1970-06-02

ROUTINE PROCEEDINGS


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, when I informed the House on May 14 of the new Canadian textile policy, I drew attention to the consideration also being given to the increasingly critical situation which had developed with respect to imports of shirts at disruptively low prices. I also indicated that pending the full implementation of the new policy, the government would be making use of the currently available instruments.
As is well known, employment in the industry has been falling and a significant number of plants have been forced to close.
Men's and boys' woven fabric shirts are now being imported into Canada in substantial quantities outside the scope of existing restraint arrangements of exporting countries, and at prices such as to cause serious injury to Canadian manufacturers and workers. Moreover, there is evidence of a further serious threat of injury to domestic producers, in that importers are arranging to purchase substantial additional quantities of these disruptively priced shirts in fibre compositions and from countries not covered by existing inter-governmental arrangements.

The government is accordingly taking action under Section 7 of the Customs Tariff to impose a surtax, on a non-discriminatory basis, on these shirts, effective midnight today, June 2.
The surtax will not, however, be applied to shirts entering Canada under arrangements whereby certain countries restrain exports of such shirts to Canada. As regards other such low-priced shirts, importation will, in general, be permitted at levels broadly equivalent to imports over the previous year.
The order provides that shirts in transit to Canada today will not be subject to the
surtax.
Governments of the countries concerned are being informed of this action. Formal notification is also being sent to the GATT, under which emergency action is permitted to deal with market disruption when injury to domestic producers results from imports. In accordance with its GATT obligations, as well as under bilateral arrangements, Canada stands ready to consult on this matter with the exporting governments concerned.
[DOT] (2:10 p.m.)
By preventing increased imports at disruptive prices, Canada is safeguarding the Canadian shirt industry while taking into account the interests of the Canadian consumer, and at the same time its international obligations.
Pursuant to Standing Order 41(2), I wish to table copies of the Order in Council respecting the imposition of a surtax on certain categories of shirts.


Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, I am very glad, as I am sure all hon. members are, that the minister has finally taken some action to give a limited degree of protection to a small segment of the Canadian textile industry. I trust that the surtaxes which are to be applied will be sufficiently high to cope adequately with the situation. The minister did not state what the level of the surtaxes would be; therefore we do not know to what extent real protection is being provided by the measure that has just been announced. I repeat that I trust it will be sufficient to give some real protection to Canadian shirt manufacturers and the people employed in this industry.
I would also hope that further announcements would be made shortly in regard to protection of other commodities that are very seriously affected by low-priced foreign imports. This is particularly important in view of the announcement yesterday of the revaluation of the Canadian dollar which will, of course, seriously reduce the competitive position of all Canadian industries. I have mentioned to the minister particularly the
June 2. 1970

Announcement of Surtax footwear industry and the electronics industry, to mention only two that are already in serious difficulties. Revaluation will make the situation very much worse and in many cases will, I am afraid, put people out of business unless some assistance is provided to them.
I am disappointed that the minister did not make a general statement in regard to protective measures which will be taken in view of the revaluation of the dollar and the difficulties already facing manufacturing industries of all kinds in this country. I hope that some such statement will be forthcoming very shortly.


Mr. Max Sallsman (Waterloo):: Mr. Speaker, on a previous occasion when the minister introduced the government's textile policy I expressed some reservations about how the policy would be implemented. I pointed out we would have to wait and see how determinedly the minister was prepared to pursue such a policy. I am therefore very pleased today to support fully the minister's action, the position that he has taken, and to congratulate him on doing so.
It is rather significant that this action has been taken under powers that the government already possess. In fact, the government could have taken this action at any time in the past. This is another indication that when the government is willing to act it has the power and ability to do so; action does not rest upon policy being formulated in a white paper. We are very pleased to see this action taken and we hope that the minister will continue to act in this way.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I congratulate the Minister of Industry, Trade and Commerce (Mr. Pepin) for having finally decided to limit imports of woven shirts by imposing a surtax.
I would greatly appreciate it if the Department of Industry, Trade and Commerce were to take similar action concerning imports of footwear, because there has been a considerable slow down in this industry in Canada. In any case, I will very soon have more to say about this in the House.
I believe that the minister and the government should continue to encourage our employers to hire people by imposing restrictions on imports of goods which can be manufactured in Canada. Presently, some primary and secondary industries in Canada and mostly in Quebec would be able to produce [Mr. Harkness.l
but they are limited by imports coming from countries where workers are paid ridiculously low hourly wages.
In the Eastern Townships, the textile and footwear industries could survive if they did not have to compete with massive imports.
Therefore, I congratulate the government for this measure and I hope it will take similar action for other products made in Canada.



MANPOWER


Hon. Allan J. MacEachen (Minister of Manpower and Immigration):: Mr. Speaker, may I, with leave, table a study of manpower requirements by occupation up to 1975.



GOVERNMENT ADMINISTRATION


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I ask the unanimous consent of the House under Standing Order 43 for leave to put a motion to the House without notice under the following circumstances.


Mr. Knowles (Winnipeg North Centre):: Agreed.


Gerald William Baldwin: This government has made such enormous strides in demanding from Parliament and exercising extensive authority to deal with and order the affairs of Canadians without any legislative means to challenge the same that the process of responsible government is falling apart.


Some hon. Members:: Hear, hear.


Gerald William Baldwin: On October 22, 1969, a special committee of the House set up to deal with this problem made an all-party, unanimous report recommending many ways by which the dangerous increase of executive authority could be brought under surveillance and restraint. The government and the top levels of the bureaucracy fear such restraint and the government refuses to do anything to implement the report.


An hon. Member:: Shame!
June 2, 1970


Gerald William Baldwin: I therefore ask that the following motion be put:
That this House ought to refuse to enact any further legislation which delegates power to the government or its agencies until the safeguards provided in the report of the Special Committee on Statutory Instruments have been implemented.


Mr. Speaker:: Is there unanimous agreement?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: As there is not unanimous agreement the motion cannot be put.



MOTION TO ADJOURN UNDER S.O. 26 FINANCE MEASURES TO OFFSET DISADVANTAGES ARISING FROM UNPEGGING OF CANADIAN DOLLAR

Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I ask leave to move the adjournment of the House under Standing Order 26 to discuss a specific and important matter within the administrative responsibilities of the government that requires urgent consideration.
This important and urgent matter is the impelling duty upon the government to give leadership by announcing forthwith a program of measures designed to complement and to offset the disadvantages consequential upon the unpegging of the Canadian dollar from a fixed exchange rate; that is, a program that will counteract the increasing difficulties faced by Canadian exporters and primary producers, the increasing difficulties faced by our domestic producers in the Canadian market, the undoubted resulting increase in unemployment; and, essentially a program that, by its immediate announcement, will ease the confusion among Canadians as to the financial and economic direction of the Canadian government.
[DOT] (2:20 p.m.)


Mr. Speaker:: The Leader of the Opposition has given the Chair the notice required under Standing Order 26, and I have since then given very serious thought to the motion. While I have some reservations and misgivings about the terms or the form of the motion proposed by the Leader of the Opposi-
Inquiries of the Ministry tion, I readily recognize, as I am sure all hon. members do, that this is a matter which is one of urgency, one of national concern, and one which at the first opportunity should be considered by the House. It has occurred to me from time to time that perhaps some of these serious and urgent matters ought to be considered and debated by the House under the terms of other Standing Orders, but at the same time the change in the rules which the House adopted some time ago was for the purpose of making it somewhat easier for the House to consider matters of urgency under the provisions of Standing Order 26.
Having considered all aspects of the matter, I have come to the conclusion that the subject matter proposed for discussion by the Leader of the Opposition is one which does fall within the purview of Standing Order 26, and I propose to put the motion.
Has the hon. member leave to move the motion for the purpose of discussing the matter stated by him?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity. If 20 members rise, the motion will be put.
And more than 20 members having risen:


Mr. Speaker:: The proposed motion will stand over until 8 p.m. this day.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: I should like to direct a question to the Minister of Industry, Trade and Commerce. Why has he made no statement on the effect of the upward revaluation of the dollar upon Canadian export industries and the measures that his department proposes to take with regard to these effects? I ask him this question particularly in view of the absence of any such statement from the Minister of Finance.


Mr. Speaker:: Order, please. I appreciate the importance of the matter now raised by the Leader of the Opposition but I am sure he will appreciate that the Chair has just ruled that there should be a debate tonight on this same subject. Yesterday we spent more than

June 2, 1970
Inquiries of the Ministry half the question period on questions regarding this very important matter. A statement was made yesterday by the minister and lengthy statements were made by hon. members on behalf of the parties in opposition. I doubt very much that we should engage again today in a series of questions and answers on the very same subject.


Robert Lorne Stanfield: May I then ask the minister whether he would be prepared to make such a statement in the course of the debate tonight?


Jean-Luc Pepin: If I am asked to take part in the debate tonight, I will.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: You are like a bunch of go-go dancers. You don't need to be invited.


Robert Lorne Stanfield: May I then extend a formal invitation to the minister to take part in the debate tonight.


Some hon. Members:: Hear, hear.


Jean-Luc Pepin: May I very informally accept the invitation, Mr. Speaker.


Gerald William Baldwin: Don't make it a Hesitation Waltz.



POST OFFICE


Mr. David Orlikow (Winnipeg North):: wish to direct my question to the President of the Treasury Board. In view of reports that Dean Carrothers will be announcing today that he can play no useful role as mediator in the postal dispute because the two parties are so far apart that there is at present no hope of reaching an agreement, would the minister tell the House what the government's position on this matter is at the present time?


Hon. C. M. Drury (Presideni of ihe Treasury Board):: Mr. Speaker, Dean Carrothers has invited both sides in this dispute to a meeting starting at 2 p.m., at which time his views will be expressed to them. I do not know what the outcome of this meeting will be and I think it would be unwise to try to second-guess him.


David Orlikow: I should like to ask the President of the Treasury Board whether it is true

that the only offer made to the postal employees by the government during the meetings with Dean Carrothers was an increase of 60 cents per month per employee for the life of the contract over the government's offer made during the conciliation proceedings?


Charles Mills (Bud) Drury: Mr. Speaker, I think the House is aware of the request of Dean Carrothers that during the currency of his mediation there should not be any public comment on the negotiations.


David Orlikow: On a point of order, Mr. Speaker, in view of the fact that Dean Carrothers is meeting with both parties at the present time and it has been announced that he will say he can serve no function, surely the government should tell the people of Canada what it proposes to do in this extremely serious situation.


Hon. George Hees (Prince Edward-Has-tings):: Mr. Speaker, I wish to direct a supplementary question to the Minister. As the actual words used by Dean Carrothers-I heard them on the one o'clock broadcast and I am sure the minister did too-were to the effect that neither the Treasury Board nor the Postal Union had moved far enough or fast enough to give any indication that a satisfactory conclusion could be arrived at, is it the intention of the Treasury Board to set an example by moving considerably farther and considerably faster than it has seen fit to do so far?


Charles Mills (Bud) Drury: Mr. Speaker, that is a suggestion as to how the negotiations should be conducted. I will take it under advisement.



POSSIBLE NATIONAL STRIKE-REQUEST THAT PRIME MINISTER INTERVENE IN DISPUTE

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I put a supplementary question to the right hon. Prime Minister. In view of the fact that the government has not even accepted the recommendation of Judge Lippe, the Chairman of the Conciliation Board, and in view of the widespread dislocation which would be caused by a postal strike, would the Prime Minister consider intervening personally in this matter to see if a satisfactory solution, acceptable to both parties, can be worked out?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I thank the leader of the New
June 2, 1970



Democratic Party for the confidence he honours me with, and I will take his representation under consideration.



INDUSTRY


Mr. Romuald Rodrigue (Beauce):: Mr. Speaker, I should like to put a question to the Minister of Industry, Trade and Commerce. In view of the precarious condition of the footwear industry, does the minister intend to announce to the House in the near future what steps will be taken to assist that industry?


Jean-Luc Pepin: Mr. Speaker, I do not wish to make such a promise, because certain reforms must first be made in the footwear sector. I would like to meet in that connection the officials of that industry and I believe that I will be doing so in a few days.



FINANCE


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I direct a question to the Minister of Finance. Yesterday he stated that as a counter-irritant, as it were, action would be taken from time to time to meet any ill effects that might result from the action taken on Sunday and announced by him yesterday. In view of the fact that the price of wheat fell six cents yesterday in consequence of the action of the government, is it the intention of the government to compensate the western farmer for that amount which actually comes out of his pocket?


Mr. Speaker:: Order, please. I will allow the minister to reply to the question if he thinks he should reply, but I have to bring to the attention of the right hon. gentleman that the Leader of the Opposition sought to ask a question on this matter a moment ago. It was suggested that in view of the fact that there is to be a special debate later today, perhaps all these questions might be put and speeches made and replies given then, and that we should not embark on a series of questions at this time. The question having been asked, perhaps the minister might reply briefly, but again I would respectfully make the sugges-
Inquiries of the Ministry tion to hon. members that we might keep this in mind during the course of the question period.


John George Diefenbaker: Mr. Speaker, you have given permission to the minister to answer and I am sure he will be first to take advantage of that opportunity.


Hon. E. J. Benson (Minister of Finance):: Tonight.


EXTERNAL AFFAIRS
Mr. J. M. Forrestall (Darlmoulh-Halifax East):: Mr. Speaker, I wish to direct a question to the Prime Minister. Has the Canadian government been approached with a request for Canadian Armed Forces to serve in a peacekeeping role in the Middle East?


Pierre Elliott Trudeau: No, Mr. Speaker.



STATUTORY INSTRUMENTS


Gerald William Baldwin: Mr. Speaker, I should like to ask the Acting Government House Leader if he can give a categorical assurance that the report of the Special Committee on Statutory Instruments presented some time ago will be implemented this session in time to become effective at the beginning of next session?


Allan Joseph MacEachen: No, Mr. Speaker.


Gerald William Baldwin: Will the Acting House Leader or the real thing-I mean the permanent House Leader when he comes along-make a short statement indicating why the government is afraid to implement the Committee's proposals which impose such a wholesome restraint upon excessive and dictatorial government authority?


Mr. Speaker:: Order, please. The question is asked in terms which make it difficult for the Chair to permit a reply.


Mr. Brewin:: A supplementary, Mr. Speaker.


Mr. Speaker:: Of course, the question not having been allowed it is difficult to permit a supplementary. Perhaps the hon. member might like to ask a related question.

June 2, 1976
Inquiries of the Ministry


Francis Andrew Brewin: I should be glad to ask a related question, Mr. Speaker. Can the Acting House Leader state the reason for the delay in implementing this report?


Allan Joseph MacEachen: Mr. Speaker, I would have to be in touch with "the real thing" for that answer.



VIOLENT DISTURBANCES


Mr. Roch La Salle (Jolietle):: Mr. Speaker, I wish to put a question to the Prime Minister concerning terrorist bombings in Montreal over the week-end.
Does his government intend to supply help to the social action groups in the city of Montreal, in order that the social up-grading of the people be achieved in peace and not in disorder, as at the present time? Moreover, would the Prime Minister be prepared to request the Solicitor General to establish a special RCMP service to assist the Quebec authorities, considering the uncertainty and the anxiety now existing in Montreal?


Pierre Elliott Trudeau: Mr. Speaker, those services are always available to legitimate authorities who seek to use them. Should the Quebec government effectively request our co-operation in this field, we are in a position to give it, but it might be useful to add that exchanges of information and meetings are continually taking place between the RCMP and the other police forces in Canada, including those of Montreal and of the province of Quebec.



FINANCE


Thomas Clement (Tommy) Douglas: My question is for the Minister of Finance, Mr. Speaker. I understand the minister is meeting with the Ministers of Finance of the provinces in Winnipeg this weekend. I should like to ask the minister whether it is possible for him to reveal what items will be on the agenda for that meeting?


Edgar John Benson: Mr. Speaker, I should be very pleased to do that tomorrow. I would not want to misquote the agenda.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speak-re. May I ask the minister if it is his intention to ask the provincial governments to cooperate with the federal government in imposing restraint on wages and salaries, and if it is the government's intention in that case to cover the entire field of other incomes, particularly profits, interest, rents and prices?


Edgar John Benson: Mr. Speaker, I had not thought of making that request of the provinces.



AGRICULTURE


Mr. Roland Godin (Porineuf):: Mr. Speaker, my question is for the Minister of Agriculture.
Were the government or the Minister of Agriculture consulted before the province of Quebec set up the Egg Marketing Board.


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, we have not been consulted with respect to setting up an egg marketing board within the confines of the province of Quebec, but we have a very keen interest in co-ordinating this with marketing agencies in other provinces and in that respect we have had many discussions with the government.


Gerald William Baldwin: Harold Wilson is interested in eggs.


Roland Godin: Mr. Speaker, I wish to ask a supplementary.
Is it correct that the Canadian government intends to question the validity of that board on the grounds that it interferes with free trade between the provinces?


Mr. Speaker:: The question as asked is out of order.
I think that the hon. member for Joliette wishes to ask a supplementary.


Roch La Salle: Mr. Speaker, I would like to ask the Minister of Agriculture whether he has received representations from the Ontario and Manitoba authorities in connection with the unconstitutional status of Quebec's central egg marketing board, and if he intends to ask the province of Quebec to give up that board in order that it be replaced by a federal board?
June 2, 1970


Horace Andrew (Bud) Olson: Mr. Speaker, this matter has been questioned by a number of producers and their organizations and, indeed, their marketing agencies under provincial jurisdiction in other provinces. I sincerely hope, and we are pursuing the matter, that we can find a negotiated position rather than attempt to enforce some legal interpretation of whether there has been a violation of certain authority with respect to the situation.



SURTAX ON IMPORTATION OF SHIRTS-EFFECT ON EXPORTS OF RETALIATORY MOVES BY FOREIGN GOVERNMENTS

Mr. David Anderson (Esquimalt-Saanich):: My question is directed to the Minister of Industry, Trade and Commerce, Mr. Speaker. With reference to the statement made a few moments ago by the Minister that Canada intends to curb the importation of shirts, may I ask whether any studies have been carried out on the possible detrimental effect on Canadian export industries of retaliatory moves by foreign governments?


Jean-Luc Pepin: Mr. Speaker, consultations have been taking place in that respect, and I will be very keen to demonstrate to my hon. friend that this action will not have the result he fears because of the exceptions mentioned in my statement.


David Anderson: I have a supplementary question for the Prime Minister, Mr. Speaker. Did the Prime Minister discuss this restrictive Canadian measure with the heads of governments he met on his recent Far Eastern tour and did they indicate at that time whether this might put Canadian exports in a more difficult position in those countries?


Pierre Elliott Trudeau: Mr. Speaker, I did have occasion to discuss this question with the heads of government in the countries where it applies. They were already aware of the general lines of our policies and I indicated to them that we would be taking steps rather soon after my return. There was no indication that this would bring retaliatory measures, but of course they did not know then exactly in what way our measures would affect them.



INQUIRY OF THE MINISTRY

Mr. Heaih Macquarrie (Hillsborough):: Mr. Speaker, my question is directed to the Post-
Inquiries of the Ministry master General. Based on the Post Office Department's failure to make delivery of a large quantity of mail sent out by the borough of York and that body's subsequent decision to use a private delivery firm for future deliveries, can the minister advise if his department is following a deliberate policy of overcoming its problems by discouraging potential customers from using its service?


Some hon. Members:: Oh, oh!



FINANCE


Mr. George Muir (Lisgar):: My question is for the Minister of Finance, Mr. Speaker. In view of the fact that the minister stated yesterday that the introduction of the floating exchange rate would give Canadians more for their products that are sold abroad, including wheat, how does he account for the fact that the price of wheat for all grades dropped six cents in Winnipeg yesterday?


Mr. Speaker:: Order, please. The question is obviously argumentative. The hon. member for South Shore.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: A question for the Minister of Fisheries. In view of the controversy raging among the inshore lobster fishermen on the east coast since the minister brought in amendments to the Fisheries Act which permit the catching of lobsters outside the 12-mile limit during any period of the year, is it the minister's intention to increase the fisheries protection staff in order to police the coast adequately so that lobster draggers will not destroy the inshore lobster stocks?


Hon. Jack Davis (Minister of Fisheries and Forestry):: We will look at that suggestion very carefully, Mr. Speaker.



SALMON-CONSIDERATION FOR NEWFOUNDLAND FISHERMEN INVOLVED IN JUDICIAL PROCEEDINGS

Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, in view of the fact that there has been considerable misunderstanding

June 2. 1970
Inquiries of the Ministry as to the application of salmon fishing licences in southern Newfoundland resulting in the embarrassment of a number of fishermen, could the minister investigate the situation and ensure that the men in question will receive every consideration in the judicial proceedings?


John (Jack) Davis: As the hon. member knows, Mr. Speaker, there has been a great increase in the number of fishermen taking salmon in the Port aux Basques area. We have limited the number of licences. However, if there are individual cases which the hon. member wishes to bring to our attention we will be glad to review them.



CATCHING OF ATLANTIC SALMON BY DANISH FISHERMEN-CANADIAN POSITION

Mr. John Lundrigan (Gander-Twillingaie):: Mr. Speaker, my question is for the Minister of Fisheries and Forestry. Could he indicate whether Canada has been successful in having Denmark completely withdraw from the high seas salmon fishing? If not, can the minister indicate whether the restrictive rules on Canadian high seas salmon fishing will be relaxed so that Canada will at least be in a competitive position?


John (Jack) Davis: As the hon. member knows, our policy is no fishing for salmon on the high seas. I do not think it would be appropriate for us to relax our regulations with respect to Canadian fishermen on the high seas.



VETERANS AFFAIRS


Stanley Howard Knowles: Mr. Speaker, I have a question for the Minister of Veterans Affairs. In view of the fact that the minister indicated to the Royal Canadian Legion yesterday that legislation respecting veterans affairs will not come in until the next session, may I ask if this covers all items of veterans legislation or could steps be taken in this session on matters concerning which there has been complete agreement, such as measures affecting Hong Kong veterans?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, I was referring, of course, to the white paper on disability pen-
[Mr. Marshall.)
sions which is before the committee at the present time. I understand that the committee will start to prepare its report on Thursday. As soon as we have received the report from the committee it will be sent to cabinet for study. It would be very difficult to have that completed before the end of June. I presume that next fall we would be able to enact legislation based on the committee's report.



IMMIGRATION


George Harris Hees: I have a question for the Minister of Manpower and Immigration. In view of the charge made yesterday by Inspector Kelly of the RCMP that Europeans with criminal records are being permitted to enter Canada without security checks, has the minister looked into this matter? If so, what action does he plan to take?


Allan Joseph MacEachen: Mr. Speaker, I have not had an opportunity to look into the matter. These checks are normally conducted for us by the security people. I have no evidence that there has been any influx of criminals from Europe. I will check further into the matter.



GOVERNMENT ADMINISTRATION


Robert Lorne Stanfield: I ask the Prime Minister whether he has noticed that in his absence the Minister of Energy, Mines and Resources has become the biggest Canadian of all? Has the Prime Minister had an opportunity to read what admittedly was a very long speech by the minister in Denver? If so, can the Prime Minister state whether it represents a statement of government policy?


Mr. Speaker:: It seems to me this question was asked of at least one Acting Prime Minister.


An hon. Member:: This is "the real thing".


Mr. Speaker:: I wonder whether it would be in order to ask the question even of the real thing.
June 2, 1970


Robert Lorne Stanfield: May I direct the question to "the real thing" because we could not get an answer from the other things.


Gerald William Baldwin: I wish to direct a supplementary question to the minister-


An hon. Member:: Supplementary to what?


Gerald William Baldwin: I shall wait until he returns.


Mr. Speaker:: Order, please. I think we should go on to other matters. The hon. member for Surrey.


Gerald William Baldwin: There he is. I see him.


Mr. Speaker:: Order, please. For the moment the Chair has recognized the hon. member for Surrey. We might return to the hon. member in a moment.



TRANSPORT


Mr. Barry Mather (Surrey):: I have a question for the Minister of Transport. Can the minister indicate the approximate date he intends to declare in effect the 29 motor vehicle safety standards? If so, can he indicate whether he will make a statement in the House at that time?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, the technical qualifications for these 29 standards are now being drawn. I hope they will be ready before the session ends. If so, I hope to make a statement in the House at that time. Otherwise I will ensure that they are given the appropriate amount of publicity elsewhere.


Mr. Warren Allmand (Nolre-Dame-de-Grace):: A supplementary question, Mr. Speaker. Will the minister also consider introducing the regulations for motor vehicle pollution control at the same time?


Donald Campbell Jamieson: Yes, Mr. Speaker. If the specifications have been drawn by that time, they will be part of the original package. If not, they will be issued separately as quickly as possible.



AGRICULTURE


Léonel Beaudoin: Mr. Speaker, I have a question for the Minister of Agriculture.
Inquiries of the Ministry
In a recent speech at Richmond in the Eastern Townships, the minister stated:
The federal government is not empowered by the British North America Act to set production quotas for each farmer.
Does the minister deem advisable to have the Constitution amended so that, at last, the federal government might have a better control over dairy production?


Mr. Speaker:: I suggest to the hon. member that his interesting question might be put on the order paper.



MANPOWER


John George Diefenbaker: My question is directed to the Minister of Manpower and Immigration. It is connected with the serious situation in which university and secondary school students find themselves today by reason of their inability to secure jobs. I know that the minister is trying very hard to rectify this situation. Can the minister give some hope to these students who depend on summer work that they will be able to find it? What proportion of the approximately 600,000 requiring jobs will be able to secure employment?


Allan Joseph MacEachen: Mr. Speaker, I share the right hon. gentleman's concern in the matter of students securing employment this summer. It is difficult to forecast at the moment the percentage of students who will succeed in obtaining work. Last summer about 93 per cent did get work for at least part of the time. The employment situation is tougher this summer and the going is tougher for students. However, we are making every effort and co-operating with private employers in order to secure jobs. I will provide the House with information on this matter as it becomes available.


John George Diefenbaker: A supplementary question, Mr. Speaker. The minister must have the latest statistics available. How many of the 600,000 have obtained jobs? Would the figure be 12 per cent?


Allan Joseph MacEachen: Mr. Speaker, 1 do not have the statistics at the present time. It would be impossible for me to get from the Canada Manpower Centres the percentage because a large number of students find jobs
June 2, 1970

Inquiries of the Ministry through other sources such as friends and their own activities. Last fall we conducted a survey to determine the number because it was impossible to base the information on records from the Canada Manpower Centres. My information from that source would be quite fragmentary at the moment.


John George Diefenbaker: A further supplementary question. Is the minister saying to the House that no projection has as yet been made by his department as to the proportion of those students looking for work who will be able to obtain work? Surely the situation cannot be in such a state of disorderly disarray.


Allan Joseph MacEachen: I want to be respectful to the right hon. gentleman, Mr. Speaker. We have not perfected our forecasts to that fine degree where we can supply the precise information the right hon. member wishes.



INDUSTRY


Max Saltsman: I wish to direct my question to the Minister of Industry, Trade and Commerce. Has the minister received representations from the shoe industry regarding the serious situation facing that industry because of low-cost imports? If so, is it his intention to present a policy paper for that industry as was done for the textile industry?


Mr. Speaker:: The hon. member will recognize that this question was asked earlier during the question period in French.


Max Saltsman: I wonder if I might be permitted a supplementary to the earlier question? Is the minister prepared to take action under section 7 of the Customs Tariff to impose a surtax on a non-discriminatory basis for the shoe industry as he did for the textile industry?


Jean-Luc Pepin: I said in French, Mr. Speaker, that we had received representations. I might say en passant that I thought I had received and accepted an invitation to meet with the shoe industry. It was not so. It has now been arranged that the invitation that did not come will be accepted. I will then be meeting with representatives of that industry in a few days.
Before making any statements on the subject, I wish to listen to these representations so that I will be more familiar with the
[Mr. MacEachen.l
intricacies of the situation. I will certainly make a few sermons on the necessity to rationalize the industry before envisaging the kind of measures recommended by the hon. member.


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


Mr. Alexander:: A supplementary question.


Mr. Speaker:: Order. The Chair has recognized the hon. member for Oxford.



PUBLIC BUILDINGS


Mr. W. B. Nesbitt (Oxford):: I have a question for the Minister of Transport. It involves a huge project in the city of Toronto to be known as Project Metro, a joint effort of the CPR, the CNR and to a lesser degree the CBC. Can the minister tell the House how soon a start will be made on this huge project which has apparently been delayed since last fall?


Donald Campbell Jamieson: Mr. Speaker, I am not sure just what portion of this project is wholly within the federal responsibility, if any. I am going to Toronto tomorrow for meetings with provincial officials on this and a number of related matters. Perhaps I will be in a better position to reply to the hon. member later in the week.


Wallace Bickford (Wally) Nesbitt: Would the minister inquire also through his appropriate colleagues to what extent the project is being held up by the failure of the CBC to gain approval for the expenditure of a relatively small amount of money to erect a tower on the building, in view of the fact that so much money has been spent in Montreal?


Some hon. Members:: Shame!


Mr. Speaker:: Order. The question is in the form of an argument and is not acceptable.



INDUSTRY


Lincoln MacCauley Alexander: My question is supplementary to one which was directed to the Minister of Industry, Trade and Commerce a few moments ago. It concerns a question which I addressed to the
June 2, 1970



Minister without Portfolio from Windsor West. I registered some concern about our manufacturing industries and I was advised-


Some hon. Members:: Question.


Lincoln MacCauley Alexander: -by the minister that the question should be directed to the minister or to the Minister of National Revenue and I ask-


Some hon. Members:: Speech!


Mr. Speaker:: Order. I have to seek the co-operation of the hon. member. We are running short of time and perhaps he should ask his question as quickly as possible.


Lincoln MacCauley Alexander: With all due respect, I had to give the preamble. My question had to do with the General Agreement on Tariffs and Trade, with particular reference to dumping. I would ask the minister whether it was brought to his attention and, if so, when we may expect a statement with respect to the general effectiveness of it?


Jean-Luc Pepin: Which question,
which minister, Mr. Speaker?


Mr. Speaker:: Order, please. I respectfully suggest to the hon. member that this might be getting a little complicated. I wonder whether there might not be direct communication between the minister and the hon. member so as to identify the question and have a reply given later.


Lincoln MacCauley Alexander: This was the problem I had sought to avoid by giving the preamble. My question was directed to the Minister of Industry, Trade and Commerce. I thought I had given a sufficiently clear preamble. My question had to do with the effectiveness of GATT, with particular reference to dumping. I asked the minister whether he was aware of the question which had been asked and whether he would be prepared to make a statement in that regard.


Jean-Luc Pepin: I will rush out and consult Hansard as soon as I can.



TRANSPORT AND COMMUNICATIONS


Mr. J. H. Horner (Crowfoot):: I wish to direct a question to the Minister of Transport. We have now reached the last month before
Inquiries of the Ministry the summer recess. Can the minister assure the House that the annual reports of Air Canada and Canadian National Railways will be referred to the Transport Committee before the end of June?


Donald Campbell Jamieson: I have been in consultation with the chairman of the committee and I was under the impression that the steering committee was about to plan its work for the month. I, personally, have no objection to these referrals.



WHEAT-ACREAGE REDUCTION PROGRAM-EXTENSION OF DEADLINE FOR REMOVING COVER CROPS

Mr. Les Benjamin (Regina-Lake Centre):: May I direct a question to the Minister of Agriculture relating to a matter which was raised about ten days ago? Hon. members will be aware that weather conditions in the prairie provinces have delayed seeding. In view of the fact that representations are being made by individual farmers, can the minister advise the House whether the government is prepared to consider extending the July 15 deadline for one or two weeks in respect to cover crops under Operation Lift?


Horace Andrew (Bud) Olson: The purpose for which cover crops were included, and could be seeded on land which at the same time was called summerfallow for wheat quota purposes, was to protect that land against wind erosion. In my opinion we never intended that there should be any great quantities of fodder produced on that land. It seems to me the main purpose of drawing up the regulations in their present form was to cover that situation. If we were to amend them and overproduce fodder in western Canada it would be to the detriment of those who are normally engaged in fodder production.


Leslie Gordon Benjamin: Would the minister consider an extension in connection with what has been regarded as a nurse crop planted along with forage, for instance, in the event of oats being seeded along with the forage crop?


Horace Andrew (Bud) Olson: Any oats seeded prior to July 15, should the farmer wish to claim the land for summerfallow for wheat quota purposes, must be rendered unharvestable as a grain crop after July 15. Considering the purpose for which the regulations were designed, the lateness of the spring is not relevant.

June 2, 1970
Inquiries of the Ministry POLLUTION



INVITATION FROM ONTARIO TO PARTICIPATE IN CONFERENCE WITH UNITED STATES GOVERNORS

Mr. G. H. Aiken (Parry Sound-Muskoka):: My question is intended for the Minister of Energy, and Resources. Has the hon. gentleman responded to an invitation from the Ontario government to attend a conference with United States governors on pollution control measures affecting the Great Lakes?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: That invitation is being considered. We are holding discussions with United States federal officials in connection with a high-level federal conference which at some stage would embrace the provinces in connection with the international control of pollution and water quality. Certainly, all these initiatives should be dovetailed; we should co-ordinate these efforts because it will take a co-operative effort on the part of the provinces and the authorities to achieve the arrangements which will be most beneficial.


Gordon Harvey Aiken: Since the Ontario government was not represented at preliminary discussions on the IJC report, and there now seems to be some hesitation about the Ontario conference, will the minister make sure that talks on this very important matter are carried on in the presence of all interested governments?


John James Greene: As I have stated earlier, the IJC report will be the basis, we hope, of the federal negotiations and consultations. Preliminary discussion has taken place and we hope that in the arrangements ultimately to be made the Ontario representatives will be a party to any negotiations which take place. As I have often said, under our constitution Ontario will have to participate in the implementation of any agreement with the United States on the Great Lakes.



MANPOWER


Mr. S. Perry Ryan (Spadina):: My question is directed to the Minister of Manpower and Immigration. In view of the great increase in the numbers on relief in Toronto and other municipalities right across the country, and the fact that the number of employables on relief rolls has increased from less than 6 per

cent to 25 per cent, will the minister make a statement in the House before the recess setting out what assistance, if any, will be given to municipalities to help meet this crisis?


Allan Joseph MacEachen: If there is a program of assistance it will be announced, but I can give no assurance that this will be the case.



AGRICULTURE


Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: I have a question for the Minister of Agriculture. In view of the serious plight of agriculture, a situation aggravated by the unpegging of the Canadian dollar on Sunday, may I ask when we can expect the long-awaited announcement on the government's over-all agricultural policies?


Horace Andrew (Bud) Olson: There have been many policy announcements made from time to time and the aggregate of these announcements is the over-all policy, which may be amended again from time to time.



SHIPPING


Mr. James A. McGrath (St. John's East):: should like to ask the Minister of Transport a question. What progress is being made in finding a replacement for the MV Patrick Morris, bearing in mind we are now entering the peak travelling season on the Gulf of St. Lawrence?


Donald Campbell Jamieson: A team from the Canadian
National has been in Europe for the past week. I was advised by telegram last night that they hope to telephone Ottawa today in regard to details and certain specific recommendations. I hope that by the end of this week a decision can be made.


EXTERNAL AFFAIRS
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Prime Minister. How has Canada responded to the earthquake and flooding in Peru which has caused such a terrible loss of life and deprivation?
June 2, 1970


Pierre Elliott Trudeau: Mr. Speaker, we have responded on a number of different fronts. First of all, the Governor General has sent a message to the President of Peru expressing the sympathy of the Canadian government and people for the disaster. We have also made inquiries as to the safety of Canadians there, but we have no report yet since communications have been interrupted between Lima and the northern part of the country where the earthquake took place. Finally, we propose to make a cash contribution of $25,000 to the Canadian Red Cross Society for making available the supplies requested, and we understand that the Red Cross itself is making available another $12,000 from its own resources. We are also checking with the Canadian embassy in Peru to see whether any other measures are needed, whether by way of assistance through the Red Cross or in any other way.


Mr. J. Edward Broadbenl (Oshawa-Whii-by):: Mr. Speaker, my question is for the Minister of Veterans Affairs. In view of the fact it has been calculated that by the year 2030 there will be only one veteran left alive in this country, will the minister assure the House that action will be taken on the Woods report prior to that time so that at least he will benefit?



FINANCE


Mr. A. D. Alkenbrack (Fronlenac-Lennox and Addington):: Mr. Speaker, my question is for the Minister of Finance and arises from complaints made by tourist operators in my riding. Will the Minister of Finance be reimbursing Canadian tourist operators who last weekend, on the Memorial Day holiday, innocently allowed many U.S. guests a 6 per cent premium on U.S. money and subsequently sustained heavy exchange losses because the minister gave them no prior notice of his action?


Mr. Speaker:: Order. The hon. member's question might well be considered at the time of adjournment or placed on the Order Paper. Orders of the day.
Water Resources Programs (3:00 p.m.)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, May 26, consideration of Bill C-144, to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources, as reported (with amendments) from the Standing Committee on National Resources and Public Works, Motion No. 15 (Mrs. Maclnnis).
Mr. Speaker:: Order. I believe some days ago the hon. member for Kootenay West filed a notice of motion on the report stage of the bill which has now been called for consideration. As the hon. member has observed, this notice does not appear on the notice paper. I am sure he suspected that there were some reservations on the part of the Chair as to whether it should be accepted at that stage.
The matter has been considered very seriously by the Chair and I am in a position to express my views at this moment. I am not sure that much purpose would be served by hearing argument in the matter. I have had an opportunity of discussing the situation with a number of hon. members outside the House, and I think there is general agreement on the decision that the Chair is prepared to give at this time. However, if hon. members desire to express their views in this connection, I will hear those views before giving my ruling.


Stanley Howard Knowles: Mr. Speaker, since Your Honour has been frank enough to indicate that you are ready to give your ruling to the House, it would hardly be appropriate for me to take very long in arguing the other way.


An hon. Member:: You know what the ruling is.


Stanley Howard Knowles: My
colleague suggests that I know what your ruling is going to be. However, Your Honour was also frank enough to say that you had discussions with a number of members, and I

June 2, 1970

Water Resources Programs should frankly admit that I was one of those with whom discussions were held.
It seems to me that there is not a clear case against what my hon. friend, the hon. member for Kootenay West has sought to do. He has sought to file an amendment to the bill, and this he did at the report stage at a time when the report stage had not been completed. Indeed, it was at a time when we had not yet reached amendments to clauses of the bill anywhere near the clause that my hon. friend was seeking to amend.
The appropriate Standing Order under which Your Honour seeks to rule is 75(5), which provides:
If, not later than twenty-four hours prior to the consideration of a report stage, written notice is given of any motion to amend, delete, insert or restore any clause in a bill, it shall be printed on a notice paper.
I realize that if I tried to read the French version, my poor French would show up. But it would also be pointed out to me that where in the English text there is reference to "a report stage", the French text refers to "the report stage". So which came first, the hen or the egg? In which language was the rule first drafted?
I confess that since our discussions I have gone back to such records as there are of the Special Committee on Procedure and Organization, and I have to admit that I cannot find any record of the discussions that took place regarding this point. It is my recollection, however, that in the special committee it was our understanding that even if the report stage had started, if it were possible to get something put in about later clauses of the bill, provided it could still appear on the Order Paper this should be permitted. For example, what happens if, as a result of the passing some of these amendments at the report stage, it becomes clear that other amendments ought to be made later in the bill? I know there is a provision that permits this to be done if these amendments are consequential only and have no substantial effect; but one can imagine situations where there would be a substantial effect.
The particular point that I wish to make is that the rule does not say that these motions have to be in before the report stage starts, and I emphasize "before the report stage starts". The rule simply provides that notice has to be given prior to a report stage. What is a report stage, especially with a bill like this where the report stage has lasted for several days?

I also point out to Your Honour that the amendment that my colleague sought to move was an amendment which took cognizance of a report made by the committee to which this bill had been referred, that report not having been tabled in the House until after the report stage on this bill had commenced. It seems to me that it is rather unfortunate when the House receives a report from a committee which says that such and such should be done, and there is then no way for the House at the report stage to take cognizance of this. Perhaps this is something that we have to correct, because it is becoming apparent that there are a number of rules which need to be refined a bit; but even as the rule stands, it seems to me that what my colleague has sought to do was appropriate, and that the proposed amendment should have been printed on a notice paper.


Mr. Speaker:: I thank the hon. member for Winnipeg North Centre for the views that he has expressed. I fully agree with him that it is obvious the Standing Order is not so clear that it cannot easily be interpreted in more than one way. At the same time, I do not think that I can give it the interpretation suggested by the hon. member at this time.
For example, on May 20, 1970 the House took up consideration of the report stage of Bill C-144, an act to provide for the management of the water resources of Canada, including research and planning and implementation of the programs relating to the conservation, development and utilization of water resources.
On May 26, 1970, after several of the motions standing for consideration at the report stage had been disposed of, the hon. member for Kootenay West, as I have indicated, proposed to file a motion to amend the said bill, and this has given rise to the point of order which I initiated a moment ago. After considering the wording of Section (5) of Standing Order 75, it seemed to me that a motion to amend the bill could not be accepted once consideration of a report stage of a bill had been undertaken. If hon. members will consult the Standing Orders, they will see that Section (5) of Standing Order 75 reads as follows:
[DOT] (3:10 p.m.)
If, not later than twenty-four hours prior to the consideration of a report stage, written notice is given of any motion to amend, delete, insert or restore any clause in a bill, it shall be printed on a notice paper.
June 2, 1970	COMMONS
As the hon. member has said, the words are very clear. The wording says, "on a notice paper". It seems to me that the operative words in that section are "prior to the consideration of a report stage." The hon. member insisted on the words "a report stage" but I suggest the operation words, as I said, are "prior to the consideration of a report stage". To my mind, those words may not be interpreted to mean prior to and during the consideration of a report stage. This point of view is supported if reference is made to the operative words in the French version of that Standing Order, to which the hon. member for Winnipeg North Centre referred. The operative phrase in the French version, which is very clear, is as follows: "avant T etude con-cernant l'etape du rapport". I suggest to the hon. member that the Chair could not possibly put on those words in the French text, which is as official as the English text, the interpretation which he thinks might be placed on the English version of the Standing Order.
It is suggested that the explanatory note which follows Standing Order 75 confirms my opinion that only amendments of a clerical or of a consequential nature can be accepted after the report stage of a bill has been entered upon. Section (7) of the Standing Order waives the requirement of notice for consequential amendments. I suggest to hon. members that this is a most relevant consideration. May I also point out to hon. members that it would easily give rise to a chaotic situation if amendments or motions under Section (5) of Standing Order 75 could be proposed at any stage or at any point in a report stage when legislation is being considered.
As hon. members will notice, the Chair is required under Section 10 of Standing Order 70 to select and combine motions, and it would make the task practically impossible for the Chair if, after making combinations of motions and selecting them, the Chair were faced a few days later with a discussion on another series of similar motions. The Chair would then be required to un-select and uncombine motions which had been decided upon in agreement with hon. members prior to that moment. I suggest that the only logical way to interpret the Standing Order is the way I have stated. I recognize the objection raised by the hon. member for Winnipeg North Centre that this should be made clearer. But that is a consideration that ought to be taken into account by the hon. members
DEBATES	7605
Water Resources Programs who look at these things in the committee charged with that responsibility. For the moment, I regret that I must advise the hon. member for Kootenay West that his motion cannot be accepted.
The motion before the House is the one standing in the name of the hon. member for V ancouver-Kingsway.


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, our amendment, in support of which I now rise, is to clause 18 of the Canada Water bill. This clause states that no person shall manufacture for use or sale in Canada or import into Canada any cleaning agent or water conditioner that contains a prescribed nutrient in a concentration that is greater than the prescribed maximum concentration of that nutrient in that cleaner, agent, or water conditioner. We feel that that amendment is all right as far as it goes and we are quite prepared to go along with it except for this: we think that the bill requires some more safeguards, and as a result we are proposing an amendment to clause 18 in two parts. We are asking that clause 18 be renumbered to read clause 18(a), and that new subclause 18(b) shall read as follows:
After January 1, 1971, no person shall manufacture for use or sale in Canada any cleaning agent or water conditioner that contains any phosphates or other prescribed nutrients.
Our thinking here is that this matter ought to be taken in stages. We should like to make sure that after January 1 of next year, no one shall be manufacturing water cleaners, water softeners, conditioners or cleaning agents containing any phosphates whatsoever. We feel that the government's legislation is not nearly explicit enough in this regard. The minister has assured us that after August 1 of this year the government intends to cut down the nutrient content, in this case phosphates, of such cleaning agents to 20 per cent of the total and, after next year, that he intends to cut this content still further in an attempt to completely remove such substances from such cleaning agents. We feel that the government is not moving vigorously enough in this matter, so we have proposed a new subclause (b) that after January 1 of next year no manufacturer will be allowed to manufacture any water conditioner, cleaning agent, etc., that contains any phosphate at all.
The second part of our amendment, which would be new subclause (c), says that after January 1, 1972 no person shall sell in
7606	COMMONS
Water Resources Programs Canada any cleaning agent or water conditioner that contains any phosphates or any prescribed nutrients. It is our intention to word the bill in such a way as to ban completely the sale of such products containing phosphates; otherwise, we might find that there are large stocks on hand of such detergents, water conditioners or cleaners that contain phosphates that could be sold. We feel it is important that the large, monopolistic company that now handles phosphates for all detergent manufacturers in Canada, as well as the large detergent companies, the manufacturers, be prevented from going ahead and manufacturing great stocks of water conditioners and detergents that contain phosphates which could be unloaded on the Canadian public over an indeterminate period of years. We want to see that temptation removed once and for all.
Our amendments introducing new subclauses (b) and (c) are in line with the International Joint Commission report concerning the Great Lakes. That report states that unless the practice of putting phosphates into Erie is discontinued, that lake will be permanently ruined by 1972. It also states that 1975 is the absolute deadline for Lake Ontario. So, we think that our amendments are in line with the IJC committee report. Also, on behalf of this party, I have a bill on the Order Paper which seeks the complete banning of phosphate detergents by 1972. Our amendments, therefore, were brought into line with our thinking.
[DOT] (3:20 p.m.)
But I think that more important than either of these is the fact that our amendments are in line with public thinking across Canada. I would point out that when this bill was introduced to the House last November, no mention was made in it whatsoever of doing anything to curb or control nutrients. It was only after such organizations as Pollution Probe, SPEC and STOP became active and got the facts across to the Canadian people by publishing the phosphate content in detergents that the people of this country, and particularly the housewives, realized there was a great deal at stake in keeping the waterways of Canada clean. They realized that not only was the health of their families, and even the survival of their children and grandchildren at stake, but so was recreation, fishing and all the other purposes for which waterways are used. It was then that they realized also there was something very definite they could do. As hon. members opposite and members

DEBATES	June 2, 1970
on this side of the House know, letters, telegrams, petitions and protests of all sorts began to flood into the Parliament Buildings in Ottawa.
What is interesting is that when this bill reached the committee stage the government itself took the initiative and introduced the amendment proposing to cut down the nutrient content of these products. I would like to make myself very clear on this point, because in my view it should be made abundantly clear that it was only following the intervention of organized and informed public opinion that a provision was placed in this bill to control and eventually eliminate phosphates in detergents in this country.
I should like to pay special tribute to organizations which gave leadership in Canada such as Pollution Probe, SPEC and STOP. Arguments have been brought out in the committee against the type of amendment we are proposing. We have been told that if phosphates are taken out of detergents, cleanliness in Canada will suffer and that only detergents with phosphates can produce the degree of cleanliness that is required in hospitals or even in homes in this country. I do not believe that is at all true; it is not in accord with the facts. A great many women have proven it not to be in accord with the facts because some of them have taken to using soap flakes and even to making their own soap in order to prove to themselves and the rest of the country that this is a possibility. Faced with the choice of having these perhaps more effective detergents or having soap flakes, faced with the choice of that or being accomplices to ruining and killing the lakes and waterways of this country, I am proud to say that the women of this country have overwhelmingly opted in favour of keeping the condition of our waterways and our environment from deteriorating.
There were other arguments advanced in the committee against the type of amendment we are proposing. We were told that the proposed substitutes for phosphates might themselves be equally or even more harmful. We were told that perhaps phosphates were not the culprits and were not the most damaging or dangerous nutrient, that in fact they might not be damaging or dangerous at all. I think, however, that the weight of the evidence that was brought before us is incontrovertible, that phosphates are damaging, that they have promoted the tremendous growth of algae which has killed fish and polluted the lakes and waterways wherever phosphates are
June 2, 1970	COMMONS
used. A long and hard delaying action was carried on in order to try to save, or at least gain time for the use of phosphates. Obviously, those people who were interested in selling phosphates and who were interested in all the tremendous advertising that goes along with them do not want to give up or adapt to the new conditions. But, as I said, I think the Canadian people have spoken now and any further attempt to evade this reality is of no use.
I believe that the arguments in favour of the amendments we are proposing are very strong indeed. As I said, regardless of what other agents or nutrients might prove harmful, we know that phosphates have been proven harmful. Let us go ahead with research into this matter and if some of the proposed substitutes prove harmful in their turn, we shall have to get rid of them also. We do not know whether or not they are harmful because they have not yet been tried, but what we do know is that phosphates are harmful and they must be outlawed.
We also know that in Sweden there is a non-phosphate detergent being used. In Canada there are several non-phosphate detergents being used. Apparently they are able to do the job fairly well. I believe that people in Canada are very earnest about this matter. It is for this reason that we feel it should be made abundantly clear that the government will not just go a little way, that it will not just say it will cut down the content of phosphates in detergents in the hope that within a year or two Canadians will forget about banning phosphate detergents altogether. We should make sure that the government is not led to believe it can get by without outlawing or banning the manufacture of phosphate detergents completely or that they can permit these products to be manufactured and then make regulations giving the manufacturers an indefinite length of time to unload their products upon Canadians.
I was interested to read this morning how the Scandinavian countries, which are in so many ways in the forefront in these social issues, are joining together, all four of them including Finland, in order to put on a very broad campaign of action against pollution of the environment. I should like to quote part of an article from the Globe and Mail of June 2. It reads:
Public pressure for intensifying these efforts is being whipped up in programs, partly sponsored by the government, marking European Conservation Year.
DEBATES	7807
Water Resources Programs With evangelical fervour, Sweden has organized a youth parliament, numerous museum exhibitions, six television programs and 10,000 adult study groups on environment problems-
Normal school activity will be suspended for the first week in September so that anyone from seven-year-olds to university students can get out and test the contamination of air and water, measure the level of noise and interview industrialists, municipal officials and citizens on what they are doing to protect or improve the environment-
-said Helge Jonsson, secretary for the conservation observance "we are now telling people how the problems can be tackled. If they have the facts then they can tell the authorities this is what we want you to do".
I say to the government that now is the time to take the Canadian people into their confidence and make them their partners in this effort to stamp out pollution and improve our environment. If the government has any imagination, it can realize that in this whole matter of pollution, as in the matter of getting rid of phosphates in detergents, the Canadian people have proved that when the facts get to them and when the objective is clearly outlined for them they can and will act; they can and will bring pressure for change.
[DOT] (3:30 p.m.)
I feel sure the Minister of Energy, Mines and Resources (Mr. Greene) is the most thankful man in Ottawa today that he had the organized Canadian consumers behind him when the great pressure began to be exerted by the soap companies, the detergent manufacturers, and the phosphate-producing monopoly. I urge the government to adopt the sort of program Scandinavia is carrying out, and that it adopt our amendments knowing that with the support of the Canadian people pollution can be wiped out.
I wish to say just a few more words on another phase of this subject. Eliminating pollution, especially that caused by detergents, is a worldwide problem.

Mr. Speaker, only recently I had the opportunity, as a member of the Canadian delegation of the France-Canada Association, to attend a conference in the beautiful Loire valley. We spent about a week there in order to study our common problems, the most important of which was pollution.
Mr. Speaker, one of the Canadian delegates, the member for Charlevoix (Mr. Asselin), made a fine statement on air and water pollution, and on other forms of pollution in Canada. One French member submitted an
June 2, 1970

Water Resources Programs excellent and quite detailed paper on the various forms of pollution in France.
I should like to read only three small paragraphs of his speech which show that we are facing the same problems and that fortunately, in Canada, we are somewhat in the vanguard by including this clause in our bill. And now I quote:
It was advisable to insist on the operative provisions of the 1964 act which represents the first attempt toward a truly preventive and comprehensive policy and provides a framework for the various pieces of legislation to be adopted subsequently in order to fight pollution in fresh waters.
Thus, France signed the agreement worked out in 1968 by the European Council on the biodegradability of detergents and an order in council now being prepared will be designed to prohibit the sale and distribution of products with a bio-degradability level under 80 per cent.
It is a long term work which requires progressive measures due to their financial and economic impact: what matters for the future is surely that the framework for action be clearly laid down and the realizations well under way.
Mr. Speaker, bio-degradability is not pollution. We have learned that this phenomenon only constitutes the approach to the problem. Since they have begun to concern themselves with these things in France, we were very happy to have the opportunity to go and visit that country and discuss this problem with our colleagues from the National Assembly.

This is all I wanted to say, Mr. Speaker. I appeal to the government to accept these new proposed subsections which will further strengthen the provisions which the government has incorporated in clause 18. We are glad to have clause 18 in the bill, but we wish that the government would strengthen its start by favouring the adoption of proposed subsections (b) and (c), which we think will take us further along the line which the Canadian people have shown they want to follow.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. There have been some discussions concerning the possibility of continuing the debate on this bill right up until six o'clock in view of the fact that tonight will be given over to another matter. I rise to say that on our part we agree to this proposal, but I thought if we were going to do this it would be useful if the decision were made now so that hon. members would not be caught by surprise at five o'clock.


Mr. Forest:: This is agreeable to us, Mr. Speaker.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is therefore ordered that the private members' hour be set aside at five o'clock.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I first wish to congratulate the hon. member for Vancouver-Kingsway (Mrs. Maclnnis). Nobody can deny that she is one of the most doughty warriors on behalf of all housewives in Canada. I also wish to remark that we know more about water now than we ever knew. I recall that about eight years ago we were worried in this House that water was going to disappear. Water levels were going down in various areas, and we were thinking of transferring water from Hudson Bay to the southern part of the country.
The presentation made by the previous speaker was an excellent one, but it gave just one side of the story and this is what disturbs me. Can we be sure that nutrients act on their own and do not need a catalyst? This is one reason I feel that we have been in a bit of a hurry with this legislation. We know that nitrates and phosphates are nutrients, but we do not know all the processes that occur in the eutrophication of lakes and rivers, and we do not know everything about mercury pollution. We do not know whether a catalyst is necessary to the process of eutrophication.
Many of the chemists to whom I have talked are not sure on this point. I do not know why we did not invite the manufacturers of phosphates to present their case. Hon. members may say that they would present only their side of the picture, but that is all to the good. Surely, we are smart enough to understand that, but we would like to know what research they have done. Do we know for sure that algae and other plants feed on phosphates without the necessity of a catalyst? I wonder why we did not get all this information. I do not think there is anyone in this House who can tell me with certainty whether that is right or wrong.
This is why I have some doubts about the amendment, even though I feel I must support it. I think that the principle is right but there has not been enough research to be certain. This is why I say we should not be in too much of a hurry, and that probably the

June 2, 1970	COMMONS
interim between the enactment of this legislation and the time provided for cutting down on the use of phosphates may bring new light to bear on the subject. I must come back to the question, why did we refuse to hear the representatives of the phosphate manufacturers? Why did we, as members of Parliament, not hear what they had to say and what their arguments were on the research end of it?
[DOT] (3:40 p.m.)
One of the things I have noted over the years, Mr. Speaker, is that much of the legislation passed in this House-when I say "much" really I mean about 15 or 20 per cent-has not mattered a great deal. As a matter of fact, it might have been better if some of it had not been passed because of the problems it has raised today. I think we must take a very good look and be sure of the things we are doing in this House. As an example, we are now having a problem with mothers allowances which were enacted away back in the forties. We now feel we may have been wrong, and there are some who believe a means test should apply. We realize that there are also other aspects of social legislation that the provinces want to take over, as well as family allowances but now there is a difference of opinion between the senior Parliament and at least some of the provincial Parliaments across Canada.
In my opinion we were derelict in our duty in not hearing what the phosphate story was, what the research files of these manufacturers disclose and what they have to show us. I know the Parliamentary Secretary will maintain that it was all agreed that no further witnesses be heard, but surely the ball game was changed with the introduction of the additional clause to control phosphates. The elimination of phosphates from detergents also involves an economic problem. I noted that the hon. member for Vancouver-Kings-way touched on it but said that we do not want to be overcome by this. It is a big problem involving hospitals, restaurants, hotels, motels and cleaning people all across the board and becomes very important dollar wise if we are not going to accomplish what we set out to do in this bill by the abolition of phosphates.
You may wonder why I am bringing all of this up now. I am bringing it in simply because of the controversy now going on in which three of the top scientists in pollution in the United States say they are not sure about the action of phosphates. It may be that
DEBATES	7609
Water Resources Programs carbon is the catalyst, and we might not be doing the right thing in wiping out phosphates. They have reported that the presence of carbon may trigger the growth of algae which would not occur with phosphates alone. It is interesting to note that Dr. Kerr, a top biologist for the federal department of water control in the United States has stated:
The data to date from both laboratory and field studies indicates the direct removal of phosphorus is not the controlling factor in the growth of plants.
We, therefore go back to the question of why we are doing this so quickly and, in fact, in the face of disagreement among some of the outstanding scientists on the North American continent. Maybe we are making another mistake. I hope that in time we will have reports from those scientists doing research, and further reports, indicating that maybe we are right. However, if they indicate we are wrong, then we will have a problem and will have to adjust to that. Parliament will again-have passed a bill not fully researched.
I have misgivings about this bill, Mr. Speaker. As I said before, if I were very sure that phosphates were causing all this trouble I would certainly support it without any hesitation. Indeed, I will support it anyway, but I have some grave misgivings that we did not fulfil our duty to listen to both sides of the question or do the studies that should have been done to prove or disapprove if the culprit really is Mr. Phosphate. If it is, this is only a weak step, as phosphate pollution comes from many other sources that may require expensive devices.


Léonel Beaudoin: Mr. Speaker, I take pleasure in rising in the House to support the motion to add two paragraphs to clause 18 of Bill C-144, entitled:
An Act to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources.
In my opinion clause 18 of the bill is not sufficiently explicit and is confusing. May I quote a passage from the text of the proposed amendment:
any cleaning agent or water conditioner that contains any phosphates or other prescribed nutrients.
Mr. Speaker, what are the guarantees given by clause 18 as it stands now?
June 2, 1970

Water Resources Programs
If clause 18b, proposed by the member for Vancouver-Kingsway (Mrs. Maclnnis) is adopted, fixed limitations will apply specifically to the manufacture and sale of the phosphates or nutrients which are responsible for pollution.
This clause aims at the eventual removal from the market of all phosphates and nutrients.
Clause 18c aims at controlling the sale of these products.
I support the motion introduced by the member for Vancouver-Kingsway.
Perhaps we should have heard again in committee the representatives of some of the major companies which are producing and marketing all kinds of detergents and soaps but, in my opinion, we would probably have wasted our time as they had nothing new to tell us, after all the committee had heard in this connection.
The committee has held 36 sittings on pollution and has heard arguments of all kinds. It was said by some that detergents were not a water pollutant, and others claimed that detergents or soaps do not pollute water more than anything else.
It behooves us as members of Parliament to safeguard to the greatest extent possible the health of the Canadian people. It is high time for us to take whatever action is necessary so that the interests of Canadians may come before the profits of some companies. It is also high time for the government to act in the interest of Canadians by devising a policy with clear-cut objectives, irregardless of any adverse effect, albeit strong ones, this may have on a few companies.
Mr. Speaker, I therefore support the amendment under consideration.


Mr. Randolph Harding (Kootanay West):: too, would like to endorse the two sections of the motion before the House asking for an earlier banning of phosphate and making it very clearcut when the use of detergents containing phosphates will cease in Canada.
I listened with a great deal of interest to the three preceding speakers and I can pretty well endorse the statements they made. However, there are one or two other points on which I should like to comment. Before I do, I must say that I think during our committee hearings the entire committee worked very hard and spent a great deal of time going over the various problems and suggestions

which were presented. While we have not got everything in the bill which we wanted-in fact, it is very weak in some sections-this particular section dealing with phosphates is certainly a step in the right direction, although frankly we feel that it does not go far enough or fast enough.
I believe it was the hon. member for Simcoe North (Mr. Rynard) who indicated that the committee had not heard both sides of the story. I realize that in the last day or two of committee hearings the soap manufacturers wished to appear but I believe it was a question of time more than anything else which prevented this. The committee members felt that the passage of the bill through committee could not be delayed any longer and they decided to proceed with their consideration. I wish to point out for clarification that the committee has been dealing with the bill for several months.
[DOT] (3:50 p.m.)
The soap companies had been warned by the minister in February of this year that certain regulations regarding phosphates would be put into effect. The idea behind this warning was to give the companies an opportunity to present briefs. When the committee met, we advertised for a period of weeks urging anyone interested in the Canada Water Act to contact the secretary of the committee so that arrangements could be made to hear their representations. For almost three months, we did not hear anything from the large soap manufacturers. A day or two before the bill was completed in committee, we were informed that they wished to make representations on another matter. There were representations from the Electric Reduction Company of Canada who dealt very thoroughly with the possibility that other ingredients in the waters of the great lakes were causing algae growth. They indicated this could be caused by nitrogen or carbon dioxide. Their presentation was excellent. The members of the committee were well informed through the excellent material provided by this company.
I have taken a good look at both sides of the situation. I am on the side of those who feel that we must move quickly to ban all phosphates in Canada. I wish to make one or two points. These are basically the reasons the amendment has been moved by the hon. member for Vancouver-Kingsway (Mrs. Maclnnis). We have been informed that there is to be a reduction to 20 per cent of phos-
June 2, 1970

phates in detergents. I think this is a rather misleading statement and worries me because people are being given charts. I have one here put out by Pollution Probe in Toronto which lists the amount of phosphates in the various detergents in Canada. I have been informed that this analysis deals with the percentage of the compound called tri-sodium polyphosphate which is actually in the detergent. In some cases this is shown as 50 per cent or more. Some detergents are shown to contain 37 per cent, 35 per cent, 27 per cent or 10 per cent. Some products on the market contain very little phosphate. This is the point I want to make.
The minister's department is basing its percentage on the content of phosphorous pen-toxide, known as P2Ob. The amount of 20 per cent phosphorous pentoxide means 35 per cent sodium tripolyphosphate. This is a very interesting comparison. This evidence was presented during the committee hearings. I believe I have correctly understood it. The experts testified that with our formula a detergent containing 50 per cent phosphates would be cut to 35 per cent phosphate content. This is an over-all 30 per cent reduction. Although it is better than nothing, it is not nearly as much as the members of our party would like to see. This is a point that has worried the members of our party considerably. It is the reason these amendments have been put on the Order Paper.
Approximately 10 days ago, a report of the International Joint Commission was tabled in this House. The International Joint Commission set up a committee to present a special report on Lake Ontario, Lake Erie and the international section of the St. Lawrence River with regard to phosphates, oil and other matter. I am only going to deal with that part of the report relating to phosphates. The committee studied this problem for four years. Over 200 scientists, including some of the best in this country and the United States, worked on this problem. The report tabled 10 days ago in this House, which was prepared by this talented group of scientists, indicated that phosphorous was the main culprit as far as algae growth in the Great Lakes was concerned. It also indicated that nitrogen contributed to algae growth. I do not think anyone would dispute that fact.
The report clearly points out the reasons why we must act quickly on the problem of phosphates. I am not going to read all of the report, but it does contain some very interesting figures which I will give to the House at 22375-631

Water Resources Programs this time. The report shows that in 1967 the total input of phosphorous from United States municipal sources into Lake Erie amounted to 35.7 million pounds. Of this total, 25 million pounds was from detergents. The Canadian contribution of phosphorous into Lake Erie was 2.5 million pounds of which 52 per cent or 1.3 million pounds was from detergents.
The picture is slightly different for Lake Ontario. The United States contributed 7.7 million pounds of phosphorous in total. Of this amount 5.4 million pounds was from detergents. The Canadian contribution from municipal sources into Lake Ontario is 7 million pounds. Exactly half or 3.5 million pounds was from detergents. When we look at the over-all picture, we find that the combined total for a year is 52.9 million pounds of phosphorous being put into these two lakes, of which 35.2 million pounds is from detergents.
The committee working for the International Joint Commission rightly pointed out that control of detergents would be the easiest and quickest means of cutting down the phosphorous content in the Great Lakes. While I realize that we in Canada are moving first on this problem and our total input is not nearly as high as that from the United States, nevertheless it is very substantial. The experts who testified before the committee indicated very clearly that even a small reduction would have a decided effect on the algae growth in the Great Lakes. They go on in their report to urge the Canadian government to move as quickly as possible to cut down the phosphate content as far as may be done, consistent with not dislocating industry too seriously. We are not making such a drastic cut as some people imagine, and I believe we could go further.
a (4:00 p.m.)
There is another point I wish to make. I believe we must place a deadline on the sale of detergents in Canada. It might be at the end of 1972 or it might be at the end of 1971. If we fail to do so, our warehouses will be loaded with packages of detergent containing a high percentage of phosphate and, by law, the manufacturers will be allowed to sell them to the Canadian people. If they get them on the market at reduced prices, you can bet your life some consumers will buy them, and the phosphorous will continue to pour into our water system. I am thinking particularly of the Great Lakes, where there is real danger of losing the western section of Lake Erie because of the tremendous algae growth.
7612	COMMONS
Water Resources Programs This is a Canadian problem. It is immediate and it is desperate. I am confident that the adoption of this amendment would go a long way toward making sure that the phosphorous content was reduced sharply, and I urge hon. members to endorse it.


Mr. Keith Hymmen (Kitchener):: I should like to make a short intervention at this point. Some criticism has been forthcoming from members of the opposition on the grounds that members on this side of the House, particularly those who served on the standing committee, have not taken part in the debate. With all due respect, I would point out that a great deal of the discussion which has been carried on during the last few days is simply a repetition of the debate which was carried on in the committee. I would remind the House that no less than 36 meetings of the committee were held and that the report of the evidence runs into well over 700 pages.
I do not think any member of the committee would disagree that the phosphate content should be reduced. I believe it should be done through the powers allotted to the minister by the regulations. The first stage of the reduction would be to a content of 35 per cent sodium tripolyphosphate and 20 per cent P2Oc. This is something which the soapers and the detergent manufacturers can live with. The soapers are very ingenious manufacturers; they can do anything, and they will abide by any legislation which Parliament decides to pass. I think we should give them a little time, though, to enable them to find a proper solution. The only suggested alternative for STP is NTA, a product which has been used to replace phosphates in Sweden. NTA itself possesses some questionable qualities; it has a corrosive effect which will have to be buffered in soap powders for household use and I understand it has some hydroscopic qualities. There are other- factors, too, which should be investigated.
With due respect to the hon. lady who introduced this motion, there are a lot of questions to be asked before we move to the second stage. I, personally, agree with the first stage. There has, of course, been a great interest in phosphates as a cause of pollution. Phosphates, detergent phosphates, have been labelled the No. 1 offender. But there is the other half of the matter to be considered-the other 50 per cent of the sewage which goes into our waterways through domestic treatment plants, as referred to in the report of the International Joint Commission. I fear

DEBATES	June 2, 1970
that by concentrating on the effect of detergents we may tend to ignore the real problem, or the equally important problem, and fail to proceed with the installation of the equipment needed to treat domestic effluent flowing into our waterways. Many municipalities presently lack primary treatment facilities. Some interesting studies have been carried on with regard to this whole question of phosphates and pollution. One of them was carried out by the Ontario Water Resources Commission which found that it was quite feasible to treat domestic sewage at the primary level and not only to remove phosphates but to remove other undesirable ingredients as well in the course of the regular treatment process.
I said earlier that I did not wish to speak at length. I certainly do not wish to delay the passage of this important piece of legislation. My hon. friends and I strongly support a reduction in the phosphate content but we have reservations as to the second stage; we want the minister and his officials to have time to carry out the necessary consultation and to allow the manufacturing industry, which, after all, is turning out a product of importance to the housewife and to industry, to look into alternatives. The clause which enables ministerial regulations to be made provides an opportunity to proceed with the second stage, and I think this arrangement will better serve the needs of the Canadian people than an attempt to implement a standard which will be almost impossible to achieve.


Mr. R. J. Orange (Parliamentary Secretary to Minister of Energy. Mines and Resources):: I suppose this particular subject of phosphates might be likened to motherhood. Everybody is in favour of banning all phosphates; the basic argument concerns the way in which this can be brought about. The intent of the motion moved by the hon. lady is one with which we agree in principle. The Minister of Energy, Mines and Resources (Mr. Greene) announced his intentions in this regard during the debate on the second reading stage. Regulations to take effect on August 1, 1970, will ban the manufacture and importation of phosphates in Canada according to the 20 per cent formula. Amendments were introduced during the committee stage permitting control and manufacture of these nutrients containing cleaning agents and detergents for sale and use and their import
June 2, 1970	COMMONS
into Canada. My only disagreement with the hon. lady is as to the mechanics of the control.
[DOT] (4:10 p.m.)
We have had repeated discussions with the major manufacturers, and officials of my department and others have examined the question from every angle. We are convinced that the simplest procedure is to control manufacture and import. There are thousands of retail outlets in Canada but only a relative handful of manufacturers and importers. Control at the manufacturing stage would, therefore, be much simpler. Moreover, we do not believe that the manufacture of sufficiently effective cleaning agents without any phosphate content whatever by January 1, 1971 is a realistic possibility. For example, we are told that there is not sufficient phosphate-free detergent for automatic dishwashers yet available, and I seriously doubt that the manufacturers could produce enough of it to meet the demand by 1971.
The schedule which has been announced involves a restriction in the phosphate content of laundry detergents measured as phosphorus pentoxide to 20 per cent by August 1 this year, and a near total elimination of phosphates in cleaning agents and water conditioners by 1972. This, I remind the House, is in line with the recommendations of the Special International Joint Commission report that was tabled in this House on May 21, based on a six-year study by eminent scientists in Canada and the United States and checked against progress in Europe. I believe we can get no better advice than that, and it is the intention of the Minister of Energy, Mines and Resources to follow this advice.
1 said earlier there would be a near total Dan in 1972, and this is because it is not entirely clear today that every ounce of phosphates should be removed from all cleaning agents and water conditioners. The hon. lady who introduced this particular amendment made reference to Sweden, and she may have left the impression with the House that in that country there has been a total ban of phosphates in detergents. Based on the lastest information that we have, the Swedish formula allows 6 per cent phosphates without affecting the water courses of that nation.
A very small percentage of phosphates may be valuable, indeed, for special uses, and these insignificant amounts would not be harmful to our water bodies. We have extensive research studies underway presently on
DEBATES	7613
Water Resources Programs this matter, and as soon as we have definitive results which will certainly be the case before 1972, we shall be more specific on this particular point. It is precisely because this is a highly technical subject involving many disciplines and a great deal of research and manufacturing capabilities that we should set the specific controls in the regulations and not in the bill itself.
I should like to assure the hon. lady, and if the minister were here he would give his assurance, that our resolve has not changed one whit in this matter. Indeed, as we hear more of this subject we become more convinced of the correctness of our action.


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


Some hon. Members:: Question.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to section (11) of Standing Order 75 a recorded division on the proposed motion stands deferred.
On Wednesday, May 20, 1970, when Bill C-144 was being considered, reference was made to the admissibility, on procedural grounds, of motion No. 16 in relation to Bill C-144. It was understood at that time that an opportunity would be made available to hear representations from hon. members with regard to motion No. 16. If there are representations to be made, I am prepared to hear them now. Failing representations I am prepared to give a decision.
Motion No. 16, it seems to me, presents a difficult procedural problem in that not only has the motion been exceedingly well prepared but it presents a related and a comprehensive proposal that appears to be independent of any provision of the bill. That motion proposes a new and a substantive proposal which purports to provide the minister with wide authority over the physical construction or extension of any plant or works which may or are likely to result in the deposit of prohibited waste in waters. If I may so sug-
7614	COMMONS
Water Resources Programs gest to the hon. member for Kootenay West, it would appear that the completeness of his proposal would seem to be the procedural weakness in his motion. He has presented, I suggest, not a motion to amend but a substantive legislative proposal that seems to be independent and beyond the scope of Bill C-144.
As stated at page 549 of May's 17th edition, an amendment is out of order if it is irrelevant to the subject matter or beyond the scope of the bill. A similar injunction is to be found in citation 406 of Beauchesne's fourth edition. Regretfully, for the reasons stated I must suggest to the hon. member that his motion may not be put from the Chair.
Pursuant to previous agreement, motions Nos. 17 and 18 will be grouped for the purpose of debate, although the questions will be put separately.


Gordon Harvey Aiken: Mr. Speaker, on a point of order, I do not see any connection whatever between amendments 17 and 18 in their substance. I suppose I will make the same speech within the context of the suggestion you have made, but the amendments seem to me to be completely independent.


Winona Grace MacInnis: Mr. Speaker, 1 should like to reinforce what the hon. member has just said. I am sure there is nothing in common in content between these two amendments; they are dealing with entirely different matters.


Mr. Deputy Speaker:: There might be some disagreement here, but I am not prepared to insist upon the point. This point was raised originally, but if both hon. members object to putting the questions together I am certainly prepared to put them separately.


Winona Grace MacInnis: That Bill C-144. an act to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources be amended by adding a new subclause 19(a) (iii) to read as follows:
" (iii) Labelling on containers of cleaning agent and water conditioners, listing percentage contained therein of phosphates or other prescribed nutrients;"
[DOT] (4:20 p.m.)
She said: Mr. Speaker, there is not much need to speak at length on this amendment which refers to the labelling of containers of cleaning agents and water conditioners listing the percentage contained therein of phos-
[Mr. Deputy Speaker.!
DEBATES	June 2, 1970
phates or other prescribed nutrients. I believe the best argument for our amendment is the fact that consumers across Canada are exceedingly anxious to discover what are the least harmful of the detergents in use, and consequently which detergents are the best buys from the point of view of a good citizen. Pollution Probe, SPEC and STOP have published lists in the press and elsewhere of the various detergents and the percentage of nutrients they contain. This has been of assistance in informing consumers. I realize that under the new regulations the limit of nutrient content in a detergent will vary between 20 per cent and 35 per cent, depending on which measurements one takes. That will be the legal limit.
Nevertheless, I am sure that if all things are equal, consumers will prefer those detergents containing the least phosphate. Some consumers will prefer buying detergents that contain 15 per cent of phosphates, instead of the 20 per cent. We know that consumers, and particularly the women of this country, are most anxious to preserve and protect our ecology, and want to know how to do this. They are now accustomed to reading those lists showing the phosphate and nutrient content of detergents. Although the regulations will permit a 20 per cent limit of nutrients in detergents, I am sure many consumers across the country will prefer buying detergents containing nutrients under the prescribed limit.
Furthermore, I believe that the general principle of this amendment is good from the standpoint of consumer education. Consumers ought to know what are the ingredients in the different products they buy. No matter whether we talk about fruit juice, meat, or any other product, we are learning that it is a good idea to list the ingredients of the product on the package so that discriminating housewives may know what they are buying. They ought to know what is the most nutritious food and what is the most economical food for them to buy. From that standpoint alone, I think this legislation ought to provide for the listing of phosphate or nutrient content on the boxes containing the detergent.
Clause 19 contains two subclauses. It provides as follows:
The Governor in Council may make regulations (a) prescribing, for the purpose of section 18,
(i)	nutrients, and
(ii)	the maximum permissible concentration, if any, of any prescribed nutrient in any cleaning agent or water conditioner;
June 2, 1970

Our amendment seeks to add a third part to subclause (a), which would read as follows:
(iii) Labelling on containers of cleaning agent and water conditioners, listing percentage contained therein of phosphates or other prescribed nutrients.
As the hon. member for Simcoe North (Mr. Rynard) has said, we may find that there are other nutrients which are also harmful and which also ought to be included under such legislation in the future. For all these reasons,
I submit, that it would be well if consumers could be informed by the label on the box of the nutrient content of the detergent inside the box. I hope the government will accept this amendment which I think is logical and harmless and which would be of real value across the country.


Gordon Harvey Aiken: Mr. Speaker, I shall be brief in my comments on this amendment. It seems so eminently reasonable and necessary that I cannot see any reason why the government ought not to accept it. It merely requires that the amount of phosphate within a detergent be printed on the outside of the box. What objection can there be to this, particularly since the minister has not indicated, except in general terms, what his timetable will be for the final reduction with respect to phosphates or other nutrient compounds in detergents. As our knowledge of the effects of the various chemicals in detergents increases, the legislation will no doubt need to be revised from time to time. Perhaps it is not unreasonable for the minister to wish to retain a certain freedom of action in this regard before he finally bans all the various nutrients altogether. He has said that he wishes to maintain this freedom of action and flexibility. If that is so, surely he will find acceptable the amendment now before us.
It will allow people to make a choice. It will give to the people of Canada the opportunity of choosing between detergents, with the full knowledge of their contents. Perhaps the Parliamentary Secretary will say that the government is accepting the amendment. I submit it is a most reasonable one and ought to be easy to accept.


Randolph Harding: Mr. Speaker, may I speak briefly to this particular amendment? I think it is important that the percentage of phosphate in a detergent be marked on the package. During the last three or four months numerous inquiries have come to me about the phosphate content of certain detergents. Many shoppers, includ-

Water Resources Programs ing my wife, wish to know the phosphate content of detergents, and wish to know those detergents that contain a high percentage of phosphates. There is an increasing resistance on the part of buyers with respect to these products, and I think that is excellent. It shows that the average housewife is interested in keeping our environment clean. When a woman goes to buy a detergent, she should know the percentage of phosphate that it contains.
While on this point, may I repeat a statement I made earlier? We must make absolutely certain, if this amendment is accepted, that a common criterion governs the percentage of phosphates as marked on the outside of detergent boxes. A number of sheets have been distributed showing the chemical compounds in detergents. Perhaps similar information might be given on the outside of packages. For instance, we have heard that phosphorous pentoxide is used in detergents. The percentage of that chemical and other similar chemicals in the detergent must be clearly indicated. The shoppers of this nation ought to know the phosphate content of detergents in boxes, and the imparting of such information ought to be made mandatory by law. I therefore, endorse this motion.
[DOT] (4:30 p.m.)


Robert John (Bud) Orange: Mr. Speaker, at the outset may I say to the hon. lady that we appreciate her suggestion with regard to labelling the phosphate content in detergents. The mail which the minister has received in the past few weeks has convinced him that there is a sincere and abiding concern among many housewives with respect to the use of phosphates. Many women in our country have written to the department indicating that they would be willing to accept a less effective detergent if they were sure it did not pollute the waters of Canada. It seems to us that under these circumstances it would be worthwhile indeed to experiment with labelling. It is for this reason that I would like to thank the author of the amendment for her useful suggestion and to give her the assurance that the minister is willing to consider it further.
On the other hand, while we agree that labelling may be a useful device, I would not want to allow a charlatan manufacturer to take advantage of the public and foist a useless cleaning agent upon them just because he has cut down on the phosphate content. It is
7616	COMMONS
Water Resources Programs our job to see that the public interest is served, and in my judgment nothing would be gained by labelling after we have eliminated phosphates by law. I believe our task is to keep phosphates out of the water by direct control, which we must make sure will be applied and will be fair to all.
Finally, we do not believe that labelling really belongs in a water act. It certainly goes beyond the scope of the bill. Perhaps it might be included in a bill on the labelling of consumer products. The minister has indicated that he is prepared to discuss this matter with his colleagues. In the meantime, he has suggested that he is not prepared at this stage to accept the amendment to the bill before the House at this time.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Standing Order 75 (11) the vote on this amendment stands deferred.


Gordon Harvey Aiken: (18) That Bill C-144, to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources he amended by renumbering the present clause 19 as 19 (1) and adding the following:
"(2). Before any such regulation is made, the minister shall first give notice thereof to the provincial governments, representatives of any industries directly affected, and such organizations of citizens as the minister deems appropriate."
He said: This amendment would require consultation between the federal Minister of Energy, Mines and Resources (Mr. Greene) and the provincial governments and representatives of industries directly affected as well as such organizations of citizens as the minister deems appropriate. I proposed this amendment in the committee when we were discussing the amendment with relation to phosphates and other nutrients. The way I phrased it was that the minister would be required to have interdepartmental consulta-

DEBATES	June 2, 1970
tions before the regulations are made. But the minister resisted very strongly the suggestion that consultation be required by statute. For that reason I dropped that part of the amendment. The minister seemed to think it was offensive to him that I should suggest he did not consult his colleagues. He also said it would be a derogation of his duties as a Privy Councillor to pass regulations without consulting other departments.
The reason I am bringing up this question is as follows: The part of the bill which we are now considering brings in regulations concerning nutrients, particularly phosphates. Clause 9 gives the Governor in Council the power to make regulations concerning the timetable within which these nutrients are to be limited or banned. It was my feeling at the time, from what I heard from officials of various departments, that there was insufficient interdepartmental consultation in connection with the drafting of the bill and if that happened so far as the drafting was concerned how much less likely is it there would be consultation in connection with the regulations that are to be drawn.
I proposed during the committee stage a much longer amendment which required consultation between this department and several other government departments, particularly the Department of Fisheries and Forestry, the Department of Indian Affairs and Northern Development, the Department of Transport, the Department of Consumer and Corporate Affairs and others. I felt that the full impact of banning phosphates is not yet known. As has been pointed out, there has been a severe reduction in the use of phosphates in Sweden and in other countries, but there is a good deal of doubt about how these reductions will affect many aspects of the economy. For example, it is still not certain whether or not the banning of phosphates will affect the operation of dishwashers and washing machines. If it does, we are in real trouble in this country if we go ahead and make regulations without knowing their effect on the whole economy and without knowing what will happen when people can no longer find the type of detergent that they can use in the washing machines and dishwashers which they own.
Even more important is the case of industrial detergents and hospital detergents, as was pointed out by the hon. member for Simcoe North (Mr. Rynard). It is not yet known whether the banning or reduction of phosphates in detergents used in hospitals or
June 2, 1970	COMMONS
institutions will seriously affect the operation of the laundry equipment and the cleanliness of the materials that are being washed. These are subjects that have not yet been discussed, and yet we are talking about limiting or banning phosphates within a few months. That is why I thought it essential to write into this bill a provision requiring consultation across the board before the regulations are passed.
I took out the words "federal departments" on the minister's undertaking that he will consult his colleagues and that the matters will be discussed in cabinet. What we have left in the amendment is the provision that the minister, before making these regulations, should give notice to the provincial governments. He should "give notice to representatives of industries directly affected", and to "such organizations of citizens as the minister deems appropriate". There was also a slight amount of objection in the committee to this part of my amendment. It was said that this is the sort of thing which just is not done, that "we consult as far as we think we should consult, and that is it. We do not think there should be a prescription in this bill saying we have to consult. We know how to do our job." Mr. Speaker, I do not think they do. I do not think any one department, any one minister, any one government official, or any group in any one department knows the impact of the regulations on the economy.
[DOT] (4:40 p.m.)
I do not think that the experience we have had in connection with the introduction and promotion of the Canada Water Act gives us any confidence that there will be broad consultation. A very excellent example is the questions that I asked this afternoon of the minister. We have had a report by the International Joint Commission on pollution of the Great Lakes. We should all be working together on it. The Canadian federal government, the U.S. federal government, eight American states and the province of Ontario are all involved. So, what should we be doing? We should be meeting this problem together. But what has happened?
The first meeting was at the federal level, when the U.S. government officials discussed the IJC report with Canadian government officials without any provincial representatives being invited. Last week the minister told me that he intended to invite provincial representatives at some later stage. Immediately after that the province of Ontario decided it should discuss the same problem with
DEBATES	7617
Water Resources Programs the governors of the eight American states bordering the Great Lakes. A meeting was to have been held in June, but unfortunately two of the American states did not respond to the invitation, nor did the federal government of Canada respond to the Ontario invitation to discuss a common approach. Where are we going? The federal governments are holding meetings without the provincial people being present, and the provincial governments are holding meetings without the federal government people being present.
The conference called by the province of Ontario is now being put off until September. A morning newspaper reported today that two of the states, which received invitations by telephone, asked where Ontario is. This certainly indicates the serious necessity for some consultation and joint effort. If we do not write this provision into the statute the federal department will not consult with the provinces unless it feels like doing so. It will not consult the provincial governments or anybody else before passing the regulations. I think it is essential, therefore, that we write into the bill a provision that before regulations banning or reducing phosphates are passed, the federal department must first consult the provincial governments.
Secondly, I suggest that the department should consult representatives of any industries directly affected. It may be that these industries will not agree with the regulations that the government intends to put forward, but that is no reason for not consulting them. In the final analysis the Governor in Council makes the regulations, and it has no excuse for not consulting the industries.
Finally, I have asked that the government consult with such organizations of citizens as the minister deems appropriate. There are a lot of citizens' organizations seriously concerned and doing serious studies on pollution problems in various fields. They should be notified that regulations are about to be passed, and they should be provided with copies of the proposed regulations so that they may comment on them. This is my factual presentation. Consultation is necessary if you are to have regulations that are going to be accepted. They must be accepted if they are necessary. As the Parliamentary Secretary said a few minutes ago, many housewives are prepaired to accept regulations and controls if they help control pollution. But you have to have understanding and acceptance before you can get co-operation. On the
June 2, 1970

Water Resources Programs basis of all the facts, I believe the government should consult and that is the purpose of my amendment.
In the committee, the minister said that this sort of thing just is not done, that you do not require the government to consult with other people before it passes regulations. In the first place, that is a very high-handed statement to make. Consultation is the essence of any type of government that involves the people. You can call it anything you like, but if you have involvement you must have consultation. Not only that, Mr. Speaker, but there are precedents for such a proposal or such an amendment. I will give them now so that somebody may not say, "This is outrageous. It has never been done."
Here are two or three examples where acts have stipulated that consultation must take place. They are taken from a booklet "Legislative Forms and Precedents" prepared by Mr. E. A. Driedger when he was deputy minister of justice. One example which he quoted concerned the Winnipeg Grain Exchange and the Winnipeg Grain and Produce Exchange Clearing Association Limited. The act required that notice be given to both bodies and that each of the associations, or any member thereof, should be given an opportunity to be heard in connection with proposed regulations. A second example relates to the Unemployment Insurance Advisory Committee. The act requires that before the making of regulations under the provisions of section 40 of the Unemployment Insurance Act "the same shall be reported on by the Unemployment Insurance Advisory Committee." In other words, there must be consultation.
I also have before me a bill which we passed in this Parliament within recent times, the Act to Establish a Canadian Manpower and Immigration Council. This act provides that the council member shall be appointed after consultation with such representative organizations as the Governor in Council deems appropriate. That is section (4) of chapter 13, assented to on December 21, 1967. It is written right into the act that appointments shall be made after consultation. Those are three specific examples where it has been written into the statute that there shall be consultation before regulations or appointments are made.
[DOT] (4:50 p.m.)
I do not want to belabour the point any further, Mr. Speaker. I presented my argument in committee. I have removed the objec-

tions that the minister had, and I feel in its present state it is a very acceptable amendment. If it is not accepted, the House will be left wondering exactly how the minister intends to go about recommending the regulations. If he is not prepared to consult with anybody, then I think we can have real suspicions about the effectiveness of the regulations that he will introduce.


Francis Andrew Brewin: Mr. Speaker, I intend to say simply that we agree with the amendment for the reasons given by the hon. member for Parry Sound-Muskoka (Mr. Aiken). I have nothing to add, but I realize that though such terseness might be appropriate at the judicial bench it is hardly consonant with the traditions of this House so I am going to add a few words.


An hon. Member:: Raise a new tradition.


An hon. Member:: Be a reformer.


An hon. Member:: We are waiting for that.


Francis Andrew Brewin: Mr. Speaker, I am going to shock the members by sitting down in about two minutes-if they do not interrupt me.
There is little argument about the advisability of the type of consultation proposed in the amendment. The industries affected should be consulted and other organizations of citizens who are concerned with the matter should be consulted. We are beginning to learn that the effective enforcement of this sort of legislation depends upon the co-operation of different bodies, depends upon consultation in advance about the sort of legislation that is required. I would have thought that even without such a provision in the legislation itself, there was an obvious need for such consultation and that it would be accepted by any reasonable government. But because it is becoming more and more clear that this sort of consultation is necessary, I cannot see what possible harm it would do in the act. It would amount to an injunction from this Parliament that they expect the government to have this type of consultation in this respect.
A committee of this House has looked into the whole question of delegated powers legislation. If we study their recommendations, we find they have urged the type of consultation recommended in the amendment. For these reasons, we would support the amendment.


Robert John (Bud) Orange: 
Mr. Barnett:: Will the Parliamentary Secretary permit a question? I will divide my question into three parts, a, b and c. In what way is part III of the bill subject to part II in those respects in which the Parliamentary Secretary referred to the requirements for consul-

tation? I ask whether the phrase in the amendment, "deems appropriate" refers only to the matter of the organization of citizens. Also, does the Parliamentary Secretary agree that when we are legislating we are dealing not only with the present minister but with future ministers who will be in office long after the discussions we are now having will be reposing largely unread on the library shelves?


Robert John (Bud) Orange: Mr. Speaker, I recognize the hon. member's point. I was attempting to say that the whole concept of the bill is based on this matter of consultation. I was giving specific examples where consultation will take place because of the nature and organization of the management agency. I am afraid I do not understand or I may have missed the third part of the question.


Thomas Speakman Barnett: Does the Parliamentary Secretary recognize that in legislating we are dealing not only with a situation that may prevail with the present minister, but with ministers who may be in office long after this debate we are having will be reposing on library shelves largely unread?
[DOT] (5:10 p.m.)


Robert John (Bud) Orange: Naturally, as long as this party is in power one would expect the same treatment from other ministers as from the present Minister of Energy, Mines and Resources. One of the major objections to this proposal is that it has no relevancy, because it says the minister can do something if he feels like doing it.


Thomas Speakman Barnett: The amendment says the minister "shall".


Hon. W. G. Dinsdale (Brandon-Souris):: have followed the words of the Parliamentary Secretary very carefully. In my opinion he made a most eloquent plea for the support of the amendment put forward by the hon. member for Parry Sound-Muskoka (Mr. Aiken). On the basis of his remarks I fully anticipated he would conclude by saying the government intended to support the amendment. He rightly pointed out that consultation and co-ordination are the essence of any successful program for the conservation and development of our renewable resources, particularly in the light of the purposes of Bill C-144. Unfortunately, having made the argument in support of the principle of consultation, the Parliamentary Secretary reached the conclusion that the amendment was not necessary.
June 2, 1970

I see that the Minister of Energy, Mines and Resources (Mr. Greene) is now in the House. I should like to take the opportunity provided by this discussion to draw his attention once again to the urgent necessity for consultation because it is my view that unless appropriate provision for consultation is spelled out in legislative form, the terms of Bill C-144 as they now stand will fail to deal with the problem of securing adequate cooperation between the government in Ottawa, the provincial governments and the private agencies which will be affected by any particular governmental action. I know that the minister has been closely involved in all the intergovernmental as well as the intragovernmental discussions which have gone on over a long period in order to make it possible to bring the Canada water bill, before the House. Unfortunately, it has taken longer than has been in the best interests of coming to grips with the water pollution crisis, mainly because of the difficulties of getting agreement between the various levels of government and also, as we have noted during the various stages of the discussion, between different departments of the federal government which have responsibility for the control of renewable resources.
It was in 1961 at the Conference on Resources for Tomorrow that urgent action to deal with water pollution in particular was strongly recommended. Here we are, nine years later. The situation has worsened because of government inaction and we are still discussing a bill designed to come to grips, legislatively, at least, with this problem.
I trust the minister will speak on the amendment because I feel he has a positive interest in the successful operation of this bill. It seems to me that co-operation with the provincial governments in particular on a voluntary basis has to be assured. Spelling out the arrangement in detail as required by the amendment appears to me as a desirable thing. The Parliamentary Secretary has told us that consultation and co-ordination are necessary. He also told us that this course has been followed in all preliminary discussions. Why, then, does the government refuse to enshrine in the bill its dedication to the important principle of intergovernmental consultation? Why will it not provide an assurance to the private sector of the economy that it will similarly be consulted? The machinery for doing so certainly exists. The Resource Ministers Council meets regularly. So there is no problem about finding a political structure

Water Resources Programs within which the necessary consultation could be carried out. It is also possible to reach beyond the jurisdiction of the government and consult with the industries which will be concerned in these decisions. This can be done through the permanent secretariat which is the operational arm of the Resources Council.
The Parliamentary Secretary referred to consultation which went on over a period of some six years in order to bring the three prairie provinces together in a joint effort to bring into being the Prairie Water Conservation Council. The governments of the prairie provinces are most reasonable governments. They are concerned about the conservation and development of renewable resources. As one who was involved in these discussions with the prairie provinces I can say that it was of the utmost importance to ensure the provincial premiers and resource ministers concerned that the federal government had no ulterior motive in bringing forward its proposition to make possible the co-ordinated development of the water resources of the prairie region. If a difficulty of this kind arose in the case of the prairie provinces it would be infinitely more likely to arise, for example, in discussions with the two central provinces of Ontario and Quebec when it came to an attempt to call forth a co-ordinated effort in the field of resource management.
It should be elementary to everyone serving in this House that resources belong to the provinces under the constitution. The provinces exercise very jealously their constitutional rights in this regard. From my own experience it would not be sufficient just for the Parliamentary Secretary to reassure the House in the course of parliamentary debate that this consultation will take place. It will be of the utmost importance to spell it out in the actual terms of reference of Bill C-144, and I think the amendment moved by the hon. member for Parry Sound-Muskoka does this very concisely and precisely.
[DOT] (5:20 p.m.)
I urge the minister of resources and members supporting the government, when this matter comes to a vote, to ensure the effectiveness of this legislation by assuring all parties concerned that the motives of the federal government in this particular regard are clearly spelled out in legislative form. Otherwise, all the work that has gone into the preliminary discussions making possible the presentation of a Canada Water Act, even at
7622	COMMONS
Water Resources Programs this late date, might fall by the wayside as a result of a slight error of judgment on the part of the government.
It has required the passage of at least 15 years to come this far in overcoming provincial suspicions in regard to jurisdictional matters relating to control and development of our renewable resources. It will require a lot longer than that if the government does not lean over backwards at this time to indicate that it recognizes the special responsibility of the provinces in this respect, and that it will go the extra mile to assure to the provinces the final decision as to how their water resources are going to be developed.
This is a reasonable amendment and the Parliamentary Secretary has indicated he supports the principle of it. Having stated his support in so many words, I trust the government will accept the amendment that has been placed before the House in good faith.


The Acting Speaker (Mr. Bechard):: Is the
House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Bechard):: those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


The Acting Speaker (Mr. Bechard):: Pursuant to section (11) of Standing Order 75 a recorded division on the proposed motion stands deferred.


John James Greene: That Bill C-144, An Act to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources be amended by adding, immediately following clause 19 on page 22, the following heading and sections:
"Seizure
Seizure
20. (1) An inspector may at any reasonable time seize any cleaning agent or water conditioner that he reasonably believes has been manufactured in Canada or imported into Canada in violation of section 18.
[Mr. Dinsdale.l
DEBATES	June 2, 1970
Storing of seized substances
(2)	Any cleaning agent or water conditioner seized under this Act by an inspector may at the option of an inspector be kept or stored in the building or place where it was seized or may be removed to any other proper place by or at the direction of an inspector.
Interference with substances seized
(3)	Except with the authority of an inspector, no person shall remove, alter or interfere in any way with any cleaning agent or water conditioner seized under this Act by an inspector; but an inspector shall, at the request of a person from whom any cleaning agent or water conditioner was so seized, furnish a sample thereof to that person for analysis.
Application for restoration
21. (1) Where any cleaning agent or water conditioner has been seized under this Act, any person may, within two months after the date of such seizure, upon prior notice having been given in accordance with subsection (2) to the Minister by registered mail addressed to him at Ottawa, apply to a magistrate within whose territorial jurisdiction the seizure was made for an order of restoration under subsection (3).
Notice to Minister
(2)	The notice referred to in subsection (1) shall be mailed at least fifteen clear days prior to the day on which the application is to be made to the magistrate and shall specify
(a)	the magistrate to whom the application is to be made;
(b)	the place where and the time when the application is to be heard;
(c)	the cleaning agent or water conditioner in respect of which the application is to be made; and
(d)	the evidence upon which the applicant intends to rely to establish that he is entitled to' possession of the cleaning agent or water conditioner in respect of which the application is to be made.
Order of restoration
(3)	Subject to section 22, where, upon the hearing of an application made under subsection (1), the magistrate is satisfied
(a)	that the applicant is otherwise entitled to possession of the cleaning agent or water conditioner seized, and
(b)	that the cleaning agent or water conditioner seized is not and will not be required as evidence in any proceedings in respect of an offence under this Act,
he shall order that the cleaning agent or water conditioner seized be restored forthwith to the applicant, and where the magistrate is satisfied that the applicant is otherwise entitled to possession of the cleaning agent or water conditioner seized but is not satisfied as to the matters mentioned in paragraph (b), he shall order that the cleaning agent or water conditioner seized be restored to the applicant
(c)	upon the expiration of four months from the date of such seizure if no proceedings in respect of a violation of section 18 have been commenced before that time, or
(d)	upon the final conclusion of any such proceedings in any other case.
June 2, 1970	COMMONS
Where no application made
(4) Where no application has been made under subsection (1) for the restoration of any cleaning agent or water conditioner seized under this Act within two months from the date of such seizure, or an application therefor has been made but upon the hearing thereof no order of restoration is made, the cleaning agent or water conditioner so seized shall be delivered to the Minister who may make such disposition thereof as he thinks fit.
Forfeiture
22. (1) Where a person is convicted of an offence under subsection (1) of section 28, any cleaning agent or water conditioner seized under this Act by means of or in respect of which the offence was committed is thereupon forfeited to Her Majesty and shall be disposed of as the Minister directs.
Destruction with consent
(2) Where an inspector has seized any cleaning agent or water conditioner under this Act and the owner thereof or the person in whose possession it was at the time of seizure consents in writing to the destruction thereof, the cleaning agent or water conditioner is thereupon forfeited to Her Majesty and shall be disposed of as the Minister directs."
and by renumbering the subsequent clauses accordingly and by substituting for the reference to section 20 in line 16 on page 2 in line 2 on page 3 a reference to section 23.-The Minister of Energy, Mines and Resources.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Bechard):: As already understood, we will group motions 20, 21 and 22.
The Minister of Energy, Mines and Resources moves:
That Bill C-144, an act to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources be amended by substituting for line 24 on page 25 the following:
"29. Any person who violates subsection (3) of section 20 or section 25".
The Minister of Energy, Mines and Resources moves:
That Bill C-144, an act to provide for the management of the water resources of Canada including research and the planning and implementation of programs relating to the conservation, development and utilization of water resources be amended by striking out line 14 on page 26 and substituting the following:
"or has been prosecuted for the offence, unless the accused establishes that the offence was committed without his knowledge or consent and that he exercised all due diligence to prevent its commission."
The Minister of Energy, Mines and Resources moves:
That Bill C-144, an act to provide for the management of the water resources of Canada including research and the planning and implementation of
DEBATES	7623
Water Resources Programs programs relating to the conservation, development and utilization of water resources be amended by substituting for the reference to section 25 in line 29 on page 28 a reference to section 28.
Motions 20, 21 and 22 are grouped for the purpose of debate. Is the House ready for the question on motions 20, 21 and 22?


Gordon Harvey Aiken: Mr. Speaker, are we not going to have an introductory statement on these Motions from the minister?


John James Greene: Mr. Speaker, Motion No. 20 extends the provision making it an offence to deposit waste to the prohibition of the manufacture and import of cleaning agents and water conditioners containing excessive nutrients. The maximum penalty is $5,000 for each day of each offence.
With regard to Motion No. 21, during the committee stage the phrase contained within this motion was deleted from the original bill because it was believed it would strengthen the prohibition. On further examination, we have come to the conclusion that it would not, and so we are asking for a restoration of the original wording.
The central purpose of clause 28 is to prevent employers from hiding behind their employees when pollution incidents occur. On the other hand, we do not want to prosecute conscientious employers for the sins of their employees. We therefore originally proposed that the accused employer must establish that he exercised all due dilegence to prevent the commission of an offence. We now believe this to be the strongest posture because it puts the burden on the employer of proving that he did in fact exercise all due diligence and that the act was committed without his knowledge. To do otherwise would be to place the burden of proof on the Crown which, after all, does not have first-hand knowledge of the situation. Thus, in our view, the original form of the bill was stronger and at the same time fairer to all concerned and in keeping with our fundamental concepts of justice. We shall see on the one hand the situation in which, if pollution occurs from the employer's plant, the employer must prove to the satisfaction of the court that he had no knowledge of it and that he exercised all due diligence to prevent such pollution. At the same time, the employee is faced with this fact: if through carelessness or negligence he allowed the pollution incident to occur, he will be responsible for it if his action was
7624	COMMONS DEBATES	June 2. 1970
Water Resources Programs contrary to the express orders of his employer and without his knowledge.
[DOT] (5:30 p.m.)
I do not think that Motion No. 22 needs any clarification on my part. That is a consequential motion to change a reference.


Gordon Harvey Aiken: Mr. Speaker, I rise to take part in the debate on these amendments, not to oppose them but to point out the terrible confusion that has arisen in the handling of the bill and particularly the amendments we are now about to consider. I say that because if one begins trying to figure out what has happened to clause 20, one sees what a mess, if one will accept that language, has resulted so far from the way the bill has been promoted and prosecuted in the House.
In the first place, the government was forced to bring in a supplementary Governor General's recommendation in connection with capital costs. When these provisions were brought before the Standing Committee they were ruled out of order, even though they were government amendments, on the ground that a Governor General's recommendation was required. Therefore, although these recommendations before the committee were proposed by the government, they were not proceeded with. The bill was reported and reprinted without having in it the amendments we are concerned about. It was then necessary to bring in a new Governor General's warrant with respect to capital costs and these provisions were included in the bill.
Similarly, those parts of the bill dealing with phosphates were not included in the original bill. They were brought before the committee and accepted by the committee and these clauses in their present form were recommended and reported by the committee. It is the same with regard to the amendments we are now considering. Those amendments were not in the original bill as presented to the House. The government included them in proposed amendments which it placed before the Standing Committee. Some of us on the Standing Committee felt that the proposed amendments were not in a satisfactory form. There were almost illegal in that they placed an unconscionable burden on a person being prosecuted. We tried to bring in amendments regarding this matter, and they concerned motion No. 21.
In its original form the clause would have held a person responsible for the acts of an employee or agent even if the agent or

employee was never identified. It was felt that this was an undue burden to place on anybody, because if the employee or agent was not identified, how on earth could any person be held responsible for the acts of that employee or agent? In any event, the amendment I proposed was defeated in the committee. Yet strangely enough, after that amendment had been defeated the committee decided to wipe out another portion of the clause. That is to say, the series of amendments that we are dealing with under the heading "Seizure" were completely eliminated from the bill. Now, with some changes, those parts are being brought back by the government.
I never considered myself a Philadelphia lawyer, yet even a Muskoka lawyer has trouble sorting out where we now are. We have seen the original bill, the government amendments to the bill as reported and the amendments that have been considered in the House. I think I have been able to sort these amendments out in my mind. I nevertheless feel that the government has adopted an inept procedure in its handling of the bill. I merely wanted to make that comment before speaking to Motion No. 21.
I recognize that Motion No. 21, which is sponsored by the government, will improve the original clause of the bill. Actually, it goes a considerable way toward meeting the objection that I raised with regard to clause 28 of the bill as it now appears, which provides: "In a prosecution for an offence under this act, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the accused whether or not the employee or agent is identified or has been prosecuted for the offence."
As I say, that wording violates basic principles of justice and the Bill of Rights, and I am glad to see that in the proposed amendment there is wording which will permit an honest person who has been the victim of circumstance to prove that the offence was not committed with his knowledge and consent. I submit that the addition of the words "unless the accused establishes that the offence was committed without his knowledge or consent and that he exercised all due diligence to prevent its commission" constitutes an improvement to that part of the bill.
Another clause of the bill bothers me. It relates to the question of seizure and to new clause 20.
June 2. 1970	COMMONS


Mr. Chappell:: Mr. Speaker, will the hon. member permit a question? I think he said that the words he referred to constitute an improvement to the bill. As I read the words and understand them, they simply restore that clause and make it exactly as it was before the committee struck those lines out. If I am wrong, I should appreciate some assistance.
[DOT] (5:40 p.m.)


Gordon Harvey Aiken: I have to admit that I cannot answer the question. The clause has been changed and altered so many times that I do not know what was in it at what stage. I do not know whether or not this is the clause as it appeared in the original bill. It is the clause which I tried to amend but which was eventually altered. However, the clause as now proposed is certainly an improvement. I will stand corrected on this, but I started out by saying that I am still so confused by the whole situation and numbering that I do not know where the amendment stands in relation to the original clause. If the hon. member alleges that the amendment that is now being proposed restores the clause to the form in which it was first proposed in the bill and which was amended, he may be right. Certainly, the addition of the words in the amendment now before us improves clause 28.
Whether or not it is different from the clause in the original bill-and the amendment is certainly different from clause 28-I would be happy to hear the hon. member's comments because in large part the hon. member for Peel South (Mr. Chappell) was responsible for striking the whole thing out. Perhaps he was right then.


Hyliard G. Chappell: I think I have a question of privilege, Mr. Speaker. The hon. member said I was responsible for striking the whole thing out. What we did in committee was simply strike out the last four lines which the amendment now proposes to put back in. I did not propose to strike out the whole clause.


Gordon Harvey Aiken: I will have to reserve my position on this point until I have gone through the various amendments once again.
I have another point to raise regarding clause 20, amendment 19. The amendment now before us is not the same as the amendment that was defeated in committee, because subclause 4 is now missing. What concerned me about clause 20, subclause 1 at that time and what concerns me now is that the limita-
DEBATES	7625
Water Resources Programs tion that was in there in the first place concerning the right of an inspector to enter a private residence has not been retained. I am sorry it was not considered necessary to do that because throughout the rest of the bill it is made very clear that under this act no inspector can go into a private residence. Yet this is not made clear in clause 20. The clause would have been a good deal better if it had been made clear that this did not apply to a private residence.


Hyliard G. Chappell: Motion No. 21 would, as I understand it, simply reverse the decision of the committee and restore clause 28 to the form in which it was before it was amended in committee. This clause was clause 25 in the first draft bill but became clause 28 on May 7, the day it was debated in committee.
Prior to the amendment in committee it read:
In a prosecution for an offence under this act, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the accused whether or not the employee or agent is identified or has been prosecuted for the offence unless the accused establishes that the offence was committed without his knowledge or consent and that he exercised all due diligence to prevent its commission.
If this amendment goes through, the clause will again read the same. On May 7, after a lengthy debate and after hearing evidence from a solicitor from the Department of Justice, I moved to strike out the last four lines. It was a well attended meeting and, I believe, the motion was supported by all but one member, that is, the hon. member for Parry Sound-Muskoka (Mr. Aiken). Unless I hear some telling reasons today for the restoration of those last lines, I shall vote against this motion.


Francis Andrew Brewin: Would the hon. member give the minister's explanation? The minister gave a perfectly clear explanation.


Hyliard G. Chappell: I shall. I should like to say a few brief words about the right of the committee members to support his position in committee when the matter comes before the House. I am fully conscious of the fact that I am opposing the minister or his advisers, but I submit that surely if after full debate in committee we have disagreed with the department officials advising the minister and made an amendment, we have not only the right but the duty to support the stand taken earlier. If we do not do so, then we were just little boys who should not have been allowed out alone in the committee.
7626	COMMONS DEBATES	June 2. 1970
Water Resources Programs
This, of course, would be subject to the minister convincing us privately or in the House that we had made a mistake. I think the next step must be that when committees, after due and careful deliberation and after hearing departmental officials, change or strike out a clause, we must then determine in the House who individual members support, the committee, the minister or the civil servants behind the minister.
Why were the words struck out? I will summarize them. They said that in a prosecution it is sufficient proof of the offence to establish that it was committed by an employee or an agent of the accused. That, in my opinion, creates absolute liability. But if there is any doubt about it one could simply add the words "knowingly or not," which would make it clear beyond all dispute. The first few words which require the prosecution to establish that the offence was committed by an employee or agent of the accused perhaps are necessary but certainly create considerable difficulty for the prosecution.
The words regarding whether or not the employee has been prosecuted are in my opinion unnecessary and completely surplusage. If the clause stopped there, the law would be clear and would spell out clearly, I submit, "Thou shalt not pollute". The plea of lack of knowledge and that he exercised due diligence to prevent pollution should, I submit, affect only the amount of penalty. There are plenty of precedents for absolute liability, such as, for example, the provincial liquor laws and our own breathalyzer provisions in the Criminal Code.
[DOT] (5:50 p.m.)
The last four lines start with the word "unless." These are the words that were struck out in committee. It reads, "unless the accused establishes that the offence was committed without his knowledge or consent and that he exercised all due diligence to prevent its commission." I expect that the intended purpose was to prevent the accused from arguing under the first part that he did not have a guilty mind. I do not think this is necessary. I think the earlier words create absolute liability, and it would not be necessary in that case to prove mens rea. These words, headed as they are by "unless," wipe out the first part and constitute a built-in defence for each polluter.
The accused need only establish that he did not have knowledge and that he exercised due diligence. I submit that all he needs to do is post signs throughout the plant prohibiting

pollution and say that he had taken trouble constantly to advise the people how wrong pollution was. I submit that the defence of a broken valve or stuck valve is all too obvious. On a second offence the accused could simply demonstrate that it was a different valve in a different department. It would seem he would have one go at pollution for each valve in each department.
I	submit the same could apply to a ship crossing, say, Lake Ontario. A valve goes and there is a string of pollution behind the ship. The captain is charged. He says, "I have warned my stockers and engineers that they were not to do it. I did not know. There are signs up everywhere." So there is his defence. A week later he is caught again, and it is a different valve in a different part of the engine-room so there is another defence. I point out to hon. members that in a criminal case we must prove it beyond all reasonable doubt, and if someone has a built-in defence that he need only show that he did not know and had exercised due care, I submit there is no way he will be convicted unless he goes on day by day in spite of all the efforts to stop him.
I submit that in this type of offence we cannot afford to be soft. In many types of offences, for example in liquor laws, the man who commits the offence does it where we can all see him or have a chance to see him. Even with someone who would break into our home we have a reasonable chance that we would see him or that a neighbour would see him. This offence, however, goes on inside a factory where we are not invited, and in some cases cannot get in without a pass to look, let alone examine and inspect, Where the man who owns the plant has absolute control. I submit that we should word the legislation in such a way that there is absolute liability, so that our intentions and the law are clear that the waters are not to be polluted.
Finally, Mr. Speaker, may I say that two days earlier, on May 5, the same committee struck out old clause 20 which was replaced today by new clauses 20, 21 and 22 on the adoption of amendment No. 19. On that occasion the hon. member for High Park (Mr. Deakon) and I were accused of knocking the teeth out of the act. We had headlines such as, "Grits Mutiny and Destroy the Act." The last such headline appeared in Toronto about two weeks ago, saying we had 30 years to live because the hon. member for High Park and the hon. member for Peel South kicked the teeth out of the act by knocking out the
June 2, 1970

$5,000 fine provision. Of course, this was complete imagination without any facts to support it at all. What the amendment simply did was to knock out legislation by reference, which would have incorporated a section of the Hazardous Products Act into this bill. The courts have speculated that that habit would continue to go on until an aroused public rebelled against it. That is all we did, to rebel against legislation by reference, and it seems as though the rebellion was successful. I make the point that we were not kicking the teeth out of the act but that we were, as we are doing right now, trying to strengthen the act.
I can see the minister's point that in some cases, no doubt, an employer has done a reasonably good job trying not to have pollution, and then some sloppy employee allows it. It could happen to the best homes, best factories, or both. In that case the judge hearing the trial has an immense discretion. The fine can be from absolutely nothing up to $5,000. That is the occasion for the court to use some discretion as to what the penalty should be. But I say there should be absolute liability in respect to our waters, and that the slogan should simply be, "Thou shalt not pollute."


Francis Andrew Brewin: Mr. Speaker, we have struggled with clause 28 and we understand the history of the different views taken of it in the committee, and so on, but it is my view that the minister gave a perfectly satisfactory explanation and that the amendment proposed by him is more satisfactory than the amendment proposed by the committee. The following are my reasons.
If the hon. member for Peel South (Mr. Chappell) is correct that clause 28 as drafted by the committee establishes an absolute liability on the employer, then I think it goes too far. I think it is against proper principles of punitive or criminal law that a person should be made liable to serious, and rightly serious fines and penalties, for a matter which he does not control, which he does not have knowledge of and which he could not with due diligence have prevented. If, on the other hand, clause 28 has a different interpretation it might imply a requirement for some degree of knowledge or consent. It might imply that it is a punitive clause-and that is often implied in criminal law, as the hon. member for Peel South, himself a distinguished lawyer, will recognize-and if that is the interpretation, then instead of being too drastic, clause 28 as amended in the committee would be too loose.
Unpegging of Canadian Dollar
It seems to me that the amendment before us, proposed by the minister, is a reasonable one. It says he will be responsible unless he establishes-the onus is clearly put on the owner or the employer-not only that it was done without his knowledge or consent but that he exercised all due diligence to prevent its commission. I do not think that would be an easy thing to establish in this connection, but if he establishes successfully that it was done without his knowledge, that he exercised all due diligence and that he could not do anything about it, I do not think it would be sound in principle to make him liable to damages. For that reason I would advise members of the House who are interested in the matter to accept the amendment proposed by the minister.


The Acting Speaker (Mr. Bechard):: Is the
House ready for the question on motions Nos. 20, 21 and 22?


Some hon. Members:: Question.


The Acting Speaker (Mr. Bechard):: Is it the
pleasure of the House to adopt the said motions?


Some hon. Members:: Adopted.


An hon. Member:: On division.
Motions Nos. 20, 21 and 22 (Mr. Greene) agreed to.


The Acting Speaker (Mr. Bechard):: It being six o'clock p.m., it is my duty to interrupt proceedings on the business now being considered. At eight o'clock p.m. a motion will be moved by the Leader of the Opposition (Mr. Stanfield) to adjourn the House pursuant to Standing Order 26. I do now leave the chair, to resume the same at eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Mr. Deputy Speaker:: Order. Leave having been granted to the Leader of the Opposition
June 2, 1970

Unpegging of Canadian Dollar (Mr. Stanfield) to move the adjournment of the House under Standing Order 26 to discuss a specific and important matter within the administrative responsibilities of the government that requires urgent consideration, namely, the impelling duty upon the government to give leadership by announcing forthwith a program of measures designed to complement and offset the disadvantages consequential upon the unpegging of the Canadian dollar from a fixed exchange rate, that is, a program that will counteract the increasing difficulties faced by Canadian exporters and primary producers, the increasing difficulties faced by our domestic producers in the Canadian market, the undoubted resulting increase in unemployment and, essentially, a program that by its immediate announcement will ease the confusion among Canadians as to the financial and economic direction of the Canadian government, the Leader of the Opposition moves:
That this House do now adjourn.


Robert Lorne Stanfield: Mr. Speaker, as we take this motion under consideration I think we should bear in mind the context in which this debate is taking place, the context in which the minister's announcement was made on Sunday evening. We should recall that we were then suffering in Canada from probably-indeed certainly, I think-the highest rate of unemployment of any developed country in the western world, a rate of unemployment that would not be tolerated in Australia or the western European countries, a context in which many of our primary producers were even then in very deep trouble.
This was the policy of the government that was announced by the Minister of Finance (Mr. Benson) on Sunday evening. It is not just his fault; it is the policy of the government. The policy has been to create slack in the economy far more than was necessary to fight inflation. Indeed, this whole business of creating slack in the economy to anything like this extent to fight inflation has been seriously questioned for some time.
One of the speakers at the recent Toronto conference on economic growth seriously questioned whether this was any longer an intelligent approach to an anti-inflationary fight. Certainly it is obvious in the case of housing that a shortage encouraged by government policies pushes up the price of housing and pushes up rents, which in turn is reflected in demands for higher wages.

It is clear that the government policy of tight money and restraint has discouraged housing starts. This fact is reflected in the number of starts for the first three months of the year, which is well below what anybody can consider satisfactory; and the occupancy rate is very high in a number of important centres. This is a clear example of how the government's restrictive measures, said to be designed to fight inflation, have in fact encouraged inflationary pressures. This whole approach to fighting inflation has been very seriously questioned. For example, the most recent issue of the Economist referring to the United States, says:
But all of America's enviable mass of statistics show that excess demand disappeared by mid-1969.
Well, there has been no excess demand in this country of ours, Mr. Speaker, for some time.
As changes in policy require at least six months to have an impact on the economy, there was a sound economic case for relaxing monetary policy during at least the second half of last year.
This is the United States.
Instead, a tight squeeze was kept on money supply until the beginning of 1970.
This is what I want to emphasize, Mr. Speaker.
The doctrine was that a deliberately lengthened period of running the economy below capacity would serve magically to check inflation.
This policy has not worked in other industrial countries in recent years, and now it has not worked in America either.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It has not worked in Canada. Of course, Mr. Speaker, the government's approach and its measures to combat inflation have been seriously questioned by the Economic Council of Canada. Be that as it may and despite worsening unemployment the government continues with its policies of restriction. The government continues these policies despite all the personal tragedies they have created including, of course, the great personal difficulties of students seeking employment.
Apparently, quite recently the government has found itself in a rapidly developing monetary crisis brought on by its own policies. The Minister of Finance said in the House yesterday that as of last Wednesday the government was not considering floating the Canadian dollar. I can only assume, therefore, that what was announced on Sunday evening was an improvised solution. I do not
June 2, 1970	COMMONS
know whether this is unfair, but I have to point out that it coincided with the return of the Prime Minister (Mr. Trudeau) to Canada. The Minister of Finance made the statement last Wednesday, just a few days before Sunday's announcement, that the matter was not being considered by the government. Then the decision was suddenly made upon the return of the Prime Minister.
Mr. Speaker, this policy has increased the value of the Canadian dollar on world exchanges and it certainly has increased the difficulties of exporters, primary producers, farmers, fishermen, lumbermen, people in the petroleum and mining industries and those in the potash industry. Some of these people are in the hardest pressed sections of the economy. What the minister has blithely announced and dismissed cavalierly with comments about how strong our export position is, really represents a disaster for a good many people who are struggling to keep their heads above water.
Consider the effect of this policy in the west, in the export industries of British Columbia and the Prairies. Consider its effect on the Atlantic provinces.
[DOT] (8:10 p.m.)
The policy announced by the minister will do more to slow down and set back the slow-growth areas of Canada than anything that has been done or will be done in the next while by the minister's colleague, the Minister of Regional Economic Expansion (Mr. Marchand).


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: This is another step toward what appears to be the deliberate policy of the government to spread poverty evenly across Canada with special emphasis on the slow-growth areas. There has not been a word from any responsible minister regarding proposed government policies to offset the detrimental effects of the minister's program.
On Sunday the minister gave the impression that he would make an announcement in the House regarding his policy. He must have been hoping for some inspiration during the evening, but he certainly did not get it. If he did, he is keeping it to himself. What about the Minister of Industry, Trade and Commerce (Mr. Pepin)? Does he know the effects of this policy upon Canada's trade? Has his department conducted any study as to the likely effects of a change in the exchange rate of the Canadian dollar with regard to our
DEBATES	7829
Unpegging of Canadian Dollar trade, or is the attitude of the Minister of Industry, Trade and Commerce like that of the Minister of Finance?
When the Minister of Finance was asked if this policy would be rough on the lumber industry, which is already having a difficult time, he replied that our export industry is in a strong position. I would like to hear the minister tell that to the lumber industry. It represents a great misunderstanding of the difficulties faced by Canadian export industries.
There will also be an effect on the tourist industry and our domestic industries. The minister says there might be some effect on the unemployment situation as a result of this policy, but it will be rather distant. I think it might be soon. It will affect, among other things, the expectations of businessmen and the possibilities of planning for the future. It is likely to quickly reflect itself in unemployment in this country.
I do not want to be unfair, but it seems that the government took the step not knowing what the consequences would be. The government threw away the stimulus of a relatively favourable exchange rate that Canada had, not knowing what the consequences would be. They threw that away without knowing the alternatives and not being able to say what their plans would be. We are confronted not only with this measure but also the white paper. Clearly, the government has no idea or comprehension of the policies it proposes to adopt to offset the detrimental and what will be sometimes the disastrous consequences of the minister's announcement on Sunday evening. The government should not have adopted this policy.
There is also the matter of consumer credit. This policy was really just talked about and not adopted. There has been an announced reduction in the bank rate from 7J per cent to 7 per cent without even the slightest indication as to what the policy will be. We have not been told whether this will be associated with a loosening of monetary policy. Apart from the indication of a reduction in the bank rate, everything is complete obscurity and utter darkness. Someone in the deep recesses of the Department of Finance, the Department of Industry, Trade and Commerce or the Bank of Canada may know what the policy is going to be, but they certainly are not telling the public.


Some hon. Members:: Hear, hear!
7630	COMMONS
Unpegging of Canadian Dollar


Robert Lorne Stanfield: There is nothing more
inscrutable in the Orient than this government and its policies. We are asked to believe and accept that father Trudeau knows best. The Minister of Finance suggested yesterday that he has to wait until the dollar finds its proper level before he can determine any appropriate action. One of the arguments made by proponents of a floating dollar is that it is not necessary to pay very much attention to the exchange rate. One of the arguments used by hon. members to the left, and others who favour the floating dollar, is that with it it is possible to pursue policies related to domestic needs. I see the Postmaster General (Mr. Kierans) shaking his head. I do not know if this is because of what I am saying or because of some new disaster in the Post Office.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: My friends in the New Democratic Party will have to explain why they have proposed a policy that will do injury to substantial sections of the country at this time. I am sure they will suggest some substantial measures, although it is hard to understand how any measures would offset the obviously detrimental effects on many of our export industries in the circumstances. I think it is their responsibility to explain their position.
The minister and the government clearly have an obligation to tell those affected what its policies are going to be. Is it the intention of the government to encourage expansion of the Canadian economy at this time? I say quite frankly that this should be the intention of the government. I have said for some time that the amount of unemployment in Canada has unquestionably not been justified.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is clear that there should be some easing of monetary policy. The government should embark upon a sensible policy of growth. This will likely be just as beneficial in any fight against inflation as the restrictive policies the government has been following. It will be much more beneficial in areas such as housing. I suggest that as far as the government's thinking on economic matters is concerned, it is living in the past.
An adjustment in economic policy by the government was necessary before. It is more urgent now. There should be encouragement for our exporters who are being affected in a detrimental manner, as well as our farmers,

DEBATES	June 2, 1970
fishermen and lumbermen. They need help. Untold damage is being done, as affairs now stand. There is discouragement and confusion, and silence by a government either unable or unwilling to indicate the direction in which it intends to encourage the country to go. This is the first government in Canadian history, to my knowledge, that has deliberately created unemployment as a matter of government policy. It is now adopting another step which will have the effect of adding to the already unnecessary unemployment which we have.
The Minister of Finance has talked a lot about not wanting to encourage speculation. All that anyone could possibly do about this government's policy is speculate as to what it might be when the government finds it.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: This is said to be a government of technocrats: everything is carefully planned. I am reminded of the assurances of the Minister of Finance in early 1968 that the budget would be balanced for the year 196869. The minister gave personal assurances. He filed a registration certificate with the SEC giving the same assurance. It wound up that the minister's successor to the Treasury Board had to admit within two or three months that the deficit would be in the order of $500 million. An ordinary man would have gone to jail for signing such a certificate.


Some hon. Members:: Hear, hear!
[DOT] (8:20 p.m.)


Robert Lorne Stanfield: This is a government which does everything by clever planning. Let us hear what the plans are. I say it is imperative that the government encourage the expansion of our domestic economy. I do not think the government has any plans. I think the government has bungled and that this will have serious consequences. I was pressing the government before this happened to adopt sensible economic policies for this country and to stop deliberately increasing unemployment.
The government having taken this step announced by the Minister of Finance, I ask specifically what its plans are. I ask whether its policy will be to encourage the expansion of domestic industry. I say this is particularly imperative in view of the disastrous consequences the policies of hon. gentlemen opposite seem to be having on the export industries of this country, particularly the primary industries. I call upon the two ministers particularly concerned to tell us tonight what
June 2, 1970	COMMONS
they intend to do to reduce the rate of unemployment and lessen the consequences of the ill-considered measures which have been followed by the Minister of Finance and by the Trudeau government.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the motion moved by the Leader of the Opposition (Mr. Stanfield) will serve a very useful purpose if it succeeds in eliciting from the Minister of Finance (Mr. Benson) a clear statement regarding the government's policy arising out of the unpegging of the Canadian dollar.
I begin by making it abundantly clear that the New Democratic Party has advocated a floating exchange rate for a long time and that we welcome the government's decision although we recognize that the Minister of Finance is making a virtue out of necessity. The fact is, he had no choice; there was nothing else he could do. He had got the country into a financial mess and this was the only door left open to him. But every time we in this party proposed a floating exchange rate he and his colleagues poured scorn on the suggestion, preferring to fight the battle against inflation with the traditional weapons of scarce money, high interest rates, economic slack and rising unemployment.
We in this party repeatedly warned the government that these blunt instruments would be ineffective; that we would get all the bad effects of inflation together with unemployment and economic slow-down.
We favour a floating exchange rate because we believe that an unpegged rate will provide Canada with a measure of monetary independence. An unpegged dollar will help cushion our economy against the effects of inflation in the United States. It has long been recognized that in large measure inflation in this country has been imported from the United States, where it has arisen from the participation of that country in the war in Southeast Asia. The unpegged value of our dollar will vary in response to United States performance, and Canada will thus be free to alter its economic priorities to suit domestic solutions.
Two of my hon. friends were members of the Committee on Finance, Trade and Economic Affairs when the question of inflation was being discussed. They prepared a report representing the views of our party. I quote one of the paragraphs from that report as follows:
As we indicated earlier, one of the areas where the existing structure of institutions was responsible
DEBATES	7831
Unpegging of Canadian Dollar for price increases in Canada resulted from our trading relationships with the rest of the world. To give us more freedom of action until such time as the world monetary system becomes more flexible we propose that Canada immediately move to a floating exchange rate.
Canada's exports have been increasing at an encouraging rate. This has resulted in pressure on the pegged dollar, with the consequence that the government has been forced to use large sums of money for the purchase of United States dollars to keep the Canadian dollar at its pegged level of 92J cents. We have now built a foreign exchange fund amounting to $4,200 million, and in the month of May alone this reserve had to be increased by $662 million. We contend that nothing could be more ludicrous than using our financial resources to maintain the Canadian dollar at an artificial level when we should be using those resources to stimulate the economy and increase our wealth production.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: The Minister of Finance has indicated that as far as the government is concerned the unpegging of the Canadian dollar is a temporary measure. We urge the government to give serious consideration to adopting a floating exchange rate on a permanent basis. Our experience with the floating rate from 1950 to 1962 was a successful one. It would not necessarily be successful for all countries, but there are few countries in the world which are as dependent upon the export trade as Canada and by allowing the Canadian dollar to find its own level we shall automatically compensate for any change in our price levels greater than those of our trading partners.


Mr. Woolliams:: Mr. Speaker, would the hon. gentleman permit a question?


Thomas Clement (Tommy) Douglas: I have only 20 minutes.


Eldon Mattison Woolliams: I wonder whether the hon. gentleman, as a representative from western Canada and a former Premier of Saskatchewan, will not admit that the prices of wheat, cattle and petroleum will go down and that employment will be adversely affected?


Thomas Clement (Tommy) Douglas: 
Jean-Luc Pepin: Mr. Speaker, my experience of teaching has given me a certain regard for logic. In that connection, it is very interesting to read yesterday's Hansard and to listen to the speeches made this evening by the previous speakers concerning the statement by the Minister of Finance (Mr. Benson)-


Mr. Nowlan:: Mr. Speaker, we do not have a translation of the minister's remarks.


An hon. Member:: There is no interpretation.


Jean-Luc Pepin: Mr. Speaker, I was saying that it is interesting from a logical standpoint to note in yesterday's Hansard the reaction and the comments of members of the opposition about the statement of the Minister of Finance on the adoption of the floating exchange rate for the Canadian dollar, as it is reported in Hansard.
The Leader of the Official Opposition (Mr. Stanfield) said, first, that the government was wrong in dropping the fixed rate, second, that it was forced to make that decision and, third, that in so doing it violated the agreement made with the International Monetary Fund. In three points, that is the position he took yesterday and the one he restated in part tonight.
The spokesman for the New Democratic party, the hon. member for Regina East (Mr. Burton) said at first yesterday that the government was right in acting in this way, secondly that it should have done so earlier
June 2, 1970

Unpegging of Canadian Dollar and thirdly, that it should never again adopt a pegged exchange rate.
So two speakers, two men who are competent, usually logical and moderate are nonetheless making diametrically opposed judgments on the decision made on Sunday. We are justified, to say the least, in concluding that it is a debatable matter.
When the government, through the Minister of Finance, says that the move was a sound one and to a certain extent, urgent on account of substantial reserve increases; when the government says that it will let the dollar fluctuate "for the time being" and it hopes "to resume the fulfilment of our obligations under the Articles of Agreement of the IMF as soon as circumstances permit", an intention, by the way, which the Fund received with satisfaction; when the Minister of Finance states that it "will therefore stand ready to maintain orderly conditions in the exchange market and to operate for the time being to moderate any appreciation of the Canadian dollar", it seems to me that we can rightly conclude that it is a reasonable, defensible and realistic position on a controversial, debatable and debated question.
It seems to me then, Mr. Speaker, that the government does not deserve such a theoretical judgment-I almost said theological-as that passed yesterday by the Leader of the Opposition and by the representative of the New Democratic Party, the hon. member for Regina East. It seems to me that we are in a field where there is room for discussion, where the position taken by the government is entirely defensible. I do not suggest that the one taken by the opposition is not at all defensible, but it seems to me once again that the Leader of the Opposition, especially, is wrong in posing here as some Savonarola who will teach us the true theology in these matters. I feel that this is a slight, if not a gross exaggeration.


An hon. Member:: The minister is reading again.


Jean-Luc Pepin: Mr. Speaker, there is another thing that struck me as I read the resolution and it deals with the difficulties facing exporters and domestic producers.

The resolution talks about the difficulties facing Canadian exporters and domestic producers. The hon. member for Regina East

(Mr. Burton) yesterday was calling for a rationalization of Canadian industry in order to make our goods competitive in world markets. The impression created was that our exports are not doing too well. I will not deny, of course, that a higher Canadian dollar will not bring adverse effects for many Canadian producers and especially exporters. But I think that the impression the hon. member tried to give was wrong. It is well to remember that the present exchange situation reflects on our part a position of strength and not of weakness and reflects in part, at least, strength in our merchandising trade position.
Perhaps now is a good occasion for me to indicate the essential features of our trading position at this time.


An hon. Member:: What about our
commodities?


Jean-Luc Pepin: That is what I intend to talk about. Our trading accounts are very strong. Our merchandise exports are buoyant, while imports are showing only slight increases. The cumulative January-April results show that the value of Canadian merchandise exports ran at 16.2 per cent higher in value than in the corresponding period of 1969, whereas the equivalent figure on the import side shows a 2.6 per cent growth.


An hon. Member:: Is the minister reading?


Jean-Luc Pepin: I am quoting figures. I have not the fabulous memory of my hon. friend, who quotes anything, anytime, anywhere. If I plucked these figures out of my imagination, my hon. friend would be the first to question my statistics.


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: The point I was making before being so rudely interrupted was that our export expansion is also much better balanced both with respect to content and with respect to the direction of those exports.


Walter Gilbert Dinsdale: Like wheat!


Eldon Mattison Woolliams: Tell us about the price of
cattle.


Jean-Luc Pepin: The results for the first four months of 1970 reveal a major departure from developments in 1969, which saw the United States market account for all the annual gain in Canada's merchandise exports. Canada's merchandise exports to the United States are running at 8.3 per cent or $277 million higher in value than during the same
June 2, 1970	COMMONS
period last year. But the important thing is to observe the growth of our exports to countries other than the United States which, to my way of thinking, is a most welcome development. Here the increase is running at some 36 per cent or $477 million higher in the first four months of this year than in the first four months of last year. The gain in exports to overseas markets now accounts for two-thirds of the total year-to-year increase in exports.
[DOT] (8:50 p.m.)
I should like to give an indication of the main commodities showing the largest gains. Of course, this will reveal that we are doing relatively well in motor vehicles and parts notwithstanding our circumstances. We are doing extremely well in minerals, copper, nickel, iron and steel products. I recognize, of course, that part of this gain is catching up from stoppages due to strikes which took place last year in Canada. So in this category we are doing extremely well, not only in terms of volume but also in terms of prices.
With respect to crude petroleum, the value of exports in the first three months of this year was up by some $54 million. The recent U.S. decision to establish a quota will of course diminish these exports in the coming months, but until now we have done extremely well. Also, there has been a sizeable recovery in the value of wheat and flour sales thus far, particularly this year, as a result of sales to state trading countries.


An hon. Member:: On credit.


Jean-Luc Pepin: Does the hon. member have another way of doing it? It is strange to hear hon. gentlemen on the other side implying that these sales are made because of credit terms and the next day accusing the government of not making credits available for the export of grain.


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: I said a moment ago that I thought I had been logical in my approach to politics. I believe this is something that some members of the opposition sadly lack. They make accusations one day for reasons that are diametrically opposed to those they used the day before, and then the same thing is repeated the next day. So it seems to me that a certain amount of elementary logic would be welcome at this time on the part of the opposition.


Gerald William Baldwin: These sales are long overdue. We should have had them two years ago.
DEBATES	7635
Unpegging of Canadian Dollar


Jean-Luc Pepin: Other areas of major buoyancy in Canadian exports include wood pulp, zinc, chemicals, non-farm machinery and barley. I have another set of figures to show that we are in a position of great strength with regard to our exports.
After an allowance is made for purely seasonal factors the value of Canadian exports in the first four months of 1970 is running at an annual rate of more than $17 billion or about 15 per cent higher than the calendar year total of $14.9 billion achieved last year. If you relate that to factors which obviously cannot be sustained but which nevertheless until now are tremendous, and if you compare that to the situation which existed with respect to imports in the first four months of this year at 2.6 per cent as opposed to 15 per cent last year, you must recognize, Mr. Speaker-and I know you do, although some members of the opposition might not-that this is a pretty good picture. As a matter of fact, the picture is so good that some of the countries to which we export have begun to complain about our doing too well. This happened with regard to petroleum and automobiles. This is certainly an indication that we are in a strong position.


Gerald William Baldwin: You should put your halo on right.


Jean-Luc Pepin: My hon. friend, who is usually quite gentle, sweet and charming should know that I am a very humble man. In fact, humility is my greatest problem.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: Get back into character, then.


Jean-Luc Pepin: There is a company that is called Humble but is very big.


An hon. Member:: Why are you so nervous tonight?


Jean-Luc Pepin: We have had previous very humble ministers of trade.
This success of exports is due to three factors. First, it is due to good footwork and imagination on the part of Canadian exporters.


James Aloysius McGrath: That is what you are showing right now.


Jean-Luc Pepin: Second, it is due to a damn good Department of Industry, Trade and Commerce. Third, it is due to good legislation passed by this government and, I will admit, some passed by previous ones too.
June 2, 1970

Unpegging of Canadian Dollar
Let me come back to the situation of trade. The first four months of 1970 show that Canada recorded a merchandise trade surplus of $793 million, or $636 million higher than for the first four months of last year. Seasonally adjusted at annual rates, this works out to an export surplus of about $2.75 billion. For comparison in 1969 our export surplus was under $900 million. I am sure that the hon. member for Prince Edward-Hastings (Mr. Hees) would like at this time to rise and congratulate the government on its tremendous performance, as well as congratulate Canadian industry.


George Harris Hees: Mr. Speaker-


Mr. Deputy Speaker:: Order, please. I
appreciate that the invitation was extended, but I am afraid I cannot allow it.


George Harris Hees: The minister gave up the floor.


Mr. Deputy Speaker:: That is not a procedure which I am prepared to allow.


An hon. Member:: The minister took his seat.


Mr. Deputy Speaker:: If the minister wishes to resume his seat I am prepared to recognize the hon. member for Roberval (Mr. Gauthier). Otherwise the minister might wish to conclude his remarks.


Jean-Luc Pepin: I was trying to be pleasant to the hon. member for Prince Edward-Hastings. Knowing how much he likes to talk, I thought I would give him an extra chance to do so very shortly.
A certain situation, however, has been created as a result of the revaluation of the Canadian dollar. On this point I should like to make three remarks. The first one is that it should be emphasized that the Canadian dollar has not been set at a new and higher rate but rather has been set free to reflect the changes in the market, and it is certainly too early to determine what the eventual rate will be or what impact it will have on particular industries.
Yesterday or even Sunday the Leader of the Opposition (Mr. Stanfield) would have liked us to come up with a set of new policies to take into account this particular change. Had we done so-the Minister of Finance (Mr. Benson) will certainly agree with me on this-the Leader of the Opposition would have been the first to accuse us on Monday of rushing into this decision and of not having thought it over before making the announce-

ment. He would have accused us of being television addicts and he would have been the first to condemn the government for lack of thought.
The second point I want to make is that for the time being it can be expected that the rate of the Canadian dollar will be above the previously established rate. Without attempting to minimize the adverse effects of a higher rate of the Canadian dollar on Canadian producers and manufacturers, it is important not to lose sight of certain offsetting benefits. You cannot have it all ways. There is usually an advantage offsetting a disadvantage. The higher rate of the Canadian dollar means not only lower prices for imported goods, components and materials, but also lower prices for domestic items resulting from the lower cost of imports. What are lower prices for some can be lower cost for others.
While Canadian machinery and equipment producers will face a difficult competitive situation, it is also noteworthy that about half of Canada's machinery and equipment requirements come from abroad, and this will now be available at lower prices. The same for imports going into re-exports. So the view presented by the opposition that this measure will be totally harmful to our export trade is certainly too simple.
My third observation is that the upward revaluation of the Canadian dollar emphasizes the need for Canadian producers to use every practical means to strengthen their competitive position and to take full advantage of government facilities and departmental programs available to this need. The implication in the resolution that the government has no program to help meet the situation is simply not justified. I do not know how many pages of notes I have here on government policies that can be used in this and similar circumstances-
[DOT] (9:00 p.m.)


Gerald William Baldwin: Scrap every other page.


Jean-Luc Pepin: -but for some reason, and maybe this is fundamental to human nature, it seems that whenever we have a situation that is slightly different from that which existed the day before, politicians are tempted to rush into new policies as if everything that had been done for a number of years-in terms of developing policies in the Department of Agriculture, the Department of Fisheries and Forestry, the Department of Regional Economic Expansion and all other
June 2. 1970	COMMONS
government	departments-had	suddenlybecome of no importance whatsoever the government being expected to create, like instant coffee, a number of instant policies to take into account today's particular event.
I am not a Conservative, but I am rather appalled to see that the Conservatives, those faithful disciples of Burke who should constantly bear in mind the values of the past, can so easily abandon everything which exists in favour of something new that the Leader of the Opposition might have conceived while looking at the handsome face of the Minister of Finance on television.


Robert Lorne Stanfield: There must be a credibility gap there somewhere.


Jean-Luc Pepin: I could go on at great length, but I know my time is coming to an end.


Eldon Mattison Woolliams: That's right.


Jean-Luc Pepin: I could go on to give an enumeration and an explanation of the tremendously worth while, efficient programs operated for example by my department, programs that can be used by industry, programs with respect to research and development, programs with respect to the advancement of industrial technology-


Mr. Deputy Speaker:: Order. I am sorry to interrupt the minister, but his time has come to an end.


Some hon. Members:: Carry on.


Mr. Deputy Speaker:: Is there unanimous consent to allow the minister to continue?


Some hon. Members:: Agreed.


Robert Lorne Stanfield: Mr. Speaker, we would be happy to give him permission if he would indicate just one program his department is announcing to cope with the new situation that the Minister of Finance and the government have led us into.


Jean-Luc Pepin: This is exactly the attitude I have been condemning. Obviously, I have not reached the mind of the Leader of the Opposition. He is willing, he is eager to trade all the programs of the Department of Industry, Trade and Commerce in favour of one single piece. That is not particularly rational. I am trying to demonstrate that in this one and other departments we have a set of programs aimed at taking care of situations like the one we have now. These programs are generally known. Apparently the Leader of the Opposition has not yet studied them well enough.
DEBATES	7637
Unpegging of Canadian Dollar
I will send the Leader of the Opposition booklets, pamphlets and sheets of paper outlining all these government programs. He used to know some of them when he was Premier of Nova Scotia, but for some reason or other he seems to have forgotten them all.
He should also bear in mind the tremendous services that our trade commissioners offer. We have 250 officers located at 75 posts in 52 countries. I could go on and on outlining all the programs that exist. For example, the Leader of the Opposition is concerned about tourism-


George Harris Hees: On a point of order, Mr. Speaker, I think the minister has made a mistake. If he will look at the date of that speech I think he will recognize it as a speech I made some eight years ago.


Jean-Luc Pepin: That is exactly what I have in mind. Why should the speech have been good eight years ago and be bad tonight? This is a logical question. May I have an answer?


George Harris Hees: The speech was a good one, but you have mucked up conditions so badly since then.


Mr. Deputy Speaker:: Order, please.


Jean-Luc Pepin: Obviously, the hon. member had to get out somehow from the trap he set for himself. I will let readers of Hansard judge the value of his rebuttal. I was talking about tourism. The Leader of the Opposition made it sound as if revaluation were the death-knell of the tourist industry in Canada. I have had the matter examined and I have been informed that overseas travellers coming to Canada spend $250 per capita for a stay of up to two weeks within our country. American tourists spend $280 here for a stay of 8 to 14 days, some $30 on average more than overseas travellers. If you take account of reevaluation, at $2.50 for each point of appreciation, for an American travelling in Canada for 8 to 14 days let us say there are four or five points of appreciation, and five times $2.50 makes $12.50. On this basis I say that the Leader of the Opposition really misjudges the intelligence of American tourists. I do not think $12.50 will prevent their coming to Canada.
I have tried to do two things tonight, Mr. Speaker. The first was to indicate that with respect to exports we were in a position of tremendous strength, so much so that we were being envied by our neighbours south of the border and by other people around the world. The second point I wished to make-
7638	COMMONS
Unpegging of Canadian Dollar and I tried to make it as simply as possible- was to demonstrate that there are a number of programs operated by my department and by other departments of the government that can be made use of in such circumstances as prevail at the present, and I am asking members of the business community to make better and better use of the services that my department and other departments are offering.
* (9:10 p.m.) tTranslation]


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, the decision of the federal government to unpeg the Canadian dollar so that it can find its own level according to the pressures of supply and demand, has been diversely appreciated in political, financial and business circles.
In order to assess the government action, it is first of all necessary to analyze the consequences of the free exchange rate. I really said "government action", because after the fact, the only thing now to do is to imagine the consequences. I do not want to make the same inconsistencies of which the Minister of Industry, Trade and Commerce (Mr. Pepin) accused the two previous opposition speakers, but I shall point to the honourable minister that it is impossible to set floating rates without expecting certain repercussions.
The minister should take care not to catch the disease of those he condemns.
Therefore, only after analysing the consequences of the government policy shall we know what steps the government should take to offset the adverse effects of a floating exchange rate, which means, in the present circumstances, a revalorization of the Canadian dollar, compared to other currencies, including mainly, the American dollar.
A rather simple way to understand the situation is to realize that at the closing of the stock exchanges or money markets last Friday, the American dollar in Montreal was worth $1.071%2>
whereas, yesterday, it was worth $1.03 only.
In other words, an American importer could, last week, import Canadian goods worth $1.07 while spending only $100 (U.S.), whereas, today, he can only import $103 worth of Canadian goods for the same $100 (U.S.).
Mr. Speaker, what I just said about the situation of the American importer also applies to other foreign importers. They will have to pay more to import Canadian prod-

DEBATES	June 2, 1970
ucts. Conversely, foreign exporters will be able to export more easily to Canada, unless the government indicates which steps it intends to take in order to prevent the Canadian industry and the workers from being adversely affected by this financial policy of the Canadian government.
The motion introduced by the Progressive Conservatives deals with the impelling duty upon the government to immediately announce a program designed to offset the increasing difficulties faced by Canadian exporters and primary producers, the difficulties faced by our domestic producers on the Canadian market, the undoubted resulting increase in unemployment; and a program that, by its immediate announcement, will ease the confusion among Canadians as to the financial and economic direction of the Canadian government.
We agree unreservedly with the terms of this motion, for it concerns the main aspects of the question and the main consequences of the revaluation of the Canadian dollar.
First, exporters and producers of basic products will have to face greater competition from outsiders on the domestic market and secondly, there will inevitably be an increase in unemployment.
On the Canadian stock market yesterday, shares in Canadian pulp and paper companies fell by 7.73 per cent, the greatest drop in at least five years. Why such a decrease in the price of those shares? Because the return on them will decrease as a result of lower sales abroad by pulp and paper companies.
As the exports will tend to go down, the companies' profits will be smaller and the dividends will decrease. But the pulp and paper mills and pulp and paper plants will not be the only ones to face the adverse effects of the government's financial and monetary policy.
One could read in the newspapers this morning that firms exporting basic products, such as nickel and copper, had shown yesterday great losses on the stock markets, while even the price of wheat had shown a drop of 6 cents per bushel in Winnipeg, as a result of the revaluation of the Canadian dollar. As for textile products, which are facing very close foreign competition, they will be doubly affected by the government's decision to free the Canadian exchange rate.
Only yesterday, Mr. Gerald Bruck, president of Bruck Mills Co., was saying and I quote:
The Canadian textile mills are the victims of imports that will have easier access to the Cana-
June 2. 1970	COMMONS
dian market while Canadian exports will be even more difficult, since Canadian textiles will cost more on foreign markets.
Therefore, it can be said that the government's decision will have a direct effect on several industries in the province of Quebec, especially in the Montreal, Quebec, Drum-mondville, Magog, Saint-Hyacinthe, Sherbrooke and Saint-Gregoire-de-Montmorency areas.
Canadian exporters and primary producers are penalized by the financial and monetary policy of the federal government.
Let us now deal with imports. We know that they will increase further as a result of the revaluation upwards of the Canadian dollar. Clothing, textile products, footwear and foodstuffs from the United States will be prejudicial to the Canadian fruit, potato and milk producers.
In the manufacturing industry, large stores will be anxious to buy radio and television sets, electronic equipment, and so on from the United States. This will bring about a slowing down of the Canadian production for domestic consumption to the benefit of foreign producers. We can foresee a decrease in exports and an increase in imports. This can only bring about a higher unemployment rate in Canada, the laying off of several thousands of Canadian workers who will join the ranks of the 700,000 already unemployed.
Mr. Speaker, If we agree with the terms of the Progressive- Conservative motion, it does not mean that we agree with the solutions they suggest. Indeed the Progressive Conservative party has none to offer.
[DOT] (9:20 p.m.)
At the time they were in office, they were faced with monetary problems. They then decided on the devaluation of the Canadian dollar. What compensation measure did they have to suggest? None. When they were in office, they did exactly the same thing the Liberals are doing now when they resort to monetary manoeuvers, for they had no other solution to off er.
What can we do now that the harm is done? What st-eps does the government intend to take? The Progressive Conservatives who have introduced the motion, are quite aware that the Liberals have no solution to offer in order to save the exporters from being penalized. They are quite aware that the Liberals have nothing to suggest to prevent foreign goods from flooding our markets and hurting our producers. They have put a tricky question to the government because they know
DEBATES	7639
Unpegging of Canadian Dollar that it is torn between its anti-inflation policy and the deteriorating employment situation.
The increase in the rate of exchange fits well in the war against inflation. Imports increase, exports decrease and unemployment rises, thus easing the pressures exerted by the unions, with the long term and overall effect of bringing down the price levels which is the objective the government has in view.
We, of the Ralliement creditiste, agree that this objective is commendable provided producers, captains of industry and workers get a fair reward for their investments and their work. We agree that this objective is commendable provided consumers are able to buy the production offered, which is possible if prices are lowered to the level of the total consumer purchasing power.
For several years now, the Creditistes have offered a solution to that problem which neither the Conservatives nor the Liberals have been able to solve.
It is a matter of enabling the consumers to purchase, with whatever purchasing power they have, all the goods available. In other words, it is a matter of balancing the purchasing power with the prices.
We know that the real cost of production is consumption. For instance, if the annual Canadian production amounted to $80 billion and consumption to only $55 billion, Canadians who only consumed $55 billion worth of goods should be able to purchase that $80 billion production. They are the ones who produced it. It belongs to them. If they managed to produce $80 billion worth of goods while consuming only $55 billion worth, they should have the total production for $55 billion. Thus, it is a matter of lowering prices to $55 billion in order to enable Canadians to purchase the total production, the cost of which was set at $80 billion.
But where will that discount come from? If Canadians produced $80 billion worth of goods, they increased the real credit in Canada by that same amount in that year. But, if in the course of the same year, they received only $55 billion in salaries, benefits, dividends, etc, as purchasing power, financial credit must be increased by $25 billion if we want finance to reflect realities.
This is one of the solutions the government ought to apply to fight inflation, to prevent price increases and to allow the consumers to purchase the goods they produce.
For instance, why would the government not pay a discount to the Canadian producers
7G40	COMMONS
Unpegging of Canadian Dollar of goods for domestic consumption? This would enable them to compete with foreign producers. It would also maintain Canadian plants in operation, supply jobs and allow Canadians to be less dependent upon other countries for the goods they need.
I should like to hear the minister's answer to these suggestions. When the minister will take the floor, we want him to say clearly what he intends to do to balance consumption and production. What assistance will he give to the consumers?
The Minister of Finance reminds me of a mariner who launches his rudderless ship on rough seas and waits to see what will happen.
This is not the way to run things. To govern is to plan ahead, and we hope that the Minister of Finance is more aware of the detrimental effects of the government's action. The Canadian population does not like a government that gropes its way.
Mr. Speaker, the people must be informed. Industrialists, dealers, farmers and all workers must know what will be the economic picture in the years ahead. That is why we are anxiously waiting for the minister's explanations.


George Harris Hees: Mr. Speaker, in speaking to this motion tonight I would like to deal for a moment with some of the remarks made by the Minister of Industry, Trade and Commerce (Mr. Pepin) when he spoke a short while ago. I was interested to hear the minister take all the credit for Canada's good export position at the present time.


Walter Gilbert Dinsdale: That is his humility.


George Harris Hees: I say to the minister that a good export performance is always due to three things, and three things only. It is due to the ingenuity, hard work and salesmanship of the Canadian industry. It is not due to the minister or his department. They help, but Canadian industry is the builder, designer, financier and salesman. It is what Canadian industry does that makes our export trade a success or a failure.


Some hon. Members:: Hear, hear.


George Harris Hees: I was most interested to hear the minister give a very condescending and lofty lecture to industry about how they should conduct their affairs. The minister said, from his high position of authority, that industry must become more competitive. By that the

DEBATES	June 2, 1970
minister is inferring that Canadian industry is soft and inefficient. If the minister had spent more years working in industry instead of in the classroom, he would know the facts of life regarding Canadian industry.
I say to him, as one who has had the privilege of working in industry, serving in the position the minister now holds and having had considerable contact with industry, that in my opinion Canadian industry is as efficient or more efficient than any other industry in the world. Through hard work and ingenuity they keep their costs very low. They keep their prices competitive because they know that only by keeping prices competitive is it possible to make sales in Canada and in the world market.
The minister owes an apology to industry for what he said tonight in his supercilious, lofty and condescending lecture. It has no basis whatsoever in fact.


Some hon. Members:: Hear, hear!


George Harris Hees: I now wish to deal briefly with the reason why this policy has been introduced at this time. As the Leader of the Opposition (Mr. Stanfield) pointed out tonight, and as I elucidated in a question I asked yesterday, the fact was disclosed as recently as last Wednesday when the Minister of Finance (Mr. Benson) was asked by the hon. member for Dauphin (Mr. Ritchie) if the government was considering-not planning, but considering-the imposition of a floating exchange rate. The minister answered with a flat and immediate no.
As recently as last Wednesday the government was not even considering putting the country on a floating exchange rate. Suddenly, on Sunday afternoon the country was put on a floating exchange rate, a very drastic and far-reaching step. It makes one wonder why this was done and where the impetus came from. This is the way this unbusinesslike government does things.
Was it because the Prime Minister (Mr. Trudeau) had pressure brought to bear, when he was in the Far East, by a great many low-wage countries? Was it suggested it would be a good idea to build a good feeling between Canada and our eastern friends by opening the Canadian market even wider than at the present time for imports from these low-wage countries? That seems to be about as logical an explanation as can be given. Otherwise, why suddenly out of the clear blue sky, without even considering this
June 2, 1970	COMMONS
proposal as recently as last Wednesday, was it suddenly introduced? It seems the Prime Minister got back, told the Minister of Finance what to do and he went ahead and did it.
[DOT] (9:30 p.m.)
This new, floating rate of the Canadian dollar which seems to be settling down at around 96J cents U.S. is being imposed on the Canadian economy at a most critical time, a time when unemployment has reached its highest point in seven years and promises to rise still further. It is being imposed at a time when Canada is being flooded by low-cost imports from low-wage countries, causing people here to be laid off in large numbers in many industries and at a time when the government's restrictive policies are slowing down the economy and making it impossible for producers to carry out expansion plans which would permit the employment of more workers.
We are now confronted with a new dilemma which will cause great trouble for all producers in Canada. This new rate will have three main adverse effects. First, it will make imports into Canada cheaper in terms of the Canadian dollar and will thereby make them more competitive with Canadian goods. This will make it harder for Canadian producers to sell their goods in the Canadian market. Many orders which would normally go to Canadian producers will go to manufacturers abroad. This, in turn, will mean that fewer Canadian workers will be able to find jobs. Orders which would normally be theirs will be lost to foreign workers whose companies will receive those orders.
Second, the floating exchange rate will make it much more difficult for our manufacturers to obtain orders in the export market. Once again, because Canadian exports will be considerably more expensive, buyers in the export market will increasingly turn to cheaper products offered by our foreign competitors. Instead of a great many orders going to Canadian firms and being filled by Canadian workers, orders will go to foreign firms and employment will be lost to foreign workers in those companies.
Finally, the floating exchange rate will deal a severe blow to the tourist industry which as you know, Mr. Speaker, is our second largest industry. Not only will Americans and people from other countries find that it will cost them four to five per cent more to vacation in Canada, but Canadians who normally take their holidays in this country will find it is 22375-65
DEBATES	7641
Unpegging of Canadian Dollar cheaper to go to the United States or to some other country for their holidays and they may well decide to go abroad. So the Canadian tourist industry will be severely hit. This is a serious blow to an important employment industry.
It is interesting to watch the Minister of Industry, Trade and Commerce as he sits and smiles while I talk about what is going to happen. He does not care. To him, it could not matter less. He looks at this from a classroom point of view. These are facts and figures which involve people who will find themselves out of a job and hungry and miserable. They mean nothing to him. Read another textbook, write another chapter: who cares? That is the attitude of the Minister of Industry, Trade and Commerce.
I think it is obvious to everyone in this chamber that if our industry is to remain competitive and retain its workers in employment, the companies concerned have no alternative but to reduce their prices by the same amount as the extent to which the price of the Canadian dollar has increased. This will not be easy because right now their prices are as low as possible. Industries producing for the export market, and the tourist industry, will need assistance from the Canadian government.
I believe this assistance should take two forms. The government should now reduce the taxes which industry pays to the federal government in the present fiscal year by an amount equal to the surplus which the minister declared the government had on hand when the last financial year ended on March 31 last, namely, approximately $350 million. I believe this surplus should be used immediately in this way, and that the new tax rates should be announced by the minister at the earliest moment. This lessening of the tax burden will help these companies to retain their position, bearing in mind that they will all be obliged to reduce their prices in order to remain competitive. Unless such steps are taken, a great many orders will be lost and very many Canadian workers will be laid off. There will be a tremendous increase in unemployment, something which we cannot allow at the present time because, heaven knows, unemployment is already serious enough.
A second form of assistance which I believe the government should make available is a rebate equal to the amount by which our exporters must reduce their prices in order to remain competitive with foreign firms against
June 2, 1970

Unpegging of Canadian Dollar whom they must compete for sales in the export market. If they are not able to reduce their prices by this amount, orders will not come to Canada, Canadian workers will be out of jobs and we shall enter a serious depression. I use the word "depression" rather than the word "recession" because the situation is as serious as that. If the government does not make it possible for Canadian industry to meet the competition which will be brought about by the increase in the value of the dollar by between four and five per cent, we will have to face a serious depression. I say this should not be allowed to happen.
[DOT] (9:40 p.m.)
If the government will do the two things I have suggested, I believe a large proportion of our export business and our tourist industry can be maintained and our economy can move ahead and employ people. If what I suggested is not done, I fear a very lean future for a great deal of industry in this country.
In conclusion, I believe that if the government will take these steps, all of which are sensible, practical and businesslike, all of which the government can afford to take, all of which can be taken very quickly and easily, and all of which must be taken, I believe a great deal of the adverse effects that a floating exchange rate will have on the economy will be compensated for. Therefore, I strongly urge the minister and the government to give serious consideration to these suggestions. They are not made lightly but are made in a desire to be practical, sensible and helpful. I hope the minister will take them into consideration and act upon them.


Mr. Steven Otto (York East):: Mr. Speaker, listening to the debate tonight makes me suspicious of the relationship between the Leader of the New Democratic Party (Mr. Douglas) and the Minister of Finance (Mr. Benson). The leader of the NDP can seem to do nothing but congratulate the Minister of Finance on his white paper and the floating value of the dollar. It seems as though he would like to place a wreath of laurels around the minister's head. I think the Leader of the Opposition (Mr. Stanfield) would also like to place a wreath on the minister, but not a laurel wreath.
This debate has turned into a debate on inflation. With all respect, I do not think there is much relationship between the Canadian inflationary cycle, the so-called remedies the government has introduced and the revalua-

tion of the dollar. As far as opposition to the government's policy on inflation is concerned, I have been opposing it longer than hon. gentlemen opposite. In fact, I have been opposing it more effectively than hon. gentlemen opposite.


Eldon Mattison Woolliams: Mr. Speaker, I wonder whether the honourable and distinguished gentleman would permit a question.


Steven Otto: Mr. Speaker, I will probably cover the simple point that the hon. gentleman wants to make during the course of my speech.


Eldon Mattison Woolliams: I rise on a point of order. The hon. member talks a big game and then votes for the government.


Steven Otto: As I was saying, the question of inflation and the government's policy on inflation is another debate entirely. What we are debating here is the revaluation of the Canadian dollar. This has a great bearing on U.S. inflation. The reason our dollar has been in high demand is this. Contrary to what the hon. gentleman who preceded me said, Canadian industry is not all that productive. According to DBS figures, Canadian production on a per man-hour basis is ninth in the world-not first, second or third.
The fact is that inflation in the United States has been due to a demand economy. The war in Southeast Asia, as the leader of the NDP said, has had a great bearing on U.S. inflation. The U.S. is also carrying on another war, the sort where it spends billions of dollars on the Apollo program. Except for the difference in intent, there is not very much difference between the two as far as the economy is concerned. It does not matter whether you produce trucks and vehicles to be blown up in Viet Nam or to be sent to the moon; the point is that the United States has rendered useless a great portion of its productive capacity. However, money has been paid in wages and there has been a demand for goods for disposal in the United States.
As a result of this inflation, our export program has prospered. We have had the value of all goods produced and we have been able to beat the prices of United States producers. This is why United States inflationary causes have had a bearing on the revaluation of our dollar. It has nothing to do with inflation in Canada, which is not a demand type of inflation at all.
The Minister of Industry, Trade and Commerce (Mr. Pepin) stated that we had
June 2, 1970	COMMONS
increased our exports up till now to about $800 million and the projection is that by the end of the year we will have a credit of about $2J billion. That is quite true. He also mentioned certain items of export such as gas, oil, steel ingots and so on. We are exporting these commodities, not necessarily because we are the best producers of them but rather because Canada is the only source of many of them. However, this paints the picture brighter for us.
The immediate result of the revaluation of the Canadian dollar is bound to be a demand for our industry to be more efficient. Indeed, this is essential. Despite all the gloom cast by the opposition, I still do not think we are heading into a depression. I think Canadian industry will be able to beat U.S. prices even though our dollar has been revalued upward.
I do not think the tourist industry will suffer very much, because nobody is going to convince me that the 5 per cent or 6 per cent differential will persuade Americans to stay home instead of enjoying the Canadian wilderness. It will have a slight effect, but we are not facing the doomsday suggested on the other side of the House. There will be a demand on exporters to become more efficient; but the rub comes when you ask where they are going to get the money with which to make their industry and their labour more productive. As long as we continue our restrictive policies, this will be impossible. However, I think the government will see the light and will soften its restrictions a little in order to allow Canadian industry to make itself more productive and to compete with United States production schedules and prices despite the increase in the value of our dollar.
Another factor that has not been mentioned is this. The Minister of Finance must remember that during the past five or six years Canadians have been borrowing a great deal of money from the United States, repayable in U.S. funds. There will now be a desire to take advantage of the upward movement in the Canadian dollar to repay this money in U.S. funds and then to borrow on the Canadian market. This is going to be difficult because there is already a shortage of money.
I should also like the Minister of Finance, when he gets a chance to reply, to explain how he intends to re-establish the value of the Canadian dollar in relation to the U.S. dollar. Will this be done unilaterally or with the consent, advice and agreement of the United States? This question has not been answered.
22375-65J
DEBATES	7643
Unpegging of Canadian Dollar
I will now get down to the issue as to whether or not it was advisable for the Canadian government to float a free Canadian dollar. It is presumed that the Canadian government could have controlled this matter. Hon. gentlemen opposite must not forget that not long ago the speculators of the world jumped on the gold bandwagon. All the might of the United States economy was insufficient to stem the onslaught of the speculators. The United States was not successful in its efforts. Obviously, the demand for gold was not a true demand, because its price today has fallen. The price had been forced up by speculators who exert fantastic pressures in this world.
[DOT] (9:50 p.m.)
Hon. members opposite will also remember that the West German government, its banking system and the International Monetary Fund could not withstand the pressure of speculators against the German mark. It is quite clear that our government could not have combated successfully the onslaught of speculators on the Canadian dollar. Indeed, the Bank of Canada has been forced to buy millions of dollars of United States currency, and if the government had not freed the Canadian dollar we should be forced to buy much more foreign currency. The action taken reflects credit on the minister and this government. They did not wait too long before freeing the dollar. If the government had not freed it, we should have spent fantastic amounts of money buying United States currency and we should ultimately have faced much more trouble.
We must therefore pinpoint the thrust of this debate to one issue: What alternative had the government at its disposal to combat the onslaught of world speculators? What would hon. gentlemen opposite have done? They condemn the government for freeing the dollar, but how would they have resisted the onslaught of speculators? How much money would we have needed to spend to stem the tide? This money could have been used elsewhere in Canada.


Gerald William Baldwin: You people should have fired the Minister of Finance (Mr. Benson) instead of appointing him originally.


Steven Otto: No matter whether we think the results of this move will be beneficial or slightly dangerous, I submit the government could have taken no other course.


Eldon Mattison Woolliams: Did the hon. member say that in 1962?
7644	COMMONS
Unpegging of Canadian Dollar


Mr.   Olio@: Hon. members opposite may say what they like, but I have yet to hear how they would have resisted the demands oi speculators. In conclusion may I say that I support the minister wholeheartedly in this action. I submit that he acted properly and the action came just in time.


Gerald William Baldwin: Mr. Speaker, any lingering doubts I entertained about the doubtful character of this move on the part of the government have been dispelled by the words of the honourable guru for York East who has just spoken. I point out that this is a good motion because within the four walls of this chamber we find cabinet ministers whom we have not seen for days and days.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: The Minister of Industry, Trade and Commerce (Mr. Pepin) made a speech. We heard the hon. member for York East (Mr. Otto), who was probably laying the foundation for the Postmaster General (Mr. Kierans).


James Aloysius McGrath: He is here every night at ten o'clock.


Mr. Kierans:: No; the hon. member opposite is.


Gerald William Baldwin: The Minister of Agriculture (Mr. Olson) is sitting entranced, no doubt wondering whether to take part in the debate.
I assume that the Minister of Finance (Mr. Benson) is the father of this idea. I wonder whether he conceived this idea after consulting other members, or was it some kind of intellectual, immaculate conception of his own. It is too bad that it was not strangled before birth.


An hon. Member:: At least he has an intellect.


Gerald William Baldwin: We can even see the hon. member for York West (Mr. Givens) and the distinguished vice-chairman of the Standing Committee on Finance, Trade and Economic Affairs sitting here to listen and worship at the feet of the greats of their party. The Creditiste party has the easiest approach to this question. It has dismissed scornfully what the government has said, and of course has referred to the position it adopted some years ago. That party has the easiest solution. It takes only one new and two old printing presses and, according to that party, all these problems are settled.

DEBATES	June 2, 1970
I suggest to hon. members opposite that they should not be too amused because some years ago when the present government was in opposition and this party was in power the leader of the Social Credit Party proposed a motion. We heard what Hon. Walter Gordon said and what the present government leader in the Senate said. They urged all their cohorts to support the motion, their idea being that it did not matter how we arrived at a certain point; the important thing was that we got there. At any rate, they supported the motion. So when I hear hon. gentlemen opposite scoffing at the Creditiste party, I say to them that they should examine their antecedents well.


Eldon Mattison Woolliams: The Minister of Agriculture (Mr. Olson) will understand that.


Lloyd Roseville Crouse: One of the funny money boys is sitting right over there with the government. He voted for the motion. The Minister of Agriculture is still a funny money boy.


Gerald William Baldwin: I am surprised at my hon. friends to the left. Usually I have an opportunity to vote with them on these matters but tonight I am amazed. True enough, there is a place for the unpegging of our dollar, but this must only take place under classical and traditional circumstances and those circumstances do not exist today, as the leader of my party has said. I am therefore amazed at the rigidity and formalism of the New Democratic Party and at its inability to adapt to changing conditions. The NDP is supposedly the most reactionary of the old-line parties, yet it adopts unimaginative approaches to many ideas. In this instance they are in the awkward position of trying to hold up their doctrines with one hand while covering up their dogmas with the other. This is a sad case of indecent exposure.


An hon. Member:: It depends on what is being exposed.


Gerald William Baldwin: I shall now try to assess the damage that will be done to this country. The Minister of Industry, Trade and Commerce talked about programs and theories. The government deals with flow charts, theories and possibilities. Its members sit so high in their ivory towers that they cannot see the people below. It sees these matters as contests between programs, theories and people-and this party, as usual, takes the side of the people.


Some hon. Members:: Hear, hear!
June 2, 1970	COMMONS


Gerald William Baldwin: Examine, think and contemplate. Who are the people who will be hurt? The agricultural industry of this country will be hurt. There is a free flow of cattle and hogs between the United States and Canada. The government's action will bring a great measure of distress to the people involved in that movement. There is no doubt about that.
I am sure that my hon. friend, the distinguished member for Crowfoot (Mr. Homer) will speak later on this topic and will go into it to a greater extent. Without doubt the government's action will have serious consequences for such people. As has been said, the price of grain already has fallen by six cents and the people of that industry will suffer very substantially. They will also suffer as a result of the stupidity of this government and the inability of the minister responsible for agricultural programs to help them. The western farmers are going to be hurt even worse as a result of this proposal to free the dollar.
[DOT] (10:00 p.m.)
What about the people in the agricultural industries who are involved in the production of seeds? In the great northern part of Alberta, part of which I represent, in northern Saskatchewan and even in parts of Manitoba, people who are engaged in the specialized trade of raising seed for sale, such as rape-seed growers, have been sufficiently skillful to adapt and to devise agricultural programs to meet the situation brought about by the ignorance and stupidity of this government. They will find that they will be hurt very severely. These people have suffered through a most difficult winter, and they will now find that the cost of the products which they have to produce and sell on the world markets will be such that the net return to them will be sadly diminished. This is something of which hon. members opposite have not thought.
What about lumber and minerals, particularly in the province of B.C.? I am amazed that the government members from B.C. have not risen to protest.


Mr. Perrault:: Don't worry.


Gerald William Baldwin: There is one hero here who makes signs now that he is going to protest. I hope he is, and I will revise my opinion of him if he does.


Eldon Mattison Woolliams: It will be a noisy opinion.


Raymond J. Perrault: Just stay where you are.
DEBATES	7645
Unpegging of Canadian Dollar


Gerald William Baldwin: The decision reveals an intolerable ignorance or disregard of the perilous state of the economy in British Columbia. Members opposite who come from B.C. are either failures or ignoramuses. They stay with a government which has been thoroughly destructive of the interests of their province. The DBS figures may show an attractive trade picture for the first quarter of this year, but the fact is that the forest and mining industries of B.C. are in trouble and the revaluation of the dollar will only worsen that situation. Their long-term contracts are based on U.S. dollars, and thus the increase in the value of the Canadian dollar is having two dangerous effects. The profitability of these industries has already been damaged, and their long-term competitiveness has been compromised.
Unless compensating measures are announced, and not the very airy fairy statement of my distinguished friend, the Minister of Industry, Trade and Commerce (Mr. Pepin) who, in speaking about his own department said not one single word about compensating factors, the situation will worsen. It may well be that the Minister of Finance (Mr. Benson), sitting like a brooding buddha, will announce such measures before the debate is over. I hope so. But unless compensating measures are announced, it is inevitable that the climate of investment and the level of unemployment in B.C. will get very bad indeed.
My hon. friend, the hon. member for Prince Edward-Hastings (Mr. Hees) made reference to the tourist industry. It is a fact of human nature that people from the U.S. come into this country knowing that the minute they cross the border their dollar appreciates in value. It may not be by a large amount but it is a very material factor in the tourist business which has been generated in this country. I prophesy that before this year is over the tourist industry will suffer substantially because of this move. One of the first things that a tourist coming here from the United States will say to you is that he was able to exchange his money and make something on it. That will no longer be the situation to the same extent, and the tourist industry will deteriorate accordingly.
There is no doubt that in the United States there is a move toward protectionism, and as a result of that and of what this government has done our export industry will suffer. I hope not. I would not like to be partisan-


Some hon. Members:: Oh, oh.
June 2, 1970

Unpegging of Canadian Dollar


Gerald William Baldwin: -and I would like to be able to say honestly that I approve of what this government has done. If there were an opportunity, I would do so. But I fear this proposal very much. The fact is that exchange rate has been freed at a time when this government, by brutal and repressive measures, has fashioned a weapon to compel the people on the lower rungs of the economic ladder to bear the brunt of inflation. I admit this inflation was not initially created by this government but it was certainly aggravated by this government. It is a government which we could call a zig-zag government. It zigs when it should zag and it zags when it should zig, and sometimes does both together.
It is a government which a number of years ago created the germ from which inflation in this country has grown. We all remember the settlement in connection with the dockworkers strike in Montreal. At that time the predecessor of this government-which was almost as bad as this one but not quite-should have dedicated its energies to dealing with inflation, should have anticipated it and taken the steps which were absolutely essential to keep it at an acceptable level. Instead, it was spending money in a prodigal way thus creating factors which brought about inflation.
We should not have a government which, on finding that there is this unacceptable unemployment Which brings degradation upon the human beings who have to accept it and who have to be saddled with all these problems, continues along the same path. Usually, the men and women who are the first casualties of unemployment are those who have had the most difficulty in securing employment. They are the people who have probably suffered for many years trying to secure for themselves some acceptable place in society. They are the ones who are being hurt. Now, we find this brutal and unimaginative government adding to their woes by this measure.
I suggest to you and to the House that a very heavy onus lies upon the Minister of Finance to justify this step, to explain why it was necessary, and to explain what he is going to do to lighten the load on the people who are going to bear the heaviest burden. If he cannot do this, there is only one honourable course for him to take, that is to make way for some man who will do it.


Eric William Kierans: Mr. Speaker-


Some hon. Members:: Oh, no.


George Harris Hees: He couldn't resist it.


Eric William Kierans: I listened in silence to hon. members and I would almost like to ask for a moment's silence because I really am alone tonight. I miss the merry monk from Hillsborough.


Gerald William Baldwin: We have sent for him.


Eric William Kierans: But I think the hon. member for Prince Edward-Hastings (Mr. Hees) will do equally well. They do have one thing in common; they both like to ask and to answer their own questions because they are the only questions they can answer.


George Harris Hees: That is a very sound statement.


Eric William Kierans: If the hon. member for Prince Edward-Hastings can accuse my colleague, the Minister of Industry, Trade and Commerce, (Mr. Pepin) of spending too much time in the classroom, I can say to him that I do not think there is anybody in this House who, after listening to him tonight, would be prepared to accuse him of the same. It is quite clear from his interpretation of the effects of the floating exchange rate that he has not spent nearly enough time there.
[DOT] (10:10 p.m.)


Eldon Mattison Woolliams: But he cleaned up the stock exchange you left in such a mess.


Eric William Kierans: Oh, no; they were asking for their money back. The hon. member accuses the Minister of Finance (Mr. Benson) of having the gall not to confide in him and the entire world about his future plans. He asks, "Do you intend to float the Canadian dollar" and the Minister of Finance says no. Then, three or four days later he does.
Underlying this action, as everyone in the world knows, particularly every speculator, were two things; one, the tremendous expansion of our trade and, second, the determined fight by the government against inflation which had created a confidence by investors throughout the world that led them to direct their investment funds to Canada. Now, the former minister of trade and commerce says, "Why didn't you tell us"?
Tell us what? That the Canadian dollar is now 92J cents but it will be allowed to go free, and then I and every international speculator in the world can make a quick 4 per cent or 5 per cent. And who pays for that speculation? It comes out of the taxpayers and the people of Canada.
June 2, 1970	COMMONS


Some hon. Members:: Hear, hear.


George Harris Hees: Was the Minister of Finance not telling the truth?


Eric William Kierans: I am saying that the question itself clearly portrays the stupidity of the people who asked it.


Some hon. Members:: Hear, hear.


George Harris Hees: You are saying that the Minister of Finance did not tell the truth.


Eric William Kierans: If you didn't interrupt me, you might even learn something. The Leader of the Opposition (Mr. Stanfield) says that we threw the fixed exchange rate away.


Lloyd Roseville Crouse: That is true.


Eric William Kierans: If we had not thrown it away what would we have done, as more and more people came to be aware that Canadian trade was expanding rapidly, that these funds were accumulating in our central bank, that Canada's fight against inflation was working far better than that fight in the United States and in many other countries of the world, and therefore by definition this was the place to put your money if you wanted to keep it as safe and as sound as possible in an uncertain world? Hon. members opposite ask why we did not tell all of these people that we were going to let the dollar free, that we were going to let it ride up. Among the many achievements of my colleague, the Minister of Finance, is the following, and this is recognized throughout the financial world today, that never has there been such a change in monetary policy where the poor speculators were beaten to the jump.


Some hon. Members:: Hear, hear.


Eric William Kierans: 
Robert Lorne Stanfield: All the difference in the world.


Eric William Kierans: 
Robert Lorne Stanfield: All the difference in the world.
DEBATES	7647
Unpegging of Canadian Dollar


Eric William Kierans: Here we accomplished it quickly, decisively and effectively.


Some hon. Members:: Hear, hear.


Eric William Kierans: The Tory party has a hangup. That hang-up comes from the fact that the Tories believe a floating rate necessarily has to be a high rate because it was a high rate when they had a floating rate. Mr. Speaker, it was a high rate because they pursued the kind of monetary and fiscal policy from December, 1960, to May, 1962, that created stagnation and heavy unemployment, and so very high interest rates.
A floating rate need not always be a high rate. The Minister of Finance and the Governor of the Bank of Canada showed, on the very same day, their acknowledgement of the fact that when you allow a strong dollar to float upwards the rate may become too uncomfortable for exporters and cause additional unemployment and that, therefore, there should be a change of direction in monetary policy. The bank rate, therefore, came down, as a signal that we knew this, from 7J per cent to 7 per cent-not the tight money policy of the Coyne-Fleming era.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: Mr. Speaker, may I ask the minister a question? Is he announcing now that the policy is going to be easier money in Canada?


Eric William Kierans: I am not announcing. I am just saying what the Minister of Finance has already done, and the Minister of Finance has already indicated on television-the Leader of the Opposition is an avid television watcher of the Minister of Finance-that there may be some changes in fiscal policy.


Robert Lorne Stanfield: "That there may be."


Eric William Kierans: Yes, but shall we tell you so that you will know exactly what industries to invest in, and so that you will have a lead too? Is this all you are interested in-in getting a jump on the speculators in this country?


George Harris Hees: Tell us about unemployment and the high cost of living.


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


George Harris Hees: Get out of the classroom.


Eric William Kierans: Nobody will ever meet you there, George; that's for sure.
7648	COMMONS
Unpegging of Canadian Dollar


George Harris Hees: And when you left the stock exchange nobody wanted to meet you there either.


Edgar John Benson: What about when you left, George?


George Harris Hees: They were all in tears.


Eric William Kierans: There is no country in the world that should work harder for the removal of restrictions to the free flow of goods, services and capital than Canada. Per capita, trade is three times more important to Canadians than it is to our neighbours to the south, and it is relatively very much more important to us than it is to the Germans, the Italians, the French or the British. We are a highly industrialized nation-


Some hon. Members:: Oh, oh.


The Acting Speaker (Mr. Bechard):: Order, please. May we have order in the House. The Minister of Communications has the floor.


Eric William Kierans: Mr. Speaker, we are a highly industrialized nation and our major weakness is that we have not got the large domestic markets that are necessary to sustain the kind of scale that we would aspire to; without access to these large markets we will be unable to take advantage of the new and costly technology in the age of specialization upon which we are entering. We should not, ourselves, recommend or introduce measures, and we are not doing it now, which impede the flow of capital and goods. We should resist, even if we cannot prevent, the introduction of such policies as the tariff protection suggested by the people opposite, by other nations.


George Harris Hees: Stop reading and tell us about the Post Office, Eric.


Eric William Kierans: Canada has pursued an
aggressive trading policy, and it became obvious that our fixed exchange rate policy was not working. We did not throw it away. It became impossible to keep on borrowing for expansion and for growth and at the same time to eat up or absorb the reserves that were flowing into the country. The basic argument for fixed exchange rates, Mr. Speaker, is to protect the Canadian businessman from fluctuations in the value of the dollar.
[DOT] (10:20 p.m.)


An hon. Member:: You are not interested in that.

DEBATES	June 2, 1970


An hon. Member:: If you listen you might learn something.


Eric William Kierans: The theory goes that with a fixed rate the business man can plan. He knows what the cost of imported tools and machinery will be; he can measure precisely the net receipts from his exports. But why should the businessman be protected from risks in making his own decisions? Is it not precisely the function of businessmen and entrepreneurs to take advantage of economic change, to take advantage of fluctuations to control and direct them?
Exporters, importers and investors know how to hedge their positions in forward markets, or they should know, whether it be in the wool markets for the Stanfield mills or tea or coffee markets. They know how to buy forward in these markets. Why can they not be expected to know how to buy forward in exchange markets? Why should the government do it for them and protect them from all the changes going on in the economies of the world?


An hon. Member:: There would be no attack from you.


Eric William Kierans: Exchange rates which should be a productive process under fixed bases, control and order our affairs. Then, we could bring the whole weight of our economic policy to bear on that one problem of maintaining an external equilibrium. This area represents roughly about 2 per cent of our gross national product, whereas what the Minister of Finance now wants is the freedom to work with monetary policy and fiscal policy on the entire 100 per cent of our gross national product and not the 2 per cent.


Robert Lorne Stanfield: Is that a policy?


Eric William Kierans: The floating rate is the prerequisite to an independent monetary fiscal policy. It is not a panacea; nobody suggests that it is. If all wages and all prices in Canada were perfectly flexible and were adjusted to every change in such a way as to achieve full employment, then it would not matter what the rate of exchange was or whether it was fixed or flexible.
But domestic prices and costs and productivity are not flexible. There are impediments to the free and smooth working of markets. This rigidity and this stickiness comes on the pricing side because of the kind of organization that we have of monopolies, oligopolies
June 2, 1970	COMMONS
and so on and on the labour side because of the labour costs and you do not get-


The Acting Speaker (Mr. Bechard):: I understand the hon. Leader of the Opposition wishes to ask a question.


Robert Lorne Stanfield: Is the minister announcing that the government of Canada has decided, as a matter of policy, to adopt a floating exchange?


Eric William Kierans: No, Mr. Speaker. I am trying to explain to people who do not know, what a floating exchange is.


An hon. Member:: Well, sit down.


Eric William Kierans: A floating rate-


An hon. Member:: Why didn't you talk to Benson before?


Eric William Kierans: A floating rate does not provide a licence for a government to pursue any kind of economic policy they wish. Folly and ignorance can destroy even a flexible rate. All we have to do to prove that is look at the Conservative record of 1957 to 1961 when we had our overcapacity, our stagnation and our heavy unemployment with a floating exchange rate. Floating rates will work only if they are really floating and not if they are manipulated the way they were in 1960-62.


An hon. Member:: You look after the floating mail.


Eric William Kierans: I think what happened there, Mr. Speaker, was proof that meddling with the forces of a market when you agree to abide by its rules means that you wind up with kind of beggar-thy-neighbour policies. This was the record of the Tory policy in 1962, of economic warfare which then rebounded on them.
Remember 1962. That is why the Tory party hates floating rates; they did not understand them then and they do not understand them now.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: Mr. Speaker, in rising to take part in this debate, I must say that I am pleased to follow the hon. minister who has just completed his remarks. Never before have we seen a question of such national urgency debated in such a narrow and partisan way. The minister in charge of post offices convinced us that he knew something of finance; he has already convinced us that he knows nothing about handling the
DEBATES	7649
Unpegging of Canadian Dollar Post Office Department. Maybe he could be transferred to be the Parliamentary Assistant to the Minister of Finance and render some assistance in that capacity more beneficial to the nation than in his present capacity as minister in charge of the Post Office.
The minister said a number of things which interested me. In reply to a question put by the Leader of the Opposition he said this: "You wanted to make a profit, too". He was talking about having knowledge of the stock exchange and what shares would go up. He said: "You wanted to make a profit, too." There is an inference there that cabinet or people in a position knew there was a profit to be made and made it. He said: "You wanted to make a profit, too." An inference was left which Hansard will bear out, the inference that the minister-


Eric William Kierans: On a point of order-


The Acting Speaker (Mr. Bechard):: The
hon. Minister of Communications on a point of order.


Eric William Kierans: The point of order, Mr. Speaker, is simply this, that the "too" referred to the hon. Leader of the Opposition's colleague the hon. Member for Prince Edward-Hastings (Mr. Hees) who wanted to make it on the exchange rate.


Gerald William Baldwin: Now, you are accusing him.


Robert Lorne Stanfield: Mr. Speaker, I understood the Minister of Communications was speaking directly to me. If he wants to take a stand about objecting to imputations and motives, he was imputing to me a motive that I wanted to get some information to make a profit. This is improper, but I let it go and I do not think he should be too sensitive himself because he stuck his own neck out.


Eric William Kierans: A point of order, Mr. Speaker. If you make a public reply to a public question like that, a lot of people are going to make money out of it.


An hon. Member:: What is your point of order?


John (Jack) Henry Horner: We can judge his remarks. Naturally, after someone points them out they can be easily corrected.
He talked about the floating rate and a fixed exchange rate. He went back to Tory times. Let me point out to him, through you, Mr. Speaker, that when the Tory government took over in 1957 our dollar was higher than the American dollar; it was worth $1.02 and
June 2, 1970

Unpegging of Canadian Dollar rose to $1.05. At that time we took steps to bring our dollar down and eliminate the floating exchange rate because we felt it was hurting our economy. In order to bring it down, we felt we had to put more money into circulation. This is where Mr. Coyne and Mr. Fleming got into the argument. Mr. Fleming proved to be right and his decision was accepted by every minister of finance of the present government who followed Mr. Fleming, including Mr. Gordon, Mr. Sharp and Mr. Benson. I do not know what Mr. Kierans would do if he were minister of finance but everyone who followed Mr. Fleming said that the devaluation of the Canadian dollar was the right step to take. In fact, our economy got rolling in 1961 on the basis of the devaluation of the Canadian dollar and the fixing of our dollar at 92 cents. You can check any Economic Council report or budget statement made by Mr. Sharp or Mr. Gordon-and even Mr. Benson, for that matter.
But let us go further. When Mr. Rasminsky was appointed Governor of the Bank of Canada he said, "The Governor of the Bank of Canada shall operate in complete harmony with the minister of finance." In other words, we did away with an independent Bank of Canada. With Mr. Rasminsky working in complete harmony with the minister of finance in fixing our monetary policy we had growth in monetary supply from 1963 to 1965. It nearly doubled, and it was a deliberate growth promoted by the minister of finance which brought about inflation.
[DOT] (10:30 p.m.)
Let us just scrape the record clean and take a good look at it. This is what brought about inflation. Inflation is something, to quote from a speech Mr. Rasminsky made to the governors of National banks in Rome, that through a system of creating an enlarged money supply can create a condition of ebullience within the country and a feeling of good times, but once inflation is started it is very hard to control. This government has foolishly attempted to curtail inflation by one quick, sharp slice of the knife. This is an impossibility. This has created high unemployment. Like it or lump it, we have to live with it.
We must remember that in setting the Canadian exchange rate free and having what is called a floating rate, we are dealing with a temporary situation. The Minister of Finance (Mr. Benson) was forced into this action by an influx of foreign money into Canada. Let us analyse this. This influx

resulted basically from the unstable situation in the United States. It is unstable because of the growing unrest there, the Viet Nam position, the Cambodian crisis and the Kent University crisis. It also results from the feeling good, solid United States citizens have that there is something wrong with the American way of life. There is the racial problem and a host of other problems.
The Americans have slowly withdrawn their money from the United States stock market. In looking for another place to invest it, they decided on Canada. This is why we have had an influx of money into Canada. It has not necessarily been registered on the Toronto stock exchange. If we look at the Toronto stock exchange, we see that it has not dropped as far as the New York stock exchange. The reason is that it was bolstered to some extent by an influx of foreign money.
Not necessarily all foreign money enters Canada through the stock market. Foreign money enters Canada because of our high interest rate. We should not be proud of an influx of foreign money into this country when we are paying 12 per cent for first mortgage loans, 11 per cent or 12 per cent for guaranteed bank loans and 10 per cent or 11 per cent for standard bank loans. We should not be proud of the fact that money is entering this country when we are forced to exist with a deliberate high interest rate brought about by this government.
The Minister of Finance has said over television and in the press that this change could have been averted. He said we had one alternative. We could have injected a supply of money into the country which, in essence, would have created a situation where we would not have had to allow the exchange rate to float. There would have been enough money available to absorb the influx of foreign money. This is the step the minister should have taken.
In the city of Montreal, only 8 per cent of the sewage passes through any kind of a treatment plant. The rest goes into the St. Lawrence River. Hundreds of cities throughout Canada are crying for money to enable them to do something about controlling the pollution of our environment. The drawback is money. The Minister of Finance tight-fistedly sat on his money and would not release it. He is now releasing it by allowing a floating exchange.
Who will benefit from this? There have been suggestions in some newspapers. There
June 2, 1970	COMMONS
is a headline in the June 1st issue of the Toronto Star which reads "Weekly grocery bill could be reduced with the rise of the dollar". If one reads the article one will see how much it is going to be reduced. The article states that grocery items such as tea, coffee and citrus fruits might show a noticeable reduction in price. Those are all the groceries the article lists. What percentage of the average grocery bill is tea, coffee and citrus fruits? I would say that it is something less than 5 per cent of the average weekly grocery bill. The article quite logically suggests the freeing of the exchange rate might bring about a reduction in the price of these items. Hon. members are aware how quickly the grocery stores will bring down their prices on tea, coffee and citrus fruits. We will be lucky if they reduce them at all. Only a few people will benefit.
The Minister of Finance admitted on a television program that greater unemployment could result. Can the country really stand greater unemployment? Approximately 6.6 per cent of the labour force is unemployed today. In addition to the 500,000 Canadians who are unemployed, 640,000 university students are searching for work this summer. This represents over a million people unemployed. The country cannot stand greater unemployment. We have had enough. The government should not have taken this step. The government should have created employment. I am not suggesting that they should put money into circulation, as was done between 1963 and 1965. They should have put money into the hands of the municipalities and cities for housing, sewage disposal plants and so on. This would have created employment, and would have created enough money to have taken care of the demand on the Canadian dollar.
Instead of this, the minister decided to take emergency action. He decided to act hastily without giving thought to the repercussions throughout the country. He relied on the Liberal party salesmanship to sell the idea to the consumer that there would be a saving. However, it will not save the consumer one bit. What result will this action have on the employment situation in the industries which are today desperate? What is happening in the automotive industry in Ontario and Quebec? Chrysler Corporation sales are down 20 per cent; Ford sales are down as are General Motors. They have been forced down because of severe competition from abroad. This government has bolstered the Ford com-22375-661
DEBATES	7651
Unpegging of Canadian Dollar pany by approximately $180 million in the last two years. Certainly, these companies can continue if they are bolstered like this. We cannot create more employment by placing these companies in greater jeopardy with regard to the importation of foreign automobiles. The complete list of manufacturers are in the same trouble.
What will this do to the agriculture industry? In analysing the situation, the experts admit that it can hurt the agriculture industry. The price of wheat decreased 6 cents a bushel yesterday. This was purely because of the devaluation of the dollar. Before the dollar finds a rate somewhere close to what it was at 92J cents, 100 million bushels of wheat could have been sold. This represents a $60 million loss to western Canada.
What about the livestock industry? The price of beef cattle yesterday on one of the major markets in Calgary dropped 1J cents a pound. This will represent quite a sizeable loss when we consider that 50,000 head are delivered each week. I am informed that if our dollar comes up to par with the United States dollar, the price will drop 2 cents. This will mean a $1 million a week loss to the Canadian agriculture industry.
The livestock industry in particular is affected because, like many other commodities, livestock is priced according to the American market. It is priced according to the American market regardless of whether we are selling into that market at the time. When our dollar increases in value, we nullify the fact of the 2J per cent tariff and we risk the danger of American cattle coming into Canada. If this is done, the price will decrease even more. It could decrease as much as 4 cents a pound. If our dollar comes up to par with the United States dollar, the price per pound could decrease by 2 cents. This represents a loss of $1 million a week to the agriculture industry. The price has now decreased lj cents per pound which represents a loss of almost $1 million a week to the agriculture industry.
Surely that industry has suffered enough through the actions of the Minister of Consumer and Corporate Affairs (Mr. Basford) over a year ago. It does not need the Minister of Finance to contribute his worldly touches. The whole list of farm products will be affected. I have dealt with only two, wheat and livestock. The Minister of Agriculture (Mr. Olson) has boasted about the sale of hogs into United States markets. What effect will this have on the price of hogs which have
June 2, 1970

Unpegging of Canadian Dollar been held up because of our inability to move hogs into the United States market? They have been held up mainly because of this policy. The price of hogs will decrease the same as the price of livestock. Canadian hog producers will have a loss comparable to that of the livestock industry.
The loss to the producer is not something that can be absorbed by the market, and the same philosophy applies to the chain stores which will not reduce the prices of tea, coffee or citrus fruits. There will be a reverse of that action. The producer will bear the brunt of the drastic cut in his price because whether or not the commodity is sold for export, it is priced according to the American market. There is a corresponding reduction to the increased rate in our dollar exchange. I imagine there will be a similar effect on the fish production of Newfoundland and the mari-times. Eighty per cent of the fish products of the maritimes move into United States markets. They will suffer a severe drop in price. This move will affect industry right across Canada, in particular, western agriculture including wheat, the fishing industry and the automobile industry in central Canada.
[DOT] (10:40 p.m.)
The government could have injected money into the treasuries of the municipalities. Every member of the House is being bombarded with letters asking that one level of government or another should do something about pollution and protect our environment. Yet even such a city as Banff is still pouring raw sewage into the Bow Biver. In Montreal, only 8 per cent of the sewage is treated. Government loans to help in the installation of primary or secondary treatment plants would have done a lot to assist without harming the economy in any way. But no action was taken. What about housing starts? The Minister without Portfolio (Mr. Andras) has admitted that housing starts will be drastically lower than had been predicted-somewhere in the neighbourhood of 180,000.
The government took a negative position. They did not know what to do. Their alternative was to remove the fixed exchange rate. This required no positive thinking and we on this side can only hope that it is a temporary measure, that as soon as the Canadian dollar stabilizes, the rate will again be fixed. This is the only way in which there can be continuity of investment by Canadians in Canada. Incidentally, I did not mention the pulp and paper industry of British Columbia, another

industry which will be directly affected because most of its products are exported and prices will be down. The oil industry will also suffer to a limited extent; its major difficulties are due to the restrictions on exports imposed by the United States government. The same can be said of the coal industry. Every primary industry across Canada will be affected.
The minister made no move to help the many thousands who are looking for work. He had within his grasp the opportunity to do something but his imaginative powers failed him and he could do nothing more than to allow the exchange rate to float, a negative approach and certainly one which in no way assists the development of the economy.
The move will not facilitate the recapture of Canadian industry-


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


Some hon. Members:: Carry on.


An hon. Member:: No.


Mr. Deputy Speaker:: The hon. member for Waterloo.


Max Saltsman: I have followed this debate with considerable interest, Mr. Speaker. I should like my first remarks to be an indication of my support for the position outlined by the leader of our party in favour of the floating exchange rate. It is something we have advocated for a long time. I was somewhat surprised as I listened to the Minister of Communications (Mr. Kierans) making his speech in which he argued that the advantage of the fixed exchange rate was to protect the Canadian businessmen from the effects of fluctuation. However, I felt as though I had seen it all before somewhere, and I had-three years ago, written by the present Minister of Communications. Where has the minister been for the last three years while we have been calling for a floating exchange rate and while the government has been pouring scorn on the idea, saying it would not work?
I also listened with interest to the hon. members on my right. I wonder whether they realize what they are saying when they argue that a lower value should be placed on the Canadian dollar. They are really saying that they are prepared to see Canadians accept a lower standard of living forever. That is what a dollar of lower value means-it is a reflec-
June 2, 1970

tion of a lower standard of living. I do not think that is the impression they wish to leave, but this is what it amounts to. When I listen to hon. members on my right saying there has been an influx of money into Canada I get the impression I am looking at a repeat of an old movie on a late-night show. I can just imagine those who are now on the government side sitting on this side of the House and saying the same things back in 1961 and 1962-saying the same things for the same reason: they were stupid government policies in both cases, high interest rates which encouraged the flow of money into Canada.
We appreciate the fact that the government has finally got around to freeing the exchange rate but I have to point out that hon. gentlemen opposite took this decision in spite of themselves. The government had the good fortune to be saved from its own stupidity by events outside its control. Ministers have constantly argued against the floating exchange rate, and on various occasions they have said: we do not need it; we are doing fine under a fixed rate. Up to now their policies have been partially disastrous. They would have been completely disastrous had they been pursued further. The conditions which were leading to a crisis forced the adoption of a floating exchange rate-I have in mind the tight money policy and the government's determination to fight inflation even though the benefits resulting from that fight are marginal and the effect on the economy extremely serious.
[DOT] (10:50 p.m.)
Following along the argument I have been making about how the government is saved in spite of themselves, I think of their attitude to continentalism. They are great continentalists. They were going to integrate our economy with the United States. This would have been done except for one thing-the United States did not want us. Had the government been able to go further with the Canada-United States auto agreement they would have, but the Americans did not want to go further. Had they been able to integrate our oil industry with the United States in an energy policy, they would have-except that the Americans made the fatal mistake of insulting them by blackmailing them and cutting off entry of our oil into the United States.
We have the present situation of U.S. policies which produce lower interest rates. The United States has relaxed its fight against inflation. Lower interest rates in the U.S. have resulted in an inflow of money into
Unpegging of Canadian Dollar Canada, the repatriation of the funds of Canadians plus an inflow of U.S. money taking advantage of higher interest rates in this country.
In arguing for a floating exchange rate we recognize that it will not be a panacea. A floating exchange rate will not in itself bring about Utopia. We also recognize there are many dangers involved in a floating exchange rate which have to be taken into consideration.


Edgar John Benson: Would the hon. member
permit a question?


Leslie Gordon Benjamin: We would rather have you make a speech.


Edgar John Benson: I will in due course. I am sure the hon. member would not want to mislead the House. Short-term interest rates in Canada are lower than those in the United States, that is, treasury bills and short-term government borrowing. The same is true of medium-term government borrowing. On the long-term side our interest rates are on a par with those of the United States.


Max Saltsman: I think the minister is referring to some of his recent moves, but the situation that we are facing has been developing for a considerable period of time. More than ever this government has to ease up on its restrictive policies. A floating exchange rate will not do us much good if the government continues with the kind of policies it has insisted upon up to the present.
It is getting late and I do not wish to speak too long, but I do think we have to put some suggestions forward for the consideration of the government. One of the first things the government has to do is ease up on its fiscal policy and immediately institute a tax cut for lower income groups in our society in order to increase their purchasing power. The government should also increase old age pensions and pensions of veterans. This has to be done and it would be helpful to the economy.
Unlike my hon. friends to my right, who seem to feel that the people to be compensated for the introduction of a floating exchange rate are the businessmen, that it is necessary to protect their profits, our party suggests that now is the time for the government to encourage expansion of the economy. This can best be done by cutting taxes for lower income groups and increasing old age pensions and veterans allowances at this time.
We welcome the introduction of this move on the part of the government. We realize it
7654	COMMONS
Unpegging of Canadian Dollar has its risks. We are also suggesting there are great new possibilities that should be pursued.


Raymond J. Perrault: ly $42 million in profit after taxes for the economy of British Columbia may be lost, and even more than that amount in corporation taxes may well be lost to the treasury of Canada.
Every cent change in the value of the Canadian dollar vis-a-vis the U.S. dollar means $14 million to the forest industry of my province, to the working people of my province, to those who provide secondary services and to those in the supply industries. The forest industry of my province provides employment for 60,000 workers. The forest industry of my province is being directly affected by this government action. As I say, many thousands of jobs in secondary industries will be affected.
I realize that arguments may be advanced that latest available figures show substantial forest product exports from British Columbia. But I remind the minister that the buoyancy of the first quarter in the forest industry's export figures is due in large measure to catch-up figures which have resulted from the longshore strike of 1969. An abnormal amount of lumber has been shipped from British Columbia and those figures must be included in the first quarter figures. I do not suggest that these figures are typical, nor can we expect them to be.
In placing on record the estimated figures for our largest industry I am aware, of course, that there may be a partially offsetting benefit for those sectors of the industry involved in the purchase of new equipment for new mill capacity. This offsetting benefit has not been touched upon by opposition speakers today. I am aware as well, Mr. Speaker, that other industries involved in the establishment of a new plant will enjoy certain undoubted benefits if they require new imported machinery.
I am aware of the advantages which flow to western Canada and to my province as a result of our dollar being pegged and supported at 92J cents as compared with the United States dollar. Nevertheless, the freeing of our exchange rate will affect our lumber prices which stand at 1964 levels in British Columbia. There has been greatly reduced demand at this time, a time when the cost of living increases and other manifestations of inflation are increasing the profit squeeze. This is a time when literally thousands of our working people are out of jobs through lockouts, strikes or unemployment.
The effect of a 4J per cent change in the value of the Canadian dollar could affect the
Unpegging of Canadian Dollar sale of western resources worth more than $2 billion-resources such as wheat, lumber, oil, gas and minerals. This policy, therefore, has profound importance for the four western provinces of this country. It could mean a loss to western Canada of $900 million annually if we assume, and we must assume, that all exporters are sufficiently good salesmen to obtain the best prices they can. Some of our mineral contracts involve sales in United States dollars for 15 years. If the Canadian companies concerned attempt to recover their losses, they may well lose the business.
I cite these facts in support of the thought that the government should consider the possibility of additional measures which will serve to stimulate the nation's vital export industries, should the effect of the freeing of the dollar have an unduly adverse effect. If I sound partisan on behalf of some of the people I represent in western Canada, I must admit I am. I have a profound interest in the future of that part of Canada.
Those who see nothing but doom, gloom, disaster and worse in the freeing of the Canadian dollar from a fixed rate of exchange fail to understand the imperative need for flexibility in today's Canada and today's world. The rigid, dogmatic economic theories of the past are largely irrelevant. Economists ranging from Galbraith to those of other countries, including the Soviet Union, know that the imperative need today is for change. Modem government must be willing to introduce an economic mix and it must be willing to change that mix as conditions change. Governments unwilling to change in the light of economic necessity do not deserve to govern.
In light of the importance of exports to the well-being of Canada it must be obvious that a variety of compensatory activities and measures can be expected in the weeks and months to come. Let us hope that they will be considered not in a partisan sense but in terms of their value to the Canada that all of us, regardless of party, desire.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, may I take time to say just a few words. I join this debate, not to applaud the recent statement of the Minister of Finance (Mr. Benson) nor even to criticize, but to ask what next will the minister propose. Certainly the decision to free the dollar on the international market and the lifting of the threat of credit curbs are only overtures to further changes soon to be made. Perhaps we can soon expect
7656	COMMONS
Unpegging of Canadian Dollar some new movement toward an expansionist monetary and fiscal policy.
What I criticize is the continual amateurish planning of this government, because certainly our Minister of Finance did not unpeg the Canadian dollar of his own volition. If we are to believe his March budget speech, he did not choose to abandon his plans to impose credit curbs. He was forced into both these actions to save face.
The minister knows full well that the move to set free the dollar is late. He knows the pressure began building up like a boil on the neck as early as December and continued throughout the first quarter of this year. What were the minister's advisers doing during this period when the Canadian dollar was straining at the upper limits of its pegged range? Certainly they were not doing very much advising.
Canada now has more than half a million workers unemployed. The freeing of the dollar will not help that situation in the short-term and may even aggravate it. Here I see the government walking a dangerous tightrope. Canada's export industries have been experiencing furious competition abroad and now Canadian products-I have in mind the primary products of the farm and the kind of products mentioned by the last speaker-will cost more. I am also keeping very much in mind that this policy will cause a delicate balancing act on the already rising unemployment scene.
If our salesmen in world markets are equal to the job, we may come through unharmed. They just might pull it off. But, Mr. Speaker, the minister has not told us everything, and the nation deserves to be told what his next moves will be. The western grain situation could not be worse. Already, before this announcement there was a drop in the price of export barley, wheat and other grains ranging to between 20 and 25 cents per bushel. We learned yesterday that the price of wheat has fallen by 6 cents a bushel. We are told that imports will be cheaper. Foreign tractors can be bought for less. Less what? Surely not money. We do not have that commodity in the west, not even those free-floating dollars. There is only one move the government can make now to prevent complete western ruin, and that is to come up with a short-term subsidy for the grain farmer. By and large the wheat producer has long been able to stand free of the encumbering subsidy, but
tMr. Ritchie.]
DEBATES	June 2, 1970
the government's misreading of the international financial book has now increased the need for some assistance.
[DOT] (11:10 p.m.)
The government can blame speculation for the need to free the dollar, if it wishes, but another fact which the government cannot deny is that it was forced into its move by that document written by and for the central Canadian businessmen on the Toronto-Mon-treal axis, the infamous white paper on taxation. In my opinion the white paper, by saying that only Canadian investment was a good thing, in the short-run repatriated much of our money, which created short-term pressure on the Canadian dollar. The government cannot deny that the white paper on taxation was a major factor in building up the pressure on the Canadian dollar at this time.
All this adds up to one basic truth, that the Minister of Finance and his advisers are incredibly poor forecasters. Now the Canadian dollar is free to seek its natural level. On the pure theory of economics, the currency of any nation should be free to find its real value. But pure theory is not realism and we realize that if the currency of all nations was floating there would be little stability left in the world. While Canadian exporters will find lower returns for their products and the domestic market will experience heavier competition from cheaper imports, I feel that freeing the dollar was unavoidable in the circumstances.
The government action does not even guarantee lower prices to the consumer. We have no assurance that the web of commerce involving the importer, the wholesaler and the retailer will allow the savings to be passed on to the consumer. Here again, there are too many uncertainties. There are too many nations like Canada which tie their economic future to the vacillations of international trade. This is why financial forecasting is such a hit-and-miss affair. I urge the government to consult other international agencies dealing with world liquidity and probe into techniques of allowing for change in the real value of a nation's currency without the constant fear of becoming the pawn of this perilous type of international gangster making his presence felt all too often, namely, the speculator in currency.
I do not think the freeing of the dollar will overprice it on the market for too long. There will perhaps be a brief flurry on the market, but I see it finally levelling at a slightly
June 2, 1970	COMMONS
higher value than it was. It will permit new freedom of action, if the government has any action. Certainly, some expansionary movement is now called for, but there we find ourselves blinded by the curtain of apparent inaction.
The reason the dollar should not go higher is that the government has already taken actions which will prevent large capital inflows. One is the white paper on the mining and oil industries in which reliable forecasts indicate that the oil exploration money coming into the country will be reduced by 50 per cent in the last half of this year. As a result of the white paper, mining too will be hard hit and will probably not attract so much incoming money. So far as our oil sales are concerned, we have had them curbed so we cannot expect a large outflow.
With regard to the wood products of B.C. and other parts of Canada, the housing starts in the U.S. would indicate there cannot be a large export of those products in the immediate future. Then we have the increasingly striking nationalism of some of our cabinet ministers who spoke about electronic barriers at the 49th parallel. All this does not help promote confidence or the freedom of action of money coming into Canada.
What Canada needs now is the introduction of full employment policies to counter the threat of heavy foreign competition. We must have no more talk of the white paper's threats to the primary industries. Our western wheat is becoming more expensive because of this freeing of the dollar, and so more difficult to sell. We need some help in that area. The minister claimed on Sunday that some adjustment will be made to help the farmer. What adjustment, we ask. An announcement of aid for falling grain prices should have been made at the same time. Let the government make the adjustment quickly. It should not falter any further because quick and decisive action is imperative.
This may be the government's last chance in its battle with inflation. If it misreads the economy this time, we may well be in for a disastrous recession. We on this side of the House do not want to see that happen even though another party sits on the treasury benches. Should the economists who have the minister's ear begin to call the play more correctly, I feel there is a chance now to tie down the dangerous inflationary spiral. Then we will all applaud.
DEBATES	7657
Unpegging of Canadian Dollar


Mr. John Burton (Regina East):: Mr. Speaker, tonight we have witnessed the very curious spectacle of a debate that has lasted 3J hours. It concerns a very important development with respect to this country's financial policies and the announcement last Sunday by the Minister of Finance (Mr. Benson). He has had every opportunity to take part in the debate. I understand he still intends to take part in it at some time. It seems to me that even if he did want to, in effect, "case the joint" and find out what the opposition speakers were going to say before he made his reply, surely he would have gained enough idea of the points being made by the opposition to have had something to say in the debate by now. He has been pacing up and down behind the curtains and on both sides of the House like a paper tiger, but we have not heard anything from him up to the present time.
I think it is very important that we hear from the Minister of Finance with respect to some of the very important points which have been raised in this debate. I do not want to enter into some of the arguments that have been put forth tonight about who did what in the past and who did not do what. I am quite content to allow the Liberals and the Conservatives to argue over their past sins of commission and omission. I think it is sufficient at this stage of the debate to point out a few of the factors that have a profound and important influence on the Canadian economy and its development which must now be taken into account.
There has been a pegged exchange rate since 1962. Since that time a number of new developments have taken place in our economy. We have witnessed the influence of the Viet Nam war. This has had a very serious inflationary impact on the U.S. and in Canada as a consequence of our increasing ties with the U.S. economy and the increasing control of our economy by U.S. capital and interests. It has become increasingly difficult to maintain an independent economic policy in Canada in recent years as a result of some of these corporate links. This includes our oil and gas industries and many of the branch plants which are operated in Canada, not necessarily from the viewpoint of the most effective type of Canadian operation that might be carried on but from the viewpoint of the corporate interests of an international or a multinational corporation. This does carry with it certain implications with respect to the rationalization of our industry which is so
June 2, 1970

Unpegging of Canadian Dollar necessary and about which the Minister of Industry, Trade and Commerce (Mr. Pepin) seems to be rather sensitive.
[DOT] (11:20 p.m.)
We also have world monetary problems to consider-problems of liquidity on the world scene. A number of emergency steps have been taken in recent years, including special measures such as the special drawing rights which were approved by Canada within the past two years. Within the framework of the Canadian economy we did have, of course, for a period of time a high level of economic activity. But in recent years, and in particular within the past couple of years, a great deal of slack demand has developed in the economy. This has been evidenced by the increasing level of unemployment, which is now well over 6 per cent. I believe 6.6 per cent is the current figure. In spite of this high level of unemployment, the rate of price increases has been maintained at nearly the same level that we have witnessed over the past several years.
The government has been forced to rely on its monetary and fiscal policies and on certain steps within a very fixed and rigid framework in order to deal with some of the problems that have existed. In the process, many essential government programs have been cut, interest rates have been forced up and a great deal of economic expansion has been curtailed. Many of these rigidities in monetary and fiscal policy were imposed because of the fixed exchange rate structure which the government has gone along with over the past several years.
The government made a number of futile efforts to deal with our economic problems, including the establishment of the Prices and Incomes Commission, hut the sooner it is scrapped the better it will be for the Candi-an economy. So far as I am concerned, the attitude displayed by the Minister of Finance throughout this entire episode has been something like an iceberg, although we could see more than the tip of the iceberg. He has been relying on Bank of Canada advice to be rigid and unfeeling in his approach over the past several months. He and the government have been prepared to accept a higher level of unemployment; they have been prepared to accept higher interest rates and all that that means for the Canadian people.
We need to ask at this stage, what does the Minister of Finance really think of floating exchange rates? Does he really believe in 

them? I ask this question very seriously in view of answers he has given on past occasions when asked about government policies Just last Wednesday, as has been noted already in the debate, he said "No, Mr. Speaker" when asked whether the government was considering any change in policy with regard to the fixed exchange rate. I have before me Hansard for April 29, when my colleague, the hon. member for Waterloo (Mr. Saltsman), asked the same question. The answer was simply, "No, Mr. Speaker." The minister was asked then if Canada might consider going to a floating exchange rate.
Last November 4 the minister appeared before the Finance Committee of this House. At that time I questioned him regarding floating exchange rates and asked whether the government was considering adopting such a rate. He indicated that the government was not going to do this. I quizzed him further about whether the government was considering such a proposal, and I would like to quote from his reply as recorded at page 52 of the Minutes of Proceedings and Evidence of the Finance, Trade and Economic Affairs Committee for that date:
Mr. Chairman, I would simply like to say that we support a study of the record achieved since we have had a relatively fixed exchange rate in the Western world and we support a study of this method. Nevertheless, I think our system of fixed exchange rates varying within limits has worked very well. Really the problems have not been the exchange rates but rather the determination of governments to take the steps necessary in order to support their exchange rates or to devalue or revalue at particular times. These are mainly political problems rather than a problem of the system.
Later I asked the minister if any studies undertaken had reached the conclusion that the fixed exchange policy was working well, and the minister said:
The present policy has worked pretty well. As you will see, our foreign exchange reserves are going quite well.
Of course, they have been going quite well in recent weeks; they have risen to an alltime record level. That is partly what forced the government finally to take some action. Thus I think we have to question seriously the credibility of the Minister of Finance in dealing with the financial affairs of Canadians, he being the chief architect of our economic policies. I suggest we have witnessed inept management of the Canadian economy over the past few years in particular. This has been evidenced by the slowdown in the economy and by the failure of government policies to work.
June 2, 1970

Unpegging of Canadian Dollar
Even though the minister has been convert- government's announcement, and they could ed to the viewpoint of a floating exchange help ease the pressure on price levels. But rate within the past few days-it would seem how can we be sure that these benefits will it was a very sudden conversion-I wonder be passed on to the Canadian people, because how effective this policy will be. As my basically we no longer live in a market leader and as the hon. member for Waterloo economy; we live in an economy of adminis-have indicated, our party supports the princi- tered prices. Yesterday I asked the Minister pie of a floating exchange rate. But what is of Consumer and Corporate Affairs (Mr. Bas-the government going to do now? By itself ford) what steps he was going to take to this step will not deal with many of our ensure that the benefit of lower priced economic problems. There is a saying that imports was passed on the Canadian people, you cannot teach an old dog new tricks. The and of course I got a nil answer from him. He other day, Monday, the minister seemed to be ducked the question completely, rather hint when I suggested that he consider What sort of investment policy for Canada resigning his post as a result of his record, as a whole is the government going to We have witnessed the record of the Minister introduce now? Are we going to have an of Finance with respect to the management of incomes policy? Mr. Speaker, I suggest that is the economy. His budget of March 12 is now the only way in the long run to deal with the a shambles. First of all he suggested a stand- economic problems that the government is pat budget. That is now changed. He also now grappling with, and which it has grap-suggested consumer credit controls. These pled with over the last couple of years in have been scrapped. He also provided the such a futile manner. To make the new policy money necessary for Operation Lift, which effective, I suggest it must be developed has been a failure in western Canada. What is within the framework of an incomes policy, he doing now in terms of follow-up policy to 0f an investments and capital policy and a make the step he has taken effective so that it policy which will deal with the problems of will benefit the people of Canada? How can those who have been hurt by inflation. Canadians or anyone else, have confidence in jj. was noted by the minister on Sunday, him in the future?	and by some of the speakers in this debate,
My principal concern at this moment is that countervailing measures are required with the policies that will be adopted as a with respect to the new policy of a floating follow-up of Sunday's announcement by the exchange rate. Of course, reference has minister. While the freeing of the exchange already been made in the debate to the prob-rate does deal with many of our problems of lem faced by export industries as a result of external balance, it does not deal with the this new policy and these have to be taken problems of internal balance. Clearly there is into account. The Minister of Industry, Trade a good deal of internal imbalance at the pre- and Commerce made an astounding speech sent time. The fact is that the step taken by when he contributed to this debate, the minister, belated as it is, does present the government with opportunities to concentrate [DOT] <11:30 P-m.)
on our domestic, economic needs.	He was very critical of my statement and
The central problem before us at the pre- referred to one of my comments with respect sent time is the how to deal with the slack in to the statement of the Minister of Finance on our economy and the unemployment situa- motions yesterday. He quoted my statement tion. What is the minister going to do to which was that the government should be stimulate the economy and to create more prepared to take the necessary steps to counjobs for Canadians? What steps is he going to teract any unfavourable effects of its new take to help regionally depressed areas, the policy on Canada's export industries. The Atlantic provinces, and to reduce high unem- minister suggested that I was implying a ployment levels in Quebec? What is he going weakness generally in Canada's export pic-to do to help my own province of Saskatche- ture. He quoted figures and a number of wan which is in a very seriously depressed examples, particularly with respect to the condition at the present time? A further ques- export of minerals and some of our raw tion, of course, is: Is the government going to materials, and of course there is no denying maintain its new policy, or is it only a very the minister's statement. Everyone who has temporary expedient?	given the subject any study knows that there
Theoretically, cheaper imports will help the has been a high level of exports over the past Canadian economy, as was suggested in the few months. But the Minister ignored my
June 2, 1970
Unpegging of Canadian Dollar basic point that there are some export industries which can, and in fact will, be hurt by this announcement and that steps should be taken to counteract such unfavourable effects.
Reference has been made to the lumber industry, and steps should be taken very quickly to offset any unfavourable impact on that industry by stepping up the housing program in Canada. The fisheries industry also faces problems, and questions have been asked about that in this House in the past two days. The minister did not know what the situation was. He had no idea what to suggest in answer to questions posed by members from the Maritime and Atlantic provinces.
With reference to the grain situation the Minister of Industry, Trade and Commerce tried to camouflage the picture by quoting trade figures in terms of total dollar sales over the past several months. The figures did not sound too bad in terms of the total, but the minister made no reference to the change which had taken place in wheat prices within the past 48 hours, no mention at all of the 6 cent drop in the wheat price. Why did he not choose to mention it? I find it very interesting to take note of the answer given by the Minister of Finance yesterday to a question posed by the hon. member for Saskatoon-Biggar (Mr. Gleave) who asked what the government was going to do to offset any unfavourable effects on western farmers and the agricultural industry in particular. The Minister of Finance looked very puzzled when he got up to reply. First of all he said, "I will have to take this matter up with my colleague who reports for the Wheat Board"; then, he said, "What this means is that Canadians will get more for their products that are sold abroad, including wheat."


Edgar John Benson: Mr. Speaker, a question of privilege. I should point out to my hon. friends that two words were left out of that answer. I pointed them out to the hon. member for Saskatoon-Biggar this morning and indicated to him that I was going to inform the Speaker. "More foreign exchange" should have been in there-"More foreign currency".


John Stratford Burton: I thank the minister for that correction, Mr. Speaker. I was not aware of it.
I am not quite sure how that changes the basic point I was making because it was quite clear that the minister really did not understand what the effect of this particular change in policy was going to be on wheat sales and wheat exports. The fact is that they will be


adversely affected. I suggest that the government has an obligation to take this into account and to adopt offsetting measures. The question arises, what should be done? It should be pointed out that the basic problem is the market situation. It must be noted that the Wheat Board responded immediately to the situation. I am in no position to judge whether their action was the correct one but in their view, as experts in the field, they considered that they had to respond to the new situation by dropping wheat prices by 6 cents per bushel immediately.
This reflects the fact that we do have a buyer's market in the world wheat market at the present time. It is not simply a case of whether we are on a floating exchange rate or fixed exchange rate that makes the difference. When we had a favourable wheat marketing situation in the early sixties we were on a floating exchange rate. When the move was made to fix the exchange rate in 1962, this boosted the price of wheat to Canadian farmers by a number of cents per bushel. But the basic situation was already there, a favourable marketing situation. We have the buyers' market to contend with at the present time and the Wheat Board had no choice, it would seem, but to go along with the changed conditions.
I should like to suggest seriously to the Minister of Finance tonight that there is one way the situation could be dealt with whereby the western farmer would not be penalized as a result of this and many other things that have happened over the past number of months. I suggest that as a result of the International Grains Agreement, which was sign by Canada, the government has an implicit obligation to the farmers of western Canada to ensure that for the lifetime of that agreement they will stand behind the minimum level of prices stipulated therein. If the government took the step of supporting grain prices at the minimum levels provided in the International Grains Agreement, it would be possible to deal with the situation effectively and it would be a great help to the western Canadian economy.


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


Some hon. Members:: Carry on.


Some hon. Members:: No.


The Acting Speaker (Mr. Bechard):: Does the House give unanimous consent to the hon. member to continue with his remarks?
June 2. 1970	COMMONS


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: They wouldn't let him.


An hon. Member:: Carry on, Ben; go ahead.


Edgar John Benson: Mr. Speaker, this evening we have heard a lot of words and one or two ideas. It has rather astounded me that the Leader of the Opposition (Mr. Stanfield) is now assailing the government in its fight against inflation. I should think that this man who a few months ago was saying each day, "What are you doing to fight inflation" should at least indicate some sympathy for the government's problems in dealing with this very important matter. This is the same Leader of the Opposition who was against the Prices and Incomes Commission. It seems to me that he often cried "Wolf" with no constructive ideas whatever to offer to the government. Tonight he has done the same thing. How would he fight inflation? Is he in favour of price and wage controls? Is he in favour of guidelines? Can the man who said he was against the Prices and Incomes Commission be in favour of guidelines?
It rather seems to me that the constructive ideas that have come out of the Conservative Party tonight have come from a very strange source-from the hon. member for Prince Edward-Hastings (Mr. Hees). He presented two ideas and said that what we really should do to offset the change in value of the Canadian dollar is take the $250 million and give it to business and, in addition, we should subsidize business a little more. This is at a time when just a few days ago people in his party and all parts of the opposition were saying, "What are you going to do about the poor, the people who are suffering from inflation?"
Sometimes it seems to me that the Leader of the Opposition is like a deuterium plant that produces nothing. He appears to try to be a great fighter of unemployment, but I would ask people to indicate to me what constructive suggestions he has made on how to fight unemployment. He wants the government to announce changes in the exchange rates in the House of Commons on orders of the day so that speculators can make a million dollars, which is astounding to me-


Robert Lorne Stanfield: Who said that?
DEBATES	7661
Unpegging of Canadian Dollar


Edgar John Benson: In your speech; I am sorry if
you were misinterpreted.


Robert Lorne Stanfield: You certainly did.


Edgar John Benson: You certainly indicated I was not entitled to change the existing rate because I did not say on orders of the day that the government has decided-


Robert Lorne Stanfield: What I said was that in response to a question on Wednesday the Minister said the government was not considering this matter.


Edgar John Benson: That is quite true.


Robert Lorne Stanfield: That is right; that is what I said.


Edgar John Benson: That is right. I said the government was not considering it; I did not say that I was not considering it. I said the government was not considering it. The government considers things when they are presented to the cabinet. That is the time that the government makes decisions. The Leader of the Opposition is saying that he wants a game plan for the financial and economic position of Canada produced in the House of Commons on orders of the day. It is impossible to do that.
[DOT] (11:40 p.m.)
I am not ashamed of the government being flexible in its fiscal and monetary policy, in its fight against inflation. Other countries have tried the game plan. They found that it does not work. I do not have to give much more lead than that for my hon. friend to know that people who have tried the game plan have been far less successful than we in Canada.
I wish to quote some comments that appeared in the New York Times with regard to Canada's move with respect to the exchange rate. I believe that this paper is now on the streets of New York. I quote from an editorial:
-Canada's move should have important educational value for other countries with undervalued currencies-In fact, a more flexible exchange rate system adopted by all nations could prevent the growing wave of protectionism from wrecking the international market for goods and capital which took so long to rebuild after the depression and world war two.
The world's finance ministers and central bankers, a notoriously conservative group,-
The word conservative is with a small "c".
-would be extremely ill-advised to try to persuade the Canadians to abort an experiment with
June 2, 1970

Unpegging of Canadian Dollar so much educational value to other nations in terms of both domestic and international economic policy.
I think it is now apparent to Canadians why the government acted to release the Canadian dollar from its previous trading margin, to let it seek and settle at a higher level. This move has been strongly and broadly supported in international comment, editorial comment and by leading economists. Many businessmen who may not stand to gain in the short run have accepted the action as necessary and wise.
The fact is that our dollar has been undervalued for some months and the trend to greater strength has been shaped by impressive forces. We have accumulated a dollar surplus in our trading and financial relationships with other countries. This indicates a confidence in Canada. Contrary to what some speakers have said, funds have not been flowing into Canada because we have higher interest rates. If one checks the short-term money rate, the treasury bills of the United States, it is higher than in Canada. The medium-term bond rate is higher than in Canada. On long-terms we are about equivalent. It was not a speculative influence of capital into Canada.
The plain fact is that in recent years Canadians have invested a great deal of short-term money abroad. Some of this money has been coming back into Canada. In addition, foreign borrowing by our municipalities and provinces has been carrying on at a high level. Canadian investors have been continuing to show their confidence in Canada by buying these securities and investing in this country. This is contrary to what the opposition has been saying for several months. I pointed out to the opposition that they were wrong when they said that all the money was moving out of Canada because of the white paper. In fact, money has been entering Canada very rapidly because of the confidence of Canadians and foreigners in the future of the Canadian economy.


Some hon. Members:: Hear, hear.


Edgar John Benson: This has resulted in a very substantial flow of dollars into Canada, especially in the month of May. We were concerned that we were on the brink of a major speculative inflow that would have been disruptive both to the international payment system and to the financial and economic conditions of this country. I wish to point out to

hon. members that, in answer to questions in the House and outside the House, I have continuously pointed out since the beginning of the year the increasing strength of the Canadian dollar and the inflow and advantage to our reserves in Canada.
This is not something that grew upon us over the course of a few days. We did not react to an emergency. We thought and talked about it for many months. I am very sorry that members of the opposition do not bother to read what is published about our foreign exchange reserves, even in the newspapers, to show what is happening to the Canadian dollar. Without the action taken Sunday in withdrawing our control of the dollar in the exchange market, we might have had to absorb an inundation of foreign currency, buying it with Canadian dollars. What happens when foreign currency comes into Canada in excess of the requirements of Canadians for investing abroad is that the federal government has to buy it. It must have the cash to buy it. It has to raise cash on the Canadian market. I can think of more useful reasons for raising cash on the Canadian market than to buy U.S. exchange and put it in exchange reserves.
It would have been an enormous financing operation. We would have had to inflate the money supply and crowded other Canadian borrowers out of the market to provide ourselves with the Canadian dollars for massive purchases in the exchange market. We would have, in effect-


An hon. Member:: An emergency.


Edgar John Benson: It is not an emergency. It has been happening for several months. I just pointed out that our foreign exchange reserves have been increasing every month by $100 million to $200 million. We have been using the cash balance. We had to buy it.
In the end, our only achievement if we had continued would have been to hand large windfall profits to speculators, profits which would have been paid by the Canadian taxpayers. This has happened in a great many other countries.


Robert Lorne Stanfield: We heard all that on Sunday. It is getting late.


Edgar John Benson: I am very pleased and
honoured that you stayed to listen to me tonight. I hope you give me the courtesy I gave you.


Mr. Speaker:: Order, please. The minister should address the Chair.
June 2, 1970	COMMONS


An hon. Member:: Where is the Prime Minister (Mr. Trudeau)?


Edgar John Benson: Where is your leader? Members of the official opposition may have noted today, with less satisfaction than I, the following editorial comment by the Globe and Mail, not a notoriously Liberal newspaper.
Mr. Benson did the correct thing and did it correctly. He notified the IMF, in advance, of what he intended to do. He did it unexpectedly (surely one of the few times when such a manoeuvre has been successful and surely not the sort of useful skill for which the Opposition should be blaming him).
In fact, Mr. Speaker, we can point to events themselves confirming the correctness of the government's course of action. There has been some appreciation of the Canadian dollar in the exchange market. The market is now settling down well to the new situation. The closing quotation today for the Canadian dollar in terms of Canadian funds was 96|, an effective appreciation since the close of business last Friday of a little over three points.
It is surely strange that members of the Conservative opposition should try to portray the strong position of the Canadian dollar as an indication of weakness on the part of the Canadian government. The very obvious fact is that the strength of our currency reflects confidence in the Canadian economy on the part of investors and the strong position of our export trade.


Some hon. Members:: Hear, hear.
[DOT] (11:50 p.m.)


Edgar John Benson: The growing competitiveness of Canadian goods in the markets of the world only serves to underline the importance to the economy of continuing our efforts to prevent prices from increasing less rapidly than those of other countries. Had we failed to act decisively to curb the inflationary spiral of costs and prices, we could expect that our exports would be considerably less competitive than they are today.
While the Conservative spokesmen have voiced grossly exaggerated fears about the possible adverse consequences appreciation of the value of the Canadian dollar could have on certain Canadian exports, they have made little or no reference to the benefits which would flow to Canadian consumers from a reduction in the prices of imported goods. This illustrates the concern of hon. gentlemen opposite with big business-and to hell with the little man, the consumer.
DEBATES	7663
Unpegging of Canadian Dollar


Mr. Bell:: What about the unemployed?


Edgar John Benson: It is estimated that out of a total of $14.2 billion worth of imports into Canada last year, some $5 billion were purchased by Canadian consumers. This indicates that Canadian consumers may expect lower costs on some $5 billion worth of goods to the extent that appreciation of the exchange rate of the Canadian dollar leads to a reduction of the price of imports from abroad.
The motion before the House suggests that the government should have had a fully prepared program for the adjustment of its economic and financial policies available for immediate announcement. I suggest, Mr. Speaker, that this is quite unrealistic. We had no way of knowing with any precision the extent of the appreciation which would take place. This was one important reason why it was not wise to establish a new par value for the dollar under the circumstances. It is surely reasonable to determine the extent of offsetting expansionary measures only when we know what must be offset. Certain measures could be decided immediately, and I refer to the further reduction of the bank rate to 7 per cent from 7J per cent, and the decision to withdraw the budget measures for the control of consumer credit.
Any further measures can be considered carefully as the need is indicated by developments in the economy. Any adverse effects which may result from a more valuable dollar will not occur overnight. There is no need for panicky or ill-considered action. Clearly, the business community has recognized that the reasoning behind this action is sound. It has been almost unanimously acclaimed among economists. We have already seen evidence of support from provincial governments.
May I quote the opinion of the Canadian Importers Association on the government's decision?


Some hon. Members:: Oh, oh.


George Harris Hees: What about the Canadian
Exporters Association?


Edgar John Benson: As I have said, you are much more interested in big business than in the little man and his ability to buy goods.


George Harris Hees: I am interested in jobs, and you know it.


Edgar John Benson: You did not propose help for the little man, you proposed help to business. The Importers Association stated that the
7664	COMMONS DEBATES	June 2. 1970
Unpegging of Canadian Dollar decision will provide effective and perhaps decisive support to Canada's tight against further inflation. Mr. James M. McAvity, president of the Canadian Importers Association, has stated that the government must be responsive to situations as they develop in the economy as a result of the move to a higher value for the dollar. He has accepted the fact that there are valid reasons for the move.
1 would like to quote the opinion of an outspoken and respected economist, Dr. Grant Reuber of the University of Western Ontario. He says the dollar action is-
-the most effective thing the Government has done so far to reduce the rate of inflation. I favor it very much.
Ontario provincial and municipal officials have noted an important effect of an appreciated dollar-that it makes it easier for provinces and municipalities which have borrowed abroad in the past to repay their debts. It will cost fewer Canadian dollars to meet these obligations.
Saskatchewan Premier Ross Thatcher was quoted as saying that if the move was part of a trend toward lower interest rates, the province "would benefit tremendously and we would be elated about that part of it".


George Harris Hees: May we now have the statement by the Canadian Exporters Association?


Mr. Speaker:: Order, please. I have to remind the hon. member that he does not have the floor. The minister has the floor and should be given an opportunity to make his speech.


Some hon. Members:: Hear, hear.


Edgar John Benson: I should like to mention that the hon. member had ample opportunity to speak while I sat quietly here and listened to his observations.
Dr. E. P. Neufeld, Professor of Economics at the University of Toronto, suggested the government's action may lead to a "happy half-way house" between the extremes of fixed and free-floating exchange rates. Dr. James Gillies, Dean of York University's School of Business, described the government's action as "a very good idea." Donald MacDonald, President of the Canadian Labour Congress observed that unemployment need not rise as a result of the unpegging of the dollar. He said the freeing of the dollar would give Canada "some degree of independence from American inflationary pressures." Mr. Carl Nickle, a very prominent

figure in the Canadian petroleum industry, has been quoted as saying that Canadian crude oil has a sufficient cost advantage over United States crude to more than offset a higher exchange rate. His view is that the impact on petroleum producers will be small.
Obviously businessmen who have got used to a fixed rate for the dollar will find conducting trade is more complicated with a floating rate. Obviously, exporters would like to have an undervalued dollar just as importers would like to have an overvalued dollar. Of course exporters who are selling in a high-ly-competitive world will have to sharpen their pencils, but it is clear that over a wide range of products, Canadian producers have become more competitive in the past few years.
We all know that our exporters had real difficulties when the Canadian dollar was overvalued, but they have now had a long period of stability and of consolidation, in which they have been able to stake out their position in export markets. But I am quite sure we will get lots of complaints from exporters or from Canadian producers facing more import competition.
I am told that the first telegram my department received was from a firm in an industry which has 90 per cent of the Canadian market and is now at last getting into export business. They already have substantial tariff protection-of the order of 12J per cent or 15 per cent-which is high for an industrial product. I doubt whether on the face of it, this is the sort of complaint we should take seriously. But we are, of course, prepared to look carefully at a factual presentation on behalf of some firm or industry which finds itself in real difficulty because of the upward movement of the dollar, but I don't think that a request for some special help should be given much attention unless a persuasive factual case can be set out.


Mr. Speaker:: Order. I have to interrupt the minister, since his time has expired.


Some hon. Members:: Carry on.


Mr. Speaker:: The minister may continue with the unanimous consent of the House. Does he have that consent?


Some hon. Members:: Agreed.


Edgar John Benson: As the Minister of Industry, Trade and Commerce (Mr. Pepin) has pointed out, we now have in place a wide range of services and programs and types of assist-
June 2, 1970

Unpegging of Canadian Dollar
ance both to exporters and to producers for the domestic market. This will enable us to intervene on a selective basis in a manner and on a scale that was not possible before when there were changes in the exchange rate which like all such changes help some and adversely affect others.
We must not forget that our exporters depend to a significant degree on imported machinery and imported materials and components. To the extent that these goods are cheaper to export, industries will find they are assisted to maintain their competitive edge. This is true even in the textile industry, which we all accept has been particularly hard pressed by international competition. I note that the Vice-President of the Dominion Textile Company has stated that their substantial imports of raw cotton would now cost them less, as would their imported machinery.
strength in the Canadian economy. I think all of us on both sides of the House should be proud of that.


Eldon Mattison Woolliams: Are you proud of 8 per cent unemployment?


Edgar John Benson: I have stated that offsetting measures have to be considered in the present situation in Canada and that the government will consider them. I do not think the government should move hastily in this regard. I believe that in regard to future fiscal and monetary policy our approach should be carefully thought out, and in due course and at the appropriate time I will announce it to this House.


Mr. Speaker:: Is the hon. member for Regina East rising for the purpose of asking a question?
As for textiles and garments, the nature of competition in this area is such that minor adjustments of the exchange rates are of very little consequence in terms of the competitive position of Canadian producers. The difference between Canadian prices and the landed cost of certain of these offshore products is very substantial indeed, and is not made significantly different by an adjustment of the Canadian dollar of a few percentage points. That is why it has been necessary to supplement the traditional tariff apparatus with negotiated quantitative restraint arrangements. Of course, the change in the value of the dollar will create some additional pressure and we will be keeping this special range of import problem under the most careful scrutiny. As evidence of this, my colleague the Minister of Industry, Trade and Commerce announced earlier today the application of an import surtax on shirts that are being brought into Canada outside the scope of restraint arrangements with exporting countries. When particular industries that have faced an unusual measure of import competition get into difficulties, the government stands ready to exercise the powers it has available; but I should emphasize only when there is a real need for it and the facts are put before us, as they were in the case of shirts.


John Stratford Burton: Yes, Mr. Speaker. In view of the willingness of the Minister of Finance to consider special cases or problems facing firms or industries, does he consider the fact that the Canadian Wheat Board had to drop its price by 6 cents a bushel within the past day, as well as the other problems faced by the industry generally, represents one example of a case that should be examined?


Edgar John Benson: Yes, Mr. Speaker.
Mr. Donald Maclnnis (Cape Breton-East
Richmond): Mr. Speaker, I heard someone request me to keep my remarks non-political, and I will do so to the same extent the hon. member for Burnaby-Seymour (Mr. Perrault) did. While I am at it, I will ask the minister why he did not take the opportunity to answer the complaints put forward by one of his own backbenchers, complaints that were also put forward by opposition members.
My purpose in rising is to take strong exception to the misconception and misinterpretation the Minister of Finance (Mr. Benson) placed on the remarks of the hon. member for Prince Edward-Hastings (Mr. Hees). He left with the House the inference that the hon. member had risen this evening to make an appeal on behalf of business, and he did not take it further than that.
[DOT] (12 midnight)
In conclusion, I should like to say that I believe, and I think most economists outside of the government believe, that the action taken by the Canadian government was timely and proper in the circumstances. It is far from a sign of weakness; it is a sign of


Edgar John Benson: Is that what you said, George?


Winona Grace MacInnis: Only a few minutes ago I heard the minister talk about how quietly he had listened to representations, but without even hearing what I said he has started to interject, something he does continually yet

Unpegging of Canadian Dollar claims otherwise. The misinterpretation placed by the minister on the remarks of the hon. member for Prince Edward-Hastings was this. He quoted part of what the hon. member said and completely misrepresented the position taken by the hon. member, who referred to the help that should be given Canadian business in order to provide employment. The minister deliberately left this point out of his remarks. He deliberately removed that very important clause "in order to provide employment" from the remarks of the hon. member.
I also take strong exception to the snide remarks he made with reference to Deuterium. Apparently he is not aware of the circumstances that brought about the development of the heavy water plant at Glace Bay. Members on the government side attempt to make snide innuendoes without knowing the history behind the program. I remind the minister once more, and for the last time, that when that industry was announced for Glace Bay, my home town, the announcement was made by the Minister of Industry of the day who is now the President of the Treasury Board (Mr. Drury) and by the Minister of Labour, who now is Minister of Manpower and Immigration (Mr. MacEachen). It was the Liberal government that took full credit and responsibility for the establishment of the plant.
Now, we hear talk that it is going bankrupt. A crown corporation was set up to look after this venture, under the chairmanship of one who is fouling up things around the city of Ottawa. Mr. Fullerton messed things up in Cape Breton. I defy anyone on the Liberal side of the House to show that anything that Mr. Fullerton did in Cape Breton was worthwhile. I submit that the money spent went down the drain. We were told that this money was spent to look after the unemployment in Cape Breton. The money we are talking about is not new money, and the Minister of Regional Economic Expansion (Mr. Mar-chand) knows nothing about it. The dollars that were spent in Cape Breton did not achieve their purpose. Everyone of those dollars went down the drain, under the guidance of Mr. Fullerton, the man who now is an embarrassment to all Ottawa members. As one of them said, he is only getting away with what he is now doing because the minister responsible does not have the guts to say anything to him. Now, the minister is making snide remarks about Deuterium of Canada without knowing the background.
We heard the minister-

DEBATES	June 2, 1970


An hon. Member:: Who, the Minister of Communications?


Winona Grace MacInnis: No, I was not referring to the Minister of Communications. He does not say anything worth listening to. We heard the Minister of Industry, Trade and Commerce (Mr. Pepin) make snide remarks about the opposition. He made snide remarks that were aimed at the Leader of the Opposition, but he did not know the facts.


Edgar John Benson: Mr. Speaker, I rise on a question of privilege. The hon. member thinks I made snide remarks to the Leader of the Opposition. They were not intended to be snide remarks. They were intended to be direct remarks, of the sort he makes about me.


Winona Grace MacInnis: Well, they say the minister never interjects. Instead, he rises on questions of privilege. I said that the snide remarks were made by the Minister of Industry, Trade and Commerce. Clearly, you do not listen. You have been sitting here all evening and wasting your time, because you are not listening-


Mr. Deputy Speaker:: Order, please. I invite the hon. member to direct his remarks to the Chair.


Winona Grace MacInnis: Mr. Speaker, I should like to do that if I could be assured that the Chair will relay the information to the minister. Perhaps all hon. members of the House are wasting their time. When I rose, I was fully prepared to defend the Minister of Finance-


Some hon. Members:: Oh, oh.


Winona Grace MacInnis: -to a certain degree,
because he needs a defence. I was prepared to say that perhaps the opposition is wrong in pointing at the Minister of Finance when there is talk of the White Paper and in pointing to him when there is talk of floating the dollar. I am sure all members of the opposition will agree, as would quite a number on the government side if they had the guts to say so, that it is not the Minister of Finance who is to blame in these matters, it is the Prime Minister.


Some hon. Members:: Hear, hear.
[DOT] (12:10 a.m.)


Winona Grace MacInnis: That is quite evident. On Wednesday the government was not considering floating the Canadian dollar, and then suddenly we heard that the Canadian dollar
June 2, 1970

was to be floated. It is quite evident that the Prime Minister must have picked up the idea from one of the countries in the far east which he visited during his tour.
He imposed it on the Minister of Finance (Mr. Benson) in the same way as he did the white paper on taxation. It is freely reported around here and it is on everybody's lips that when the Minister of Finance discussed the white paper with the Prime Minister (Mr. Trudeau) and used the phrase "our white paper," the Prime Minister asked, "Whose white paper, Ben?" In other words, they are saddled with it. He is dictating to every member of this government, and every minister has to take the brunt of any criticism made of his department.
It was shameful this evening to watch the Minister of Communications (Mr. Kierans) stand up in this House and try to defend the Minister of Finance. I say it is shameful because not one member of the government tried to defend him. Granted, his position has been indefensible all along, but one would think they would have gone through the motions. It must have brought shame to the Minister of Finance to realize that a man whom none of his cabinet colleagues have supported rose this evening to try to support him.
The minister had much to say. He said that efforts will be made to assist those industries that are adversely affected. I wonder what effort has already been made to assist the lumber industry in the Maritimes, which has already lost thousands of dollars. The hon. member for Bumaby-Seymour (Mr. Perrault) has placed clearly on the record what this means to the fishing, lumber and mining industries of B.C. Everyone will agree that British Columbia is one of our greatest exporting provinces.
We have our problems in the east, too. The minister said that an effort should be made to help the Maritimes also. While the minister was quoting he left out some quotes from newspapers. He failed to quote an article which said that A. G. Rumbold, chairman of the Maritime Lumber Bureau, said that the Maritimes lumber industry is seriously threatened by large-scale lay-offs and eventual bankruptcy because of the move. He said the industry is already drained by lack of domestic construction and building projects as a result of the government's anti-inflationary efforts. He said that Maritimes exporters have overnight lost several hundred thousand dollars through contracts already shipped and

Unpegging of Canadian Dollar not paid for and contracts concluded but not yet shipped. I ask the minister, in his quest for more immediate action, what has he done in respect of this loss of hundreds of thousands of dollars to the Maritimes lumber industry?
When he was on his feet he had something to say about what opposition members said about the floating of the Canadian dollar, but he completely ignored the remarks of his own backbencher. It is unfortunate that the hon. member for Burnaby-Seymour has been continually ignored in this respect. I understand he has no other forum, because if he gives notice that he will bring this matter up for two minutes at his next caucus meeting, the caucus chairman will probably rule it out because it will be an annoyance to the Minister of Finance.
The minister and his government feel that they are doing a great thing. It is unfortunate that the Minister of Regional Economic Expansion (Mr. Marchand) cannot be here to support the move. I say "support" because I have correspondence in which he supports some of the things I have said about the development corporation which was recently established. Our only hope lies in the fact that they appointed a new chairman.
I have been more or less quiet on this matter because I think the new chairman will cure all the ills and mistakes that Mr. Fullerton left behind. It is unfortunate that the city of Ottawa is now saddled with this man. However, I would remind the minister, who thinks he is dealing fairly with the unemployed of this country, to look at the situation in Cape Breton. Since this Crown corporation took over, another 1,200 men have been taken off the payroll. All that this Crown corporation has accomplished in this area so far is to remove several million dollars from the economy of the town affected.
This government cares nothing for the unemployed. The fact that they have adopted a policy created to increase unemployment in this country, and have now come forward with this measure which will further increase unemployment confirms this opinion. The minister quoted Donald MacDonald, chairman of the Canadian Labour Congress, to the effect that unemployment need not rise as a result of the unpegging of the dollar. That is not a statement which the Minister of Finance can take pride in quoting in this House. Mr. MacDonald, President of the Canadian Labour Congress, did not in any
7668	COMMONS
Unpegging of Canadian Dollar way, shape or form support the pegging of the dollar. He said it need not have been pegged. It would appear from the views we get from people all over the country who have been following this situation that it cannot help but increase unemployment.
As I have said, the minister has been wasting his time all evening because he has not been listening to any of the representations that have been made. Again I say that on occasion the remarks he has made in this House have been so far removed from the fact as to be ridiculous. I said that I hoped to defend the minister, and that this was not all his responsibility. The responsibility lies with the Prime Minister who is continually dictating to a group of cabinet ministers who do not have the intestinal fortitude to stand up and resist policies which they know are detrimental to the Canadian economy. The
DEBATES	June 2, 1970
minister shakes his head, but it is not a very emphatic shake. We are fully aware of the fact that this policy, adopted since last Wednesday, could not have come from anyone but the Prime Minister on his return to Canada.


Mr. Deputy Speaker:: Pursuant to section 13 of Standing Order 26, I am satisfied that the debate has been concluded and I therefore declare the motion carried. This House stands adjourned until two o'clock p.m. tomorrow, pursuant to Standing Order 2(1).


Stanley Howard Knowles: Tomorrow?


Mr. Deputy Speaker:: Later this day.
At 12.17 a.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, June 3, 1970