about unemployment because it has remained at the same level. In fact, he is admitting that the just society has fallen flat on its face, and that unemployment has remained at the same level.
He did not say what the Minister of Manpower and Immigration (Mr. MacEachen)
February 12, 1970
3554	COMMONS
Control of Inflation and Unemployment said, namely, that we are better off and that unemployment has decreased. He said it has remained at the same level and that we have not achieved the great just society that was talked about so much. He said that the rate of job creation is four times as great.
I have in my hand two small documents from which I should like to quote. The first one is a report of the Department of Regional Economic Expansion for the period January 1 to January 31, 1970, on the operation of the Regional Development Incentives Act. There were 31 incentives given to industry. If I may be parochial for a moment, let me state that Newfoundland, it has been estimated, has an unemployment rate of around 22 per cent. This is the worst situation that has ever existed since I became a Canadian in 1949. It is a most distressing state of affairs, because I think we have gone beyond the stage of a recession in my province.
Every small businessman in Newfoundland is terrified. There are two types of people in my province: those who are unemployed and those who are terrified of becoming unemployed. The minister speaks about the programs instigated by his department. Let me state some facts. In January of this year 31 grants were made under the Regional Development Incentives Act. One went to Newfoundland, resulting in an estimated additional employment of 11 persons and a total input of $64,000. This is what the member speaks about. What a lot of nonsense!
Let me relate to the House some facts which it was impossible to get from the minister in answer to questions which have been asked of him, but which we have received as the result of the ingenuity of some hon. members in our party who added up the figures from reports which come out every month.
The following is the total amount of money which has been injected into the Canadian economy under the incentives program since it started, including the two announcements in February of this year: In British Columbia, $70,000 was granted under the regional economic incentives program; in Alberta, $1,200,000; in Saskatchewan-the hon. member for Assiniboia (Mr. Douglas) will want to take issue with this, and he has been up on his feet every day-not one cent has been granted; in Manitoba, $1,400,000; in Ontario, $350,000; in Newfoundland-the slow growth area of Canada-$215,000; in Nova Scotia, $137,000; in New Brunswick, $745,000; in Prince Edward Island-too bad the hon. member for Cardigan (Mr. McQuaid) is not here, because
[Mr. LundriganJ

he would love to hear this-$15,000 was granted. I left Quebec to the last-you can draw your own conclusion from the figure- $13,454,094 was granted. These are the facts of the situation, and this is what the minister talks about when he refers to his great program.
Since the government's program of austerity has taken hold in Canada, it has been applied equally across the whole of Canada. Every single government department in my province has applied the same stringencies and restrictions as in the most progressive parts of Canada. There were two men in the Department of Transport in my town who had 24 years experience and who were laid off with nothing more than a notice telling them to put in their names at the manpower centre.
The Minister of Public Works (Mr. Laing) agrees that fishing facilities are necessary and economically justified, but he is sorry; there is no money for them. In dozens and dozens of places this is the excuse given to every member who represents the provinces of Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick and in some cases, I imagine, Quebec, especially the Gaspe area.
The Department of Transport eliminated the passenger railway service in Newfoundland. They laid off the men who man the repair stations across the island, and they cut back 60 or 70 men in recent days. The Department of Indian Affairs and Northern Development has placed a restriction on the employment of casual workers in my province. No more has been made with regard to the Bonne national park which might employ a couple of hundred men. The Minister of Fisheries and Forestry (Mr. Davis) eliminated our sea fishery, which means that another 100 men are out of work. And we have 11 jobs created by the Department of Regional Expansion!
[DOT] (9:30 p.m.)
We have the same thing happening in the Post Office Department. The same kind of programs that the minister introduced to mess up the Post Office elsewhere in Canada have been implemented by him in Newfoundland. The biggest reason for this goes back to the Prime Minister (Mr. Trudeau). As far as I am concerned as a Canadian, this is the biggest problem we have. The Prime Minister of Canada has no feeling, no knowledge and no understanding of what it means to be unemployed and to live in a slow growth area. For
February 12, 1970

example, we have the Prime Minister talking about his great effort in regional development, and he has convinced other ministers. The greatest tragedy in our nation today is that the Prime Minister has made up his mind, regardless of the consequences of unemployment, that it is going to be the answer to inflation; and the saddest part of the story is that other ministers in this government-I notice the Minister of Finance (Mr. Benson) peeping through the curtains- have not the gumption to take issue with this kind of approach. Some members asked today, what are our suggestions? Right now any member from my province-and we have all done this-could stand up and in ten minutes tell the government of this nation the areas where I can go in and create hundreds of jobs. I can point out 15 or 20 areas in my constituency where it is economically feasible to create fishing facilities. I can give the Minister of Transport (Mr. Jamieson) proof positive of the need for a $2 million investment right in my own town of Gander. We can get no action on it, although the minister agrees it is justifiable. The Minister of Finance agrees that the fiscal policies of the government which are applied equally across Canada are having an adverse effect on my province and on the whole of the east coast. We should be getting about $10 million for national parks on the west coast of Newfoundland, but that is not happening.
With respect to the Minister of Manpower and Immigration (Mr. MacEachen), the men employed in his department's local office in Gander cannot make phone calls like they used to, because now they have a budgetary restriction on the number of phone calls they can make to the people in my riding. I have asked that department to make a special effort to send its officials out to the communities which have 40 per cent and 50 per cent unemployment. But they have not the manpower and, the money to travel, nor the money to make the necessary phone calls, let alone money for the programs which could upgrade the skills of these people and temporarily alleviate the effects of unemployment.
As far as I am concerned as a Canadian, unless we can get a modification in attitude on the part of the Prime Minister of our nation, there is only one simple answer; that is, that we must have a change of government. That may sound partisan. We can begin by having a change of prime ministership in Canada and go ahead from that and have
DEBATES	3555
Control of Inflation and Unemployment ministers of the Crown, especially ministers from the east coast-we have a couple from there-who can take issue with the present starvation measures being implemented by the government.
If I had more time I could outline in detail some of the areas in which the government has no excuse for not moving on, other than that the Prime Minister has laid down a rule and he has the other ministers toeing the line. This is the biggest reason for unemployment in my part of Canada.


Albert B. Douglas: Mr. Speaker, for just a few moments I would like to speak about the unemployment situation in Saskatchewan, the province in which I was born and where I have always made my home.


An hon. Member:: You are reading.


Albert B. Douglas: I am not the only one. Saskatchewan had a remarkably low rate of unemployment until the last few months, when it climbed above the national average. But high as it may be now, it is still deceptively low, because unemployed people and young people seeking jobs tend to leave Saskatchewan to swell the population and the labour force or the unemployment statistics in other provinces. This is not because we have had Liberal or NDP governments since 1934 in Saskatchewan, but because Saskatchewan people are adventuresome and willing to take chances-in other words, not Conservative.
Other factors contributing to our easy mobility are that our weather is harsh, although invigorating, especially in winter, and that it is not far to prosperous Alberta and B.C. to the west, or to prosperous Ontario and Quebec to the east. Not only that, but most of us have relatives, if not friends, in those provinces.


Eldon Mattison Woolliams: Would he hon. member permit a question?


Albert B. Douglas: When I have finished. As a result, Mr. Speaker, Saskatchewan's population has remained almost static for over 40 years. We have not even retained our natural increase. For example, in June, 1967, our population was 958,000. Last July it was 959,000, and it has gone down considerably since then.
This exodus, and the recent high unemployment in my area, are in large measure due to the decline in wheat sales and the consequent shortage of cash in the hands of the farmers.
3556	COMMONS
Control of Inflation and Unemployment Since the Prime Minister (Mr. Trudeau) appointed a minister with exclusive responsibility for the Wheat Board and the grain industry, some improvements in wheat sales are in prospect for the balance of this crop year and for future years. Prairie people expect a great deal of Saskatchewan's cabinet minister, and I know he is putting tremendous effort and determination into his arduous task. I am sure that all prairie farmers, and I hope all Members of Parliament, wish him well.
Saskatchewan is in dire need of more industrial development to provide jobs for our young people and for the people who cannot make a living on our farms. It was very gratifying to learn that at least part of Saskatchewan has been designated as eligible for industrial development grants. I am at a loss to understand why the whole province was not designated as was Manitoba, including the city of Winnipeg. Regina and Saskatoon were left out. The only reason I can think of is that the decision must have been based on statistics which were two or three years old. But even in those areas which have been designated, progress toward industrialization is very slow. As the hon. member for Gander-Twillingate (Mr. Lundrigan) mentioned-and this is an example of what opposition speakers do-there have been very few grants paid to Saskatchewan; but he picked out one month and said that therefore Saskatchewan had no money assigned to it under the regional incentive grants program. The facts are, Mr. Speaker-


John Howard Lundrigan: On a question of privilege, Mr. Speaker, the hon. member is giving false information to the House, because Saskatchewan has not received a cent since the inception of the legislation. The hon. member should know that.


The Acting Speaker (Mr. Bechard):: Order, please.


Albert B. Douglas: The fact is that Saskatchewan has had at least two projects approved, but I am not sure whether the money for them has yet been paid. The hon. member was quoting statistics for one month only. To my knowledge only one or two small projects have been approved. Other possible projects are being held up for what seems to be an unnecessarily long time, awaiting the agreement of the federal government. I appeal tonight to the goverment to extend the area eligible for assistance and to speed up action on applications now pending.

DEBATES	February 12, 1970
But what about the unemployed people who leave Saskatchewan? They have been given to understand that the Department of Manpower and Immigration will assist them and their families to move to places where employment is available. However, some of my constituents are having difficulty in getting this assistance. One man with a large family was laid off in Saskatchewan. He is an industrial welder. At his own expense he went to B.C. and found work and worked for a month to make sure that both he and his new employer were satisfied. This having been accomplished, he went back for his family. When he tried to obtain the moving assistance, he was told that a position as a welder had just materialized in Saskatoon and therefore he was not eligible for assistance to move to B.C. This matter was finally straightened out to the satisfaction of this former Saskatchewanite who now lives, works and votes in British Columbia.
[DOT] (9:40 p.m.)
Tonight I received a telephone call from another Saskatchewan man who had moved from Moose Jaw to Alberta to take a job. He is having the same kind of difficulty. I hope he eventually gets the help he deserves. I ask the officials in charge of manpower service to administer these programs more liberally. Let's stop throwing roadblocks in front of these enterprising people who get out and find jobs for themselves.
Mr. Speaker, I would like to express my never-ending wonder at the ability of the opposition to level such blanket condemnation at the government without making any real contribution by proposing practical solutions to the problems they describe so eloquently and in such exaggerated terms. I also marvel at the tactics of the opposition. They seem to assume that all they need do is repeat something long enough, and enough times, and people will believe it. In spite of repeated denials by those in a position to know, the opposition still insists that there is a deliberate policy to create unemployment.


Some hon. Members:: Hear, hear!


Albert B. Douglas: This is patently ridiculous, Mr. Speaker. No government, not even the previous Conservative government, would be so foolish as to adopt such a policy. The facts are that some unemployment is the unfortunate, unwanted and lamented byproduct of the only methods available to the government in the fight against inflation.
February 12, 1970	COMMONS DEBATES	3557
Unrestrained inflation would cause much more suffering and, eventually, much more unemployment than we are now experiencing. Our Prime Minister and others in the cabinet are doing everything possible to get voluntary restraints which would control inflation without imposing excessively harsh fiscal and monetary policies.
I hope that current negotiations for voluntary restraints are successful. All Canada will be watching anxiously next week to see whether the provincial governments will cooperate in these voluntary restraints.


An hon. Member:: Pass the buck.


Albert B. Douglas: The people in the prairies will accept price and wage controls, I believe, if the voluntary system does not soon prove successful.


Eldon Mattison Woolliams: I wonder if the hon.
member would permit a question, Mr. Speaker? I think the hon. member will admit that there is unemployment and distress in Saskatchewan. Would he mind explaining to the House why it is that two or three years ago the largest grain exporting nation in the world was Canada, and now we are in fifth place?


Albert B. Douglas: Mr. Speaker, the hon. member who asked this question seems to know all the answers to other things. He should know also that many countries in the world have increased their production of wheat. The production of wheat throughout the world has increased tremendously and many countries, once importers of Canadian wheat, are now themselves exporters of wheat. He knows this as well as anyone in this House.


Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have been very interested to listen to the remarks of my neighbour from Assiniboia (Mr. Douglas). When he comes into the House he reminds me-


An hon. Member:: Of an apple polisher.


Richard Russell Southam: -of Mr. Clean on his white charger who is going to fix up everything in this country with his recommendations. I wish he would impress the cabinet with some of his suggestions. If he did, we would not have this situation in Saskatchewan today. I rise to lend my support to the motion condemning the government-
Control of Inflation and Unemployment


The Acting Speaker (Mr. Bechard):: Order, please. The hon. member for Assiniboia.


Albert B. Douglas: Mr. Speaker, I was wondering if the hon. member for Qu'Appelle-Moose Mountain (Mr. Southam) would mind reading a little louder. I can hardly hear him.


Richard Russell Southam: Thank you; I shall. I rise to lend my support to the motion condemning the government policies which have deliberately created unemployment up to a crisis level, thus placing the country in danger of a recession, and which have failed to stop the rapid and continuing increase in the cost of living. This House therefore calls for the immediate implementation of full employment measures and a commitment to a comprehensive prices and incomes policy.
In Saskatchewan today we are faced with the most serious economic situation we have been confronted with since the hungry thirties; I would not be exaggerating if I said, in our history. Not only have we a most serious and depressed situation in our agricultural industry, but for the first time in many years we have one of the highest rates of unemployment of any region of Canada. At one time, happily, we were rated as one of the "have" provinces but now, thanks to the policies or lack of policies of the federal government, we have again slipped back to the embarrassing category of a "have not" area of Canada.
Unemployment in the agricultural sector of the Saskatchewan economy has greatly increased as a result of the Liberal government's apparent policy of supporting the principle of providing cheaper food for Canadians at the expense of the producer. During the past year and more recently, another cause of unemployment in the prairie region has come to light. I am referring to the proposal of Canadian Na'ional Railways to implement their master agency plan all the way from the Lakehead to the Alberta boundary. This concept, developed through technological advances in recent years, is designed to concentrate the various services usually available in hundreds of stations along the CNR lines over past years into a few large urban centres, and is slated to become effective on April 1, 1970.
For the sake of the record I would like to list a number of the services that our citizens have had available to them over the years and are now to be denied. They include rail
February 12, 1970
3558	COMMONS
Control of Inflation and Unemployment passenger service, local incoming and outgoing l.c.l. shipments, travel advice, ticket service, telegrams, box car orders tor moving grain, express service, express money orders, etc. Now all these services are being taken away from our rural people. Besides these facts, the agent and his wife and family who have always been an integral and important away from our rural people. Besides these communities are having to move.
Now we are faced with the horrible prospect of hundreds of agents and their families being plucked from their homes and normal job environment, many of them not having been assured of work in another part of the system, not to say anything about the inconvenience and cost that will face the thousands of Canadians living adjacent to or in the towns and villages that will be affected by this plan. None of us wants to close his eyes to the advantages of technological advances in our society, but coupled with this goes the responsibilities of those in authority to see that human suffering is prevented and that sociological upheavals do not take place.
A few years ago we spent many days in this House and in committee developing the new transport act, and we established a new body called the Canadian Transport Commission headed by the often referred to czar of transport, Hon. Jack Pickersgill. During those debates and deliberations we were led to believe and to hope that we had reached a sense of rationalization in all matters related to transportation. But what do we find today, particularly in western Canada which is a captive market? We find service cut-back, we find highly increased freight rates, we find many applications for rail line abandonment, and now last but not least, this master agency plan set out by a government-owned company to greatly reduce service. At the same time the company appears so heartless as to place many of its faithful servants in the ranks of the unemployed.
What is the answer, Mr. Speaker? The basic solution is to have our government, advised by its ministers of transport, labour and manpower and immigration, step in and insist that the CNR slow down the pace of this plan and allow these things to take place by normal attrition.
I have many pieces of correspondence on file from station agents and top officials of labour unions representing station agents and others affected. I do not intend to name these agents who have written to me, but I want to quote for the record a statement made by one
[Mr. Southam.l

of them who has to face his customers day after day. This is indicative of the mood of people in the west. He wrote:
Everywhere I go people come up to me and say: "What has happened to railway management, have they gone out of their minds or have they no regard foi the problems of the west?" It is a hard question to answer but it is a problem that must be dealt with now before the situation turns to violence.
[DOT] (9:50 p.m.)
Communications have been taking place for almost a year now between officials such as Mr. T. B. Goodwin, general chairman of the Communication Employees Union, and railway officials such as Mr. F. E. Eas.erbrook, vicepresident of T-C Division, Montreal; Mr. W. T. Wilson, vice-president, Montreal and Mr. J. L. Cann, general manager of the prairie region, all emphasizing the seriousness of the upcoming problem and all suggesting a slowdown of the inception of this program and advocating the normal process of attrition.
In conclusion, Mr. Speaker, I wish to point out that I have already brought this problem to the attention of the government on several occasions, as the record will indicate. I again want to refer to the importance I place on the government defending the costing formula that was developed by the Canadian Transport Commission and which is presently being contested by Canadian Pacific Railway before the Supreme Court of Canada.
Naturally, I must join with my many colleagues who have spoken in this debate in strongly condemning the government's policy of fighting inflation by creating unemployment, which in turn creates human misery and suffering. I also support the position that my colleague, the hon. member for Central Nova (Mr. MacEwan), took this afternoon on the question of post offices across Canada. In this area, again, the government is imposing a heartless program on the small rural communities and people living in them. This applies to Saskatchewan as much as to Nova Scotia. There are hundreds of small hamlets and towns dotting our rural scene, each with its post office, postmaster or postmistress. The post office is central to these communities, the government's heartless policy of closing many of these small post offices is causing much unemployment.
The hon. member for Gander-Twillingate who spoke before me pointed out the failure of regional incentive programs in Saskatchewan. The province has not benefited as much as it should from such programs, as the hon.
February 12, 1970
member for Assiniboia (Mr. Douglas) suggested. Proposals have been made, but no money has been forthcoming and no job opportunities created to ease the job situation in our western area. So I ask, Mr. Speaker, where is the just society in a situation such as this?


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the opposition motion put forward by the New Democratic party and now under study strikes me as basically ill-founded, especially because of the exaggerations it contains.
On the one hand, the government is accused of having deliberately caused economic ills such as unemployment, recession and inflation-as if a government could want such things to happen-and, on the other hand, it calls for the adoption of measures guaranteering full employement, and the application of a comprehensive prices and incomes policy.
To my mind, the motion does not make much sense, and once again, as always, we see that it is extremely easy to accuse, to criticize, and to request instant remedies to all evils, but much more difficult to suggest concrete, realist, practical and efficient steps, for instance, to check inflation, reduce unemployment and keep industrial production from decreasing.
The speeches made today by the members of the opposition contained no solution capable of solving the present economic problem which, besides, is not the monopoly of Canada, but exists as well in all industrialized countries, at least in the free world.
Canada is now faced with a number of economic problems but they are not as serious as in some other countries. The provincial governments could follow the example of the federal government and meet its suggestion by restricting their expenditures and by wholeheartedly contributing to the war against inflation. Were the big companies and other bodies also willing to co-operate, I am sure that the economic situation would improve and that confidence would be restored for, basically, our economy is sound.
We can rely on large natural resources and if we can manage to go on selling our products at competitive prices, Canada will go on expanding just as it has for the past few years, under the Liberal leadership.
Indeed, for the past seven or eight years, we have witnessed progress unprecedented in 21701-15
Proceedings on Adjournment Motion our history. During that period, Canada has demonstrated that it had grown into an industrial power. It has become one of the greatest trading nations of the world.
In the field of exports, for instance, our performance has been astonishing. From $5.2 billion in 1959 our exports have increased every year to $14.5 in 1969. This means an increase of 180 per cent over a 10-year period. If we want to get an idea of the progress made, we simply have to remember that our exports increased by 30 per cent only in the '50's which were considered quite good years.
This is due mainly to the action of this government. I will mention, for instance, the auto pact with the United States which led to better co-operation between the government and the industries, and to a better promotion of the finished products. An outstanding achievement in 1969 was the legislation introduced by the Minister of Industry, Trade and Commerce (Mr. Pepin) which led to the setting up of the Exports Corporation which provides new services for the promotion of exports.
To keep our markets, we have to remain competitive with other countries and curb inflation which remains at the present time the main problem facing Canada. The constant rise of consumer prices has not left unconcerned the federal government which is conscious of its role and its responsibility in that respect. It particularly looked after those on a fixed income as, for instance, those getting a pension or retirement benefits.


The Acting Speaker (Mr. Bechard):: Order, please. It being ten o'clock, it is my duty to inform the House that pursuant to Standing Order 58(11) the proceedings on the motion now before the House are deemed to have expired.


[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, if Aristotle Onassis were to visit Nova Scotia at this moment, he would neither

February 12, 1970
3560	COMMONS
Proceedings on Adjournment Motion be admired for his collection of coloratura sopranos and other interesting women nor applauded for finding a haven from the tax the rest of the world must assume-the income tax. Instead, I suggest that if Mr. Onassis were to visit Nova Scotia he would be boiled in low-grade bunker oil because the wreck of his ship will probably cause a greater disaster to Canada than the Torry Canyon caused to British beaches a number of years ago.
My concern in raising the matter of the Arrow this evening is that what happened, happened not only in one part of the country but could happen in another part of Canada. For example, if the Arrow had gone aground on the shoals on the west side of the entrance to Halifax harbour, that port would have been tied up for months and possibly years. The same could have happened in Saint John, or the St. Lawrence River, for that matter. We are met with a very serious situation and I think that three points particularly have to be considered.
[DOT] (10:00 p.m.)
First, the weather was reasonably calm for February at the time the accident occurred. At that time, when remedies might have been available which would work in calm water, it was necessary to spend the time deciding exactly what should be done. I do not think it is unreasonable to suggest that the government and the Minister of Transport (Mr. Jamieson) in particular have a duty to have plans available for emergencies such as this. They have been developed elsewhere in the world in great abundance. Why did Canada not have a plan? Instead, we were faced with rather ridiculous experimentation. I say "ridiculous" because it should have been known exactly how to ignite fuel such as is aboard the Arrow. When the Leader of the Opposition (Mr. Stanfield) made his point about planning, I thought it was a very sensible suggestion.
On the day following the grounding of the Arrow the minister said there was no major threat at that time. Yet all the elements were there to cause a holocaust and disaster. My second point concerns regulations and control. The minister said, as recorded at page 3358 of Hansard:
I am not at all sure any regulation would have, in fact, changed the situation.
I suggest there are a couple of regulations which could have, in fact, helped to avoid the Arrow disaster. There could be a requirement


that ships such as the Arrow use certain shipping lanes. I also suggest that they have Canadian pilots on board so that captains and crews could not sneak along a coastline with which they are not familiar, short-cutting, when they are carrying a lethal load.


Some hon. Members:: Hear, hear!


Robert Jardine McCleave: I believe these two suggestions could very well have been part of the regulations. Then if the regulations were not adhered to, the ship could be prohibited from touching any Canadian port. My third point deals with navigational aids. The hon. member for South Shore (Mr. Crouse) mentioned the possibility of installing radar reflectors. In January of this year I placed a question No. 835 on the Order Paper, dealing with an apparatus known as radar transponder beacons. These cost very little, yet they greatly improve navigational safety. We received a very curious answer from the Minister of Transport who was not very definite as to whether the buoy that was supposed to be on duty had been removed. I would think that would be a point of information that would be pretty obvious, but the minister seemed to hedge on his answer when pressed on the point by the Leader of the Opposition.
Yesterday the minister stated that the situation was slightly more under control. Wihin a matter of hours the stem section of the Arrow settled down into deep water even with the assistance of three tugs which were trying to keep it afloat. The situation of horror has now been compounded. I talked to Nova Scotians when I was home last week end. Some of them were absolutely white in the face, particularly those from Cape Breton, because the Cape Breton shoreline is the immediate target of this disaster. They were absolutely white with rage that such an incident could be allowed to happen in a civilized country.
[DOT] (10:10 p.m.)
Heaven only knows, Mr. Speaker, how long it will take to cure this situation. I imagine it will be decades before life along that shoreline returns to the situation that existed before the Arrow grounded itself a week ago. I suggest that when the immediate crisis is over there must be a public inquiry by the best commissioner that can be found. He should be given the widest possible terms of reference; the public conscience will not stand anything less.
February 12, 1970

In the immediate future we should apply ourselves to such cleaning-up tasks as bringing in legislation to impose proper penalties on both the carrier, in this case Mr. Aristotle Onassis, and the supplier of the cargo, Imperial Oil. I think the supplier has a duty not to put his cargo into just any ship that is passing through. He must be responsible for seeing that the highest standards of seamen-ship are practised on the vessel, and that every possible care is taken so that the ship will operate as if the lives of Canadians were at stake. I am exasperated and I cannot-


The Acting Speaker (Mr. Bechard):: Order.


Yves Forest: Mr. Speaker, I am sorry that the Minister of Transport (Mr. Jamieson) is not here tonight, but I wish to inform my hon. friend that according to my information the minister is leaving almost immediately for Halifax, Nova Scotia, to make a personal inspection of the scene and to conduct his own inquiry into how the accident happened.
I also undertake to bring to his attention the suggestion made by the hon. member in regard to navigational safety. I wish to inform the hon. member that while the policy of providing adequate navigational aids for the conditions which prevail along our coast is not being re-examined at this time, the effectiveness of navigational aids in all ports is under continuous review. Where changes in traffic or other conditions dictate the need, aids as required will be provided.


Mr.   Gaeian-J. Serre@Nickel Belt: 
Hon. Robert Stanbury (Minister without Portfolio):: Mr. Speaker, I congratulate the

hon. member for the interest he has shown in the NFB, a very important Canadian institution. I am sorry that I cannot add much to the answer given yesterday by the Secretary of State (Mr. Pelletier) during the question period. It is of interest to note what Mr. Saumier had to say on the matter in his recent report, and I quote:
The self-financing experience carried out with regard to the film-library appears worthwhile; an analysis of the results of this experience will show whether it is possible to make this field of activity more self-sustaining.
However, the Secretary of State said yesterday that if new factors had to be taken into account, this decision of the NFB might be amended.
I thank the hon. member for his comments and his useful suggestions which will be taken into serious consideration.

Motion agreed to and the House adjourned at 10:17 p.m.
February 12, 1970


[Stage Direction]
February 10, 1970
[Stage Direction]
The National Conference on Price Stability, called by the Prices and Incomes Commission, met in Ottawa on February 9 and 10. It was attended by senior officers of national business and farm associations, representatives of professional groups, leaders of a broad spectrum of the Canadian business community and observers from the federal and provincial governments.
The Canadian business community had previously demonstrated its willingness to exercise a meaningful degree of restraint in pricing policies in 1970 through proposals made to the Commission by the Canadian Chambre of Commerce, the Canadian Manufacturers' Association, the Retail Council of Canada and the Canadian Bankers' Association.
While the groups represented at the Conference are prepared to take an initiative as a contribution to a broad program of restraint, they emphasize that an indispensable requirement for the control of inflation is a comparable measure of restraint by wage and salary earners, by governments at all levels and indeed by everyone.
There was broad agreement among those attending the Conference on the following:
(a)	Business firms generally, if called upon to do so, would reduce the number and size of price increases they would normally make in 1970.
(b)	More specifically, where higher prices are needed to cover higher costs, and market conditions made them feasible, business firms generally, if called upon to do so, would ensure that price increases were clearly less than the amount needed to cover the increases in costs at a normal volume of output and sales.
(c)	The Conference recognizes that domestic price criteria should not be applied to goods sold mainly in export markets. The Commission will keep the position of export industries under review and if it finds that developments in some of these industries are impairing the general price restraint program, it will seek appropriate solutions to the problems.
(d)	Business firms would be prepared to co-operate with the Prices and Incomes Commission in such price reviews as it might
decide to conduct (a brief outline of the proposed review procedure is appended).
(e)	The Conference recognizes that over most of agricultural production farmers do not have any significant discretion over the level of prices they receive. The representatives of agriculture present agreed that in the narrow range where the marketing system permits some price discretion, farmers, if called upon to do so, would act during 1970 in accordance with the general pricing criteria and procedures.
(f)	Specific commitments have already been given by the chartered banks for 1970 not to increase their existing schedule of service charges in Canada. They have also undertaken not to increase interest rates charged on Canadian dollar loans in Canada, except to the extent of any corresponding percentage point increase in the rates payable on Canadian dollar personal savings deposits. Trust and mortgage loan companies have agreed not to increase the existing spread between their prime mortgage lending rates and the highest rates paid on their term borrowings, and to refrain from increasing existing service charges on savings accounts. Representatives of life insurance companies, credit unions and other types of financial business affirmed their full support for the Commission's restraint program, and agreed that the principle that price increases should be held within cost increases should apply in their own operations.
(g)	That professional groups would be prepared to participate in a broad program of price restraint and to recommend to the provincial associations that they postpone or limit increases in existing fee schedules for professional services during 1970.
(h)	Representatives of the transportation, telecommunications and utilities industries endorsed the Commission's general criteria for price restraint. As a positive expression of co-operation, the members agreed to provide the Commission with thirty days' notice of any intent to increase general rate schedules.
(i)	The general merchandise sector of the retail and wholesale trades in determining pricing policies during 1970 would undertake not to increase initial markups on its various merchandise categories unless realized profit per dollar of sales would fall below that of
[Stage Direction]
February 12, 1970
the base period. In such cases increases in markups would be sufficient only to restore returns to the level of the base period.
(j)	The grocery sector of the retail trade in determining pricing policies during 1970 would undertake not to increase initial markups unless realized profit per dollar of sales, calculated on the volume of sales carried on over their entire operation would fall below that of the base period. In such cases increases in markups would be sufficient only to restore returns to the level of the base period.
(k)	It is recognized that costs have been advancing particularly rapidly in most sectors of the construction industry and that special steps are needed by all concerned to reduce the rate of increase in these costs, including efforts to level out the flow of construction work. The representatives of the construction industry agreed that individual firms in the industry if called upon to do so would during 1970 absorb a proportion of their increased costs in accordance with the general pricing criteria.
Outline of Proposed Review Procedure
The price reviews are intended to ensure that the revenues produced by a price increase are less than the increases in costs that led to the price change, unless the increase in price is needed to improve a demonstrably inadequate rate of return on capital investment. Reviews will not be broad studies but will concentrate solely on compliance with the proposed pricing criteria.
The Commission is to be informed as soon as possible about any major price changes, but approval by the Commission in advance of the change in price is not necessary, and would not in general be practicable. The reviews will be conducted by a qualified staff of senior government officials and business executives who will be working with the Commission on a temporary basis.
Information needed to determine relevant revenue and cost changes will be requested by the price revie w staff in private meetings with the firm or firms involved. Actual operating records will be requested in most cases. Assistance in analysing data will be sought from fu ms but any conclusions reached will be made by the Commission as an independent body.
One of the main reasons for conducting price reviews on a detailed basis is to sort out cost changes arising from a change in the volume of sales from those due to a change in the price of inputs. The year 1969, or the nearest fiscal year, will in general be used as the base year when considering changes in costs and revenues. In cases where this would be clearly inappropriate, a suitable alternative base period would be selected.
During 1970 some firms may well experience unit cost increases as a result of a temporary decline in their volume of sales or output because of adverse market conditions. Such cost increases cannot be regarded as automatic justification for an equivalent price increase. On the other hand, some firms will experience unit cost decreases as a result of increases either in the volume of sales or in efficiency. In these cases, firms are expected to pass on some of the cost savings in terms of lower prices. The price review teams will attempt to decide what is reasonable price behavior in response to unit cost changes brought about by changes in volume. Consideration will be given to both the size and the likely duration of the "abnormal" sales volume.
Because of the care with which the price reviews must be made, it is proposed to concentrate them on important price increases by major firms and by market leaders in smaller markets. Some additional reviews may also be undertaken of less important price increases reported to the Commission by customers or other interested parties.
[Stage Direction]
Friday, February 13, 1970