1970-12-08

PRIVILEGE


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I rise on the question of privilege. The other day, in response to a question from the hon. member for Winnipeg North Centre (Mr. Knowles), I indicated that, to the best of my knowledge at that time, provision made in the main estimates for the Prices and Incomes Commission would be adequate to meet their needs during the current year and consequently no provision was made in the supplementary estimates which I tabled for a change in this provision. As a consequence of the negotiations at the recent conference which the chairman of the Prices and Incomes Commission had with representatives of business in Canada, the future course of action of the commission is now rather clearer. I have now learned that a proposal will be made for supplementary estimates, in addition to the provision made of approximately $1 million in the main estimates, for the balance of the fiscal year.


Mr. Stanley Knowles (Winnipeg Norih Cenire):: Mr. Speaker, may I ask a supplementary question. In view of the statement that the minister just made, can he say whether any money is now being drawn from the contingency fund to cover the commission's expenses?


Charles Mills (Bud) Drury: It will be drawn from the contingency fund, Mr. Speaker, prior to the tabling of further supplementary estimates in the House.



ROUTINE PROCEEDINGS


[Stage Direction]
Second and third reports of Standing Committee on Finance, Trade and Economic Affairs, in both French and English-Mr. Clermont.

[Stage Direction]
Second report of Standing Committee on Agriculture- Mr. Beer.
[Editor's Note: For text of above reports, see today's Votes and Proceedings.]

Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, pursuant to Standing Order 41(2) I wish to table copies of Order in Council P.C. 1970-2047, dated November 26, passed pursuant to the Public Service Rearrangement and Transfer of Duties Act. It deals with the transfer of responsibilities for environmental matters to the Minister of Fisheries and Forestry and is directly related to the bill of which I gave notice yesterday.



TABLING OF REPORT OF SPECIAL COMMITTEE ON USE OF ORAL CONTRACEPTIVES

Mr. Gaston Isabelle (Hull):: Mr. Speaker, under Standing Order 41, I would like to table copies in the two official languages of a report of the special committee established by the Minister of National Health and Welfare to advise the Food and Drug Directorate on all aspects of the innocuousness and effectiveness of oral contraceptives sold in Canada.

[DOT] (2:10 p.m.)



AGRICULTURE


Mr. Bruce S. Beer (Peel-Dufferin-Simcoe) moved: that
the first report of the Standing Committee on Agriculture, presented to the House on Thursday, November 26, 1970, be concurred in.


[Stage Direction]
Motion agreed to.


Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to inquire whether the House would be content to give unanimous consent to the moving of a rather bland and mild motion pursuant to Standing Order 43. The pressing necessity therefor is the need for the House of Commons
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December 8, 1970

Inquiries of the Ministry
to express an opinion in favour of Canada. The motion I seek consent for is as follows:
This House is of the opinion that the special tax concessions made available to Time and Reader's Digest are inimical to the interests of Canada and should be forthwith discontinued.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Skeena. By virtue of Standing Order 43, this motion requires the unanimous consent of the House.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is no unanimous consent. The hon. member cannot put the motion at this time.


Frank Howard: Mr. Speaker, I rise on a point of order to suggest to Your Honour that you should not have heeded the negative voices from the Liberal party, especially in light of the decision made a few weeks ago by over 800 to 50 to discontinue these tax concessions.


Mr. Speaker:: Order, please. The hon. member will appreciate that this is not the kind of consideration that the Chair has to take into account. I have to listen and to advise the House as to what I have heard. In this case there were negative replies, so the motion cannot be put.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask a question of the Minister of Finance. Following his conference with the provincial treasurers, at which concern was expressed regarding the rate of growth of the economy in the future, does the minister propose to make any statement? In particular, does the minister intend to propose any new measures to stimulate the economy along the lines indicated by the provincial treasurers?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, the House is presently debating the budget which was designed to do just this.


Robert Lorne Stanfield: Since the minister is clearly not going to make a statement, may I ask him whether the provincial treasurers expressed concern regarding the effect of the current and prospective slow growth of the economy upon provincial government finances, both on the revenue side as a result of the slowdown in revenue growth and on the expenditure side with regard to increased expenditure on welfare resulting from increased unemployment?


Edgar John Benson: Mr. Speaker, the only one who expressed that opinion was my hon. friend's friend from Toronto.


Robert Lorne Stanfield: Since the minister is not prepared to be very forthcoming, I should like to ask him whether it

would be fair to say that, in the view of the provincial treasurers at the meeting, the minister's management of the economy has greatly increased the financial difficulties of their provinces, far more than any offsetting, any help-


Mr. Speaker:: Order, please. I do not think it is in order for the Leader of the Opposition to ask whether it would be fair or unfair to say something; in those terms the question is argumentative and I do not think it can be allowed.


Robert Lorne Stanfield: Then I would ask the minister whether the provincial treasurers did not make it very clear to him that the dampening effect of his policies on their revenues did far more harm to them than any benefit they might derive from the minister's loan fund?


Edgar John Benson: It would not be fair at all to say that, Mr. Speaker.


Some hon. Members:: Oh, oh!



CONVERSION OF PART OF FUND FOR LOANS TO PROVINCES TO GRANTS

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: May I ask the Minister of Finance whether the provincial treasurers, during his meeting with them, expressed any views or made any representations regarding the $150 million loan fund? Did they ask whether part of this $150 million could be in the form of grants rather than loans, as originally suggested by Premier Bourassa of Quebec?


Edgar John Benson: Of course they would rather have grants than loans, Mr. Speaker, but generally I would say the loan fund was very well accepted. The only thing they wanted was more.


Thomas Clement (Tommy) Douglas: In view
of the fact that these loans will add to both the debt and the debt charges of the provinces, will the minister tell us whether he is prepared to consider making part of the $150 million available to the provinces in the form of grants on the basis of the rate of unemployment in each particular province?


Edgar John Benson: I would say no, Mr. Speaker. These are loans and they will help the provinces greatly. They will enable the provinces to bring forward projects-this is a condition of the loans-which they could not otherwise undertake in the current or the coming fiscal year. This, I believe, is important to the Canadian economy.



AMOUNT ALLOCATED TO ALBERTA FROM LOAN FUND

Mr. Eldon M. Woolliams (Calgary North):: I have a further question for the Minister of Finance. Bearing in mind the fact that the budget previously discriminated against certain cities-Calgary, Edmonton, Vancouver and others-with the object of cooling off the economy, may I ask whether the province of Alberta has now made a formal complaint on the grounds that the provision of only $4 million, which will be spent over a number of
December 8, 1970

years, to the province from this loan fund is discriminatory against the province of Alberta?


Edgar John Benson: No, Mr. Speaker. The hon. member does not appear to realize that the regulation regarding depreciation to which he refers expires at the end of this month.


Eldon Mattison Woolliams: I am well aware of what the Minister of Finance has just said. He is merely trying to cover up the situation. I asked him whether he had received any formal protest from Alberta alleging discrimination with reference to this $4 million. We know what he did to Alberta last year.


Edgar John Benson: No, Mr. Speaker. In fact, I have not even had a formal protest from the hon. member for Calgary North.
* * [DOT]



PRICES AND INCOMES COMMISSION


Hon. George Hees (Prince Edward-Hastings):: I have a question I should like to direct to the Prime Minister. In view of the fact that the Prices and Incomes Commission is in future to function as a fact-recording rather than as a price-regulating body, in consequence of which its need for executive direction will be greatly reduced, is it the intention of the government to terminate the employment of the chairman and of his principal staff members in order to be consistent with the oft-repeated admonition of the commission to industry that costs should be kept as low as possible?


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: This being the day of the Minister of Finance, I will ask him to reply to that question.


Edgar John Benson: Mr. Speaker, the commission is to continue as a fact-finding body to examine undue increases-


An hon. Member:: At great expense to the taxpayers.


Edgar John Benson: The hon. member is a great expense to the taxpayers. The commission will continue as a fact-finding body. It will present its findings, particularly with respect to price and wage increases, to the government and it will be up to the government and to hon. members to express their opinions on them just as the commission did in the past.


George Harris Hees: Mr. Speaker, as the function which the commission has carried out during the past year has been a complete failure and as it is going to be less useful to the Canadian people in the future, will the minister not follow the advice of the commission and cut costs for the good of the Canadian people?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.
Inquiries of the Ministry HOUSE OF COMMONS



COMMISSION ON MEMBERS' AMENITIES-INQUIRY AS TO REPORT

Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Prime Minister and I do not ask it because of any interest I have in any recommendations in this connection. When will the government be tabling the report of the commission in connection with members' salaries and the like and increases thereto?


Pierre Elliott Trudeau: Mr. Speaker, the House takes note that the hon. member is not interested in this, but for the benefit of the rest of the members I am empowered to say that the chairman of the commission said he would be prepared to issue his report to the government early next week. As soon as we receive it I propose to table it in the House.


John George Diefenbaker: Mr. Speaker, is the Prime Minister in a position to say whether the report provides that any increase which may be brought into effect shall not be effective until after the next ensuing election?


Pierre Elliott Trudeau: Mr. Speaker, the usual practice of the government when it asks for a report of this kind, not a royal commission report, is to receive it, study the recommendations and arrive at a policy before tabling it. But out of respect for Parliament, which the right hon. member knows I esteem greatly-


Mr. Baldwin:: When did you start?


Some hon. Members:: Oh, oh!


John George Diefenbaker: When did he commence?


Pierre Elliott Trudeau: -I thought it wiser in this case, since it deals with a matter which involves equally all opposition members as well as government members, to seize the House and perhaps public opinion with the report before the government dare touch it.


John George Diefenbaker: I am pleased to know that the Prime Minister is starting to have some respect for Parliament, even belatedly, but in view of the fact the government does not intend to touch the report before it is presented to the House, has he examined it yet, even though untouched?


Pierre Elliott Trudeau: Mr. Speaker, I am not psychic and I do not know what is in the report. I have not received it and I am not in a position to indicate the content of it, without having touched it or seen it.


Mr. Crouse:: Mr. Speaker, my question is supplementary to the question asked by the hon. member for Prince Edward-Hastings addressed to the Minister of Finance.


Mr. Roch La Salle (Jolieife):: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: Order. I believe that the hon. member for Joliette wishes to ask a supplementary question.

December 8, 1970
Inquiries of the Ministry


Roch La Salle: Mr. Speaker, would the Prime Minister tell us if he is aware that most hon. members would be interested in knowing more about those increases before the next general elections?


Mr. Speaker:: Order, please. Is the hon. member rising to ask a question svpplementary to his previous question?


George Harris Hees: Oh, no, Mr. Speaker, my question is supplementary to the question of the right hon. member for Prince Albert to the Prime Minister. As he has indicated that public opinion will guide him in his decision on this important matter, has he decided to follow the practice of the late Mr. King which was to find out by which gate the sheep wished to leave the pasture and then lead them through it?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.



STATUS OF WOMEN


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I should like to direct my question to the right hon. Prime Minister. Will he consider designating a minister of the cabinet to deal with the implementation of the recommendations of the report of the Royal Commission on the Status of Women?


Pierre Elliott Trudeau: Mr. Speaker, the bill of which I gave the House notice yesterday concerning government reorganization does permit the government to have greater flexibility in the appointment of ministers. If the House passes this bill with great speed, perhaps I will be able to extend that flexibility in the direction of the hon. member.


Winona Grace MacInnis: Mr. Speaker, I am very glad to learn about the flexibility. In view of the widespread interest in this report, would the Prime Minister meanwhile inform the House and the country as to which minister is to receive the many representations from individuals and organizations which will come in?


Pierre Elliott Trudeau: Mr. Speaker, in so far as the report deals with matters under the jurisdiction of this Parliament, it appears to me there are ministers now who are empowered to deal with all aspects of our society. Thus it would be a relatively easy matter for those who wish to make representations on labour matters to know what minister to address themselves to-obviously the Minister of National Health and Welfare.


Some hon. Members:: Oh, oh!


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I should like to ask a supplementary question of the Prime
Minister. In view of the fact that this royal commission report contains many recommendations concerning abortion I wonder whether the Prime Minister would consider asking the Minister of Labour to take care of this matter?



COMMISSION RECOMMENDATIONS-PROVISION OF RETRAINING PROGRAMS AND DAY-CARE CENTRES

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my supplementary is directed to the Minister of Manpower and Immigration. In view of the goals set forth in
the government's white paper on income security, is the government planning any new programs of retraining and day-care centres to assist the large number of women who are forced to subsist on welfare rolls?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, the increased programs for training have been announced. Of course, if the hon. member is referring to the recommendations of the recent royal commission report, these will be under consideration in due course.



POST OFFICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Minister without Portfolio in charge of the Post Office whom I welcome back from his far-away pursuits of far-out zip codes. Can he now give a reply to the question taken on his behalf by the Postmaster General many days ago concerning the four days without mail in the Christmas season, a lacuna of service inexcusable and intolerable even in the post-Kieransian era?


Hon. Jean-Pierre Cote (Minister without Portfolio):: have not seen that question, Mr. Speaker. I will take notice of it now.



NATIONAL REVENUE


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, I should like to direct my question to the Minister of National Revenue. Can the minister indicate whether, on behalf of farmers, the Minister of Agriculture has conferred with him about the present policy of reassessing for tax purposes farmers who for economic reasons are taking off-farm work, and has he assured the Minister of Agriculture that this policy, often made retroactive, will be sympathetically reviewed?


Hon. Herb Gray (Minister of National Revenue):: Mr. Speaker, the Minister of Agriculture and I are in contact with each other on a number of matters and I always listen carefully to anything he has to say to me.

December 8, 1970



POLLUTION


Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is directed to the Minister of Fisheries who now has the responsibility for dealing with matters of environmental pollution. It is founded on evidence produced before the Special Committee on Environmental Pollution by witnesses from the petroleum industry of Canada and a scientist from Memorial University, all of whom indicated under questioning that Canada had no contingency plan to deal with a major oil spill similar to the Arrow disaster. My question to the minister is: What steps is the government taking to provide Canada with such a contingency plan?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, the government does have a contingency plan. Also, in respect of the particular area which I know the hon. member has in mind we have a task force in my new department looking at the industrial project in question.


James Aloysius McGrath: Mr. Speaker, may I ask the minister whether, when the task force makes its report, he will release it to the House?


John (Jack) Davis: I would be glad to do so, Mr. Speaker.



SPREAD IN RAPESEED PRICES-INVESTIGATION OF MANIPULATION

Mr. A. P. Gleave (Saskaloon-Biggar):: Mr. Speaker, I should like to direct my question to the minister in charge of the Wheat Board. I gave him notice. In view of the unjustified spread which has prevailed in recent weeks between cash prices for rapeseed paid to producers at prairie points and future prices quoted basis Vancouver, has the minister initiated an investigation into what appears to be manipulation in the pricing and marketing of rapeseed? If not, will he undertake such an investigation and report to the House?


Otto Emil Lang: My concern about the spreads to which the hon. member refers led me several weeks ago to inquire of the Winnipeg Grain Exchange about its knowledge of the situation, and I asked for its comments upon it. This was in line with the recommendation of the oilseeds committee report which had indicated that in the first instance we should expect to see a better degree of self-policing within that organization.


Alfred Pullen Gleave: May I ask the minister, since he has referred to self-policing, whether he can assure the House that he will make the report public in view of the fact that apparently self-policing has not worked well in the last two months?
Inquiries of the Ministry


Otto Emil Lang: It is of course true that the spread has existed, but on the other hand rapeseed prices have been rising substantially as well. I cannot really indicate to the hon. member what use I may be able to make of the report until I know what report I will receive and under what circumstances and conditions it will be sent to me.



INFORMATION CANADA


Gerald William Baldwin: I would like to ask the Prime Minister whether, in light of the advertisement placing by Information Canada in newspapers calling for a chief of attitudinal surveys to provide the government with reliable public opinion reports on a variety of topics relating to government programs, is it now government policy and is the government now planning to go into the business of public opinion polls for political and other purposes?


Pierre Elliott Trudeau: It appears that the hon. member would not know what an attitudinal survey is even if he were shown one.



FINANCE


Hon. Marcel Lambert (Edmonton West):: My question is for the Minister of Finance. Would the minister advise the House whether, during the recent discussions between Canadian and United States cabinet ministers, there was any intimation from the United States Secretary of the Treasury to the Canadian government that means would soon have to be found to restrict borrowings by Canada in the United States, and will discussions start between officials of the Department of Finance of Canada and U.S. treasury officials with a view to arriving at some formula which would impose such a restriction on the flow of funds from the United States to Canada?


Edgar John Benson: Absolutely not, Mr. Speaker.



PRODUCTION AND RECEIPTS POLICY-PAYMENTS TO FARMERS

Mr. S. J. Korchinski (Mackenzie):: I would like to direct a question to the minister responsible for the Canadian Wheat Board. In light of his statement yesterday that under the new grains policy the elevator companies will no longer be paid under the Temporary Wheat Reserves Act, will any storage payments or handing charges be paid for out of the pool accounts which would normally go to the farmers?

December 8, 1970
Inquiries of the Ministry


Otto Emil Lang: The normal practice, of course, is for payments to be made by the Wheat Board to the handling companies for storage which they perform on its behalf, and there will be no change in this policy. The change is in the financing by the government of a portion of the cost to the Wheat Board for these charges.


John George Diefenbaker: The farmers could lose $60 million a year.


Stanley James Korchinski: My question to the minister is for clarification. Is it not right that money will come out of the pool accounts that would normally go to the farmers?


Otto Emil Lang: As I explained yesterday, there will of course be some consequential effect in regard to the amount of grain which is in the handling system. As hon. members know, the first 178 million bushels of wheat have always been carried by the Wheat Board or by the farmers pool account, and with the increased movement of barley which we anticipate and the increased movement of rapeseed it is unlikely that the system could efficiently handle or carry regularly much more than that amount of wheat in any case.



PAYMENT TO WHEAT BOARD UNDER TEMPORARY WHEAT RESERVES ACT

Mr. A. B. Douglas (Assiniboia):: Could the minister inform the House whether or not the payment which would have accrued to the Wheat Board under the Temporary Wheat Reserves Act last August 1 has in fact been made to the Wheat Board?


Otto Emil Lang: I do not believe that the payment has been made to this point.



PRODUCTION AND RECEIPTS POLICY-STATEMENT IN BUDGET RESPECTING STABILIZATION PAYMENTS

Mr. John Burton (Regina East):: I should like to direct a supplementary question to the Minister of Finance. In view of statements made in the House last week by the minister in charge of the Canadian Wheat Board that payments under the grain stabilization plan would not be made until after the end of the crop year, could the minister throw some further light on the statement contained in his budget speech that cash stabilization payments would be made next spring and summer totalling $100 million?


Edgar John Benson: I checked that statement with the minister in charge of the Wheat Board and he agrees that the statement is fair and reasonable.


Alfred Pullen Gleave: My question is to the minister in charge of the Wheat Board. In view of the fact that the consequential payments he mentioned would be in the neighbourhood of $60 million, is he considering steps whereby farmers will not have to bear the cost of this extra payment?


Otto Emil Lang: I am afraid I would have to ask the hon. member to explain what he means by the consequential $60 million. I explained that with the much smaller amount of wheat being carried, the ordinary payment under the Temporary Wheat Reserves Act would in the future be much reduced.


John Stratford Burton: Mr. Speaker, I wish to rise on a question
of privilege with respect to the answer just given by the Minister of Finance in which he indicated that he had checked his statement in the budget speech with the minister in charge of the Canadian Wheat Board. I suggest that there is a direct conflict between those statements and I suggest they cannot be allowed to pass-


Mr. Speaker:: Order, please. This is a debate between the hon. member and the minister. I believe that in the past I have had occasion to say that a dispute or a debate between two hon. members as to what the facts are cannot be considered a matter of privilege and cannot be raised as a question of privilege. Perhaps the hon. member might find another way of clearing up the record.



CONSUMER AFFAIRS


Mr. Roland Godin (Portneuf):: Mr. Speaker, I should have liked to put a question to the Minister of Consumer and Corporate affairs, but in his absence I will direct it to his parliamentary secretary.
Can he tell us whether the Prices and Incomes Commission will investigate automobile insurance premiums which seem to be increasing from year to year, since a 12 per cent increase is expected for 1971?


Mr. Speaker:: It seems to me that the question was
asked yesterday.



POST OFFICE


Roch La Salle: Mr. Speaker, I direct my question to the Minister without Portfolio in charge of the Post Office.
Since he has had discussions with employees of G. Lapalme Inc. these last few months, could he say if this matter has been shelved or if negotiations are still going on with the minister?


Joseph Julien Jean-Pierre Côté: Let
us say the matter has not been shelved, Mr. Speaker.

December 8, 1970


EXTERNAL AFFAIRS
Mr. W. B. Nesbitt (Oxford):: I have a question for the right hon. Prime Minister. Would the Prime Minister make a statement on motions some time before the Christmas recess, or perhaps request the Secretary of State for External Affairs to do so, concerning our relations with the Republic of Cuba and the Republic of Algiers. I specifically refer to the question of Canadians being trained as terrorists under the auspices of these governments with whom we have relations who are sent back to Canada and, in the Cross case, sent back to Cuba. A great many Canadians are inquiring about this.


Pierre Elliott Trudeau: The Secretary of State for External Affairs will be in the House tomorrow and if asked the question he may be able to reply.


John George Diefenbaker: My
question is for the minister who reports for the Wheat Board. It is very difficult to follow him in the answers he gave to various hon. members. As it is today, the government of Canada pays the excess on the storage over and above 170 million bushels of wheat. The result is that the farmer gets that much more than he otherwise would get. I ask the minister this: What is the estimated carry-over of wheat that the government has in mind now for 1970-71 and 1971-72? He must have some estimate.


Otto Emil Lang: Mr. Speaker, at this stage it can only be an estimate, but it may be in the order of 250 million bushels.


John George Diefenbaker: If it is 250 million bushels then on approximately 70 million bushels the storage will be charged to the farmers whereas today the government pays it? Is that not correct?


Otto Emil Lang: That is correct, Mr. Speaker, on that sort of figuring. In other words, the reduction from the amounts which would have gone out of the treasury to the farmer may be in the order of $15 million, and in compensation through the stabilization fund he may receive $100 million.


Mr. Speaker:: The hon. member for Oshawa-Whitby.


Mr. Broadbent:: Mr. Speaker, I had a question for the Minister of Industry, Trade and Commerce but he seems to have disappeared within the last 30 seconds.
Inquiries of the Ministry SHIPBUILDING


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Minister of Supply and Services. Would the hon. gentleman check with the Minister of National Defence and other ministers with ships regarding possible contracts for Halifax shipyards in view of pending lay-offs?


Hon. James Richardson (Minister of Supply and Services):: Yes, I will do that, Mr. Speaker.



FINANCE


Lloyd Roseville Crouse: Mr. Speaker, I wish to direct a question to the Minister of Finance. Since the Prices and Incomes Commission now has 125 men on its staff and as its chairman has announced that the guidelines on prices and wages will be dropped by the end of this month, thereby relegating the commission to the minor role of making fact-finding studies of prices and wages, is any consideration being given to merging the Prices and Incomes Commission with the Economic Council of Canada, thereby enabling the government to cut down on some of its staff?


Edgar John Benson: No, Mr. Speaker. I would also like to say that I think the commission did a tremendous job in the last year. Only in Canada will you find there were not increases in basic commodity prices in the last year.



CANADIAN NATIONAL RAILWAYS


Stanley Howard Knowles: Mr. Speaker, in the absence of the Minister of Transport may I direct a question to the Acting Minister. In view of the desire of the government House leader to get through as much business as possible before the Christmas recess, will the government consider making a commitment with respect to CNR pensions, as recommended by the House of Commons, so that we can get the CNR financing bill through with a minimum of debate?


James Armstrong Richardson: Mr. Speaker, I believe the Minister of Transport has responded to that question several times.


Stanley Howard Knowles: As a supplementary question, Mr. Speaker, may I ask if instead of just communicating with the CNR we can have a commitment that something will be done?
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December 8, 1970
Inquiries of the Ministry



ST. JOHN'S, NFLD.-REPORT ON ACCIDENT INVOLVING SNOW-CLEARING EQUIPMENT

Mr. Waller C. Carter (Si. John's Wesl):: Mr. Speaker, in the absence of the Minister of Transport, who is supposed to be here today but is absent, I direct my question to the Acting Minister of Transport. I know we have a Minister of Transport who is an actor, but we have an Acting Minister of Transport.


Some hon. Members:: Oh, oh!


Walter C. Carter: Can the minister inform the House whether a report has been submitted to his department as the result of a CNR accident with snow-clearing equipment near St. John's almost a year ago?


James Armstrong Richardson: Mr. Speaker, I am certain that accident has been studied carefully. I will check to see if a report has been brought forward.



NEWFOUNDLAND-INVESTIGATION OF BUS ACCIDENTS, QUALITY OF SERVICE

Mr. John Lundrigan (Gander-Twillingaie):: Mir. Speaker, again in the absence of the minister, and as a supplementary question, could the acting minister check into the series of accidents involving the CNR in that province and make a full report to the House of Commons at the earliest possible opportunity to indicate the quality of CNR operations in that province?


James Armstrong Richardson: Mr. Speaker, I am certain that both hon. members who have asked questions in this area know that the CNR follows up all accidents with great care and that there are continuous studies to improve safety.



INDUSTRY


John Edward Broadbent: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. In view of the reports of the declining percentage of sales of Canadian auto subsidiaries, as a percentage of the total North American market, has the minister requested that Canadian auto manufacturers come to Ottawa soon in order to get a commitment about future expansion of the automotive industry on this side of the border?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, that is news to me. I was not aware of a decline. I will check to see if the hon. member is better informed on this matter than I am, but the future of the auto pact agreement, in view of the United States suggestion that the safeguards should be eliminated, is presently being reviewed in my department. As was said in the communique issued at the end of the Canada-U.S. ministerial meeting, meetings will be held soon at which these safeguards and other possible improvements of the pact will be considered.


John Edward Broadbent: Would the minister assure the House that he will attempt to obtain a commitment from the Canadian manufacturers to improve the safeguards which go back to the 1964 levels of production?


Jean-Luc Pepin: There is a difficulty there because the Americans would consider that setting targets would be worse than keeping the safeguards which they are requesting should be suspended or abolished.


Mr. A. D. Hales (Wellington):: Mr. Speaker, would the minister advise the House whether it is the government's intention to include replacement parts when they are studying the pact?


Jean-Luc Pepin: Mr. Speaker, this will be included in the possible improvements that will be discussed at the next Canada-U.S. meeting.



FISHERIES


Mr. Maurice Foster (Algoma):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries and Forestry. Does the minister plan to raise the acceptable level of mercury in fish products from .5 parts per million to one part per million as advocated by some cabinet ministers of the province of Ontario?


Mr. Speaker:: Order. It seems to me that this question was asked before, but if I am wrong the minister may wish to reply.


John (Jack) Davis: The answer is no, Mr. Speaker. However, we will be holding meetings early in the new year with health officials from both the United States and Canada with a view to exploring the possible raising of the level. Meanwhile, since Canada exports 90 per cent of its commercial catch and because the quality of our fish is its greatest attribute we are carefully observing to the .5 parts per million specification.



CANADIAN BROADCASTING CORPORATION


Mr. Henry Lalulippe (Compton):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister concerning some remarks made last Saturday by the president of the CBC, Mr. George Davidson, on the program entitled: "Your Two Bucks Worth".
Does the Prime Minister and his government agree with Mr. Davidson's statement that as long as separatism is a valid political option, CBC employees have the right to express their political opinions, whether or not they are separatists?


Mr. Speaker:: I regret to intervene at this point, but the hon. member must agree that it is out of order to ask a minister to confirm a statement made outside the House by a person other than a minister.
December 8, 1970



ATTENDANCE OF MINISTERS

Mr. Thomas M. Bell (Saint John-Lancasler):: Mr. Speaker, I have a question tor the Prime Minister. In view of the fact that there were only 11 ministers present yesterday and only 11 today when there should have been 18, that is, seven away on each day, and in view of the fact that on the order paper there is a measure that would increase benefits for ministers and parliamentary secretaries, can I ask the Prime Minister if this will mean a further decrease in ministerial attendance or will we be able to count on them being here more often?


Pierre Elliott Trudeau: Mr. Speaker, the House may be interested to know that all the ministers who are away are away on government business and they are replaced in the House by acting ministers or by their parliamentary secretaries. Mr. Greene, of course, is in Japan on a Canadian mining mission. Mr. Chretien is in Yellowknife attending the Arctic transportation conference.


Mr. Speaker:: Order, please. The reason I intervene at this moment is that the Chair has always suggested to all members, including cabinet ministers and the Prime Minister, that members should be referred to by their constituencies and ministers by their ministerial responsibilities. I think we should try to respect this practice.


Pierre Elliott Trudeau: That is very good advice, Mr. Speaker. The Minister of Energy, Mines and Resources is in Japan on a Canadian mining mission. The Minister of Indian Affairs and Northern Development is in Yellowknife attending the Arctic transportation conference. Both have their acting ministers present today. The Minister of Agriculture is in Edmonton attending the Union of Farmers annual convention. The Minister of National Defence is visiting the Canadian Forces base at Lahr, Germany, after having attended the NATO meetings of course.


Gerald William Baldwin: Goody, goody.


Pierre Elliott Trudeau: The Minister of Transport is in Yellowknife attending the Arctic transportation conference. The minister responsible for housing and urban affairs is attending the Second Conference on Mortgage Investment for Trusteed Pension Plans, and the minister acting for him is also here. The Minister of Finance, who is at the federal-provincial finance ministers-


Robert Lorne Stanfield: He is here.


Some hon. Members:: Hear, hear!


George Harris Hees: He didn't know you were here, Ben.


Pierre Elliott Trudeau: I am told, Mr. Speaker, that if he is absent the Minister of National Revenue will take note of questions for him.


Thomas Miller Bell: Regardless of whether these ministers are away on important duties, in view of the fact they have
Inquiries of the Ministry
violated the roster system would the Prime Minister consider red-circling their positions until such time as they come and attend to their business as they are supposed to in the House each day?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I will take note of the approbation of the hon. member for red-circling and I will read the Beaupre Commission report concerning members with this in mind.


John Howard Lundrigan: Mr. Speaker, may I ask the right hon. gentleman if any plans are contemplated for throwing out the roster system and allowing ministers who are in the buildings to attend in the chamber to answer on behalf of their departments, as they ought to according to the rules of the House of Commons?


Pierre Elliott Trudeau: Well, Mr. Speaker, this matter has been coming up less frequently as of late because I think it has
been recognized that the system has some advantages.


Some hon. Members:: Oh, oh!


John George Diefenbaker: For the ministers, no doubt.


Pierre Elliott Trudeau: If I have some firm representations from the opposition that they would rather go back to the chaotic system of the past in which the opposition never knew what ministers responsible for departments were going to be present to answer questions-


George Harris Hees: But they are here every day.


Pierre Elliott Trudeau: -we will certainly be prepared to consider the matter. But there will be no guarantee that the attendance of ministers will be any more frequent than now. Ministers have to attend cabinet meetings and attend to government business across the country.


George Harris Hees: We always used to do that in the past.


Mr. Speaker:: Order, please. The Chair sees that three members wish to ask supplementary questions, the hon. member for Cape Breton-East Richmond, the hon. member for Gander-Twillingate and the hon. member for Chicoutimi. There is only one minute left in the question period and other hon. members wish to ask questions. I wonder whether it is the wish of the House that we pursue this matter.


Winona Grace MacInnis: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: The hon. member rises on a question of privilege.


Pierre Elliott Trudeau: No doubt it is about the "rooster" system. I hope the hon. member says something funny.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.
23568-46 J

December 8, 1970
The Budget-Mr. Pepin


Winona Grace MacInnis: Mr. Speaker, my question of privilege arises from the comment just now made by the Prime Minister. He referred to the previous system under which opposition members did not know what the responsibilities of the ministers were. Mr. Speaker, one does not need to strain one's memory to recall that the Minister of Regional Economic Expansion did not know what his responsibilities were with respect to the Cape Breton Development Corporation, nor did the Minister of Justice, nor did some others.


Mr. Speaker:: Order, please. If the hon. member has a question of privilege, he ought to state it quickly. He knows what a question of privilege is. What he is bringing forward now is debate; it is not a question of privilege.


Winona Grace MacInnis: Mr. Speaker, I could produce letters from the ministers indicating that they do not know-


Mr. Speaker:: Order, please. That will not strengthen the hon. member's case in so far as privilege is concerned. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, December 7, consideration of the motion of Mr. Benson, that this House approves in general the budgetary policy of the government, the amendment thereto of Mr. Lambert (Edmonton West) (page 1808) and amendment to the amendment of Mr. Saltsman (page 1812).
Jean-Luc Pepin: Mr. Speaker, this afternoon I should like to comment on certain aspects of the budget concerning industrial development.
Of course, I do not want to repeat the remarks of the Minister of Finance (Mr. Benson) on the state of the Canadian economy, except to mention again that our exports are faring relatively well, with a surplus trade balance estimated, on an annual basis, at $2.75 billion, which helps to give us, for the first time since 1952, a surplus in our balance of payments. I note that this results partly from the success of the government's fight against price increases, and I also note that it is taking place in spite of the inevitable re-evaluation of the Canadian dollar.
I also note that the Minister of Finance, in his budget speech, comments on the slowing down of the rate of economic growth this year, estimated at 2.5 or 3 per cent for 1970, compared to 5 per cent in 1970. Although the rate of growth is now improving, the government, in view of persistent unemployment, has decided to give it an extra push by initiating additional incentives.
The government, as we know, faced two alternatives. The first consisted of general measures such as tax reductions, which the government felt could lead to a return of galloping inflation. The other alternative was adoption of specific, selective measures, geared to specific regions, specific industries and specific individuals. As we know, it has chosen the second alternative. Had the government chosen the first one, the opposition would of course have accused it of lacking intelligence, finesse and subtlety. Had it chosen them both, the opposition might have accused it of irresponsibility. But as it has chosen the first one, it is accused of lacking courage.
Mr. Speaker, I am afraid that the government will never win that game, because there always will be criticism.
But by choosing the first alternative, that is selectivity, the government is in good company. In a recent OECD commentary, for instance, a Committee on economic policy stated, and I quote:

-'in cases where unemployment is rising towards unacceptable levels, attention should be directed to the possibility of selected action directed to areas of high unemployment, rather than indiscriminate increases in public expenditure or general tax cuts.'
[DOT] (3:00 p.m.)

Thus we are in good company when we choose a selective approach rather than a general one.
As regards industrial development, Mr. Speaker, there are, in the budget of the Minister of Finance, four measures which for me, as Minister of Industry, Trade and Commerce, have a tremendous value, and I know that hon. members will want to keep them in mind too.
These four measures proceed from a concern for reinforcing the industrial base, and this shows that the short term concern meets the long term one. Here they are: (1) The expansion of the industrial incentive program of the Department of Regional Economic Expansion, which is already well known. (2) Additional capital cost allowances to manufacturers and processing industries which may result in a tax abatement amounting up to $25 million, and bring to Canada a possible $3 million investment. (3) Measures providing for loan insurance and direct loans to some especially affected industrial sectors; (4) Subsidies to the shipbuilding industry.
Obviously, I would like to discuss the last two items. First of all, why is this assistance provided to those industries, more specifically to the footwear industry which has come up to join the textile and clothing industries? Why this assistance to shipbuilders?
The hon. member for Waterloo (Mr. Saltsman) has pointed out in a recent speech-and this, by the way, happens to be the only positive things he said then-that there was a relationship between the demands arising out of international trade liberalization and the demands of industrial efficiency.
In other words, if we, the people of Canada, strive to trumpet forth the advantages of free international trade

December 8, 1970

and make it pay, then the Canadian industry must become highly competitive. Otherwise, our philosophy does not agree with our interests. And this is my concern at this time.
Exports are faring relatively well, especially in the primary and semi-manufactured products sectors. We are selling easily enough our grain, our oil, our gas, our coal and our materials to international markets.
But what about manufactured products? Obviously that sector is making progress, but it is encountering difficulties and will always have them because international competition is and will remain extremely keen.
However, Mr. Speaker, it should be mentioned that we are progressing. Ten years ago, our exports accounted for approximately 10 per cent of manufactured products. Today, they represent between 35 and 40 per cent.
I agree that cars play a most important role. In any event, we have progressed, but may I reiterate that competition is fierce, particularly under the current circumstances of international trade which are lower tariffs, frequently involving protectionist threats, especially in Canada, a reduction in the national defense budget, a most healthy dollar and in certain industrial sectors, a desire by Canadian workers to attain wage parity with their American counterparts.
Is it not self-evident, Mr. Speaker, that we must give this sector of secondary industries, where the best prospects for creating jobs are, all the consideration that the circumstances I have just described warrant?
So we must continuously try to rationalize our manufacturing sector, and in this respect, all the tools available to the government and the public sector must be used.
I shall not mention all those available to my department as well as to some others, but this budget contains a provision which seems of particular interest to me- the extension of the General Adjustment Assistance Program to the footwear industry. You will recall that this extension had already been made to the textile and clothing industries.
This decision, I think, deserves some specific attention from hon. members.
In most cases, Mr. Speaker, this rationalization process is ensured by industry itself. There are also cases where it is not done, unfortunately, especially when industrial sectors are endangered and become vulnerable because of the liberal trade policy of the federal government. Where profits are lower and the future looks less promising, I feel that the government may and must contribute, in short may and must try to help private enterprise to rationalize and modernize its operations, or just to keep up to date as is often the case.
Mr. Speaker, we know that there is a program of manpower conversion to which the federal government contributes some $300 million a year. I think it is normal that a few millions of dollars be contributed also yearly to ensure that the conversion of industry itself, of
The Budget-Mr. Pepin
factories, takes place where there are particular problems of the type that I have outlined.

The general assistance program is known to many members of the House, but possibly not well enough. I wish to spend five minutes to describe it.
The GAAP program was established in 1968 to provide financial and technical support to Canadian manufacturers to take advantage of export opportunities arising out of the Kennedy round tariff cuts made by Canada and other countries. That is the main purpose of it.
The program is administered by a general adjustment assistance board which consists of a chairman and two members from the business community, as well as members from the Department of Industry, Trade and Commerce, the Department of Finance and the Department of Manpower and Immigration. It will soon include members of the Department of Regional Economic Expansion to ensure that maximum co-ordination is accomplished.
The Board is authorized to provide three forms of assistance. The first form is government assistance of up to 90 per cent of loans made by private lenders to manufacturers for the restructuring of their operations. This is a loan. There is a charge of one per cent of the sum involved. The second form is direct government loans to manufacturers who have been seriously injured or threatened with serious injury and are unable to obtain an insured loan. In some cases then there is the possibility of a direct government loan.
The third form is grants of up to 50 per cent of the cost of services of qualified consultants required for the developments of sound restructuring proposals.
To date, the board has authorized loan insurance of $32.6 million to assist 30 manufacturers. No manufacturers have qualified for direct loans. Grants totalling $77,000 have been approved for consulting assistance for 10 manufacturers. I wish to give some examples to illustrate how useful the program has been.
A small Ontario based appliance manufacturer had been showing outstanding growth in sales and earnings. Exports sales in particular increased from $105,000 in 1968 to $700,000 in 1969 as a result of an aggressive sales policy combined with the Kennedy round tariff reductions. Further growth was limited because of the unavailability of funds to finance the required inventory buildup. The GAAP board authorized insurance of a $300,000 working capital loan early this year. With this financing, exports for 1970 will reach $1.4 million. Further, outstanding growth is projected for 1971.
Another example is a Maritime manufacturer who had developed a product line which was well received in the United States Market. The Kennedy round reductions further improved the market potential, but sales increases were restricted by limited plant capacity and inadequate inventory financing. The GAAP program provided a grant to finance a portion of the cost of a consulting study which recommended changes in plant

December 8, 1970
The Budget-Mr. Pepin
layout to streamline production flows and more than double plant capacity. The board later authorized insurance of a $470,000 loan to enable the company to implement the consultant's recommendation and provide inventory financing. The combination of grant and insured loan assistance will enable the company to increase export sales by $1.3 million per year by 1972.
It is forecast that as a result of the loan insurance authorized to date, exports in 1971 will be $28 million higher than they would have been without GAAP. For 1972 and 1973 the equivalent figures are $54 million and $89 million. I suggest that this is a very valuable program, Mr. Speaker. Now, if the program is good for exports, why should it not also be good for the domestic market? Extension of the program for that purpose was announced a few weeks ago in respect of textiles and clothing. The Minister of Finance (Mr. Benson) announced the other night that it would be extended now to the footwear industry. I do not think anyone will disagree with that. I hope not. Parliamentary approval is now being sought through supplementary estimates for extensions of GAAT to all three sections: textiles, clothing and footwear. By so doing, we shall be contributing to the process of rationalization of those industries.
[DOT] (3:10 p.m.)
I might add that a further amendment to the GAAP program will authorize the board to insure loans made to certain non-manufacturing firms providing financial, marketing or other services essential for the operations of eligible manufacturers.
The situation is this, Mr. Speaker. A manufacturing plant somewhere in Stormont, let us say, would be in a better position if somebody was taking responsibility for financing, warehousing, marketing, or the like. The GAAP program, which up to now, could be used only by manufacturers, will now be offered to those who contribute indirectly to manufacturing. Again, I believe this is a good move. May I underline the importance of the announcement made the other day by the Minister of Finance with respect to the extension of the GAAP program to the footwear industry.

The footwear industry, as we know, is very important in Canada because it provides employment to 20,000 or
30,000	workers. However, being so fragmented, it is now going through a difficult period of adjustment. It is also submitted to strong pressures from imports.
I have here some figures that I would like to quote: [English]
Fifteen footwear firms in Canada have gone out of business in the past 12 months. In the first half of 1970, the volume of imported leather footwear was some 16 per cent higher than in the first half of last year and this trend is expected to continue. Six of the larger firms, employing about 2,600 workers, have recently requested federal government assistance in restructuring their operations to enable them to compete effectively. The import pressure is great, and this pressure comes not only
'Mr. Pepin.]
from low cost countries but from highly industrialized countries such as Italy, France, United Kingdom and the United States. The only real possibility in these circumstances is for the Canadian footwear industry, the leather section in particular, which still has 80 per cent of the domestic market, to become as efficient as possible. If they do so, not only will they keep that good large share of the domestic market but they will export a lot more than they are exporting today.
Everybody agrees with this. The Canadian footwear industry and the clothing industry possess originality, have ideas, and have style. They could produce for the Canadian market, and export a lot more than they do now.
Again, in order to do that, they need to be fully modernized; they need to specialize; they need to integrate. They agree with this estimate of their needs. They say, though, we should do something to help them do just that. And this is what is intended by the extension of the GAAP program.

The same concern for rationalization can be found in the government decision, as the result of increasing international demand, to assist the shipbuilding industry for export purposes. We know that this grant will range from 14 to 17 per cent, according to the tonnage of the ship.
The main purpose of that decision, confirmed by the Minister of Finance, is evidently to contribute to maintain a certain number of jobs. Jobs in that sector throughout Canada have decreased by some 5,000 since 1966 and they now number between 5,000 and 6,000. But if the steps already announced were not taken, perhaps 1,000 others would disappear during 1970 and next year. Consequently, it is essential to act.
In my statement of November 27 last, I emphasized the importance of reducing costs in this industry. It is easy to say. But the only way to do it is to try and produce more than one unit at a time, to build in small series. This is why both the number of ships being built and the budgetary measure encouraging exports are important.
I insisted also on the importance of diversification and specialization in order to lessen the vulnerability of shipyards in terms of fluctuations of the national and international demand.
Mr. Speaker, people should not believe that this desire for rationalization in the shipyard sector has only come up recently: my department has a Defence Material Industry Productivity Program known as DIP which has already tackled and made an important contribution to the problem. In fact, several shipyards, including St. John Shipbuilding, Marine Industries, Vickers, Davie Shipbuilding have already shared in the DIP program of my department to the amount of $3 million and have improved their production.
What about the result? I gave it in my release of the other day: "It is significant that a number of our yards
iv


December 8, 1970

are already producing efficiently a wide variety of heavy equipment such as pressure vessels, penstocks, gates, steel structures, industrial machinery and equipment and rail car, etc."
Do people know for instance that Marine Industries in Sorel and Davie Shipbuilding in Lauzon are already devoting 50 per cent of their activities to projects other than shipbuilding?
That is an attempt to diversify which I thought worth mentioning.
In conclusion, making secondary industry more modern, diversified and specialized is one of the basic concerns of my department and of the government. I wanted to show today how the two measures announced by the Minister of Finance-the extension of the temporary assistance program and the subsidies to shipbuilding-were part of a larger framework, that of continuing improvement of Canada's industrial base, which will enable us to serve the domestic market more efficiently and to increase our exports.


Robert Jardine McCleave: Would the minister permit a question arising out of his remarks in connection with shipbuilding? It occurs to me that once the ships were built they might have foreign crews. Are further steps planned so that we might have not only more Canadian shipbuilding but more Canadians manning the ships?


Jean-Luc Pepin: This is one of the many questions which was raised by the Robertson report, the possibility of having a Canadian merchant navy. The report is still being considered but, along with other studies, as I said on a previous occasion, no decision has been made on the matter.


Robert Lorne Stanfield: Mr. Speaker, I do not intend to comment in detail upon the remarks of the Minister of Industry, Trade and Commerce (Mr. Pepin), though I have no doubt a number of my hon. friends will do so. At the outset of his observations, the hon. gentleman referred to his pleasure concerning the state of our exports. I should like to remind him, before I go any further, that the large balance of trade presently in our favour is perhaps due not so much to any increase in our exports as it is to a reduction in our imports. I also express the hope that the minister will not be so lost in admiration for the balance of trade this year that he will overlook some of the difficulties he and I discussed the other day in connection with future Canadian exports, particularly to Britain and the common market.
[DOT] (3:20 p.m.)
With regard to the budget, this budget marks the end of a so-called period of restraint and the adoption by the government of some sort of goal of expansion. The government ends this period of restraint not with a full treasury but with a substantial and increasing budgetary
The Budget-Mr. Stanfield
deficit. It ends this period of restraint with the country experiencing massive unemployment, with its antiinflationary program in ruins, indeed dismantled, and with the Prices and Incomes Commission retiring into a period of seclusion.
Despite this, the minister told us the other night that everything is going to be great. Unfortunately, the minister has not yet been right. Let us consider just how wrong he has been. I am not going to go back to 1968, when he told us that we were going to have a balanced budget and, in fact, we had a deficit of $750 million. There is no need to go back to 1968, let us consider 1970.


Edgar John Benson: How about 1969?


Robert Lorne Stanfield: I will be happy to talk to the minister about 1969 at any other time but let me talk about 1970 at the moment. Let us go back to the March budget when the minister took a good, clear look forward. One thing he said was that the situation was such that '"we need to consider introducing consumer credit controls to keep the economy from running away on us". He predicted a surplus of $250 million for the year. During the first few months he abandoned any idea of introducing consumer credit controls, and by October he was talking about a budgetary deficit of $150 million. In his budget speech the other night, he talked about a budgetary deficit of $350 million.
The minister refers to this as "a process of constant and continuing review". That is how he describes it. What we really have on the part of the minister is a constant and continuing effort to adjust to his previous errors in estimates, his previous forecasting mistakes. First of all, the minister realizes that he is completely wrong about consumer credit regulations. Then, he realizes things are not going the way he calculated so he increases some sharing arrangements made with the provinces to "reverse the process", as he called it. Then, as the year went on he realized that he and his colleagues had created a virtual catastrophe in the housing program, and he now sees the need to put more money into the program.
We now have this budget. From March until today, there has been a constant effort on the part of the minister to readjust to the very serious errors in forecasting he made last march. The forecasts of the March budget were a complete botch. No one need take my word for that; all he need do is to follow the manoeuvring of the minister ever since. At first, he was rather cautious and very complacent, but his manoeuvres escalated until recently they reached a flurry of activity as the extent of unemployment in this country finally became apparent, apparent even to this government with its superb talent for seeing only what it wants to see and absolutely nothing else.
The minister said on television the other night in a program called "Encounter" that his forecasting this year had been pretty good, that things had worked out just about as he had anticipated. That, Mr. Speaker, is patent-

December 8, 1970
The Budget-Mr. Stanfield
ly untrue in view of the manoeuvring and scrambling that he has been doing ever since he made those forecasts. I must say I find it impossible to believe that the government foresaw what has happened but sat back and allowed it to happen. I am prepared to believe that the government is incompetent, but I am not prepared to believe that it foresaw the present levels of unemployment, for example in the province of Quebec, British Columbia and the Atlantic provinces. I am not prepared to believe that the minister and his colleagues foresaw this level of unemployment and accepted it, despite the hard boiled remarks made by his Prime Minister (Mr. Trudeau) regarding the degree of unemployment that he is prepared to accept. I can see that the government is absurdly complacent, but I do not believe it is that cruel.
One of the most alarming aspects about the whole economic scene in Canada today is that, despite these terrific errors in forecasting and judgment, the Minister of Finance still believes that his forecasting was good. His capacity for self-delusion almost goes beyond the degree of complacency that the government exhibits.
The budget of March was a bad mistake in judgment. The slowdown in our economy had already been allowed to go too far. There were warnings from the Economic Council of Canada and from others. To continue deliberately to run down the economy below par, and deliberately to hold down the growth in the economy below the rate of growth of the labour force, with the consequent increase in unemployment, is inexcusable. Why did the government make such a distorted judgment of the outlook last year? Was it to show those fellows in the organized labour movement just who is boss in this country? It was said to be done in the name of fighting inflation. I have said many times that the minister's policy was inhumane.
The minister and his friends are fond of talking about OECD. Massive unemployment is not accepted by OECD as a weapon or tool for fighting inflation. It is not accepted because it weakens the will to fight inflation. Despite all the talk about OECD by my hon. friend opposite, no government in western Europe would accept anything like the degree of unemployment that this government has accepted during the past year.
Furthermore, there is not the slightest evidence that unemployment to this degree is in any way a necessary part of an effective fight against inflation in this country. I admit that when a government brings on a recession and creates massive unemployment, certainly the rate of price increases will slow down. But the Canadian people have had to pay a very heavy price. Not only have they had to pay a very heavy price, but the government has not dealt with the basic causes of inflation in this country. The government has not established any defence against the development of inflation in future in this country. Indeed, the anti-inflationary machinery of this government lies in ruins. The Prices and Incomes Commission has reverted to the status of a study group and, as it has done so, it has made this pronouncement: The Prices and Incomes Commission has said that unless
there is moderation in wage demands in this country we can expect either excessive inflation, excessive unemployment or compulsory prices and wage controls. That is the pronouncement of the Prices and Incomes Commission on its way to retiring into obscurity. It is a grim prospect, in addition to the existing unemployment and other difficulties of this country.
[DOT] (3:30 p.m.)
The Prices and Incomes Commission also accepts and emphasizes the view that fiscal and monetary policies are not by themselves adequate tools to fend off inflation. This is also the view of the OECD, and it is not for the Minister of Finance or anybody else to pretend that they are adequate in themselves.
Here we have massive unemployment and we have a big budgetary deficit. We have a government which has no idea how it is going to cope with inflation when we do achieve something like full employment again, short of the prospect of compulsory control. The minister says that the main weapons against inflation must be monetary and fiscal policies. He says voluntary restraints can work only for a short time. Let me say two things to him, sir. Monetary and fiscal policies will not do the job by themselves and even compulsory controls can work only for a short time.
I admit that no country has worked out a satisfactory program in respect of a voluntary income restraint policy. I admit that, but nevertheless nearly every country now recognizes the need, as does the OECD. The government has become aware I think that voluntary restraints must be based on co-operation, and cannot be imposed by a government or government agency. Such a policy has a much better chance of getting started and working if it is introduced in a period when inflationary pressures are not too great.
The government tried to introduce such a policy from above, and tried to do it when inflationary pressures were very great. I had urged an approach to this sort of thing in this House as far back as 1967. The government delayed, and when it tried it failed to get co-operation. As a result, the effort was abandoned. I say in all sincerity that if inflationary pressures have now ceased, and if the rate of inflation has now decreased, this is the time the government should be trying rather than giving up. It should be redoubling its efforts to participate with management and labour in working out a program of restraints.
I do not say this is easy but I say the government should try. I also suggest that tax reductions at this time would have helped create an appropriate climate for this kind of initiative in this country. If the government was able, in a period lacking strong inflationary pressures, to work out a framework of restraint on the basis of cooperation, then fiscal and monetary policies could be used to prevent an over-heating and building-up of excessive pressure. Then, we would have a chance in Canada of attaining satisfactory employment and stability at the same time. Instead, the government has thrown in the towel. Its boast of success against inflation is not the

December 8, 1970

result of superior management but simply the result of a severe slowdown of our economy and severe unemployment in our country. Now, we have a slowdown and unemployment, and the outlook is for more inflation as our economy expands because this government clearly knows no way to head off inflation. Indeed, the government is already commencing to increase its own pressures on the capital markets of this country.
The keynote of this budget, if there is one, is expansion. What is the government doing with regard to unemployment and what is its approach? Its approach is basically one of pump priming concentrated in areas of slow growth in the country. The reason given for increasing expenditures and loans rather than reducing taxes is that this is an effort to pin-point where the expansion is to take place in order to benefit areas of slow growth.
The Minister of Industry, Trade and Commerce said this afternoon that the government cannot resort to a reduction in taxation without producing galloping inflation. With all respect to him, there is nothing to back up his statement. In fact, there is very good reason to believe that a reduction in income tax at this time would modify wage increases. In any event, there is not the slightest reason to believe that a reduction in income tax at this time would lead to galloping inflation in this country.
When the Minister of Industry, Trade and Commerce purported to justify the resort to increased expenditures in certain areas rather than reducing taxes he again quoted the OECD as advising countries to consider selective approaches to unemployment rather than such general measures as reduction in taxation. That advice of the OECD makes very good sense for countries in western Europe, for example. It makes excellent sense for a government that has virtually full employment, except in certain areas of the country.
I suggest it is nonsense on the part of the Minister of Industry, Trade and Commerce to take this advice which makes very good sense under other conditions and apply it to Canada where there is massive unemployment across the country.


Jean-Luc Pepin: I say that my program will combine both.


Robert Lorne Stanfield: No, sir. I anticipate there is a much more fundamental reason for the government choosing the course it did rather than choosing to reduce taxation. I think it is because of its mechanistic view of the economy of Canada. It believes you can slow down the economy any time by tightening the screws, and obviously you can. Conversely, the government seems to believe that you can bring about expansion when and where you will simply by loosening the screws and putting more gas into the machine by spending more money. Certainly, you can slow down the economy that way but you cannot necessarily assume this is a machine that you can start up again simply by feeding it a little more gas. The economy is not just a piece of machinery which the government can regulate in this way.
The Budget-Mr. Stanfield
The expectations and confidence of individuals play a great role. The minister, in his budget speech, stated his expectations but he certainly did not create confidence. He did not carry a conviction to this country that his projections were going to prove to be true. It is fair to say that everyone in this country was virtually shaken by the increase in taxation and by the increase in taxation I mean the imposition of the surtax beyond the time when it was clearly understood it was to be discontinued. I think everybody in the country is disconcerted by the implications of this move by the minister. I say there ought to have been a tax decrease, particularly for people with lower incomes. The Minister of Finance admitted that a tax decrease would have an expansionary effect on the economy.
[DOT] (3:40 p.m.)
I say, too, it would provide a great psychological lift. Indeed, such a reduction in taxation leading to an expansion in the economy would tend to generate more revenue for the government. The government, therefore, would not be giving up very much revenue as a result of reducing taxation in a way which would lead to expansion of the economy. The government did not choose to do that. It chose instead to maintain taxation, and then some. It chose this course because I believe the government thought it was better for the government to raise and spend money in order to try to pinpoint where growth will take place than it was for the government to free the individual when this was possible. I say this attitude of the government toward increased taxation is depressing and is counterproductive. Such an attitude certainly adds to the uncertainties that are around as a result of the floating dollar and adds to the uncertainties that are around as a result of the failure of the Minister of Finance to clarify what he proposes to do in respect of tax reform and what recommendations of the committee he proposes to accept.
All this uncertainty is holding up decisions in the private sector of the economy. As I have said, this action of the government in increasing taxation when it ought to be reducing taxation adds to the uncertainties. I might be more accurate if I were to say this decision by the Minister of Finance to increase taxation at this time gives certainty to the fears of many Canadians that the minister will use tax reform, as he is now using economic disparity, as an excuse or a disguise for higher taxation in this country. That is a pretty depressing prospect. The driving force of the economy is not just the money the government pumps around in this country. Certainly, intelligent fiscal policy is an important factor in growth and stability. But individual motivation is important, incentive is important and confidence is important. The government is destroying incentive, is destroying confidence and is discouraging the people of this country.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Over the years we have heard a lot about the fight against poverty. The minister referred to

December 8, 1970
The Budget-Mr. Stanfield
old age security and pensions. The other night he said we are increasing these pensions and the assistance to the aged just at the right time. The right time for whom? The right time for the pensioners was a couple of years ago. Yet so much does the minister identify the interests of the government with the interests of the older people of this country that he assumes this is just the right time for the older people of the country. He asks them to wait until next spring for this kind of help. The minister says it is just the right time.


Edgar John Benson: For the economy.


Robert Lorne Stanfield: For the economy, I see. I am sorry but I am no more ready now than I was before to accept the minister's judgment concerning what is just the right time for the economy, either. It may be more obvious that the minister's timing was not in the interests of the older people of the country, but one does not have to look much further to decide it was not right for the economy, either.
Certainly, the government is not attacking poverty. Certainly, there is no sign in the government's white paper on social security that the government intends to attack poverty. I want to say that a buoyant economy in this country is essential to any attack on poverty. First of all, a buoyant economy is necessary in order to reduce unemployment which has added so much to the poverty in this country in the last year or so and, second, a buoyant economy is necessary to produce the revenue needed for an effective high productivity program. I say that the prompt stimulation of our economy is an essential part of the fight against poverty in Canada today. The same applies to regional disparity and regional poverty. Surely, it is not necessary for me to emphasize the importance I attach to the fight on regional disparity. It is not necessary for me to emphasize the importance I attach to moving ahead more rapidly in areas of slow growth in this country. I believe this government will get nowhere in an effort to help these areas of slow growth unless the economy of the country generally is buoyant.
The areas of slow growth, such as the Atlantic Provinces, parts of Quebec and parts of the other provinces, are the first to feel the effect of any slackness in the national economy. It is in these areas the slackness tends to concentrate. More than ten years ago, this fact was emphasized to the governments of the Atlantic provinces by consultants we used. Professor Alex Cairncross, who later became the chief Economic Advisor to the government of Great Britain, emphasized to us that the Atlantic provinces and other areas of slow growth certainly needed development programs but that these would do little good in those areas unless the national economy was healthy and going forward at the same time. I have been saying this for years. The Minister of Regional Economic Expansion (Mr. Marchand) apparently finally has realized this also because he said so in the House the other day. This realization, however, certainly is not reflected in the government's policy as announced in the budget. As one would anticipate, the national slowdown in our economy has created new depressed areas.

If the Minister of Finance continues in the same way, the whole country will require designation pretty soon. Indeed, in the sense that the whole economy is below par, it almost requires this today. If the economy picks up substantially, such programs could help Quebec and other areas of slow growth-although I must say that the concept of designation is coming pretty close to being absurd, if it is not there already, when one considers the proportion of the country that has now been designated. I repeat that I am certainly in favour of such measures of help. But the best immediate help to the Province of Quebec, the Atlantic provinces and other areas of slow growth would be a rapid increase in national prosperity. This is the measure that would afford the most immediate help to all these regions because these are the regions which feel the greatest impact of the national recession that is taking place. I say that tax reduction is the most immediate and effective way to produce this prompt stimulation of our economy. Such a tax reduction could be associated with specific measures of encouragement.
Tax reduction would create the psychological climate required for expansion, as the Minister of Finance admits. This was the course which should have been taken, rather than the choice made by the Minister of Finance which was a tax increase, with an all-wise government increasing its encouragement in certain sectors of the economy and just assuming that its increased expenditures as well as some kind of an expanding monetary supply in themselves would ensure an expanding national economy, without which the minister's help to slow growth areas will accomplish very little or practically nothing.
[DOT] (3:50 p.m.)
Of course, I suppose it is possible that the minister may be right for once in this projection, but what a chance to take. If the economy is slow to respond, after being screwed down the way it has and worried after this budget, consider first of all the beautiful fiscal mess that the minister will have created both for himself and for his provincial counterparts. But, more important, think of the disillusionment and the bitterness that will have been created among our youth and among the hard core unemployed.
Our economy is not just a machine. The minister and his colleagues talk in terms of inputs and outputs, but what he is really dealing with is people. He is fooling around with the lives of people.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I know his job is difficult. I do not think he is an unkind man. I assume he is a man with some feeling and he probably says to himself when one of his policies creates some unemployment that it hurts him more than it hurts the unemployed, rather like the parent taking the whip and beating the child. I say to the minister in all sincerity that his methods of forecasting are not reliable enough to justify the kind of decision he has taken in his budget. In fighting inflation he resorts to overkill-unintentionally I am sure, because he did not
December 8, 1970

know what he was doing-and in fighting unemployment in Canada today he is guilty of underkill. I say the economy needs a large stimulus now, and despite what the Minister of Industry, Trade and Commerce said, this would not be stoking the fires of future inflation. A cut in taxes now would not stoke the fires of future inflation. There are all kinds of slack in the economy today, and a large stimulus now need not be a continuing stimulus. As the economy picked up, the minister could start applying the braking process. But what he needs to ensure now is that the economy picks up, and he should not just take that for granted.
I say to the minister that his forecasting methods are crude, that the government's methods of manipulating the economy are crude, and that the economy is far more complex than he and his advisors conceive, otherwise they would never have concocted the white paper on tax reform. Instead of a tax reform designed to fit our economy, the government has been trying to fit the economy to its concept of tax reform. Now, instead of producing a budget designed to suit the needs of this country, a living, breathing complex of relationships among people, the government chooses to treat the economy as a piece of machinery which it can adjust at will, as if it were a question of putting in a little gas in the right place and in the right amounts. I say to you, Mr. Speaker, don't you believe him.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Hundreds of thousands of Canadians are already paying a high price in unemployment. The budget does virtually nothing for them in the coming months, and they will continue for months to pay for the government's past mistakes. I ask, how long are we all going to have to pay for the present mistakes of the government in the budget that we are now discussing? One newspaper describes this budget as "a scattergun approach". That is certainly not being too hard on the government. Apparently the government has decided that such an approach is sufficient, because it still does not really believe our economy is in trouble. In fact, after reading the budget speech itself, one would think that there are no real problems in Canada at all. In language consistent with the language in the Speech from the Throne, this budget speech once again takes a complacent, unconcerned line that has become the hallmark of this government. It talks smugly about "improving trends", tells us that we are "moving out of the pause", and generally simply takes for granted what it should be proving.
This budget is really little more than a gesture, a sort of public relations gimmick, a pat on the head of the unemployed and the Canadian people to say "there, there, you will see; everything will be all right". It is a little like a mother saying she will kiss away the hurt suffered by her little child when he has a fall. That is O.K. if it is just a scratch, but the government's policies have wounded our economy far more deeply than that. I say it is an insult for this government to suggest that
The Budget-Mr. Stanfield
now all it has to do is to kiss away our wounds. It is an insult to the Canadian people, and it is an insult to the hundreds of thousands of unemployed men and women walking the streets of Canada today looking for work.
This budget does nothing to help the low and middle income Canadian taxpayers. On the contrary, through the maintenance of the surtax when it was supposed to be eliminated, when we were all assured that was to be the case and when everybody was counting on it, the budget hurts everybody. Our approach would have been one of selective tax reductions, once again with the aim of engendering confidence. But the government has refused to do so, and once again I say the government is wrong.
This is a sort of go-it-alone budget, one that assumes rather arrogantly that only the government can be trusted with anything, even if it is precious little, that only the government can be trusted to do anything about economic expansion. The budget ignores the contributions of Canadians, whether they be taxpayers or businessmen. The budget ignores the contributions that Canadians can make through their own efforts and through their own decisions.
This is a budget that does nothing to encourage confidence in the economy, the sort of confidence that can lead to expansion and to growth. True, the government speaks in optimistic words, but we have seen enough of this government's lack of foresight to realize that these are words and nothing more. The government can fool itself, but it is not going to fool anybody else. What was needed was not words but action to demonstrate the government's confidence in the economy. There was not any. That was the true eloquence of that speech, a very unfortunate sort of eloquence, if I may say so.
This is a budget that clearly falls between two stools. In terms of the serious and immediate situation this winter, including the prospect of the worst unemployment situation in a decade, this budget is virtually useless, and in terms of long term economic planning it is virtually meaningless. It gives no hint of what, if any, long term plans the government has. This budget is totally devoid of meaning. Perhaps we will have another budget in January, I do not know. The budget is a mish-mash of unrelated, mostly insignificant measures that neither give any hope for the solution of immediate problems nor provide any guidelines for the future of our economy.
The hon. member for Edmonton West (Mr. Lambert) and other opposition speakers so far have called for a number of measures which I wholeheartedly endorse. These include the abolition of the surtax, the immediate relief for low income wage earners-which the government itself has claimed to favour-a reduction in the federal sales tax on building materials, and an emergency amendment to the Unemployment Insurance Act to temporarily increase the period of benefits and reduce the qualifications during the coming winter.
[DOT] (4:00 p.m.)


An hon. Member:: For how long?

December 8, 1970
The Budget-Mr. T. C. Douglas


Robert Lorne Stanfield: On an interim basis.


Edgar John Benson: You just spent $2,000 million.


Robert Lorne Stanfield: The minister says we just spent $2,000 million.


Edgar John Benson: That's right.


Robert Lorne Stanfield: That is a completely irresponsible
statement.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: A completely irresponsible statement.


Edgar John Benson: Add it up.


Robert Lorne Stanfield: I calculated it, Mr. Speaker, and that is the kind of silly talk in which the Minister of Finance indulges. That statement is as silly as some of the forecasts he has made in the past.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Sir, these are practical proposals. They are the sort of proposals that we were expecting the government to bring forward when it announced it was going to bring down a budget, because when it made that announcement we assumed the government had something useful to contribute. Instead, we have a document that, I am sorry to say, is quite worthless in terms of facing up to the very grave problems we are facing today.
The Financial Times summed up the situation, I think, very nicely in an editorial this week, and I quote:
Mr. Benson's budget last Thursday may not have disappointed everybody in Canada. No expectations were high and some pessimists expected less than others. But Mr. Benson must have administered the greatest possible disappointment to the largest number of people.


Some hon. Members:: Shame.


Robert Lorne Stanfield: Sir, this is a disappointing document. This is an arrogant, complacent document. But it is one that once again shows the Canadian people the true face of the government. I am only sorry that the Canadian people have to pay so high a price to have a glimpse of the reality that is behind the fine words which we have been served so long.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: Mr. Speaker, this is the budget that was not going to be brought down, in order to deal with the unemployment situation which the Minister of Finance (Mr. Benson) says does not exist, and to improve the economy that the government says is progressing satisfactorily. Certainly, that is the conclusion anyone would come to who reads the speech of the Minister of Finance when presenting this budget last Thursday. That speech, Mr. Speaker,
would lead one to believe that the Minister of Finance is living in a world of make believe. As reported at page 1738 of Hansard he says:
-unemployment on a seasonally adjusted basis appears to be falling.
Surely, the minister has to be kidding. It is true he can hang that statement on a technicality because the seasonally adjusted unemployment rate from September to October dropped from 6.9 per cent to 6.6 per cent. However, he fails to point out that at the end of October there were 419,000 unemployed, that this figure is 21,000 higher than the previous month, and 105,000 higher than the same month of the previous year.
On the same page the minister is reported as saying:
The national accounts for the third quarter also reveal that real output in the economy is rising.
Later, on the same page, he is reported as saying:
-this latest information confirms that the economy is now advancing again-
But in the same speech, Mr. Speaker, the minister admits that budgetary revenues are expected to decline by $100 million below what had been forecast, which is surely an unfailing sign of a slackening in the economy. The fact is that the national economy is stagnant. There has been hardly any real growth since last spring. After allowing for taxes and rising prices, the average real personal income of Canadians actually dropped in the first half of this year.
It should be pointed out that the minister's optimism is in glaring contrast to statements made by Mr. Arthur Smith, Chairman of the Economic Council of Canada, in a speech which he made in Montreal on December 2. On that occasion the Chairman of the Economic Council said: Thus a significant portion of our national production resources are now running to waste-in total, perhaps at an annual rate of about $4 billion. In other words, on the average, in each week in the latter part of 1970, perhaps about $75 million to $80 million of output is not being produced that could potentially be produced, and an equivalent amount of total income that could potentially be earned is not being generated.
In the same speech, the Chairman of the Economic Council went on to point out that it would require an increase in real output of about 10 per cent to take the economy back to about 4 per cent unemployment by early 1972. To achieve our potential output by 1973 would require a 7.5 per cent growth rate in each of the next two years. I point out that this is a totally different prognosis of our economy from that which has been given to the House by the Minister of Finance. We have already had a bill to gag the Auditor General. Perhaps we shall now be confronted with legislation to silence the Chairman of the Economic Council of Canada, whose economic forecasts have been conspicuously accurate and whose warnings the government has consistently ignored. In his speech the minister said, and I quote:
We are in fact having a considerable boom in housing in Canada-
This is mainly due to massive pump priming by the government. But the 270,000 housing starts to which the

December 8, 1970

minister referred should be set in their proper perspective. At the beginning of the year the government set as an objective the construction of 200,000 houses. This was later revised downward to 180,000 houses. The last reports indicate that this goal will not be reached, and that the figure is more likely to be in the neighbourhood of 165,000 homes completed in 1970.
The minister contends that rising prices have been curbed, but this has been largely due to the drop in food prices with disastrous results for the farming population. The slowdown in price increases has been bought at the price of an economic slowdown and an unemployment rate that is the highest in the western world. The truth is that the Prices and Incomes Commission has abandoned its guidelines as a colossal failure because the government lacked the courage to impose selective mandatory controls in the sensitive areas of the economy. The government has consistently followed what I would call a stop-go policy. Instead of pursuing a policy that has clear cut goals and objectives which the Canadian people could understand and foster, the government's economic policy has been one of fits and starts.
In 1967 a former minister of finance, now the Secretary of State for External Affairs (Mr. Sharp), said the economy was like a car that had been going too fast, and that we must now take our foot off the gas and put it on the brake. Six months later he took his foot off the brake and put it back on the gas, and a few months later he had it back on the brake again. In 1968 the government decided to put its foot on the brake with a vengeance and introduced monetary and fiscal restraints. It was warned by the Economic Council of Canada, by some of the best economists in the country, by newspaper editors and by members of the opposition, that these restraints would inevitably lead to an economic recession. As late as a few weeks ago when the president of the Canadian Labour Congress, Mr. Donald MacDonald, warned that unemployment could reach 9 per cent this winter, the Prime Minister (Mr. Trudeau) not only questioned the accuracy of these figures but questioned Mr. MacDonald's veracity. For the past year danger signals have been flashing, but the government has consistently refused to see them. Rumour has it that the Prime Minister is annoyed with some of the economists in the Department of Finance for not warning the government of the impending unemployment crisis. Yet the government has no one to blame but itself. It has consistently refused to listen. Consequently, this country faces a very grim winter indeed.
[DOT] (4:10 p.m.)
The government was asked questions in the House as to whether any new measures would be introduced to deal with the unemployment situation. The answer was no. They were asked whether unemployment insurance benefits would be increased. The answer was no. They were asked if the government would implement a winter works program. Again, the answer was no. Having said no to all these proposals, the Minister of Finance is belatedly trying to put them into effect by bringing down this budget.
The Budget-Mr. T. C. Douglas
However, the budget, I submit, is too little and too late. Because of the time lag, through which it takes between four and six months for policies to become effective in providing jobs, the action taken by the government now will do little to provide employment this winter. It is to be hoped that it will provide some benefit in 1971.
This stop-go policy has caused irreparable damage to our economy. We have lost production in the last two years that can never be recovered. The government have been jumping from the brake to the accelerator, going when they should be stopping and stopping when they should be going.


An hon. Member:: And going into reverse.


Thomas Clement (Tommy) Douglas: Now
they have put their feet on the brake and the accelerator at one and the same time, with the result that the car has stalled.


An hon. Member:: It stalled because they went into reverse.


Thomas Clement (Tommy) Douglas: The
Minister of Finance will be known as the "great miscal-culator". He has been wrong in almost every prediction that he has made.


An hon. Member:: Take away his driver's licence.


Thomas Clement (Tommy) Douglas: He has
landed this country in an economic mess. If he had lived a few hundred years ago under an absolute monarchy-


Stanley Howard Knowles: Perhaps he did.


Thomas Clement (Tommy) Douglas: -he
would have been demoted from keeper of the King's purse to keeper of the royal chamber pot.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: Everything in this country has gone to pot.


Thomas Clement (Tommy) Douglas: This budget should have been aimed at getting the country going again. In order to do this, the government would need two basic approaches: first, an expansionist program to put the unemployed to work; second, a redistribution of purchasing power to stimulate the economy by creating effective demand. It is for this reason that the members of the New Democratic Party have been advocating repeatedly that the government should use large expenditures for the purpose of stimulating housing, the construction of schools and hospitals and other items of high social priority. We have urged that financial help be granted to the unemployed, to the old age pensioners, to

December 8, 1970
The Budget-Mr. T. C. Douglas those on veterans pensions and to the recipients of war veterans' allowances. We have pressed for a reduction of tax payments for the low and middle income groups. This would have had the effect of redistributing income.
What have been the government's solutions with respect to these proposals? First, let us see what they have done about expanding the economy to put the unemployed to work. Belatedly, now, they are going to spend some money on public works. Twenty million dollars has been allocated for roads to the international airport at Montreal, and $23 million for the rest of Canada.


An hon. Member:: Big deal.


Thomas Clement (Tommy) Douglas: Yes, big deal. This is a pathetic gesture, like throwing a sardine to a hungry whale. They are proposing to spend $40 million for housing. This will help, but it falls far short of what is required. No action is being taken to reduce the 11 per cent sales tax on building materials at a time when the lumber industry, which depends for 80 per cent of its business on the export trade, in facing a 6 per cent increase in costs as the result of the rise of the exchange rate of the Canadian dollar.
The government has proposed setting up a $150 million capital loan fund, from which the provincial governments can draw for public works. Mr. Speaker, the premier of Quebec first made these proposals last June in Winnipeg, at the federal-provincial conference. He called for a fund to be utilized for both grants and loans. The grants were to increase for the provinces with the highest unemployment and the loans would be a smaller part of the contribution which they would receive. What the provinces are to receive are not grants at all, but loans entirely, loans to be lent at very high rates of interest. No wonder Premier Bourassa is reported in the press as having said that, "The budget is insufficient to deal with Quebec's problems."


Some hon. Members:: Shame.


Thomas Clement (Tommy) Douglas: Let us
see what this fund is to do in putting the unemployed to work. It is to be spread over 16 months. Quebec is to get $68 million, and $28 million of that amount this winter. British Columbia will get $35 million, and of that amount $13 million this winter. Ontario will get $17 million, and $6 million this winter. Manitoba will get $8 million and $3 million this winter. Saskatchewan and Newfoundland will each get $5 million, and of that they will get $2 million this winter. Nova Scotia and New Brunswick are to get $4 million, and of that $1.5 million this winter. Prince Edward Island will get $1 million. Mr. Speaker, does anyone really think that these amounts of money will enable provinces to cope adequately with the problem of unemployment?


Robert Lorne Stanfield: The Minister of Finance seems to think so.
[Mr. Douglas (Nanaimo-Cowichan-The Islands) .1


Thomas Clement (Tommy) Douglas: By
refusing to give this money in the form of grants as opposed to loans, the federal government has merely passed the buck to the provinces, which must now increase their debts and debt charges in order to receive amounts of money that will do little to help them solve the problems of the unemployed.
Let us see what the government is doing about the matter of redistributing purchasing power. We all expected, of course, that the 3 per cent surcharge on personal income and corporate tax would be dropped, because it was due to expire at the end of this month. The government has announced that the tax is to be retained. Mr. Speaker, this budget was not necessary. The public works items in it could have been included in the supplementary estimates, and members of the government could have made statements on motions. Why was this budget brought down? This budget is a farcical charade designed to conceal the reimposition of the 3 per cent surcharge which the minister said only six weeks ago would not be reimposed.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: This whole structure has been built up as a budget to conceal the fact that the government was going to continue taking from the pockets of the taxpayers of Canada $245 million a year. That money ought to have been allowed to remain in their pockets so that they could buy goods to stimulate the economy and create effective demand in this country.


Mr. Gilbert:: Hear, hear!


An hon. Member:: A nice Christmas present the taxpayers have been given.


Thomas Clement (Tommy) Douglas: By
creating effective demand, the government could stimulate the economy more effectively than by making available some of the write-offs and capital cost allowances which it proposes to hand out. These, the minister tells us, are going to cost the taxpayers of this country some $250 million. There has been no reduction of taxes in the lower and middle income groups. The least that could have been done was to have exempted from taxation single persons earning $2,000 a year or less and married couples earning $4,000 a year or less. The government has not done that. This is why we have moved an amendment criticizing the government for failing to do this. Even those in receipt of the guaranteed supplement will have to pay income tax on a pension which leaves them far below the poverty line.
[DOT] (4:20 p.m.)
Instead of raising pensions for those in receipt of the basic old age pension, as of January 1 their pensions will be reduced by $1.17 a month. Under the present legislation those receiving the basic pension would be entitled to a cost of living bonus which would have increased their pension to $81.17 a month. The government is
December 8, 1970

to freeze their pension at $80. What does this mean? Assuming that the cost of living increases by at least 2 per cent, and it will probably increase more than that, at the end of five years they will be receiving $9 a month less in actual purchasing power than they would have received if the legislation now on the statute books had been left alone.
It seems unbelievable that the government would freeze the basic old age pension and refuse to grant a cost of living bonus to these people. No other group coming under federal jurisdiction is denied a cost of living bonus. Retired civil servants, military personnel, Members of Parliament, Senators and those receiving the Canada Pension Plan all have a built-in cost of living bonus in their retirement plan. Only the old people are discriminated against.
What is the government saving? It is saving $15 million a year. Contrast this with capital cost allowances to industry which the Minister of Finance (Mr. Benson) estimates will cost the treasury $250 million. The government cannot find $15 million a year to give a cost of living bonus to the old people, but it can find $250 million to hand out to industry through write-offs. This is in keeping with the Liberal philosophy, "take care of the corporate structure and the corporate structure will take care of you."
Increased pensions for veterans and recipients of the guaranteed supplement will not come into effect until April 1, 1971. This will do nothing to help these people eke out an existence during the coming winter months. It will do nothing to help stimulate the economy at a time when it is in the doldrums. One cannot escape the conclusion that the government is callously unconcerned about what happens to the old people, the veterans and the unemployed during this winter. Their plans are aimed at an economic upswing during the latter part of 1971 in the fond hope that the economy will be rolling again by 1972. Such cynicism is unhumane and inexcusable. I am convinced that the Canadian people are not likely to forget this attitude.


Mr. Romuald Rodrigue (Beauce):: Mr. Speaker, the supplementary budget tabled last week by the Minister of Finance (Mr. Benson) brings nothing new but that it indicates the government has abandoned its policy of balancing the budget.
Over the last few years, both the government and the Minister of Finance have spoken very highly of the benefits to be derived from a balanced budget.
With a strong government, they said, there will be no more adverse budgets. The government was to take every step to insure maximum administrative efficiency.
All the afore-mentioned, Mr. Speaker, was to bring us a just society and a balanced budget. Those promises were made throughout the country and widely publicized, and Canada was to enjoy after that all the pleasures of the Garden of Eden.
The Budget-Mr. Rodrigue
That period was short, barely long enough to launch the publicity and inform the population. We just got to see the outside of that famous paradise, that is to say the fence in front of which some flowers had been planted for show.
Yet the Minister of Finance was so optimistic in his budget speeches of the last two years. Nevertheless last Thursday, as he announced a deficit, the Minister of Finance kept his smile and his confidence. Confidence in what? I wonder.
The minister talked of strategy, of economic objectives, of improving the income of Canadians, of guiding the economy toward high and sustained expansion, of eliminating regional economic disparities, of a more equitable distribution of goods and services and of several other matters. How conceited! There is no doubt that those objectives offer interesting features and are sought by all Canadians.
[DOT] (4.30 p.m.)
Mr. Speaker, I am positive that all members, whatever their political affiliations, are wishing for the same thing as the hon. minister and that they approve of the objectives. We hope these expectations will materialize and progress beyond the stage of wishful speeches. Otherwise, we will be bound to believe that the minister has joined the ranks of meteorologists who are always so sure of their long-term forecasts which in any case prove to be partly right in the long run.
So, this is a return to the adverse budget policy. When the budget was introduced last March, a surplus was forecast but now it so happens that the Minister of Finance is speaking of a $570 million deficit for the current year. Even if the minister while forecasting a deficit has no new taxes to announce except for the extension of the 3 per cent surtax, or social development tax, until December 31, 1971, an adverse budget points to new taxes later on. This is not for the coming months, of course, but new taxes will have to be levied some day, because deficits cannot be covered by borrowing only. So, there will be an increase of the national tax and of course, interest also will have to be paid on these borrowings, because as far as I know, the minister has yet to make the decision of asking the Bank of Canada to finance public projects on an administration cost basis.
For the time being, the government deals with liquidity problems, without caring too much for the future. A few weeks ago, it floated a $550 million bond issue, at rates of 5J, 6 and 7 per cent depending on the term of the loan. It was said on the prospectus of this issue that the capital from the bonds would be used for the redemption of $375 million worth of maturing on Canadian government bonds on December 15, 1970 and for general expenditure purposes of the Government of Canada, including advances to the Canadian National Railway for the reimbursement of $40 million in bonds maturing on January 16, 1971, at a rate of 25 per cent.
The amounts borrowed to redeem bonds at maturity are ever increasing, in fact, they are even greater than the amounts to be redeemed, as well as the rates of

December 8, 1970
The Budget-Mr. Rodrigue
interest. That is what budget deficits lead us to: ever increasing debts and rates of interest, to the extent where servicing the debt-14.1 per cent of the budget-ranks third immediately following health, which represents 23.7 per cent, and regional economic expansion, 13.7 per cent. It will not be long before servicing the debt ranks second among budget expenditures.
The 10 per cent increase in unemployment insurance announced by the Minister of Labour (Mr. Mackasey), which is provided for in the budget, will certainly be welcomed by the recipients. That step will enable them to meet part of their needs. By taking that step, the government recognizes the seriousness of the situation. They also recognize the fact that the programs announced in the budget will have no beneficial effect on the economy before several months.
Let us not delude ourselves about the results of the programs that have been announced: several months will go by before all the preliminary steps have been taken, so that the amounts given for this year will in effect be carried over to 1971.
While admitting that higher unemployment insurance benefits will put additional purchasing power into the hands of jobless consumers, we should not forget those people who are not entitled to these benefits, those who are no longer eligible or will soon cease and those who have never been eligible for one reason or another. Those people will not benefit from the 10 per cent increase and we know that there are many of them.
The Minister of Labour stated in his press release of December 3, and I quote:
The 10 per cent increase in benefit rates will put a total amount of $54 million into the hands of the unemployed. This increase in their purchasing power will help stimulate the economy.
We agree with this statement. For years we have been repeatedly asking that the consumer's purchasing power be increased so that no action from the government will be necessary as regards production or investment.
It is astonishing that before suggesting a 10 per cent increase in the unemployment insurance benefits, the minister did not ask himself certain questions. In fact he did not say: Those benefits cannot be increased because they will create inflation. He did not hesitate. He did not say I am sorry, we cannot do it, there are not enough products, dairy products are scarce, grain is scarce, Canada is short of clothing. I am sure he did not even think of that. Indeed, he was quite pleased to make this announcement because he knew that it would be well received.
When the Minister of Finance said, in beginning his speech, that employment in Canada is rising, I think he was contradicting himself. If employment is rising, why has it been decided to raise unemployment insurance benefits and to announce the introduction of new programs? It is high time the real problem should be recognized.
More precisely, the Minister of Finance declared, some time ago in Alberta, that unemployment has become the
government's No. 1 enemy. In saying so, the minister confessed to his own failure.
During the year 1970, large corporations have laid off at least 10,000 workers in the province of Quebec only. In my view, these figures are conservative since lay-offs in large corporations outside Quebec have not been taken into account. Among the larger corporations, Can-adair has laid off nearly 3,150 workers during the year 1970 and has announced another 350 lay-offs before the end of the year.
Canadian Marconi has laid off 800 workers since the beginning of the year.
In the Quebec City area, Industries Valcartier, a general Investment Corporation subsidiary, will lay off 500 persons before the end of the year.
On the other hand, the United Aircraft Corporation has reduced its staff from 5,400 employees to 4,850 since the beginning of the year.
In the last six months, some six companies in Drum-mondville have closed their doors or have laid off nearly 800 workers.
Recently, the Wabasso Corporation has been laying off employees in Grand'Mere and Trois-Rivieres.
This is the situation in the field of employment. All the investment programs which have been announced will be beneficial in the long term. But this does not solve our present short-term problems.
Before investing or capitalizing in excess, we must also think of consuming.
Adoption of the sub-amendment now being considered which aims at raising personal tax exemptions to $2,000 for single persons and $4,000 for married persons would be a positive action allowing people with insufficient income to increase their purchasing power, consume more and leave in the economy an important sum of money. I will therefore support this sub-amendment without qualification.
Before concluding my remarks, I would like to say a few words on the extension of the General Adjustment Assistance Program to the footwear industry. That program will not solve all our problems. I agree with the Minister of Industry, Trade and Commerce (Mr. Pepin), who believes that certain industries must modernize and recycle their production. That is true, but the great problem now is not so much that of modernization, because I know certain industries which have spent considerable sums of money in recent years to modernize their plants and which are in a position to produce a very large quantity of shoes everyday. Yet, despite all that modernization, those industries are facing problems because for a few years now we have been importing very large quantities of shoes from countries where salaries are low and where they still use manufacturing processes given up here many years ago. I have even learned that in some countries, certain phases of the manufacturing of shoes were given to women who did part of their work at home during their spare time.

December 8, 1970

Thus by proceeding in that manner, it is obvious that goods can be marketed at a lower price and I do not believe that, even if the government is ready to pursue notable endeavours in the way of modernization, it will be in a position to definitely solve the problem confronting the shoe industry, especially if it merely grants subsidies to the manufacturers or guarantees their borrowings. In fact, from 1956 to 1969, footwear imports increased by 568 per cent, reaching in 1968 the record volume of 46 million pairs of shoes.
Now, I believe that the problem is acute, especially considering that skilled shoe industries are located in areas where unemployment is quite high and where wages fall below the Canadian average. Therefore, measures other than the assistance made available for modernizing machinery should be introduced because the existing uneasiness in the footwear industry has significantly contributed to boost unemployment in several areas this year. I consider that it is high time to act before it is too late.
There are many other points that I should like to touch upon and that I feel very important, including construction. As many others, I had hoped that the Minister of Finance would announce at least some reduction in the sales tax on building materials. This would have been a tremendous encouragement to construction in some areas of the province of Quebec as well as in the whole country.
The government did promise to provide an additional $40 million in the field of construction. This amount will be used to build some 4,000 housing units. Frankly, considering the housing needs in Canada, it can be seen that those $40 million cannot solve the problem.
Once more I express the wish that the Minister of Finance seriously consider the possibility of abolishing the sales tax on building materials. I hope he will bring forward in a few months, before the next budget, bills to assist those who need a home. Reducing or abolishing that tax would be a great step toward the solution of Canada's housing problem.
[DOT] (4:40 p.m.)


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker-


Stanley Howard Knowles: Make it good!


Bryce Stuart Mackasey: I thank the hon. member for the advice. I am debating whether to follow my notes or to answer the heckling. Perhaps I should start again and try to follow the text.


Thomas Clement (Tommy) Douglas: Enjoy yourself!


Stanley Howard Knowles: It would be more interesting if you would just talk to us.
The Budget-Mr. Mackasey


Bryce Stuart Mackasey: If I were to talk about the socialists I would have to comment on their contributions to this debate to date, which amount to absolutely nil. That is predictable. It was the same contribution we have heard from them during every budget speech for the last 25 years-no taxes, more welfare, put the corporations out of business, and somehow everything will work out all right. This has been their philosophy in Saskatchewan for so many years, and we all know what happened to the hon. member; he has been travelling ever since.


Thomas Clement (Tommy) Douglas: They are not doing very well now!


Bryce Stuart Mackasey: I know you are not, but hope springs eternal. Perhaps the hon. member, having lost the leadership of his party, should go back to his riding cap in hand and say to his constituents: "If you will take me back I shall be able to represent you a little longer".


Thomas Clement (Tommy) Douglas: That
does not happen to be true, but you could go out there and try.


Bryce Stuart Mackasey: I understand my Parliamentary Secretary did a good job, but perhaps the hon. gentleman will do better next time. I would rather talk about unemployment insurance and the contributions that will flow from the increased benefits that come into effect on January 1, namely the 10 per cent increase in benefits for people on unemployment insurance.
The Leader of the Opposition (Mr. Stanfield) was kind enough yesterday to ask some basic questions about why the Minister of Labour had recommended that the government follow the procedure of increasing the size of the benefits rather than extending the period of benefits for the winter months. I must admit that the alternative suggested in the question of the hon. gentleman had been thoroughly discussed within the department but rejected in favour of increasing benefits, and for fairly logical reasons that I should like to explain.
One of the reasons is this. If not for logical reasons certainly for historical reasons, and because of climatic conditions, we have paid in the winter months what is known as seasonal benefits. Seasonal benefits, as most members of the House already know, provide a method for extending unemployment insurance benefits to those unemployed who, under normal circumstances, would not be eligible for benefits for a variety of reasons-for example, perhaps not enough stamps in their book, indicating insufficient attachment to the work force before becoming unemployed.
Because we already have in the existing plan this feature that permits the Unemployment Insurance Commission the maximum degree of latitude with regard to extending existing benefits to those people who normally would not be drawing any benefits, it was felt that it might be in the best interests of the economy, and of the people drawing unemployment insurance in particular, that these benefits be increased by 10 per cent.

December 8, 1970
The Budget-Mr. Mackasey
I think it is significant, too, that the $54 million will not be taken out of the Unemployment Insurance Fund but will be taken from general revenue. This simplifies the introduction of this change and prevents the necessity for legislation. In addition, it removes the temptation on anyone's part to suggest that the 10 per cent increase, or the $54 million, should at the same time be accompanied by an increase in contributions.
I think this particular feature of the budget that was announced by the minister the other eveming should meet with general approval from the House. Let me make it quite clear that it helps only certain of the unemployed, those who are temporarily without earnings, rather than the chronic unemployed, the underemployed, or people who unfortunately have to live off assistance and welfare. Nevertheless this immediate injection into the economy of $54 million should in some way help to provide some of the spending power that I think we need if we are going to stimulate the economy in the immediate future to any great degree.
[DOT] (4:50 p.m.)
I think the Minister of Finance has already pointed out in greater detail than I could, and I do not intend to repeat, the other features that were announced during the week prior to the budget. I have in mind the increase in war veterans' allowance pensions, and in basic pensions, GIS, etc, all plans which eventually will put into the hands of people many at the bottom level of the income scale in Canada the type of income they need and deserve.
I might sound rather like a heretic if I were to suggest that a country as rich as Canada should never again be faced with this degree of unemployment. People today are interested in the quality of life rather than quantity of life. A better educated work force and, paradoxically, a better educated non-working force will no longer tolerate the booms and busts of our economy. They have been synonymous with most of the economies of what is loosely known as the western world. The targets of this and all future governments should at all times be full employment. I think I am really echoing the sentiments of the cabinet in general, and certainly those of the Prime Minister (Mr. Trudeau), in saying that, everything being equal, this government is dedicated to the concept of full employment.
Full employment is a matter of definition, of course. The Economic Council defines it as 3 per cent unemployment. Others define it as 3.5 per cent, and the actual records I have from 1962 probably indicate that the rate of unemployment in the last decade has been between 4 per cent and 5 per cent. I might indicate as well, in case the opposition feels a little smug or complacent about their own record, that between the years 1958 and 1962 the rate of unemployment in this country surpassed 7 per cent. I am not trying to be partisan by this remark but there is a parallel between the problems which confronted Canada between 1958 and 1962 and the problems that face the country at the present moment.
Behind unemployment, or contributing to it, has been the repetition or recurrence of inflation. Among our economists, at least those of whom favour, Galbraith, Friedman, Keynes, there is a difference of opinion as to how to control inflation. Traditionally, the manner in which it has been controlled in most countries associated with the International Monetary Fund and similar organizations has been by fiscal and monetary policies.
The Prime Minister or the Minister of Finance (Mr. Benson warned a year or so ago that fiscal and monetary policy control inevitably and unfortunately led to unemployment. It seems to me, as a person who does not claim to be an economist, that the time has come when economists both in the government and outside find a better way of controlling inflation and replace measures that unintentionally put Canadians out of work. I think speakers on both sides of the House have indicated the terrible toll this takes and the lack of productivity it generates. There is a greater need at this time for a better way when the work force of this country, both employed and unemployed, is demanding a better quality of life. People today no longer will tolerate slums or accept unemployment. They will not tolerate pollution and exploitation.
Perhaps one of the phenomena of the present decade, and certainly of the future, is that the people have the media to communicate their discontent. Perhaps what has been overlooked by the House is that as far back as the month of March the Minister of Finance predicted the problems with which we are now faced. In the month of March the government released considerable sums of money into the economy. The chartered banks of the country today have more than ample money available for lending, and interest rates have decreased substantially. This was not the result of action taken last week but the result of action taken last March. This indicates that the Minister of Finance was doing the proper things as far back as March to stimulate the economy, to control unemployment and to reduce the always terrible spectre of inflation which, in the final analysis, is as equally demoralizing as a high rate of unemployment.
The Leader of the Opposition (Mr. Stanfield) and the leader of the NDP as well, as other hon. members in the opposition, are and will logically be talking about the problem of unemployment. They talk about people on fixed incomes and our senior citizens. I am as aware of these people as they are. I am not unaware of what inflation does to these people on fixed incomes. All of us realize there is a limit to what a country of this size with 20 million people can do in the form of desirable social measures. This is a country of many regions with many regional disparities. It does not have the productive capacity of the United States. Certainly, anything is economically possible in a time of full employment. I think the message we should be getting is that we cannot expect both a high rate of unemployment and the high measure of social assistance this country desires and expects. Certainly, none of us appreciates or feels comfortable with certain fiscal and monetary policies that control inflation but result in higher unemployment.
Mr. Mackasey.]
December 8, 1970

There is no point in any member of the opposition or anyone else presuming that inflation was not one of the great problems this country has been faced with in the last year or so. It is all too easy to forget that it still lurks around the comer. Learned economists still point out that unless we are very careful, the reinjection of money to prime the pump, as somebody has said, such as money needed to increase housing starts for instance, is a factor that contributes to inflation. I might also mention the $54 million which will be put into the economy this winter and the $150 million the provinces will be using for winter works, as well as the reduction in interest rates designed to stimulate operations and expand the economy, all are potential factors in recreating inflation.
[DOT] (5:00 p.m.)
One thing intrigued me more than anything else in these contributions to which I have listened today. I refer to the contribution of the leader of the New Democratic Party who on many occasions has emphasized the need for selective controls in the future. This could be the answer. I have heard him use this expression on half a dozen occasions in this House. To this extent, we know that he is sincere in speaking of selective controls. I have heard him on radio and television speak of the use of selective controls. I have never heard him tell us precisely in what areas he would use his selective controls. I do not know whether he would advocate controls in respect of abnormally high wages in the construction area. I do not know whether this is one area he would consider. In all probability, he would place selective controls on the chartered banks of the country. In line with the philosophy or what used to be the philosophy of that party-I am not sure what it is these days but presumably it is the philosophy before the waffle group takes over-I presume the selective controls in this country would be in general against big business just as if big business has no place in the economy.
Big business does generate jobs and the opposition must realize that if we are to have the social policies this country needs, and if we are to create the jobs we need for perhaps the fastest growing force in the world, we will have to encourage Canadian investors, multinational and international corporations to invest in this country, preferably along guidelines that will protect the Canadian economy and prevent further erosion of Canadianism. Nevertheless, I think the suggestion of the hon. gentleman who leads the New Democratic Party that we should be prepared to introduce selective controls might very well be the answer to the next round of inflation. The point I am getting at is that this country can no longer afford the type of unemployment that faces us this winter.
If an unemployment figure of 3 per cent historically has been equated with full employment or what is commonly called the trade-off point or the emergence of inflation, then from that point on, if we are to have full employment, it is obvious that we will have to find something other than simply fiscal and monetary policies with which to conquer inflation. It may be that selective controls would be a solution. Certainly, this would be
The Budget-Mr. Mackasey
preferable to massive unemployment. We may have to introduce controls. They may be selective controls, as Galbraith suggests, over key industries and over key trade unions or over the unions which operate in the key industries such as the steel industry, the automotive industry, the chemical industry and others. He suggests these unions should be controlled because their agreements affect the service industries and the effect on these industries breeds dissension among the low-income workers, so the spiral starts all over again. I do not know whether these are the selective controls to which the hon. member alluded, but they are the controls referred to by Galbraith.
The other method by which to control inflation is voluntary restraint. I think we have gone through a period which indicates that this approach leaves a lot to be desired because there were not too many volunteers. There were very few volunteers in the professional ranks. There were not too many landlords who were prepared to roll back rents. There were not many professional associations, such as architects and engineers, that were willing to roll back their fees. There were not too many people in the medical profession who thought they should reduce their fees. So obviously the villain of the piece was identified as organized labour. The method of voluntary restraint leaves much to be desired because it requires not only the full co-operation of some of the groups I have mentioned, but also requires the full and absolute co-operation of the provinces since we live in a federal state. It is unfair to select labour as the villain of the piece in respect of the workability of voluntary restraint. It is also unfair to presume that the Prices and Incomes Commission did not have any effect on prices.
If the Prices and Incomes Commission had no effect on prices, then big businesses would be tripping over themselves to re-endorse the concept because so long as they endorsed the concept and labour did not it was very easy for them to pinpoint labour in respect of its inability or unwillingness to co-operate. The fact that big business has not re-endorsed the Prices and Incomes Commission is an indication that this commission did have an effect, if only a psychological effect, on prices. With the new policy it will be interesting to see whether or not prices will remain within bounds over the next year or year and a half.
I believe the proposed changes to the Unemployment Insurance Act which will come into effect in July represent legislation which is long overdue. I believe this is the feeling of the committee which is composed of members of all parties in the House. Certainly the co-operation has been extraordinary. The points of difference have been very few. I believe this is a realistic approach to unemployment, or to the problems in respect of a particular group of unemployed, those who are temporarily unemployed or temporarily without earnings.
This legislation is not intended to be, nor will it ever need to be, a substitute for a guaranteed annual income. Nor, indeed, will it be the instrument by which to look at the problems with regard to the permanently disabled, the permanently unemployed or people without work for

December 8, 1970
The Budget-Mr. Mackasey
long periods of time. But at least the benefits under this new plan which will be related to income will permit the person temporarily out of work to seek work without the problems which plague people who draw the rather low benefits which the unemployment insurance plan now provides. At the present time there are too many Canadians who happen to live off two cheques, one from the Unemployment Insurance office and another from the Canada Assistance Plan or local welfare. The new plan, if adopted and if the standing committee report does not basically change it, will do a good deal to remedy this. There is one feature in it which ought to appeal to members of the House. This is the fact that the government will absorb the cost of the plan once it reaches 4 per cent seasonally adjusted.
I do not believe members quite appreciate precisely what this means. When, for reasons best known to the economists or to the government, the unemployment figure may hit anywhere up to 7 per cent, the cost to the government would be $433 million. Certainly, this is a sum which may make people wish to review a little more closely what we call the trade-off factor. I think this regulatory feature is one of the better features of the new plan.
[DOT] (5:10 p.m.)
In conclusion let me say that I think the time is approaching when the problem of inflation should be tackled on a tripartite basis. I think that some medium of communication between labour, management and government is imperative in the future. There have been such talks of course at private levels. I have participated in some of it, and some of the viewpoints that have been advanced by economists attached to the labour movement have been very enlightening, very fruitful and very progressive. But I do not think that organized labour can stand back and divorce themselves from the problems of this country any more than big business can expect to operate in isolation without any humanitarian approach to the problems. I am not particularly pleased when multinational corporations close up plants in Cornwall or London, Ontario, with a minimum of advance notice and with little or no concern for the plight of the people whom they put out of work.
These are the type of responsibilities that private enterprise must assume in the future because there is more on trial than just the government or the opposition. In effect, the whole system is on trial, and people want more out of the private enterprise system than just a job and 4 per cent or 5 per cent rate of unemployment. They want full employment; they want social measures; they want an end to slums and pollution and all the other social evils. The message that all of us should get is that unless we are capable of taking up this kind of challenge we are going to be hardpressed to maintain this kind of private enterprise system which I happen to think is the best for our economy, despite what the socialists may think. We need and will see more and more government intervention and government participation in the decisions over the next decade. We can no longer afford inflation nor can we any longer afford abnormally high rates of unempoyment.


Mr. Jack Murta (Lisgar):: I really had not expected to be called upon to speak in the House so soon, but it appears my colleagues in the official opposition have decided that, since I am here, they might as well put me to work.


Mr. Mahoney:: Good idea.


Jack Burnett Murta: It would be an understatement to say that I am happy to be sitting in the House of Commons. What would perhaps be closer to the truth would be to say that I am overwhelmed. It is surely one of the greatest honours that can be accorded to any Canadian to be selected to representent a riding in this great country. Having said that, I hope hon. members will indulge me when I say that it is a particular honour to be chosen to represent the Lisgar riding in the province of Manitoba.
Hon. members will know that I came to the House of Commons as a result of a by-election following the untimely death of the previous member for Lisgar, George Muir. In his years in the House, George Muir earned the respect and regard of the people in his riding as well as of those who knew him in his capacity as a sitting member. I hope and trust that, as I mature in this job, those who selected me as his replacement will feel that they have made the right choice.


Some hon. Members:: Hear, hear!


Jack Burnett Murta: This might be a good time to enlighten my colleagues as to the advantages of living in the Lisgar riding, and to invite them to take the first possible opportunity to avail themselves of our hospitality. Easterners are inclined to think of Vancouver, Edmonton or Calgary when mention is made of the west, but the fact is that the great Canadian west begins in Lisgar.
Lisgar riding stretches for about 130 miles from east to west, bounded on the south by the United States border and ending in the picturesque farmlands of a town called Killarney. Its eastern boundary follows the twists and turns of the Red River as it flows north from the United States border, and part of the northern boundary is the historic Assiniboine River. The Pembina River winds through Lisgar from west to east and flows into the Red River.
A large proportion of Lisgar riding comprises fertile land, and this, coupled with the fact that there are no large cities in the riding and very little industry, has resulted in an agriculture based economy in the riding. This can be both good and bad. In good times, when crop and livestock prices are high and there are good markets, life in Lisgar can be filled with all of the good things for which men and women strive. Conversely, when the agricultural economy in the country is in decline, the people of Lisgar would feel the effect a bit more than areas which enjoy an input from industries or resources. It could be said that in Lisgar we live with one anxious finger on the pulse of the agricultural economy.

December 8, 1970

People are the most important element in any riding, and I would like to speak for a moment, with justifiable pride, about the people in Lisgar. We have a situation that is fairly representative of agricultural communities in the country in that about 30 per cent of our people are 45 years of age or older. This is largely because we cannot provide adequately for the young people, talented and eager young people who want more than is available to them in a situation where the family farm is on the decline and there is no industry to absorb them. This is understandable, but it saddens me none the less, to see young people leave the rural life, not because it does not appeal to them but because there is no alternative.
About 40 per cent of the people in my riding are of British origin. Among them are some of the first families to settle in the area. About 11 per cent are of French Canadian origin, and it is the nature of the French Canadian to preserve his language and his culture wherever he settles. This has greatly enriched the culture of Lisgar, and we can consider that we benefit from the fact that we have the best of the two founding cultures of this great nation. We are also extremely proud of the people of Dutch ancestry who make up about 23 per cent of our number, and the 11 per cent of our riding who are of German origin. There are others, such as Poles, Ukrainians and Italians, to mention a few of the ethnic groups that grace our riding. We are indeed fortunate, and perhaps a little proud.
It is to the credit of the farmers of Lisgar riding that they saw the wisdom of diversification in agriculture long before the advent of the Lift program. Our people are not easily discouraged, and when it became apparent that farmers would have to adapt to new conditions and appeal to new markets if they were to survive, they began to diversify. They diversified because they wanted to survive. The people of Lisgar, for the most part, enjoy their way of life. The farm and the rural community are what they know best and what they like best, and they have decided that they will not easily be discouraged from holding on to the way of life that appeals to them.
[DOT] (5:20 p.m.)
I should mention in connection with that, Mr. Speaker, that about 80 per cent of the farm families in Lisgar live on the farm the year round. It is not just a business with them; it is their way of life. Many of the people I am talking about weathered the great depression. They came out of it poorer, but proud and more determined. Such people scoff at suggestions that they leave the farms for the cities, and we can ill afford to displace them, whatever the reason.
Much as I believe that the farm and the rural community are worth saving, and much as I believe that the headlong rush to the cities should be decelerated, I am not suggesting that we attempt to stop the clock. Progress is just as inevitable as death and taxes, and we in Lisgar want as much as anyone else to be a part of the great era of science and technology that lies before us. And we in Lisgar realize full well that we can do much to preserve our present environment by diversifying still further, and
The Budget-Mr. Murta
setting out to attract industry to bolster our local economy. At the same time that we are ensuring the continuance of those things that we want to keep, we might also encourage our young people to stay in our riding. The time has come when we need them. However, we must ensure that we not only keep them but that in future, when they look back, they will be glad they stayed.
To attract industry, a riding must have a labour force and an abundant supply of good water. We have the labour force and the water in Lisgar, but the water flows through our riding into the Red River and is lost. It is possible that at some future time my colleagues in this House will join with me in exploring ways that this water might be put to use in Lisgar. My predecessor was engaged in studies with regard to a series of dams on the Pembina River which would make supplies of water available to our agricultural region, and also provide the water reserves necessary to the development of industry. If a series of dams such as this could be built I have no doubt that industry and processing plants, as well as a new intense form of agriculture would emerge in Southern Manitoba.
Before I leave this point, Mr. Speaker, I would like to dwell for just a moment on the aspect of agricultural people leaving the farm to find a new life in the city. By this I do not mean the young people who are just starting out in life. I am thinking about the people whose lives have been moulded, people who have spent a considerable part of their working lives in the agricultural economy, and who cannot easily adjust to an alien way of life. For the most part, these people would not have an opportunity to learn a new trade or profession, and would therefore be unable to compete in the job markets.
If it is necessary that these people should be relocated, and I concede that this will be necessary in many cases, then their prospects would be bleak indeed if we did not plan such moves very carefully in advance. I know many such people, and so I have a particular interest in what happens to them. They are for the most part proud individuals who have been used to working hard for what they receive. They would not take lightly to such remedies as welfare, and yet without training they would not have a chance in an alien environment. I mention this, Mr. Speaker, because this is an area in which I will take a special interest when I become fully involved in the affairs of the House. I do not suggest that I am in favour of accelerating the decline of the family farm as a part of the Canadian agricultural industry and as a way of life for those who prefer to live and work in the country. It just so happens that I think if our rural life is to continue it will be because of strong family farm units in rural areas.


Some hon. Members:: Hear, hear!


Jack Burnett Murta: I understand fully that an uneconomic farm unit must be phased out of the economy, just the same as an uneconomic business or industry must fall by the way. I am hopeful that some means can be devised whereby as many as possible of our farm units can be preserved where people want to remain on the farm, and where

December 8, 1970
The Budget-Mr. Murta
such people can contribute to the success of their farm businesses with the application of sound management principles. Those who are forced to leave the farm should be trained for new jobs, and assisted until they are resettled.
While there are many advantages to living in Lisgar, Mr. Speaker, we are faced at the present time with the same problems that face the rest of the country. For that reason my people are understandably interested in what the federal government is doing and what it is proposing with respect to resolving farm problems. Now that I am in Ottawa, I expect that I will be getting letters and phone calls asking me what I am doing to help solve some of these problems.
Again, like the people in the rest of Canada, the farmers in my area are sorely beset by a shortage of cash to see them through the winter and to assist them in getting in the crops in the spring. Because of the nature of the farm industry in my riding, it appears that the corrective measures instituted thus far will have less effect than in some of the areas further west. However, I will be in a better position now to determine just what is being done and what is being planned.
Cash shortage in my riding is the result not only of slow movements of grain out of storage but is also the result of low market prices for hogs and other livestock. There is also a great deal of concern in my riding over the way the traditional markets for eggs and poultry have virtually dried up as a result of provincial restrictions imposed recently on the movement of eggs and poultry across provincial boundaries. I am hopeful that these problems will be resolved before permanent damage has been done to our traditionally stable markets.
Inasmuch as the entire economy of Lisgar is agriculture oriented, I hope sincerely that we will be able to devise some means of getting our farmers through the winter and spring. It is imperative that we do so if we are to head off economic disaster in rural ridings. I am not being an alarmist, Mr. Speaker; the situation is really that critical.
My colleagues will no doubt be happy to learn that I am about to conclude my remarks. I would guess that they are as happy as I am that I managed to get through my first speech without destroying the parliamentary system of government. I will try to correct that when I engage in serious debate in the future.


Some hon. Members:: Oh, oh.


Jack Burnett Murta: I would like to conclude my remarks by saying to my colleagues on both sides of the House that it has been most gratifying to have been received so warmly on my arrival here. I have been greatly encouraged by the kind of assistance that has been rendered me on every hand. Now that I am formally installed as a member of Her Majesty's Loyal Opposition, I hope fervently that I will be here long enough and will conduct myself in such a manner that I will be able to feel
at some future time that my colleagues on both sides of the House are also my friends. Thank you, Mr. Speaker.


Some hon. Members:: Hear, hear.
[DOT] (5:30 p.m.)


Henry P. Latulippe: Mr. Speaker, several things have already been said about the budget, but there is still a great deal to say. The main things have yet to be said. No mention at all has been made of logical solutions likely to settle our problems. The problems exist, but no solution is being proposed. Solutions are feared as if they were thunderbolts, but I shall take it upon myself to suggest some.
Every time the budget is brought down, reference is made to taxes and the taxpayers are even more burdened with taxes. Indeed, the administration takes in from 50 to 60 per cent of the income, so that the taxpayer is left with practically nothing.
In order to make money available to taxpayers, new loans must be raised and, consequently, more debts, that many more new burdens and difficulties which lead us to the worst failures on record. The more we move ahead, the more complicated the process becomes; as the rate of unemployment increases, so does dissatisfaction and also the trouble we have in solving our problems.
And all this is due to the fact that we ignore the true solutions to our problems. Once these problems are solved, it would be easier to provide for a sound administration.
Over the weekend, through the newspapers, I read some of the comments of various public and semi-public organizations on some aspects of the budget.
No general reduction in income taxes was announced, but a 10 per cent increase in unemployment insurance benefits was made official.
If we decide to increase unemployment insurance benefits, it is a sign that we are very far from the measures which should be passed to give the population what it is entitled to.
It was decided to continue for another year the surtax of 3 p. 100 on individual and corporate incomes. Well, Mr. Speaker, when one wants to relieve someone who has a very heavy load to carry, one makes his burden lighter rather than heavier. The situation is directly opposite in the present budget.
Nearly $150 million are granted to the provinces for job-creating projects, therefore laying at the door of the provinces the present difficulties because if they borrow $150 million they will have to pay an excessively high rate of interest.
If the Minister of Finance (Mr. Benson) had frozen the interest rate at 1 or 2 per cent, then it could have been said that he was truly willing to help the people instead of being partial to the financial sector. What he is doing now he is doing it for the latter at the people's expense as well as at the expense of the provinces already overtaxed and to whom further loans will only bring further difficulties.


December 8, 1970

Subsidies of $23 million are granted to the areas that have won the "unemployment Grey Cup" for the fight against unemployment and $20 million for building roads and facilities at the new airport. That makes sense because such things are necessary, but those are not the measures required to solve the problem of unemployment because machines are doing the work nowadays. In fact, only a few hundred workers will be hired for the construction of the international airport.
The Canadian Manufacturers' Association and the Chamber of Commerce of Canada, two of the most powerful organizations in the country, give the same interpretation to the budget statements of the Minister of Finance. Both say that the minister has chosen to give a little help instead of a moderate assistance to the economic development. Those are the words of Mr. J. C. Winthrop, vice-chairman of the Canadian Manufacturers' Association.
The newspaper La Presse of December 5 featured an article by Mr. M. K. Carthy, the Executive Chairman of the Chamber of Commerce, who speaks along the same line. In both cases, they are experienced people whose opinion deserves respect.
As for me, Mr. Speaker, I want to take advantage of the few moments at my disposal to try and determine the constant cause of popular dissatisfaction over the budget that the minister has tabled.
Mr. Speaker, the estimates for our national production for the year 1970-71 are so favourable that they should allow all Canadians to enjoy a decent life. If we admit the importance of this production, on the other hand, we can state positively that it is not in keeping with the purchasing power of most Canadians.
[DOT] (5:40 p.m.)
United Nations experts have many times called the Assembly's attention to the vicious circle in which the undernourished people find themselves.
According to them, malnutrition is one of the main causes of poor health in the Western world. And yet, we pay Western farmers to prevent them from growing grain, and that does not bother anybody, except those who are hungry. That makes them think.
The capacity to run into debt is greater than the ability to repay. Where are the reforms that the Minister of Finance or the government introduced to remedy the situation? Nobody notices anything and loses sleep over it. Discussions are held in order to go deeper into debt, while the old debts remain unpaid.
The government refuses to face facts. We are heading for complete failure because of our refusal to recognize that the problem is strictly economic, because we refuse to protect our economy by using our rights and prerogatives.
A time will come when new strategies will be planned because capitalism refuses to realize the meaning of the progressive discontent of frustrated populations. However, it is time to tell those who govern us to wake up, because they are dozing in the face of a dissatisfied society on the road to rebellion. The man who is natural-
The Budget-Mr. Latulippe
ly dedicated to justice revolts in the face of the present glaring injustice of our financial and fiscal systems. If we persist in ignoring the real objectives of community life, the real functions of the nations ministers and representatives, the fundamental structures of society will be undermined at the root and we shall witness the final collapse. The day this will happen may not be far away, and I am not hoping it will come. I am here today because I want reforms and because I see what is forthcoming. If others cannot see it, I do. Such are the conditions in which I speak before you now, in all awareness, anxious to assume my own responsibilities.
I regret that such a large number of Liberal and Conservative members have no solutions to offer to the government. It would still be possible to bring in the corrective measures needed within the framework of our conventional capitalism and stop communism from gaining ground.
We are fighting against poverty. Every attempt is made to balance our present economic system which generates poverty, but poverty persists. Departments and commissions are set up to determine whether poverty exists in Canada. This problem has been considered for many years.
When I was elected to the House in 1962, the Liberals were in the opposition. They were accusing the government of doing nothing to fight unemployment. They deplored the high unemployment rate, they denounced the misery of the people and they asked the government to take the necessary steps to put an end to it.
And the Conservative government passed all sorts of measures, including a winter works program, for instance, in the hope of protecting our citizens from unemployment and poverty. To this end, credit was loosened and the government had to run into deficit again and the Liberals inherited this situation when they took office. They said that the country was suffering from inflation and that it was absolutely necessary to take measures liable to cure it. But, in the guise of fighting inflation, they are pushing the Canadian people back into a state of dire need and they put our economy out of balance to an extent yet unknown in our country.
We are unable to avoid going from one economic recession to another. And even with stable governments, we have never succeeded in ensuring economic stability. Therefore, no stability, either with the Liberals or with the Progressive Conservatives. Indeed, we have known only unemployment, poverty and wars because we refuse to establish social justice as a means of distributing affluence instead of want.
The hon. Minister of Finance is now attempting to solve the present economic problem with his dropping-tube budget. Indeed, it takes more than a dropping-tube to eliminate the economic disorders we are now plagued with and that will plague us in the future if the government persists in generating want instead of distributing affluence.
We are not responsible enough to assume our responsibilities. Such an attitude is totally uncalled for.
The people are disatisfied with their traditional administrators, Liberals and Progressive-conservatives. The

December 8, 1970
The Budget-Mr. Latulippe
people are led up with old-line politics of backward and fossilized governments, unable to keep in tune with modern thought and science.
There is something wrong with the thinking of administrators, and any remedy is being cast aside. When one is well seated in an upholstered chair, when there is no problem at home, when a certain class of society is satisfied with the system, as are the big financial institutions
__because that system is a gold mine for them, even if
they operate at the expense of the little people-one can expect that the people will see to it one day. And that day, it will be a terrible disaster.
The dissent of students, and even the sensible recommendations of the new and less complacent political parties are as many symptoms of an uneasiness which will not disappear even through the most desperate efforts of an obsolete administration not attuned at all to our modem times.
[DOT] (5:50 p.m.)
Since the beginning of this century we have seen big industrial capital settling down in Canada and expanding so successfully for itself and for its millionaire and billionaire institutions; time has come to wonder whether all this show of power and production is actually meeting the rightful aspirations of our population.
Recent unusual events have forced this government to introduce unusual legislation.
Where are we heading to? The people are at a loss and are watching the government and the 264 ministers and Members of Parliament they have democratically elected to lead the country. This includes even the disserters and those who voted for the opposition members, including the impatients and the revolutionaries who are trying to get justice within a just society in Canada.
The unusual events that forced us to introduce an unusual legislation deserve at least being analyzed and studied with a view to finding their underlying reasons. And this is not being done. Let us think about it because when the bus is slowly skidding off the highway the driver should be wakened up and not the passengers. We are now trying to wake up the passengers because the driver is doing a bad job and refuses to take his own responsibilities to reach his goal.
This is a comparison. Normally when a passenger is travelling by bus no unusual events happen. Everybody reaches his destination and is quite satisfied with the trip made at an agreed price.
If the bus skids into the ditch, the passengers have reasons to be annoyed and dissatisfied, to seek out the people responsible for the unusual event and to ask at least to be led to their destination as established on departure.
If at the time of the last elections our citizens asked for a just society in a united Canada, they expect to live in such a society. They have reasons to be displeased if they see injustice everywhere, as well as a faulty distribution which makes the rich become richer and the poor poorer. They are also right when deploring unemployment and inflation, the exclusive privileges granted the large corporations, the hardship, want, insecurity and poverty prevailing among too large a sector of the population which, in its own way, contributes to the social, financial, economic and political life of the whole nation, according to its means and intellectual capacities.
The unwonted events which took place these last months should compel us to plead guilty and examine our conscience as to the way we guided the destiny of 22 million Canadians who paid to have a just society in a united Canada, as requested by the Prime Minister (Mr. Trudeau) who seems to be doing its utmost but who is always hindered in his action by traditions, red-tape and known or secret influences. It behooves us to support him in order to lead the state again towards justice, balance and harmony.
Mr. Speaker, when you administer a whole, you must take care of every part, because as everybody knows, the whole is made up of the parts. Canada is a whole which is made up of 21.5 million Canadians. These 21.5 million Canadians must be given a guaranteed income. Everywhere production is divided between consumption and capitalization. In all administration, revenue equals expenses plus profits. If we are to have a just administration, we must have revenue. In order to pay taxes and live decently, every citizen must have an income. And if the individual in society does not have sufficient income to cover his expenses, then there is unemployment and the undeserved poverty that we now have.
On behalf of all Canadians, I call upon hon. members to think deeply. In the name of justice, I call upon them to meet their responsibilities and to establish a fair system of justice based on economic reality. None of this was provided for in the budget, and few members strive towards social justice in Canada. I have come to the conclusion that they have no social conscience at all.
In 1970 production amounted to $84 billion. One should find in this amount expenses for $63 billion and benefits for $21 billion. That percentage of 75 and 25 should show up at the level of every single administration whether individual, domestic, social, municipal, provincial or federal. Everone should get his share of that production of $84 billion. Consumption should amount to $50 billion, and the capitalization surplus should amount to $34 billion. Capitalization is so considerable that citizens are denied a decent living standard. Part of it should be distributed within society. The Minister of Finance should have announced a reduction of the cost of living that is high at present because of ambitious people who capitalize too much.
The minister should have stepped in but unfortunately he still protects the big financiers. He is the enemy of the people because he does not assume his responsibilities.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but I must do so, it being six o'clock.
At six o'clock the House took recess.

December 8, 1970


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Henry P. Latulippe: Mr. Speaker, before recess, I was saying that it would be easy to balance our economy if we would all co-operate.
The various white papers published up to now by the government, the Speech from the Throne in September 1970, the miniature budget brought in by the Minister of Finance on Thursday last, the investigation of the Senate committee on poverty as well as the eventual report that is not expected before next April, those are different indications that the economic system is sick and completely unbalanced on the whole as well as in its various forms of activity.
What should be the established order is organized disorder, planned economic unbalance. And all the efforts made to correct this situation do nothing but clog all the more the wheels of administration without in any noticeable way improving the results. Everyone does his best, under these circumstances, at each administrative level, but the main fault lies with those who lead, be they well known or unknown, elected by the people or by the shareholders of big financial, industrial or business corporations.
Mr. Speaker, I have drawn a table to shed a little light on ail the white papers proposed by various departments. This table is more eloquent than all the thick reports of the Royal Commissions on banks, unemployment, poverty, biculturalism and many other topics, which are so costly in time and money but very often do little more than increase the confusion in the minds of officials, ministers and departmental technocrats.


The Acting Speaker (Mr. Laniel):: Order. I regret to interrupt the hon. member, but I must point out to him that his time has expired.
The Chair is taking this opportunity to remind the hon. member for Compton that it is not in keeping with parliamentary procedure to allow hon. members to have part of their speeches or a document printed in Hansard, unless the House is agreeable.

Would the House agree to allow the hon. member for Compton to table the documents and tables or to make them an appendix to Hansard?


Some hon. Members:: No.


The Acting Speaker (Mr. Laniel):: Apparently the House is not willing to allow the hon. member to do so. I, therefore, feel compelled to recognize the hon. member for St. John's East.


James Aloysius McGrath: Mr. Speaker, when the minister introduced his budget a few days ago we were encouraged by the many references he made to
The Budget-Mr. McGrath
regional development and particularly to the Department of Regional Economic Expansion. We were encouraged because many of us in the House, indeed many throughout the country, have long held the view that in order for regional economic expansion programs to be effective in this country they must be co-ordinated with the government's monetary and fiscal policies.
We hope that the government is finally coming around to this viewpoint, because in order to have regional development policies that result in the creation of employment and the stabilization of the economy there must be this co-ordination with our monetary and fiscal policies. More particularly, if these regional development programs are to be truly effective in stabilizing the economy and creating employment, then they in turn must be truly regional in concept. We therefore welcome this change in government policy, noting at the same time that it is one we have advocated for some time.
[DOT] (8:10 p.m.)
This concept is directed essentially toward the creation of employment opportunities in the regionally disadvantaged areas of the country. It is our belief that if you designate the whole country as a special area under a regional development incentives program, as my col-leage the hon. member for St. John's West (Mr. Carter) said you will end up, in fact, with no special areas and the program as a consequence defeats its very purpose. This is what we have been trying to tell the government since this program was first announced. As a result, we draw some encouragement from the fact that the minister announced in his budget speech that the government proposed to lift the ceiling on individual projects undertaken in the Atlantic provinces under the regional incentives program. Special incentives are essential if the area is to attract new industry or encourage plant expansion by existing industries.
We all know that industry has to take the initiative under this program, and we point this out as one of the major weaknesses in the program. If the initiative is left to industry, it will want to locate in areas close to major markets. This, we submit, is a major weakness in the program. The government, in announcing the special incentives for the Atlantic provinces-which we feel are essential if the area is to compete with other designated areas close to the major markets of the country-offset this advantage to the Atlantic region because in the same budget speech the government announced the designation of the city of Montreal and the southeastern area of Ontario as special areas. I submit it will take considerably more than the 10 per cent additional incentive for the Atlantic region, which the government has proposed, to offset this move.
I am not for a moment suggesting that unemployment is not seriously high in Montreal and the southeastern area of Ontario, because we all know it is. I am saying that the Atlantic provinces do not stand a chance under this program. There is no way they can compete with the advantaged areas of the country in terms of transportation and proximity to major markets. In this respect the Atlantic provinces are just not in the ball game. I am

December 8, 1970
The Budget-Mr. McGrath
very much afraid it will take a winter of hardship, as a consequence of probably the highest unemployment since the depression, to prove this point. This also applies to other areas of the country; I have in mind particularly northern Ontario and the Gaspe region of Quebec.
The proposed amendments to the Regional Development Incentives Act will certainly improve the program; nobody would deny that. But it will not do so in so far as the regional disadvantaged areas of the country are concerned. I make special reference to my own province of Newfoundland. In this connection that province does not stand a chance. The only way industry will be induced to establish in the province of Newfoundland, with its transportation problems, is if the people of Newfoundland will assume all the risks involved in a new venture. We have evidence and many examples that this is a fact. The people must assume all the risks, thereby making it so attractive to promoters that they in fact have nothing to lose. The people of Newfoundland must assume all the risks which would normally be assumed by the entrepreneur. This added burden to the people of Newfoundland must automatically increase the already high burden of provincial debt. This is a debt which I submit is already critically high.
The Minister of Regional Economic Expansion (Mr. Marchand) and the officials of his department seem to have been completely carried away. That is the only way one can explain the reason for this program which makes the whole of the country a designated area, to the economic disadvantage of regions which are now completely out of the economic picture, particularly areas such as the Atlantic provinces which had certain advantages prior to the coming into effect of this program. I refer to programs such as the Atlantic Development Board which gave that area a special status. This special status has been lost. The government cannot escape its responsibility to the slow-growth provinces such as Newfoundland and the other Atlantic provinces. The government has a responsibility to discharge in respect of the implementation of its special programs. It must be responsible to the regionally disadvantaged areas of the country.
These special programs can only be successful when the government recognizes that regional development must be approached on a regional basis. There must be regional application of this policy. What is good for the city of Montreal, the county of Glengarry or the southeastern area of Ontario is not necessarily good for Newfoundland, the Atlantic provinces, northern Ontario or the Gaspe region of Quebec.
It is a fact that unemployment in the Atlantic provinces is expected to reach 14 per cent of the work force this winter. What other area in Canada would tolerate such an astronomically high level of unemployment? This is the prospect we face in the Atlantic provinces. In Newfoundland and other parts of the Atlantic provinces, the rate of unemployment will actually exceed this figure. It may, as the hon. member for Gander-Twillin-gate (Mr. Lundrigan) suggests, go as high as 20 per cent. This government does not seem to realize that the structural causes of high unemployment in this region, such as
remoteness from major markets, an aging population, inadequate educational capacities and reduced capability of the work force, have been seriously aggravated by the government's anti-inflationary policies.
[DOT] (8:20 p.m.)
It is not good for the government to saddle a region with the high cost of its anti-inflation campaign and then, unsuccessfully, try to offset these costs with an inadequate regional incentives policy. I submit that the region must be provided with a new economic base. The Atlantic provinces must have a new economic base if they are to compete not only in terms of this program but under ordinary circumstances with the rest of Canada.
To quote the major recommendation of the fourth report of the Atlantic Provinces Economic Council, we must have a new economic base if we are to become a viable sector of the Canadian economy. RegretfuEy, I suggest to the House that we will not get that essential, new economic base under this program and consequently the program will fail, as it is failing now, to meet the needs of the Atlantic region. As I have said, what little advantage we had has been lost. We have lost the Uttle special status that we had. To realize this one has only to quote the recent reaction of APEC, the Atlantic Provinces Economic Council, in reference to the budget and to the government's proposal to designate Montreal and the southeastern area of Ontario as special area. The reaction was as follows:
If DREE wishes to counterbalance the designation of Montreal, Hull and Cornwall it has the power to do so by extending maximum grants to firms locating in the Atlantic region. Extending the ceiling is merely window-dressing.
Further in the same article there is this statement by the government of New Brunswick:
This will make it more difficult for us to attract new industrial firms, which will tend to locate in central Canada. Although Mr. Benson has indicated these are only for a limited time it will be difficult for Ottawa to resist local pressures to retain them.
By designating the city of Montreal and southeastern Ontario as special areas under the regional development incentives program, the government has in fact placed the Atlantic provinces at a further disadvantage which will become more painfully apparent this winter with the prospect of a record high rate of unemployment, the highest contemplated unemployment since the depression.
I listened today to the Minister of Industry, Trade and Commerce (Mr. Pepin) refer to the need for a selective approach to areas of high unemployment. This is precisely the point we have been trying to make in the House since the government announced its program. I submit this is the point the government has failed to recognize in bringing down this policy. The government persists in taking a blanket approach to the problem, failing to recognize that this country is not one homogeneous unit but is, rather, comprised of five distinct areas each with a distinct economy. I submit this is a major weakness of the government's program to deal with regional economic development and is, regretfully, one which the Minister

December 8, 1970

of Finance (Mr. Benson) failed to recognize when he brought down his budget.
What is equally disturbing about the government's development policies is the arrogance that seem to personify the Department of Regional Economic Expansion. The department takes an arrogant approach to the problems of regional disparity. We see it in the House in the minister's cavalier attitude in responding to questions on regional economic expansion. As a matter of fact, the attitude of the Minister of Regional Economic Expansion is such that we cannot seem to get an answer to a question in this House; he always seems to skate around the question.
One senses the same arrogance on the part of the Department of Regional Economic Expansion, in the Standing Committee on Regional Development. The attitude of the minister, his deputy minister and the officials of the department toward the members of this Standing Committee of the House is such that they tell the members of the committee as little as possible. They completely fail to respond to questions. The minister and his officials evade questions and adopt a cavalier attitude, or one of non-cooperation, with the committee. The result is that this Standing Committee is one of the most ineffective committees of the House.
This committee should be in a position to help the government and the department in devising and implementing regional development incentives programs. This particular committee, of which I have the honour to be a member, has travelled throughout the country. It has visited many areas of western Canada, the Atlantic provinces and eastern Quebec where members of the committee had an opportunity to take a first-hand look at the existing programs for which the Minister of Regional Economic Expansion assumed responsibility and see them at work. We had an opportunity to speak to the people in these areas.
However, the committee has failed to make a single recommendation to the House. As I say, it is the most ineffective committee of the House. I submit that a great deal of the blame for this situation rests with the Minister of Regional Economic Expansion and his deputy minister, because their attitude has created a situation of continuing frustration.
The arrogant attitude of this department, upon which so much dependence is placed by the government in this budget, is frightening. It is causing a great deal of concern because the government feels-certainly the Minister of Regional Economic Expansion feels-that in regional development programs it is preferable to proceed on the basis of trial and error rather than on the basis of listening to the elected representatives of the people and taking advice from the provinces and municipalities of this country. The minister, in a statement released today, explains the proposed amendments to the government's regional industrial incentives program as follows:
[DOT] (8:30 p.m.)
We have had to learn some lessons by experiment. No doubt it will turn out that we have made a few mistakes.
The Budget-Mr. McGrath
Time does not permit me or my colleagues from disadvantaged areas of this country to catalogue those mistakes in the House because it is a substantial catalogue of trial and error. Why is it necessary for the government to proceed in this way? Why does the government not pay heed to the Standing Committee on Regional Development? Why does the government not pay attention to the members of this House who day after day direct questions to the Minister of Regional Economic Expansion? In particular, why does the government not consult the provinces and the municipalities? Why does it persist in ignoring these essential sectors of government in respect of programs that can only be successful and effective so long as they have the complete trust and confidence of the provinces and municipalities? The government persists in its program of trial and error.
In the same statement the minister announced that in order to reduce the tremendous workload that is placed upon the shoulders of senior officials of his department in connection with the regional development incentives program, a special board would be established. I quote from the minister's statement as follows:
I therefore propose to establish a small board, consisting of my own senior officials plus representatives of the Department of Finance and of the Department of Industry, Trade and Commerce, together with a few expert advisers from the private sector.
No reference whatsoever was made to the provinces and municipalities which have an essential part to play in any industrial incentives program and which have a very important role to play in any program of regional economic expansion. Why the government persists in this philosophy is beyond me. One can only conclude that this department, with its minister and deputy minister, its senior technocrats and bureaucrats, a department which every day grows in size and in organization, has an attitude of "we know best".
They have a condescending, cavalier attitude toward the provinces and municipalities of this country and to the House. They refuse to take advice in areas where programs they are implementing are essential to the local governments, municipal and provincial. Perhaps the attitude of the Minister of Regional Economic Expansion can best be summed up by a comment that was made by an assistant deputy minister of the department at a conference on regional and rural economic adjustment which was held in Winnipeg from November 12 to 14, a conference sponsored by the Canadian Council on Rural Development and the Canadian Economic Association. He said that one of the reasons the performance of the Department of Regional Economic Expansion was less than adequate was that DREE had to respond to political expediencies in their development program.


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


James Aloysius McGrath: May I be permitted one final sentence?


The Acting Speaker (Mr. Laniel):: Does the House give unanimous consent to the hon. member to continue?
1870

December 8, 1970
The Budget-Mr. Broadbent


Some hon. Members:: Agreed.


James Aloysius McGrath: I merely wanted to say that this sums up the failure of the department-it has to respond to political expediencies. For this reason it has failed to meet the objectives set out for it by Parliament. Consequently, the Minister of Regional Economic Expansion has an obligation to the House, in view of the special responsibility placed upon him by the budget, to come before the House and explain his program in terms of the budget.


John Edward Broadbent: Mr. Speaker, the economic program of this government since it was elected in 1968 has achieved the paradoxical combination of a series of ad hoc decisions combined with a consistent and lunatic preoccupation with inflation. Even on the question of inflation itself the Minister of Finance (Mr. Benson) has never been able to sort out whether he is dealing with the cost-push or demand-pull factors. We saw in his budget last spring all kinds of contradictory evidence on this point, and we saw the same kind of confused thinking in the budget which was brought before us last week.
The result of this kind of seriously and almost criminally directed effort has been that the growth rate of our economy has been reduced in effect to zero, if we consider the population growth and, not unrelated of course, we are about to achieve in Canada the highest number of unemployed in the history of our country. This has been the serious forecast by a number of competent economists regarding the trends which will reach their lamentable peak next February. This, I repeat, is a deplorable record for any government, and particularly deplorable in light of the expectations of hundreds of thousands of Canadians who thought they were electing a progressive Prime Minister (Mr. Trudeau).
Instead of dealing in a serious and meaningful way with the situation, instead of coming before Parliament and the people of Canada last Thursday with an imaginative, sound, serious program dedicated to achieving full employment and, not unrelated again, a sense of community in this country, we had the same kind of quick, unthought-out, contradictory proposals that have characterized the Minister of Finance since he assumed that position. The budget gives every indication of being concerned both with unemployment and inflation. The surtax is left on, yet all the rhetoric that is in the speech purports to reflect a concern for the unemployed position in which hundreds of thousands of Canadians find themselves. A trivial $250 million is to be given up by this government in its 115 per cent capital cost depreciation allowance program-a pitiful amount of money if we intend seriously to inject funds into the economy to do something about unemployment.
[DOT] (8:40 p.m.)
Firstly, the government proposes to grant an increase of $5 to a family man who is living on unemployment
insurance__a ridiculously low amount which would still
leave an unemployed man with a family at the poverty level. If you consider the budget seriously, these are the
[The Acting Speaker (Mr. Laniel).]
central recommendations. Instead of that, what was needed was a concerted attack on the present economic position of the country. We should have had an across the board tax cut for middle and low income families, and complete removal of taxation from family men and women with incomes up to $4,000 and single people with incomes up to $2,000.
Secondly, we should have had a major infusion of public capital into the economy. Thirdly, we should have had an indication from the government that it was going to establish a central economic planning board which would give serious priority to economic development. The amount of money that this party recommends, Mr. Speaker, is not the paltry $250 million that the minister is going to save on the 115 per cent capital cost depreciation allowance, but rather it is in the billions of dollars. That is what we need now, and we need it in a very serious way. It should not be spent in subsidizing private corporations but in the creation of Crown corporations and co-operatives on the one hand and, on the other, on encouraging public expenditure through municipal governments and agencies which already exist. I will return to that point.
It seems to me that this kind of spending through the public bodies and co-operatives on the one hand, spending on new enterprises and significant increases in expenditures at the municipal level on the other hand would achieve the desirable economic effect of injecting new cash into the economy and therefore would provide some increase-I do not want to exaggerate the possibilities^-in job opportunities.
The second important point to be made is that such money spent affects people living in our society on the basis of equality, and that is what the spending and the use of political power of democratic governments in our kind of society should be all about. Let me give specific examples of how this money could be spent in a way that would not just stimulate the economy but would benefit those who need it most. In respect of public housing, for example, approximately 2 million people are in need. In the city of Toronto alone there are 88,000 of these people. That is a rough calculation based on 22,000 families who right now need public housing. Yet the government is spending only 3.9 per cent of all its funds on public housing, which is less than 60 cents per capita. Spending in this area would have an important spin-off effect by encouraging full employment in all industries related to housing and it would provide housing to people who badly need it, many of whom are out of jobs.
Secondly, in terms of tax relief I have already said that tax cuts across the board are needed at the middle and low income levels, and we need the complete removal of income tax from single people earning up to $2,000 and from couples earning $4,000 or less. The other point I want to make with respect to tax reform, which should be introduced now and not postponed, is that the government, if it wants to redirect the economy, should get away from the ad hoc kind of decision-making that has gone on in Canada ever since World War II. It should take seriously the objective of stimulating and expanding
December 8, 1970

the public sector. It could have done this now by introducing special tax credits for those who want to purchase municipal and provincial bonds. This would be a significant reform.
It is in the area of municipal and provincial public spending that we can most readily affect those who have average and low incomes, because in the main the facilities provided by municipal and provincial governments are provided to citizens on the basis of equality. It makes no difference whether a child is a member of a rich or a poor family in terms of whether that child benefits from public schools, public universities, public parks, public swimming pools, or what have you.
It is just this kind of shifting of priorities that we need in our economy if we are to take simultaneously and seriously the democratic objective of equality and the economic objective of stable employment. But no such indication has come from the government, certainly not in this budget and certainly not in the white paper on tax reform.
The hundreds of thousands now unemployed, the fishermen in Newfoundland, the auto workers in my constituency who were unemployed in their thousands before the strike which is currently taking place and will likely remain so after it has been settled, the unemployed cab drivers in this city-in short, the unemployed throughout the country-need their unemployment insurance benefits increased and increased immediately. Those benefits need to be increased much more than the paltry $5 which the government offers for the family man. The very minimum we need, and need now, is the kind of proposal in the white paper on unemployment insurance. There is no reason why an unemployed man in this country should not receive at least two-thirds of his income during periods of unemployment. He does not create that unemployment. It is created by the economic policies of government, whether it be federal or provincial, and neither he nor his family should have to suffer the consequences.
In terms of public spending, the government could have shown a little imagination. For example, it could have decided to develop winter parks in the way that many of the provinces have developed summer parks. We could have taken our national parks and installed several ski-tows in each of them at a cost of $50,000 or $60,000 per tow. That would provide a minimal kind of employment initially, but at the same time it would provide a real opportunity for skiing Canadians who happen to earn less than the $15,500, which is the average income of skiers in this country, to use such facilities. We could provide a meaningful and exciting winter parks program for the people of this northern country instead of leaving our recreational facilities in the winter available primarily for the rich.
Also, at the time of the budget announcement the government could have decided that it would no longer leave to corporations the unfettered right to open and close factories. We could have taken away from Duplate Canada Limited and the Dunlop Corporation of Canada Limited the right unilaterally to throw hundreds of workers out of work even though the men and women
The Budget-Mr. Broadbent might have been in those jobs for up to 35 years. It is not merely the human right to have some say about your job that is at stake here-and that is an important right-but also at stake is the unfettered right of corporations to make these investment decisions. Only by getting at that kind of control which currently remains with our corporate sector can we effectively develop an economy based upon the principle and the goal of full employment.
Much of the fooling around with the system, the special tax allowances and so on, that the government seems to admire so much is totally and completely wasted. What is needed instead is a serious effort by the government to have some say in these investment decisions. But, Mr. Speaker, that would mean effectively taking on the corporate directors in this society, and no Liberal government in the past-and certainly not this Liberal government-has shown the slightest indication of willingness to take this kind of action.


Mr. Benjamin:: What about "Tiger" Basford? He takes them on.


John Edward Broadbent: Mr. Speaker, the member who preceded me talked convincingly about the inadequacy of the regional development program. He did not mention that over 60 per cent of the funds which have gone into that program since the election of this government have gone into foreign-owned industries. We are perpetuating, in underdeveloped parts of Canada, the economic sickness which is reflected in the developed regions. Our party has argued that this kind of financial assistance to foreign-owned firms should cease immediately. We are not saying that no foreign capital should come in; that should be made clear. However, we are insisting that when it comes in, it ought to come in on the basis of a minority shareholder.
[DOT] (8:50 p.m.)
Instead of relying overwhelmingly, as we now do in regional development programs, on foreign-owned firms which will distort the priorities of our economy and which will contribute to the boom and bust cycle, we should be encouraging a combination of mixed capital development projects, using federal funds and private Canadian capital as well as private foreign capital. This method has been used in Turkey, in Sweden and in Japan. It has been used so often that one would think even Liberals had learned about it.
In addition, we should use in many cases public capital exclusively for investment in development. In some cases we ought to create entirely new enterprises, and in some cases we ought to buy up existing enterprises, especially those in the natural resource sectors. We have some $4 billion now in the reserve fund. A good part of that money will not be needed if we maintain a floating exchange rate. I do not see why a good part of this money should not be used to gain control, for example, of the oil and gas industry in this country. This would stop the export of the profits of that industry. Also-and this is at least of equal importance-it is a modern industry

December 8, 1970
The Budget-Mr. Broadbent in this society and in the modern world economy. It has real potential for growth.
By gaining control of that kind of industry we would begin to control the research and development that is related to its ownership. We could begin to develop in Canada, for example, many of the new products that are associated with the petrochemical industry in its operations all over the world. These products are being currently developed outside our borders because the industry is foreign-owned. This kind of imaginative step, if taken, would not have provided remarkable, short-run improvements in our unemployment situation. It would have provided some new jobs; there is no doubt about that. However, such a step would have indicated that this government is interested in bringing about a structural change in the economy and that it is providing for real, economic growth in the future. In the budget speech there is not the slightest hint that the government intends to move in this direction.
Finally, what is needed is a federal economics planning board. This board ought to be concerned about all the areas I have mentioned. It ought to encourage the development-the Prime Minister (Mr. Trudeau) ought to do this-of equivalent planning boards in all provinces so as to co-ordinate the investment priorities as between the federal, provincial and municipal authorities of this country. Such a step would require, of course, the federal government and provincial governments to assume a number of the powers currently held by corporations, especially the exclusive power to determine their investment priorities. That is the kind of deliberate action that is required, and only that kind of action will begin to have, in the long run, a significant effect on our economy.
What would be the net effect of the proposals that I have made? Some are specific and some are rather general in nature. It would be irresponsible of me to suggest that in the short run thousands of new jobs would be created. That would not be the case. There would be many new jobs created if we started to put money into housing, streets, schools and new, publicly-owned enterprises; but it would take time for the effects to be really felt. Probably they would not be felt until next spring, at best.
In addition to the short-run economic effects, however, there would be other benefits. The people of this country would sense that we have a government that is concerned about equality for all the people, about equality of condition for all the people of this nation. If in the short-run such action is unable to bring about 100 per cent employment for our people, and if it is unable to bring about a purely egalitarian situation, it would enable us to regain control of our economy over a period of time. It would be seen that the government fully intends to use democratic power in the economic sector of our society to bring about the kind of full democracy that is surely desired by all. Such action, in short, would give the people of our country who are now living in a condition of unemployment without power and lacking in dignity, a real basis and legitimate foundation for believing there is hope for the future.


Patrick Morgan Mahoney: Mr. Speaker, I should like in opening my remarks to extend my felicitations to the hon. member for Lisgar (Mr. Murta) who made his maiden speech a little earlier in this debate. He has succeeded a man who was well known to many of us and dearly beloved. In following in the footsteps that George Muir trod in this House, I wish him well. The hon. member expressed some concern that many of us in the House think of the west as beginning at Calgary, Edmonton or Vancouver rather than at Lisgar. May I assure him that when he has been here a little longer he will find that many members think the west begins at Oakville or Hamilton.
In the debate this afternoon the Leader of the Opposition (Mr. Stanfield) joined in the general clamour for a tax reduction and increased social programs, while all the time complaining about the government's increasing pressure on the capital markets as a result of the deficit proposed in the budget that we are considering. As nimble as he is, the Leader of the Opposition will have difficulty keeping all those dumbbells in the air at one time. There are some contradictions that we must face in terms of simple arithmetic if not sophisticated economics.
[DOT] (9:00 p.m.)
The Leader of the Opposition has suggested that monetary and fiscal policies alone cannot do the job of curing inflation; that we must supplement these with an incomes policy, although he says this has not worked satisfactorily anywhere. If left with monetary and fiscal policies as the main weapons against inflation, how would he use them? How would he maintain the full employment that he advocates and still bring the long, inflationary spiral under control? This, Mr. Speaker, is an aim that no country, regardless of the degree of intervention the government has taken in the private sector, has succeeded in achieving.
The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) earlier today advocated large expenditures in terms of schools, hospitals and like items of social developments, as well as increased financial assistance to the aged, disabled and unemployed. He also advocated a tax reduction for those in the low income group. He at least had the decency not to criticize the government for pressure on capital markets in view of the program that he was advocating. However, he was concerned about what he alleged were the stop-go programs that this government had adopted. I asked him to recall the problems that the Labour government in Britain faced when it pledged to end its stop-go policies. They were obliged to follow stop-only policies in order to prevent inflation caused by the wage demands of the unions that supported them. That party is no longer in power.
The reaction of the opposition parties to this budget provides the clearest indication so far as to how bankrupt they are in policies and programs for promoting strong, stable, long-term growth in our economy. The Conservatives and New Democrats have engaged in a contest to outbid each other in extravagance in their proposals for creating a massive government deficit through mammoth
[Mr. Broadbent.1
December 8, 1970

increases in spending and a major reduction in government revenue through tax cuts. There would be economic disaster for Canada if the government were to adopt their proposals, or if through some misfortune they had the opportunity to implement them.
With regard to inflation, opposition parties have over a number of years belaboured the government when prices have risen, acknowledging that inflation is a critical national problem. Yet they have opposed virtually all measures adopted by the government to deal with this problem, measures of a kind which the Organization for Economic Co-operation and Development and the International Monetary Fund recently urged other governments to follow.
I quote as follows a number of recommendations of the OECD for the coming 12 to 18-month period for countries facing inflation:
AH member countries should aim to restore at least the degree of price stability associated in the past with sustainable levels of employment and economic growth. To this end, cautious demand management policies are required. Excess demand should be eliminated and governments should be prepared, where necessary, to accept temporarily some slack in the use of resources until there are signs that better price stability has been achieved.
I believe Canada has achieved that position. Other nations have yet to achieve it. I continue quoting:
In cases where unemployment is rising towards unacceptable levels, attention should be directed to the possibility of selective action directed to areas of high unemployment, rather than indiscriminate increases in public expenditure or general tax cuts. Within the framework of appropriate over-all fiscal restraint, expenditure on government-sponsored manpower training and relocation programs should be increased as much and as quickly as is possible.
That is precisely what this budget is all about. This budget is a series of measures of selective action directed toward areas of high unemployment. It is not indiscriminate increases in public expenditure or general tax cuts. The third recommendation of the OECD made last month is as follows:
Despite the difficulties, the search for effective price-incomes policies should not be abandoned; but this should be regarded as a long-haul operation unlikely to yield miracles.
I think it has been proved to our satisfaction that this has not yielded miracles in Canada. The government is pursuing these policies in an attempt to achieve all that it can within the limits of our Constitution. We have every confidence that in the long haul we will indeed achieve these objectives.
Experience has shown that the present inflationary round that Canada, as well as other nations, has had the misfortune of having is one of the most serious and intractable ever to develop in the post-war period. What solutions have the Progressive Conservatives advanced to halt this inflationary spiral? They have urged the adoption of voluntary restraint guidelines. This afternoon the Leader of the Opposition stated that the government adopted these guidelines a year or two too early and that now is the time to be pushing them. That is regrettable.
The Budget-Mr. Mahoney
The government in fact did this long ago through the establishment of the Prices and Incomes Commission. The Conservatives also advocate the abolition of the sales tax on building materials. Is it possible to imagine that so major and critical a problem could be overcome by such a bromide?
The exercise of responsible restraint by all sectors of the economy is desirable and necessary. However, the OECD, the International Monetary Fund and the Economic Council of Canada have all underlined the fact that such restraint can only be a supplement to other measures adopted by governments to put out inflationary fires. In fact, Conservative proposals for dealing with inflation are so devoid of substance as to be ludicrous.
The Conservatives have charged that the government has done too little, too late, to deal with the problem of unemployment. They now urge mammoth increases in spending and mammoth tax cuts. This is diametrically opposed to the course they proposed some months ago. What was the position of the Conservative party earlier this year? When estimates for the current year were tabled in this House in Feburary, the hon. member for Edmonton West (Mr. Lambert), the party's financial critic, strongly criticized the projected increase of $900 million. He said:
When we consider that in 1963-64 the total estimates or total expenditures of the government were just over $6.4 billion, we can see that the series of Liberal administrations has more than doubled government expenditures at the federal level. We have complained from time to time that this government follows the practice of taxing up to expenditures. It is for this reason that we are facing continuous surcharges or additional taxes.
In the budget debate on March 12, the hon. member for Edmonton West again complained about the projected $900 million increase in benefits and said:
That is not controlling expenditures. If there were to be control, if there were to be a real fight against inflation by fiscal measures, we would be taxing to defeat inflation, not merely to catch up with the bills that are coming into the government.
Speaking in this House during the Throne Speech debate in October, the hon. member for Edmonton West dismissed as insufficient the series of measures adopted by the government since the last budget. He contended that a "much more massive injection must be furnished by the government". In this House, on November 12, the Leader of the Opposition urged major increases in spending, echoing the New Democratic Party's proposal for calling a federal-provincial conference to discuss development of a public works program, in addition to substantial spending in other areas.
[DOT] (9:10 p.m.)
The Leader of the Opposition also proposed tax cuts on the same occasion suggesting it would be "very interesting" to see whether this would work to counter inflation. While his proposal was lacking in clarity, he appeared to suggest that the surtax should be allowed to expire and income taxes reduced a further 6 per cent. This, presumably, was in addition to the abolition of the sales tax on

December 8, 1970
The Budget-Mr. Mahoney
building materials. The cost of these tax cuts would be as follows. The elimination of the 3 per cent surtax would cost $240 million, the reduction of personal income tax by 6 per cent would cost the treasury $310 million and the cost to the provinces as a result of the same cut could be $135 million.
In addition, eliminating the sales tax on building materials would cost $360 million, and if the Leader of the Opposition intended that his proposed 6 per cent income tax cut should extend to corporations as well as to individuals, the treasury would lose a further $118 million. In other words, the total cost of these suggestions to the treasury, if implemented, would be $1,163 million, or $1.04 billion if the 6 per cent reduction in corporation tax is excluded.
The New Democratic Party has recognized that inflation is a serious problem and has acknowledged the need to employ fiscal and monetary restraints to help overcome it. Nevertheless, they have continued to urge a massive expansion within the existing framework of fiscal and monetary policy which would have the very opposite effect. They have suggested that inflation could be overcome by the imposition of controls over prices and incomes, although recently they have been shifting away from this position.


Thomas Clement (Tommy) Douglas: Not at
all.


An hon. Member:: What about the unemployed?


Patrick Morgan Mahoney: You will have the opportunity to prepare your manifesto before the leadership meeting. We have listened to the trial run with some interest. We note that the imposition of controls is strongly opposed by both the Conservative Party and by organized labour, which may or may not have something to do with the shift in the approach taken by the NDP. The government has resisted pressure to apply controls because of the adverse impact this would have on economic growth consequent upon drastic interference with the working of the market economy.


Some hon. Members:: Explain.


Patrick Morgan Mahoney: Increased spending programs proposed by the NDP for social assistance, social capital and economic development w^ uld, of course, run into billions of dollars. Apart from the abolition of the sales tax, the NDP never suggested general tax reductions prior to the budget, although urging a host of spending programs on the government. Since the budget, though, the NDP have been outbidding the Conservatives in proposing tax cuts. Their deputy leader contended that personal income tax should be reduced by 10 per cent to 15 per cent-


Lorne Edmund Nystrom: Except yours.


Patrick Morgan Mahoney: -which would cost federal and provincial governments between $1.1 billion and $1.7 billion in lost revenue in addition to a proportionate reduction in equalization grants to the provinces. Again, the abolition
of the sales tax on building materials, which was also recommended, would cost the treasury a further $360 million. If we take the figure of 15 per cent which the hon. member for York South (Mr. Lewis) suggested, the tax reduction would amount to more than $2 billion.


Lorne Edmund Nystrom: Hurrah!


Patrick Morgan Mahoney: For his part, the hon. member for Waterloo (Mr. Saltsman) proposed to increase the exemption for single people to $2,000 and the exemption for married people to $4,000. This would cost the federal treasury around $1,750 million and the provinces a further $500 million, based on 1969 tax receipts. He also suggested, though he was far from specific about it, that tax relief should be provided for those in the middle-income bracket. This concern for people in the middle-income bracket on the part of the hon. member for Waterloo is novel, especially to hon. members who had the pleasure of sitting with him on the finance committee during the past year while the white paper on tax reform was under consideration. As I say, the hon. member did not tell us what reduction or rate changes he had in mind for people in the middle-income group, so it is impossible to assess the cost which would be involved in his proposal.
It is difficult to know where one stands in connection with this general recommendation to alleviate the plight of people in the middle-income group. In addition, we lack a definition of "middle-income group", something which the hon. member was most assiduous in trying to dig out when various witnesses appeared before the finance committee last year. Perhaps he will take an opportunity to make his views on this matter clear at an early date. The hon. member also suggested that the budget was economic lunacy. This would have to be taken as something of an expert opinion and contrasted with the position advocated by the NDP, which would truly be the action of a government gone mad.
The government has proposed a series of measures since the last budget, the cumulative effect of which has been strongly expansionist. The government could have chosen to cut taxes instead of directing spending into areas of slow growth and high unemployment. The greatest advantage would then have gone to areas of the country already prosperous and with considerably lower unemployment. The benefit to slow-growth areas would have trickled down only partially and slowly. The approach of the government is in line with the course advocated by the OECD in its report last month to ministers on the Economic Policy Committee, namely:
In cases where unemployment is rising toward unacceptable levels, attention should be directed to the possibility of selective action directed to areas of high unemployment, rather than indiscriminate increases in public expenditures or general tax cuts.
As the Minister of Finance (Mr. Benson) made clear in the budget, there are real limits as to how far the government can go in adopting expansionary policies without creating an excessive risk of new inflation. One of the lessons learned from the sixties was that it is danger-

December 8, 1970

ous to expand the money supply in order to finance massive government deficits, setting the stage for a new round of inflation. Yet this is the advice the opposition gives us. This point, again, is underlined by the Economic Council in its recent report, "Performance and Potential".
Monetary policy (together with fiscal policy with which it is closely interrelated) should evolve in a way that seeks to avoid large destabilizing swings in the growth of the money supply. There are long lags between changes in policy and their effects on the economy.. .For the creation of a stable environment for growth, we therefore consider it essential that the growth of the money supply over the longer term should be approximately in line with the underlying growth rate of potential output, with smaller swings around the rate of increase in potential output than have characterized past policy.


Some hon. Members:: Explain.


Patrick Morgan Mahoney: The hon. member for Edmonton West took specific issue with the proposal in the budget concerning investment incentive credit. He said it would have only a slow effect in spurring capital investment due to the length of time required to make expenditures. Indications of investment spending intentions show that there is a large carryover of capital programs already planned by the big-business sector and ready to roll once conditions are considered appropriate. These were deferred during 1970 because of market conditions and the expectation of a fall in interest rates. The effect of the increased capital cost allowance will be similar to that of a reduction in borrowing costs and it is expected it will produce a quick reaction.
We have been treated to a very similar response on the part of both the official opposition and the New Democratic Party. Their leaders are anxious to spend more money and to take in less by way of taxes, to provide greater incentives, increased social programs, increased expenditure on public works, extended and expanded assistance programs, all on the basis of decreased revenues and, evidently, without significant borrowing so as not to exert inflationary pressure on capital markets. This game of leapfrog, this game of bribing taxpayers with their own money, is far more typical of an era of minority government, of insecure government with the opposition tasting the prospect of office. Perhaps what we are looking at today is the phenomenon of minority opposition-an insecure official opposition and a New Democratic Party tasting office and hoping to convert ineffective opposition into official opposition.
[DOT] (9:20 p.m.)


Mr. A. D. Alkenbrack (Fronlenac-Lennox and Adding-Ion):: Mr. Speaker, when I was preparing my notes for today's debate I made a special effort to avoid areas of sensitivity for the present government. I did this out of a sense of compassion. I really do not want to embarrass the government or any of the puppets of the Prime Minister (Mr. Trudeau). Every day that passes must surely be embarrassment enough in itself when you consider that we end up with more problems and fewer solutions than we had the day before.
The Budget-Mr. Alkenbrack
Canada is plagued by many corporate ills at the present time. Chief and most injurious of these to her progress are the following. First, a Liberal government and a Liberal syndrome of permissiveness, contempt of the law, corruption and waste in administration, and even contempt of Parliament. The latest example of this was the government's efforts to downgrade and make less effective the Auditor General's department. Second, there is a mounting national debt too great for the taxpayers to handle. Cost of servicing this debt alone amounts to $1,704 million a year. I obtained that figure this evening and I believe it is correct.
Third, we have an overstaffed and economically unproductive, and in some respects empirical civil service, in number and cost out of proportion to the needs of the country. Fourth, we have an extravagant and wasteful annual budget running currently at $14 billion, the source of which is inexorably being levied from fewer and fewer taxpayers in the middle-income class who at the same time are being deprived of family benefits and allowances.
However, there is nothing that one can say about the way this country is being run without causing great embarrassment to that army of experts on the front benches opposite. They must surely be experts, because this government and the Cabinet that is composed mainly of former civil servants can turn out more white papers on more subjects than any other government has since this country was founded. But apparently the brand of expertise available to the Prime Minister is not equal to the problems that beg solution. We on this side of the House, indeed millions of Canadians from coast to coast, would gladly trade all of this questionable expertise across the floor of this House for just a little bit of applied common sense.
The budget that the government tabled last week is a good case in point, Mr. Speaker. Our jovial finance minister has stated that there are solutions in the budget to a wide range of serious problems, though so far no one has been able to point them out. One day last week the hon. member for Prince Edward-Hastings (Mr. Hees) suggested that the finance minister was the Charlie McCarthy of the chartered banks. I have to disagree with that analogy, though I can certainly go along with the sense of the hon. member's statement. Charlie McCarthy had real talent. McCarthy could fool all of the people all of the time and make them like it. Our finance minister cannot fool any of the people any of the time, especially from now on, and he certainly cannot make anybody like what he is doing. This budget is not recognized as such by many people. Indeed, one Liberal today called it simply a financial report.
Whatever the present government tackles, we end up with another little island of chaos. The fear is spreading across the country that these islands will all come together and we will have general chaos. However, Canada is resilient, and so are Canadians, and I firmly believe that the next general election will remove this treat to our economy and way of life.

December 8, 1970
The Budget-Mr. Alkenbrack
There is one thing that can be said to the credit of the present government, and that is that it is consistent. This government can be counted upon to do some things as regularly as clockwork, and for this it deserves full marks. Here again I point to the budget that we are presently debating, in which the finance minister showed consistency. He tabled a budget when there was no demonstrable need for a budget at this time. That is why my Liberal friend called it a report. There was and is enabling legislation whereby, the minister could have accomplished any of the measures proposed in this budget that might be considered worth while. Yet apparently the minister was unaware that he had that authority, and so once again he was consistent. This is a nothing budget, and we have seen a succession of nothing budgets from the present government. I did not want to miss this opportunity to give credit where credit is due.
There is another area wherein this government is consistent and shows evidence of real finesse. The present administration has to be considered the all-time champion in the game of sloganeering. First we had the just society. This was laughed out of existence, and personally I was disappointed. I very much wanted the Prime Minister to create this just society because there were many adjustments to be made to our system. I wanted him to elevate all of us to a little higher plane of existence. I hated to see that one go by the board.
Then in the Speech from the Throne we were told that we were on the threshold of greatness. I really got caught up on this one. The idea that somehow we could achieve greatness in spite of the bungling and ineptitude displayed on the other side of the House was an intriguing one. However, my hopes were dashed again when the Leader of the Opposition (Mr. Stanfield) exposed that particular slogan. Our leader reasoned that the Prime Minister was referring to the Conservative victory at the next general election, so I find I will have to wait a couple of years before 1 can achieve a share of this greatness.
However, Mr. Speaker, I really do not mind the wait, because every day that passes finds more and more Canadians wondering how this government, with one of the best mandates in the history of Canada and with the largest budget in our history, totalling $14 billion, manages to provide so little for Canadians. But this is the day of reckoning, the day that the government hoped would not come. The government has called the tune and has danced; it will now have to pay the fiddler. But that is not all. The slogans are still coming and they get better all the time. We now have the Prime Minister caricatured as Robin Hood riding through the country robbing the rich and giving to the poor. Robin Hood rides straight out of the finance minister's budget, and this is very fitting. If there were not so many people across this country in dire need at the present time, this would be the funniest slogan to come out of the government's slogan department in a long time. But it is not funny, Mr. Speaker.
There always seems to be a key phrase in every document that this government tables that points straight to
the fallacies that are inherent in all of them, and this so-called budget is no exception. We are told that there are many rich people in Canada. In fact, everyone in this country who makes $10,000 or more must now consider himself to be rich. He must wait for Robin Hood to pay him a visit and then he must pay up-again, again and again. There appears to be no end to the price one must pay in this country for the "sin" of being self-supporting. There is no end to the penalties one must pay in this country for the "sin" of being enterprising and for displaying initiative.
[DOT] (9:30 p.m.)
A few days ago I asked a question in this House about the government's policy of permissiveness with regard to allowing Cuban embassy and consular officials to openly support extremist and revolutionary groups and activities in Canada. This question may be found at page 1716 of Hansard for December 3. I found out shortly afterwards that there is general concern throughout our country over this apparent disregard for threats against our social and political systems. However, the Minister of Manpower and Immigration (Mr. Lang) answered in general terms about the present regulations being sufficient to screen persons coming to Canada to visit or to settle. He avoided the purport of my question and he had good reason to avoid it. The relations that exist between the revolutionary Cubans and other elements in our country made it possible for the government to get the kidnappers of James Cross out of the country in a matter of hours. It appears that all of them will be allowed to keep their Canadian citizenship. This attitude bears looking into.
There is evidence that this government is exhibiting a lack of leadership and concern with regard to safeguarding Canadian life, property and traditionally Canadian institutions. In addition to the unrestrained efforts of Cuban diplomatic officials to finance and train terrorists in Canada, the present government flatly refuses to use the powers inherent in the Immigration Act to prevent people like Abbie Hoffman, William Kunstler, the Black Panthers and others coming to Canada to spread their poison and treason throughout our country. In a recent issue of the Globe and Mail, MacKenzie Porter quoted from a speech by Dr. Roger Gaudry, rector of the University of Montreal. I think this quotation should be recorded in Hansard. It reads as follows:
Ideological chapels have grown up in our universities so that a young professor who wished in certain cases to defend the position of a government that was not left wing, or to defend a position that is not left wing, would be quickly put down by his colleagues.
Dr. Gaudry in his speech was emphasizing the great danger we face today from the direction of our universities, the very institutions we should look to for intellectual defence of our system, particularly because of the influence of left wing faculty members. These people, these leftists, are getting a lot of direct and indirect support. The taxpayers' money is going to the Company

December 8, 1970

of Young Canadians in spite of clear evidence before committee hearings that CYC personnel in Quebec have been giving support to the FLQ. When the committee hearings were in progress in the fall of 1969, the government said the FLQ was not a threat and that there was no reason to inhibit the CYC on those grounds. Scarcely one year later the Prime Minister implied that the FLQ was about to take over the province of Quebec and possibly the ent're country, and it was necessary therefore to invoke the War Measures Act.
I pointed out earlier that the present government is often inconsistent, at least in certain areas. 1 should also point out that it can also be inconsistent in other areas, and it is the government's inconsistencies that pose the greatest danger. I could also mention the thousands of draft-dodgers, deserters and other weirdos the government encourages to come to Canada to swell the ranks of revolutionaries and also the ranks of the unemployed. But such warnings would only fall on deaf ears, ears that will not hear, eyes that will not see and minds that will not reason. What we are witnessing is a tragic comedy; the tragedy of dissipating God-given resources, both natural and human, and the plundering of willing minds.
But all is not lost. We have the blundering of the government to lighten our hours in the conviction that we have only a couple of years to go before the voters indicate that blundering has proven too costly to tolerate and that the Liberal syndrome and the fallacy and myth of "Trudeaucratic" charisma does nothing for Canada's ills.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, in the few minutes remaining before the vote, I should like to make a few remarks on the speech made by the Minister of Finance (Mr. Benson) when he brought down the budget on December 3rd.
It will be remembered that last year the Prime Minister (Mr. Trudeau) asked the Canadians to tighten up their belts in the fight against inflation, and that in a subsequent speech, the Minister of Finance (Mr. Benson) told them: Work more, increase productivity, to fight inflation. The Prime Minister said: Do without; while the Minister of Finance said: Work hard.
I remember that, at the time, we had said that the means suggested to overcome inflation would probably result in increased unemployment in Canada, mostly in underdevelopped areas. Our predictions unfortunately came true since, according to the December 1st edition of La Presse, more than 10,000 Quebecers lost their job in 1970.
For instance, the Canadian Marconi Company has fired 800 people since the beginning of the year and expects to fire 700 more before the end of the year.
At Les Industries Valcartier in the Quebec City area, a subsidiary of the General Investment Corporation, the layoff of 500 to 1,000 workers is anticipated before the end of the year.
The Budget-Mr. A. Lambert
The Northern Electric Company has dismissed 200 of its employees and expects further layoffs.
On the other hand, the United Aircraft Company which had a staff of more than 5,400 employees had only 4,500 as of December 1.
The same applies to the Wabasso Company in Drum-mondville which has apparently dismissed from 500 to 600 employees during 1970.
Going down the list, we would note that dismissals affect 500, 600 or 1,000 employees at the same time.
In his budget speech, the Minister of Finance stated that most economic indicators showed improving trends in the Canadian economy, an increase in employment, a decrease in unemployment and a recovery in the production of goods and services.
Mr. Speaker, if this inquiry had been made more seriously in sectors others than the manufacturing or industrial sector, we would have indeed found out that the number of unemployed has risen significantly, because a great number of farmers including those involved in the production of industrial milk have ceased producing because of the dairy policy of this government which does not allow the smaller farmers to operate their business and stay on the labour market.
Mr. Speaker, if we give the situation a closer look, we realize that a certain number of young people who are just out of school will soon be on the labour market. Although they have no particular experience, they no longer belong to the student population. Therefore they cannot claim any unemployment insurance benefits or obtain any other form of aid to the unemployed.
Thousands of these students are willing to work, but their names are not on the list of the 10,000 people who have lost their jobs in Quebec. They represent however a number of workers important enough to deserve consideration.
The policy outlined by the government in the budget speech will not be enough, in my opinion, to stop inflation and reduce unemployment, especially in eastern Quebec where conditions are alarmingly bad.
For instance, at Sainte-Anne-de-la-Pocatiere, a snowmobile factory employing a certain number of workers has laid off over 250 of them in the last two weeks. Those workers will be unemployed for an indefinite period of time, because the factory owners are unable to sell their snowmobiles fast enough. Warehouses are full and that was the reason for the employer's decision.
In order to get the economy moving again, the government should have proposed a tax reduction and primarily the removal of the tax on building materials. In the field of construction, the situation is none too good as this tax on building materials contributes to the increased cost of houses, and this coupled with the high rate of interest, prevents promoters from building houses and renting them at prices suitable to workers.
Mr. Speaker, I see you looking at the clock. I must resume my seat as it is 9.45 and the House has to vote on the sub-amendment.
1878

December 8, 1970
Division
[DOT] (9:40 p.m.)


Mr. Deputy Speaker:: Order. It being 9.45 p.m., it is my duty, pursuant to section 6 of Standing Order 60, to interrupt these proceedings and forthwith put the question on the subamendment now before the House. Is it the pleasure of the House to adopt the said sub-amendment? All those in favour of the subamendment 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 opinion the nays have it. And more than five members having risen:
NAYS Messrs:
Anderson
Badanai
Barrett
Basford
Bechard
Beer
Benson
Blouin
Borrie
Boulanger
Brown
Caccia
Cafik
Cantin
Chappell
Clermont
Cobbe
Comtois
Corbin
Corriveau
Cote (Richelieu)
Cote (Longueuil)


Mr. Deputy Speaker:: Call in the members.	Crossman Cullen
The House divided on	the amendment to the amend-	Cyr Danson Davis Deachman Deakon De Bane Douglas (Assiniboia)
ment (Mr. Saltsman) which was negatived on the following division:
 YEAS Messrs:		
Alkenbrack	Maclnnis (Mrs.)	DruryBaldwin	MacLean	DuprasBarnett	Macquarrie	Emard EthierBeaudoin	MeCleave	Bell	McCutcheon	ForestBenjamin	McGrath	ForgetBigg	McIntosh	FosterBroadbent	McKinley	FrancisBurton	Marshall	GendronCadieu	Mather	GervaisCarter	Matte	GillespieComeau	Monteith	GoyerCrouse	Muir	GrayDionne	Murta	GroosDouglas (Nanaimo-	Nesbitt	Guay (St. Boniface)Cowichan-The	Nystrom	Guay (Levis)Islands)	Paproski	GuilbaultDowney	Peddle	HopkinsFlemming	Peters	Howard (OkanaganForrestall	Rieard	Boundary)Gauthier	Ritchie	HymmenGilbert	Rodrigue	IsabelleGleave	Rose	JeromeGodin	Saltsman	KaplanGrills	Scott	LaflammeHales	Simpson	Laing (VancouverHarding	Skoberg	South)Harkness	Southam	Lang (Saskatoon-Hees	Stanfield	Humboldt)Howe	Stewart	LangloisKnowles (Winnipeg	(Marquette)	Laniel
North Centre) Korchinski Lambert
(Bellechasse) La Salle Lundrigan MacEwan Maclnnis (Cape Breton-East Richmond)
Thomas (Moncton) Thompson (Red Deer) Thomson (Battleford-Kindersley) Valade Woolliams Yewchuk-71
Leblanc (Laurier)
LeBlanc (Rimouski)
Lefebvre
Legault
Lessard (Lac-Saint-Jean) Lind Loiselle MacEachen Mackasey McNulty Mahoney Major Marchand (Langelier)
Munro
Murphy
Noel
O'Connell
Otto
Pelletier
Pepin
Perrault
Portelance
Pringle
Richard
Richardson
Roberts
Rochon
Rock
Roy (Timmins)
Roy (Laval)
Serre
Sharp
Smerchanski
Smith
(N orthumberland -Miramichi)
Smith
(Saint-Jean)
Stafford
Stanbury
Stewart (Cochrane) Stewart
(Okanagan-Kootenay)
St. Pierre Sulatycky Thomas
(Maisonneuve-Rosemont)
Tolmie
Trudel
Turner
(London East)
Turner
(Ottawa-Carleton)
Wahn
Walker
Watson
Weatherhead
Whicher
Whiting
Yanakis-112
[DOT] (10:00 p.m.)


Mr. Speaker:: I declare the amendment lost. It being
after ten o'clock, this House stands adjourned until two o'clock tomorrow afternoon.
At 10.09 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, December 9, 1970