1971-01-19

ROUTINE PROCEEDINGS


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, in accordance with Standing Order 41(2) I wish to table in the two official languages a report entitled "The Seaway in Canada's Transportation", volume I, prepared by D. William Carr and Associates, Limited.


Mr. Speaker:: Motions.


Mr. Lundrigan:: On a point of order, Mr. Speaker, before we leave motions and because of the restricted nature of the question period I wish to make a suggestion which might facilitate the business of the House today and for weeks to come. I suggest that the Acting Prime Minister should make a clarifying statement on motions right now indicating whether Canada has abandoned its major goal of full employment as outlined by the Economic Council of Canada some years ago, which was the burden of the statement by the Minister of Labour yesterday and seems to have been supported by a number of other ministers over a period of time.


Mr. Speaker:: Order, please. The hon. member seems to be asking a question which he might want to ask during the question period.



ORAL QUESTION PERIOD


Hon. George Hees (Prince Edward-Haslings):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister. Was the Minister of Labour expressing the view of the government when he said in the House yesterday, as recorded on page 2507 of Hansard:
It takes courage sometimes to create unemployment. We have created unemployment in the textile industry and we will probably create it temporarily in other industries as we automate and as we rationalize these industries.


Mr. Speaker:: Order, please. The Acting Prime Minister may wish to reply to the hon. member and I will, of
course, allow him to reply to the question. I suggest to the hon. member, however, that we are immediately, with the first question, becoming involved in the debate which will continue after the question period. I hope hon. members will keep this in mind. This having been said, perhaps the Acting Prime Minister might like to reply to the hon. member's question.


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, I listened very carefully to the Minister of Labour when he spoke yesterday. He spoke of what is undoubtedly a very difficult problem which my colleague, the Minister of Industry, Trade and Commerce, has been dealing with. It is, and I hope the hon. member recognizes this, necessary if we are to continue to compete in world markets that we should rationalize our industries and bring them up to date. That may involve some temporary difficulties, but in the long run there will be more people employed in Canada.


George Harris Hees: As the Minister of Labour said yesterday and as the Acting Prime Minister has reaffirmed today, the government intends to create additional unemployment. I was wondering how much additional unemployment-


Mr. Speaker:: Order, please. Would the hon. member please ask his supplementary question.


George Harris Hees: Mr. Speaker, I will be very glad to. May I ask the Acting Prime Minister how much more unemployment, with the misery and hardship that it imposes upon the Canadian people, does the government intend to create in order to fight something which the Prime Minister recently advised us had been licked?


Mr. Speaker:: Order, please. The hon. member for Gander-Twillingate.


Mr. Baldwin:: How much more courage does the government have?



UNEMPLOYMENT-FULL EMPLOYMENT GOAL AND GOVERNMENT PLANS RESPECTING UNEMPLOYED

John Howard Lundrigan: Mr. Speaker, may I ask the Prime Minister-the Acting Prime Minister who is aspiring to be Prime Minister-if he can indicate why the government had abandoned the goal of full employment, and will he state whether there are government plans to accommodate unemployed persons who one minister indicated should amount to approximately 10 per cent of the work force at the present time?


Mitchell William Sharp: Mr. Speaker, perhaps I ought to comment on the first part of

January 19, 1971
Inquiries of the Ministry
the question put by the hon. member. It was never my ambition to be Acting Prime Minister.


Mr. Bell:: The minister is a great actor, then.


Mitchell William Sharp: May I say that the government has never changed its policy which is to work as effectively as possible toward full employment for all Canadians.


Gerald William Baldwin: What about that healthy 10 per cent?


John Howard Lundrigan: May I ask the aspiring Acting Prime Minister whether he would indicate to the House on motions the reason behind the statements continually emanating from ministers that we must tolerate high unemployment and, as the Minister of Labour said, that we should not be concerned in 1970-71 about unemployment because we have had it in previous winters?


Mitchell William Sharp: Mr. Speaker, I listened to the Minister of Labour, as did the hon. gentleman, and the minister did not say that. What the minister said and what we must recognize is that even in the best of years, even when this country's economy was booming, there was a big increase in unemployment during the winter. We are trying to remove regional disparities and with some success. But we have not yet succeeded in eliminating winter unemployment.



UNEMPLOYMENT MEASURES TO AVOID LAY-OFF OF AIR CANADA EMPLOYEES

Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to put a supplementary question to the Acting Prime Minister.
In view of the fact that Air Canada has announced the lay-off of over 400 employees and that unemployment is critical in Canada, does the government intend to do anything at all to prevent Air Canada from laying off those 400 employees?


Mr. Speaker:: If my memory serves me right, that question has already been put to the minister. However, if there are new developments with which the minister wants to acquaint the House, he might answer the question of the member for Temiscamingue.


Donald Campbell Jamieson: Mr. Speaker, I met for several hours yesterday with the chairman of the board, the president of Air Canada and a number of top officials of the company. We discussed certain proposals and possible alternatives that might at least delay the present plans to lay off approximately 400 employees. The company officials undertook to take these suggestions back to their head office to see whether they will be in a position to implement them. They hope to be in a position to advise me either late today or tomorrow regarding their intentions.


Thomas Miller Bell: I have a supplementary question for the Minister of Transport

in connection with the Air Canada lay-offs. Can the minister assure the House that he has taken into consideration the extra overtime required, particularly in the Maritimes, because of the adverse weather conditions? Has the minister considered that aspect in connection with these proposed lay-offs?


Donald Campbell Jamieson: Yes, Mr. Speaker. This was one of the many considerations that were discussed in detail yesterday. The problem is the uncertainty as to just when these workers are going to be required. This is one of the matters the company is trying to work out to at least alleviate the lay-offs to the maximum extent possible.



UNEMPLOYMENT-MEASURES TO AVOID LAY-OFF OF AIR CANADA EMPLOYEES-YARMOUTH AIRPORT

Mr. Louis-Roland Comeau (South Western Nova):: have a supplementary question for the Minister of Transport. In view of the fact that Air Canada lay-offs are supposed to be in the order of two per cent, will the minister consider investigating the reduction of approximately 33 per cent at Yarmouth airport?



UNEMPLOYMENT-PROVISION OF MORE HOUSING STARTS AND LOWER INTEREST RATES TO COPE WITH PROBLEM

Mr. John Gilbert (Broadview):: I have a supplementary question for the Minister without Portfolio in charge of housing and urban affairs. In view of the serious unemployment, what immediate steps does the government intend to take to provide more housing starts and lower interest rates in order to cope with the unemployment problem? If this is too large a question to be answered now, will the minister make a statement on motions?


Mr. Speaker:: I was going to suggest to the hon. member that this is a large question which should be replied to by way of a statement on motions. The minister might like to answer the question in this way.


Hon. Robert K. Andras (Minister without Portfolio):: think that very significant results are showing up right now in the statistics recently released with regard to housing starts in the last quarter of 1970.


Mr. Speaker:: Order, please. I suggest to the minister that the statement should not be made now. He might indicate to the House whether a statement will be made in due course.



UNEMPLOYMENT-FINANCIAL ASSISTANCE IN REHABILITATION OF EXISTING HOUSING TO COPE WITH PROBLEM

Mr. Andrew Brewin (Greenwood):: I have a further supplementary question for the minister in charge of housing. In the statement that the minister makes, will he give consideration to the possibility of government assistance to finance the rehabilitation of existing housing as a means of combating unemployment?
January 19, 1971


Robert Knight Andras: We are already embarked on a program of that nature, but I will give consideration to elaboration in any statement I might make on the subject.

Inquiries of the Ministry
Did the announcement he made yesterday that a program called "assured mail-delivery" would be established, mean there will be an increase of personnel in his department and did the minister want to have a share in the fight against unemployment?



THE CANADIAN ECONOMY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: wish to ask the Acting Prime Minister whether his attention has been drawn to a survey conducted by Mr. David Belli of the United States Department of Commerce, which indicates that 94 per cent of the money used to expand American subsidiaries in Canada has come from Canadian sources. Upon examining this report, will the government be prepared to make a statement as to what steps they intend to take to prevent the Canadian economy being bought out with Canadian money?


Mitchell William Sharp: Like the hon. member, I also saw this report in the paper. I have not seen the original report. I will look at it now that it has been brought to my attention. This information is also in the hands of the Minister of National Revenue who has been preparing a study on the whole problem. I know that this is one aspect of the problem which is concerning him very much.


Thomas Clement (Tommy) Douglas: I have a supplementary for the Minister of National Revenue. Is he aware of this situation described in the survey made by the United States Department of Commerce? Are there any recommendations in this regard in the report which he will be making to cabinet, and will the minister be prepared to disclose those recommendations at a later date, if not now?


Hon. Herb Gray (Minister of National Revenue):: am aware, generally, of the thrust of the points to which the hon. member has referred, although I have not seen the specific report. This is a matter which I certainly have been looking at in the course of my work. With respect to specific recommendations, these, of course, will be among the matters to be considered by the government and dealt with when the government is in a position to make a statement to the House on the matter.


Thomas Clement (Tommy) Douglas: Can
we be given any indication when the House will be appraised of the investigation and recommendations of the minister?


Herbert Eser (Herb) Gray: Not as yet, Mr. Speaker.



POST OFFICE


Mr. Gilbert Rondeau (Shefford):: 
Hon. Jean-Pierre Cole (Minister without Portfolio):: Mr. Speaker, I think this service can be given with the personnel we now have.
*
* *



ADMINISTRATION OF JUSTICE


Gerald William Baldwin: I have a question for the Solicitor General. I have already asked it twice, but perhaps the Solicitor General might be able to answer. In view of the alarming increase in crime and violence and the anticipated acceleration of the increase because of social unrest related to high unemployment, does the Solicitor General have any thoughts in mind as to what can be done? Is there any intention to hold a special conference with the provincial authorities?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, the relationship that may exist between unemployment and crime in general, or manifestations of violence, is not always as direct as one would think. For instance, there may be people who commit criminal acts and who may be considered, from a statistical point of view, as unemployed persons, because they cannot report an illegal job.


Gerald William Baldwin: Has the minister any intention of discussing this very serious problem with the provincial authorities?	'


Jean-Pierre Goyer: 

QUEBEC-PROPOSED INTRODUCTION OF IDENTITY CARDS -DISCUSSIONS WITH PROVINCIAL MINISTER AS TO CONSTITUTIONALITY

[Stage Direction]
Mr. Lincoln M. Alexander (Hamilton Weslb Mr
Speaker, in view of the fact that the province of Quebec is moving quickly toward the implementation of identity cards, can the Solicitor General tell us whether he has had an opportunity to discuss this very controversial
[Stage Direction]
January 19, 1971
Inquiries of the Ministry
matter with his counterpart in Quebec as to its constitutionality and so on?
Jean-Pierre Goyer: No, Mr. Speaker.


Mr. Alexander:: Is it the intention of the minister to discuss this matter with his counterpart in the province of Quebec?


Jean-Pierre Goyer: It could be discussed, once the Quebec Minister of Justice has indicated that he intends to take such a step.



THE CANADIAN ECONOMY


Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to ask the Acting Prime Minister a question.
Since the government has been unable to control the increase in unemployment, could the Acting Prime Minister-


Mr. Speaker:: Order, please. The hon. member cannot preface his question in this way, he must ask the question directly.


Roch La Salle: Thank you, Mr. Speaker.
I would like to ask the Acting Prime Minister if in view of the present situation the government is willing to call a meeting of representatives of all sectors of the private industry and of labour leaders to try and find a solution to the unemployment problem?


Mitchell William Sharp: The
government's policy, the encouragement which has been given to private industry to expand, the very large increase in government expenditure directed to the easing of unemployment, and the big drop in interest rates are indications of how effective these measures will be in promoting employment in the private sector.


George Harris Hees: Mr. Speaker, would the Acting Prime Minister be so good as to outline at the first opportunity on motions what inducement the government has given private industry to expand, because private industry is not aware of any inducements having been offered?


Mitchell William Sharp: Mr. Speaker, I might point out to the hon. gentleman that the surveys we have regarding investment intentions indicate a very substantial increase in activity during the present year.


Mr. Speaker:: Order, please.



CANADIAN NATIONAL RAILWAYS


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I have a question for the Minister of Transport. In view of the statement he made on January 13 in answer to a question of mine concerning the dropping of trains Nos. 7 and 8 of Canadian National Railways and the minister's indication that a public hearing would be held before withdrawal of the trains, has the minister any information to convey to the House following his discussion with the Canadian Transport Commission in this regard?


Donald Campbell Jamieson: Yes, Mr. Speaker. I made an investigation following the hon. member's question. I was under the impression that it was abandonment of a service to which he referred, in which case a hearing would have been mandatory. I now understand that there is to be a reduction of service and therefore the railway is not obliged to go through the necessary hearing procedures. Subsequently, however, I was informed that the railway has undertaken to ensure that service is maintained at its prior level through some other arrangement involving the utilization of other trains.


William Arnold Peters: Mr. Speaker, from the reply of the minister I think he did understand the original question because he said that there would be no train withdrawals without a public hearing and indicated that the two trains were being withdrawn. As the minister who is empowered by the Act to intervene in such matters, is he willing, on behalf of people in northern Ontario scattered across an area of several hundred miles, to exercise his ministerial prerogative in this regard?


Donald Campbell Jamieson: Yes, Mr. Speaker, to the extent that I have the authority. I do agree that perhaps I did unwittingly mislead the hon. member when I spoke of train withdrawal. Under the Act a train can be withdrawn as long as service is maintained on that route. It is the total abandonment of a service or route that requires a public hearing. I will take a look at this matter and see whether there is any means through which I can intervene, and if I can help I shall be glad to do so.


Mr.   Gaeian-J. Serre@Nickel Belt: Mr. Speaker, I have a supplementary question for the Minister of Transport. In view of the fact that some centres in northern Ontario will be completely without passenger service, would the minister consider setting up a public hearing at these centres?


Donald Campbell Jamieson: Mr. Speaker, I think that is virtually the same form of question as that asked by the hon. member for Timiskaming earlier. If there is a total abandonment of service as the hon. member indicated, then it is my understanding that a hearing is required. If in fact an area is going to be without service in the way that he suggested, then, of course, the commission may possibly


January 19, 1971

recommend its continuation and subsidization. But I would have-


Mr. Speaker:: Order, please.



REQUEST FOR INQUIRY BY HOUSE COMMITTEE INTO NORTHERN ONTARIO SERVICE

Mr. B. Keith Penner (Thunder Bay):: I have a supplementary question for the Minister of Transport, Mr. Speaker. I wonder whether the minister could find a way to have the House of Commons transportation committee inquire into all aspects of Canadian National service in northern Ontario, which has deteriorated to a shocking extent?


Donald Campbell Jamieson: Mr. Speaker, I assume that either the estimates or the annual report of Canadian National, for example, will at some point during the session be referred to the Standing Committee on Transport and Communications, and I suggest that this would be the most appropriate time to carry out an examination.


Gerald William Baldwin: I have a supplementary question for the Government House Leader. Will the committee be allowed to call witnesses?



BANKRUPTCY


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. On December 18 the minister tabled a report in regard to bankruptcy and indicated that he would ask for representations from the public. At that time I suggested that perhaps it would be better to refer the report to the appropriate house committee for examination and report back to the House. Has the minister made up his mind yet as to what procedure he is going to follow, and can we soon be told precisely what is going to be done with regard to the report on bankruptcy?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, as I said before, my inclination is, of course, as indicated in the Speech from the Throne, to proceed to the drawing of a bill which would then be government policy and would be examined very carefully by a committee. I have heard and seen little that would persuade me that this would be the wrong course, but I am still giving the matter consideration.


Marcel Joseph Aimé Lambert: Did the minister ask the public for any representations on this bankruptcy report and, if so, when and where?


Stanley Ronald Basford: Mr. Speaker, I would have to check the wording in Hansard, but I think I mentioned there that I looked forward to receiving representations from the
Inquiries of the Ministry
public. Certainly in press statements I urged the public and those interested to respond to the report and make comments to me. I have already had a number of comments and I know of a great list of people, organizations and groups who have indicated to my office or to my officials that they want to make comments on the report.



REPORT OF STUDY COMMITTEE-EXTENSION OF DEADLINE FOR REPRESENTATIONS TO MINISTER BY PUBLIC

Lincoln MacCauley Alexander: Mr. Speaker, I have a supplementary question. In view of the fact that the minister has invited representations from the public but has stymied those representations in that they have to be in the minister's hands by January 31, and there is a great deal of apprehension about this, has he now made up his mind to extend the time in order that he may receive full representation from throughout the country?


Stanley Ronald Basford: Mr. Speaker, I urged people to get their representations or comments in as quickly as possible and said I should like to proceed to the drafting or drawing of a bill by the end of January. Naturally, of course, this government, being a democratic government, will receive representations and comments at any time.


John Gilbert: Mr. Speaker, in view of the fact that it took four years to prepare this excellent report, would the minister speed up the drafting of the legislation so we can study it?



INQUIRY OF THE MINISTRY

Gilbert F. Rondeau: Mr. Speaker, the Secretary of State being absent, I wish to ask a question of the Acting Prime Minister.
Would he tell us whether Information Canada will be completely established and ready to operate when the next federal election is called?


Mr. Speaker:: That question could be put on the order paper.



TRANSPORT


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the number of tragic fatalities this winter involving the use of snowmobiles, and the multiplicity of designs and makes of these machines, can the minister inform the House whether his department is attempting to draw up minimal safety standards for the production of snow-

January 19, 1971
Inquiries of the Ministry
mobiles so Canadians can be assured of a safe winter recreational pastime?


Donald Campbell Jamieson: Mr. Speaker, as to the objective of a safe recreational pastime, of course, this depends in large measure, as I am sure everyone is aware, on the skill and care of the driver. We have drawn up basic safety regulations for these machines and before they leave the factory they have to meet certain specifications. I would have to check to see whether these regulations are in effect now or are about to be proclaimed. We have also undertaken to make certain research grants in respect of the whole question of snowmobile safety to see what kind of standards might be adopted in this field.


Mr. MacDonald (Egmoni):: In view of the great degree of difference between provinces in the standards enacted by them regarding the safe use of these machines, has the federal government entered into consultation with the provinces, or will it be calling together provincial representatives in order that the best form of national safety standards may be enacted in consort with the provinces?


Donald Campbell Jamieson: Yes, Mr. Speaker, we have had two or perhaps three meetings, two of which I attended personally, with provincial ministers of highways, or whatever their titles happen to be in each province, and we are working toward the goal the hon. member has outlined- the maximum degree of uniformity. Actually this does not so much relate to the vehicles themselves as it does to the driving conditions or regulations within each individual province.



WHEAT-INCREASE IN PRODUCERS' DELIVERY QUOTAS

Mr. Jack Murla (Lisgar):: Mr. Speaker, I intended to direct my question to the minister responsible for the Wheat Board but in his absence perhaps I should direct it to the Acting Minister or to the Minister's Parliamentary Secretary. In view of the fact that current wheat sales have been made from stocks owned by the Canadian Wheat Board and have not been reflected in delivery quotas to producers, when will wheat quotas to the financially depressed producers be increased?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I will bring this question to the attention of my colleague.



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is for the Minister of National Defence. Can he now confirm to the House his department's plans to raise the basic levels of rent for PMQ's across the country and, if so, can he indicate to what
levels rents will be raised and when these increases will be effective?


Donald Stovel Macdonald: Mr. Speaker, I should like to thank the hon. member for the notice he sent to me at my seat in the House today. I would be glad to make an inquiry and give the hon. member a precise response.


J. Michael Forrestall: When the minister is making the inquiry, will he determine and then advise the House what percentage of the recent pay increase will be absorbed by the rental increase?



POST OFFICE


Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, my question is directed to the minister in charge of the Post Office. What are the Post Office operations which it appears the department proposes to move from Calgary to Edmonton, and what is the reason for this proposal?


Mr. Speaker:: I am not sure that this is a matter of immediate urgency and I wonder whether this question could not appropriately be placed on the Order Paper. If there is an urgency, the minister might want to give the House the information sought by the hon. member.


Hon. Jean-Pierre Cote (Minister without Portfolio):: do not know exactly what the hon. member means, Mr. Speaker, but I will take notice of the question.



INDUSTRY


Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Is he aware that the Renfrew Aircraft and Engineering Company is scheduled to be closed entirely by March 31 next, putting a lot of people out of work, and is his department looking into the situation, particularly in view of the fact that Renfrew is a designated area?


Jean-Luc Pepin: I am not personally aware of that situation but I presume my department is, as usual. I will look into it.



POLLUTION


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Transport. In view of recent

January 19, 1971

complaints by the town council and chamber of commerce of Parry Sound concerning pollution caused by iron ore carrying vessels pumping polluted ballast into Georgian Bay, can the minister say whether any action is contemplated by his department to rectify this situation?


Donald Campbell Jamieson: Mr. Speaker, I am not personally aware of this particular incident and I will take the question as notice. Of course, if there has been a breach and we can identify the culprits the normal course of the law will be followed.



NATIONAL PARKS


Mr. Rene Matte (Champlain):: Mr. Speaker, I want to ask a question to the Minister of Indian Affairs and Northern Development.
Has he received any resolutions from individuals, public agencies or intermediaries being opposed to the selected site for the future St. Maurice Valley National Park?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: I received many favourable requests and very few unfavourable representations, Mr. Speaker.



COMMUNICATIONS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister regarding the involvement of the government of Quebec with the government of France in the regional telecommunication satellite project Memini, in respect of which the Quebec Minister of Communications recently made a statement. Can the Acting Prime Minister advise whether the Canadian government is being officially informed or is in any way involved in the discussions now going on in Paris on this important matter?


Mitchell William Sharp: Mr. Speaker, I saw this report in the newspapers also and I have made some inquiries. When I have the answer I shall give the particulars to the hon. member.
s|c sfc tfs



AIR TRANSPORT


Mr. Erik Nielsen (Yukon):: Mr. Speaker, on December 4, as recorded on page 1759 of Hansard, I asked the
Inquiries of the Ministry
Minister of Transport whether there were consultations between officials of his department and the manufacturer of the DC-8 for the purpose of perfecting the design of a fail-safe spoiler for that aircraft. The minister said he would look into the matter and report to the House. Has he now had an opportunity to do so and is he able to say whether such consultations are going on?


Donald Campbell Jamieson: Mr. Speaker, in respect of consultations I am not sure whether they are continuing. I can say that the steps which were recommended or ordered by the Civil Aeronautics Board of the United States, in which we concurred, regarding the posting of the necessary notices, etc. in the cockpits of the DC-8's, and also the manual changes which were recommended, have been undertaken.


Erik Nielsen: As the minister knows, the posting of notices is not a fail-safe device. Has he looked into the specific question of a fail-safe device to prevent the inadvertent deployment of these spoilers in the air?


Donald Campbell Jamieson: As the hon. member is a pilot he has me at a bit of a disadvantage in terms of the technical side of this matter. I can only say that I have been advised by the officials that as a result of the incidents which brought this to the fore discussions by our department with the manufacturers and also with the airlines are under way. I would be pleased to get him a written statement indicating the status of these discussions at the moment.


Erik Nielsen: Mr. Speaker, I have a supplementary question-


Mr. Speaker:: Order, please. We have less than ten minutes left in the question period. I must seek the co-operation of hon. members. If I allow two or three supplementaries to every question asked, we will be in difficulty in a few minutes. Perhaps the hon. member for Yukon might ask the last supplementary, and again I will seek the co-operation of hon. members to get on as quickly as possible.


Erik Nielsen: My question is a related one and very brief. May I refer the minister to the answer to my question on December 1, to be found at page 1632 of Hansard, and ask him whether he is yet ready to report to the House, which he undertook to do at that time?


Mr. Speaker:: Order, please.



TRANSPORT


Mr. Barry Mather (Surrey):: I want to direct my question to the attention of the Minister of Transport. Having in mind the warning which has just been issued by the United States Department of Transportation alerting motorists to certain potential risks in the operation of General Motors Chevrolet Corvair models, 1961 to 1969,

January 19, 1971
Inquiries of the Ministry
is the Department of Transport aware of the situation and is a similar warning being issued to Canadian motorists?


Donald Campbell Jamieson: will have to consult the officials regarding the specific nature of the situation. The hon. member was good enough to send me the general notice from the United States national highway traffic safety administration. I note that it is a general warning at the moment and it does not require the specific notification of individual Corvair car owners. I assume we will be doing exactly the same thing, but I will look into it.



ESTABLISHMENT OF NOISE STANDARDS FOR SNOWMOBILES

Mr. Norman A. Cafik (Ontario):: I have a question for the Minister of Transport. In view of the consideration the department is giving to safety standards for snowmobiles, is the department also considering the establishment of reasonable noise standards for the use of such machines in order to reduce the serious problem of noise pollution?


Donald Campbell Jamieson: Yes, Mr. Speaker, and they are working at it twice as hard as before last weekend when my son nearly drove me out of my mind.



AIR CANADA


Mr. Eldon M. Woolliams (Calgary North):: I would like to ask a question of the Minister of Transport. Questions have been asked with reference to the submissions made by the Canadian Airline Employees Association with regard to the Air Canada reservations staff in Ottawa. Will there by any closing of other offices across Canada, particularly in Winnipeg, Calgary, Edmonton and Vancouver?


Donald Campbell Jamieson: This was part of the discussions which were held yesterday. I am also expecting further information from Air Canada on their plans in this regard. They did tell me yesterday that it is part of a program which it is anticipated will be expanded to other parts of the country. They did not give me the specific locations. I have asked for them and will pass them on as soon as I get them.


Eldon Mattison Woolliams: When the minister does find out- equipment has already been installed in Calgary-will he also ascertain how many employees will be affected and whether a serious effort will be made to make certain that their jobs are protected and that they will be able to move to other departments of Air Canada?


Donald Campbell Jamieson: Yes. I brought this up again yesterday at great length and I am told that the relationship between the union and the company is such, and the nature of their agreement is such, that personnel cannot be displaced as a result of technical changes of this sort.
[Mr. Mather.l



BAY OF FUNDY TIDES-REVIEW OF PROGRAMMING BOARD'S REPORT

Mr. Robert C. Coates (Cumberland-Colchester North):: have a question for the Minister of Energy, Mines and Resources. In view of the fact that the Premier of Nova Scotia is in town today, did the minister have a meeting with him and has he had any communication from him regarding a possible review of the programming board's report on the harnessing of Fundy tidal power?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: I had a meeting with the Premier of Nova Scotia this morning but it was not about that subject matter.



URBAN AFFAIRS


Mr. S. Perry Ryan (Spadina):: My question is for the
Minister without Portfolio responsible for housing and urban affairs. Has the government decided to support a co-ordinated public transportation system for the metropolitan Toronto area?


Robert Knight Andras: want to thank the hon. member for giving me notice of his question this morning. The answer is that no such commitment has been made.



POLLUTION


Mr. Randolph Harding (Kootenay West):: I have a question for the Minister of Fisheries and Forestry. Has Dow Chemical of Canada Limited, which is reportedly dumping .55 pounds of mercury per day into the St. Clair River, satisfied the federal government that this is an adequate standard for mercury pollution control?


Hon. Jack Davis (Minister of Fisheries and Forestry):: My understanding is that the Dow Chemical Company is not dumping any mercury into the river in that area. I will check our records, but my understanding is that all of its effluent is now being recycled and has been for many months.



ALLEGED FREE BUS TRANSPORTATION PROGRAM Mr. S. J. Korchinski (Mackenzie): I should like to ask the Acting Prime Minister which department has the crazy idea of spending $50 million to take young people-


Mr. Speaker;: Order, please. The hon. member has already put himself out of court. I wonder whether he might like to rephrase the question.
January 19, 1971


Mr. Korchinski:: May I ask the Acting Prime Minister who is co-ordinating the idea of spending $50 million to take the young people of this country for bus rides instead of providing them with jobs?


Mitchell William Sharp: As I said once before, this is a purely speculative story. I hope the hon. member will not repeat it again.


Some hon. Members:: Oh, oh!



FISHERIES


Mr. William Knowles (Norfolk-Haldimand):: My question is for the Minister of Fisheries and Forestry. Since Lake Erie fishermen who have suffered losses because of mercury pollution are in severe financial straits while awaiting the long-awaited government loans, will the minister ascertain whether the joint loan committee has mailed all the loans cheques that should be sent to these men?


John (Jack) Davis: 1
will certainly check that matter. I should point out, however, that the committee is chaired by an official from the province of Ontario.



LABOUR CONDITIONS


Mr. Leonard Hopkins (Renfrew North):: My question is for the Minister of Labour but in his absence I will direct it to his Parliamentary Secretary. Would the minister investigate fully reported unfair and highhanded labour practices on the part of Frank Hill Limited, a paint contractor from Brantford, Ontario, who is presently engaged under a Defence Construction Limited contract to paint 300 PMQ'S at Canadian forces base, Petawawa? At the same time, would the minister consider using his good offices to get the jobs back for those men who were fired this morning because they had enough courage to sign a written statement bringing these questionable practices to light?


Mr. Speaker;: Order, please. That assertion is in the form of a representation rather than a question. The hon. member will have to assume that it will be taken into account.



AIR TRANSPORT


Marcel Joseph Aimé Lambert: My question is for the Minister of Transport. At the beginning of last
Inquiries of the Ministry
week the hon. member for Crowfoot and myself asked questions with regard to the decision of the Canadian Transport Commission respecting Wardair, and I believe an appeal has been made to the minister. Is he in a position to tell us when he expects to make a decision or what the situation is with regard to Wardair?


Donald Campbell Jamieson: Contrary to press reports, there has not been a formal appeal filed with me as of this moment. I have some information informally to the effect that the officers of the company are at present seeking ways and means of meeting the requirements of the CTC order. The last word I had was that they were having some success in that direction, but there has been no appeal of any kind.



AGRICULTURE


Mr. R. E. McKinley (Huron):: I have a question for the Minister of Agriculture because I do not like to see him sitting there unnoticed. It has to do with odours coming from outside liquid manure holding pits for livestock. This is a very serious problem. Is the minister conducting any special research in his department to develop some kind of chemical that could be used in these pits which would be helpful in holding down these odours?


Mr. Speaker:: Order, please. The hon. member's question should be placed on the Order Paper.


Robert Elgin McKinley: On a point of order, Mr. Speaker, the question I asked is a very serious one. It needs attention immediately and I wonder if the minister could be allowed to clear the air on this matter.


Mr. Speaker:: Order, please.



INDUSTRY


Mr. J. Edward Broadbeni (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the uncertainty existing among those working in the industry, can the minister inform the House when he will be prepared to make a statement in the House on the progress of negotiations that are now going on between the governments of Canada and the United States on the Canada-U.S. auto pact?


Jean-Luc Pepin: Mr. Speaker, I will inform the House when I am able to inform the House that such a statement is needed.
2540

January 19, 1971
Inquiries of the Ministry NATIONAL DEFENCE



MEETING WITH INDIANS TO DISCUSS RETURN OF PORTION OF CAMP IPPERWASH PROPERTY

Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I have a question for the Minister of National Defence. Have he and the Minister of Indian Affairs and Northern Development met with Chief Shaukens and other Indians to discuss the proposed return of that portion of Camp Ipperwash to the Indians which was expropriated in 1942?


Mr. Speaker:: Order, please. I think that question might be placed on the Order Paper. If there is urgency the hon. member can give the Chair notice that he wishes to raise it at the time of adjournment.



NATIONAL PARKS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. I am glad to see him back in the House after a long absence. Can the minister say what measures are in effect by his department to prevent some national parks, particularly Wood Buffalo National Park, from being stripped of their trees without a reforestation program?


Mr. Speaker:: Order, please. It seems to me that this question was asked in the House a few days ago.


Joseph Jacques Jean Chrétien: Mr. Speaker, on a question of privilege.


Mr. Speaker:: Order, please. The minister rises on a question of privilege.


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not believe I have to tell hon. members that I am in the House more often than the hon. member who has just spoken.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE

Gerald William Baldwin: On a point of order, Mr. Speaker, affecting the business of the House, because the ordinary business was changed by the two days of budget debate and because tonight there will be a vote so that I will not be able to ask then, could the Government House Leader indicate the business for tomorrow and Thursday?


Mr. MacEachen:: Mr. Speaker, tomorrow we will begin with the Northern Canada Power Commission bill, the Yukon mineral bill, and then the Textile Clothing Board bill. Then we have also the crop insurance bill which I would like to bring back this week, but I will not do that without advising hon. members opposite.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, January 18, consideration of the motion of Mr. Benson, that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West) (page 1808).
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, when we adjourned last night, I was discussing the important problem of unemployment and the solutions that should be adopted in order to remedy an unceasingly deteriorating situation. I also said that real credit is the fruit of the labour of the whole nation, of the whole community. It is therefore a social credit. The Credistes neither discovered that, nor added anything thereto. They merely propose a more social financial system enabling the whole community to benefit by that real credit, without private financial institutions cashing in on it for their own profit. That is why we suggest using the Bank of Canada to coin the nation's credit.
Furthermore, if we consider how our society is organized and how it is administered, we discover that we are living within a constitutional system in which there are three clear-cut power levels. In this respect, I would like to quote the following from the publication entitled "A Super-Power":
Civics manuals generally identify three power areas within a political regime: the legislative power, the executive power and the judicial power.
The legitimate government in any free-
-such as Canada-
-and truly sovereign nation must have the power to make laws designed to control the relationships of its citizens between themselves and with the established bodies, without having to request permission from a foreign authority. Such is the legislative power.
This assembly of hon. members here is called the Canadian Parliament. Le me quote further:
Similarly, the government of a sovereign nation must administer the country in accordance with its laws and its constitution, without having to submit its actions to the approval of a foreign government. Such is the executive power.
This is known as the cabinet. The cabinet has no intention of unfairly blaming the inefficiency of ministers, for they rarely have access to the wherewithal required to implement plans which might profit the whole of the community.
The last aspect is that the government of a sovereign nation must have the power to implement the laws of the country, to prosecute and penalize those who break them, to judge disputes between citizens, throughout that country, without having to obtain approval from a foreign government. Such is the judicial power.
This is what is reported on front pages by all newspapers in Canada, especially in the Province of Quebec, in connection with the trial of the members of the FLQ. Reading the newspaper, one might think that there is only

January 19, 1971

that association in Canada, while there are so many serious problems which should get attention from the newspapers, the radio, and television.
I listened to the news last night and I noted that very little information was given on the study of the unemployment problem which this Parliament is currently conducting. I found that very disturbing.
Why should there be this silence, this collusion? This is because aside from the three powers I have mentioned, i.e. legislative, executive and judicial, there is a super-power.
I quote further:
While the three powers-legislative, executive and judicial- are the great established powers of any sovereign government, there is another power, not classified as such, but which overrides them all and dominates governments themselves.
This super-power whose authority stems from no constitution and which does not care about it more than a bandit in the exercise of its power, is the monetary power.
This power is especially significant among those who, as absolute masters of money, govern and grant credit at their own sweet will.
It is that credit I spoke about yesterday, that credit created by the people, through the activities of the people, that credit which is coined by private institutions and granted according to their will.
-Thus they distribute in some way blood to the economic body whose life is in their hands so that nobody can breathe without their consent.
Lacking that consent the governments-in Ottawa, in the provinces and the municipalities-must because of lack of money and finance, postpone the implementation of public works useful to society. The monetary superpower controls and dominates governments elected in a democratic way by the people and those governments are paralysed.
Monetary power is the power to issue money and credit of the nation; to condition their circulation; to determine the term of financial credit; the power to require its reimbursement at a time set in advance under penalty of confiscation of the goods which are the fruit of the labour of those from they are confiscated; the power to impose upon governments themselves the conditions of liberation and return, demanding as a guarantee the power all governments have to tax their citizens.
They are granted loans on condition that they have the courage to levy even higher taxes on the worker who creates the real credit of the nation.
Now, that financial credit, that money, is the authority to use the productivity, not of those in control, but of the people of the nation. Money and credit controllers cannot make a wheat stalk-
I ask my friends from the West to go and see if those who control money and issue credit to make the economy work, have created a single wheat stalk or succeeded in making a single oat seed grow. Credit controllers, I go on with the quotation:
-do not produce a single pair of shoes, do not make a single brick, do not dig a single mine well, do not have one square inch of road. Therefore, it is his own real credit. But he cannot use it without the consent of credit controllers, of financial credit which is only an entry in bank books representing the value of the nation's credit.
23786-20}
The Budget-Mr. A. Lambert
The pen of the banker who accepts or refuses to give individuals, companies, governments, the right to mobilize talents, good will, the natural resources of the country is the one that controls; it accepts or rejects; it lays terms when granting permission; it drives into debt individuals and governments to whom permissions have been given. It is a despotic pen in the hands of a super-power, a monetary power.
There is no worse tyranny than that of the monetary power: a tyranny which can be felt in households, in all institutions, public administrations and governments.
From where does that super-power obtain its authority? The other three government powers get theirs under our national constitution. But which constitution could have granted to a super-power the right to control governments themselves?
It is a fiendish power so permeated with a sacred aura that we are looking for the causes of economic and social evils everywhere except in the application of the monetary and credit systems. Looking elsewhere is permitted; but there, hands off, even for sovereign governments.
It is forbidden to search that particular field.
But how many minds eminently qualified to understand, to differentiate between a domination system and a service organization have preferred to close their ears and eyes for reasons of pride or interest!
Why would not the media give to the population the necessary information so that it would better understand that the present difficulties due to unemployment and its attendant hardships, are not solely the consequence of a contract, of a written constitution, but are due to the fact that our financial system, this super power, does not serve the community. It would seem normal that information media would very objectively echo the proposals made in this House by those who seek the means to settle this very serious problem before it is too late.
Yesterday, in this House, the leader of the Ralliement creditiste (Mr. Caouette) made a sincere and honest outline of the situation and suggested solutions that should be not only considered but applied, and newspapers do not even mention it. If the leader of the Ralliement creditiste had made a blunder or a statement worthy of some interest, by its unusual character, it would have been published.
I do not, by any means, blame the newspapermen who are in the pay of a controlled and conditioned press that must necessarily keep its influence, because it benefits from this super monetary power.
What we need, instead of this power, is a monetary power legally instituted so as to put it at the service of the community, as are the three others I have referred to earlier.
Yesterday, the Minister of Labour (Mr. Mackasey) said, and rightly so, that there were in banks huge sums of money waiting for borrowers. But that is not the problem.
To illustrate my point may I give the following example. A motorist crossing the Laurentian Park has a breakdown and tries to find out what caused it. Someone discovers that his tank is empty. The motorist would like to reach his destination but he has no more gas. A third one comes along, a representative of the monetary superpower, who says: You are wrong, and you are complaining for nothing, my good man, because gas is not lacking

January 19, 1971
The Budget-Mr. A. Lambert in Quebec, there is some at Wolfe's Cove and at Bagot-ville. And the motorist answers: I know all that, I know there is some in those huge tanks, but it is my own small tank that is empty, and that is why my car won't run.
What is going on now is that the small tanks-the individuals' wallets-are empty and that is where it is necessary to put purchasing power. That is where a remedy should be applied.
In the second place, I remember a comparison made by the minister in his remarks. He contrasted the present Liberal administration with the previous Progressive Conservative government.
The minister may divert himself by comparing the present number of unemployed with corresponding statistics of the then Conservative administration, but it does not solve the problem. It is petty politics; it is making fun of people, especially those who are hit by unemployment. Whether the figures are 8.4 per cent in 1971 or 8.2 per cent in 1962-63, all the same, this is unemployment and a dangerous social plague at that.
In the third place, the minister rightly said that the leader of the Ralliement Creditiste made concrete proposals. I agree with him on this point.
Since I have been elected to the House of Commons, I hear the government talk about fighting inflation. Yet, we had told him so, and I remember having also said on many occasions, that his anti-inflationary policy would gradually push up unemployment, and this is what happened. As a matter of fact, the restraint policy, higher interest rates, and so on, discouraged initiative.
For these reasons, projects have been abandoned, that otherwise would have created jobs and precisely because of rent increases, higher interest rates and poor control of the money supply, all of which precluded companies and entrepreneurs from carrying out public works projects required by the population, by municipalities, by provincial governments and even by the federal government.
How many building jobs have been delayed or abandoned precisely on account of that notorious fight against inflation. At a certain time, the right hon. Prime Minister (Mr. Trudeau) says: There is no more inflation, boys, we can make a fresh start! It happened overnight!
Mr. Speaker, unemployment is serious because it is the primary cause for diminished purchasing power. Here I would like to express my view of matters clearly.
When the purchasing power decreases and the number of unemployed reaches 500,000, families, especially large families, are the first victims of the stagnation. The decrease in purchasing power automatically is followed by reduced sales.
It is obvious that if I have an annual income of $6,000 I will work out my budget according to that income. But, if at a certain time my budget is reduced to $2,000, I will have to reduce my purchases.
The drop in sales is the cause of the slowing down of production, which brings about an increased number of unemployed.

The increase in the number of unemployed cuts down on purchasing power; the decrease in purchasing power is reflected in a lesser sales volume and this in turn causes a slow-down in orders from industries.
When plants have to store their products because of a shortage of orders or a decrease in sales, they lay off their workers who become unemployed.
This is the way we go around in circles. Misery, and destitution prevail in spite of a glut of goods made by Canadians for Canadians.
Progress in the field of manufacturing has as one of its side effects a decrease in the number of workers needed to create a larger productivity. This I will prove to you.
In 1970, in spite of an increase in the number of unemployed, the Dominion Bureau of Statistics tells us that the gross total production in Canada has increased by $22 billion; this goes to show that the machines did not stop operating. When machines operate, workers are laid off; they lose their buying power while the machines go on producing goods which people still need to buy.
Progress in the field of construction has had the effect of creating the same situation.
I have been in construction. I once had many workers under my supervision to erect some sort of building and today, when I visit a construction site, I note that with a very small number of workers, a similar building is erected in a relativly short time, which means that progress has also come to the field of construction.
With modern implements, producers have become more efficient. While employing less and less manpower, they can do more and do it faster, which means that the unemployed are simply watching machines do the work. Through a window of the plant, they can see that the machine is doing a tremendous amount of work but at the end of the week they are not paid for watching because they did not participate in the work. They are the unemployed: people with a lower purchasing power and dissatisfied people.
The same phenomenon can be found in public works for the construction of roads, bridges and public buildings. I will tell a good story hon. members in this connection.
As for the younger members who did not witness such a horrible thing, I ask them to check the story in old newspapers.
Forty years ago, when settlement roads and even highways such as the Trans-Canada Highway were built, many laborers were hired. The hon. T.-D. Bouchard, the great Liberal genius at that time-he was a minister in the Godbout cabinet in Quebec-had authorized the grading of Highway 20. Indeed, he had authorized the spreading of gravel on the road by a grader drawn by men to increase the number of jobs and tractors were rusting in the yards. I saw and experienced that situation and I can say where it happened. It was in Villeroy, in Lotbiniere. I even have pictures. And we pretend to live in a civilized country.
January 19, 1971

The hon. minister was serious when he cited the Lord's words: In the sweat of thy face shalt thou eat bread. He forgot that at the same time, God created man in his own image to make him resort mostly to his intelligence. That is what man did. He used his intelligence to find out how to make natural elements work for him: water, wind and everything that God had created, in order to ease his physical tasks, in other words the work he had to do as an animal since animals are not intelligent. Our good Lord permitted that. Man wanted to adjust to nature's design.
At one time, man refused to make use of his intelligence to control a financial system that does not correspond to the needs in 1971.
Man is caught in a vice, a victim of his own inventions, because to this day governments have always considered the financial system a master and not a servant. That is the problem!
Mr. Bourassa, premier of Quebec-


Mr. Speaker:: Order. I hesitate to interrupt the hon. member, but I must remind him that his time has expired. He may not continue without the unanimous agreement of the House. Is there unanimous agreement?


Some hon. Members:: Agreed.


Joseph Adrien Henri Lambert: I thank you, Mr. Speaker, for your kindness and also thank my colleagues. I shall try to condense as briefly as possible the main ideas I wanted to develop in the course of this debate.


Mr. Speaker:: Order. The hon. member will allow me to point out that several members wish to speak before the closing of the debate and I believe it would be fair on his part to limit his comment as much as possible.


Joseph Adrien Henri Lambert: Very well, Mr. Speaker. I wanted to say that the premier of Quebec Mr. Bourassa made a great discovery as recorded in The Gazette of January 15, 1971, by Richard Cleroux. I quote the premier's statement as reported: "The unemployment in Quebec is due to the postwar wave of births." It is extraordinary! Due to the great number of young people born shortly after the war and now reaching the employment market. Acording to Mr. Bourassa, that is the main reason for the high rate of unemployment in Quebec.
According to Mr. Bourassa, the birth-control pill came too late. If we were less numerous in Quebec or Canada, the problem would be solved. But at the same time, Mr. Bourassa, his party and his economists, say that the population should be increased through immigration to insure Canada's prosperity. There is nothing to understand.
The previous week, Mr. Bourassa had said that the high rate of unemployment stemmed from the fact that we were living in North America and that we were dependent upon the United States. Finally, he confirmed
The Budget-Mr. Benson
what many people say: that we mortgage our future to the U.S., that we promote there the actual credit, the nation's credit.
Before concluding my remarks, Mr. Speaker, I would like to make a suggestion in order to improve the present situation. In my view, eliminating the 11 per cent tax on building materials would greatly contribute to solve this problem, because it would give a boost to the building trade.
Secondly, I would invite the Prime Minister to read carefully the letter he received in the first days of January, from the mother superior of a religious congregation who, on New Year's day sat at her desk to meditate on the serious problems concerning agriculture and unemployment. This letter contains some most interesting suggestions that deserve to be read and pondered over by all hon. members.
I had intended to read this letter, but since my time is rather limited, I shall close my remarks by thanking all hon. members for granting me some extra time.


Mr. Speaker:: The Minister of Finance.


Roch La Salle: Mr. Speaker, I should like to ask a question to-


Mr. Speaker:: Order. The hon. member for Joliette (Mr. La Salle) wishes to ask a question to the hon. member who has just sat down. I suggest, however, that, because of lack of time, we should allow hon. members who intend to take part in the debate, to do so immediately.


Roch La Salle: Mr. Speaker, my question is a very brief one. I would like to ask the hon. member for Bellechasse (Mr. Lambert)-


Mr. Speaker:: Order. As the hon. member's time has already expired, that question can be asked only with the unanimous consent of the House. Now, as this consent does not appear to have been granted, the Chair must recognize the Minister of Finance.


Hon. Martial Asselin (Charlevoix):: Mr. Speaker, has the House been asked to allow the hon. member for Joliette to ask his question?


Mr. Speaker:: The Minister of Finance.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker 1 welcome the opportunity to speak further about the state of our economy during this renewal of the debate on the budget which I introduced in the House on the night of December 3.
In discussing our economy, it is essential to keep our primary objective as a nation foremost in mind. As I pointed out in my budget address, that objective is a

January 19, 1971
The Budget-Mr. Benson
steady and sustainable improvement in the real income of Canadians everywhere. This, in turn, requires the fullest possible utilization of the nation's human and material resources. Because of the serious strains imposed in the economy in the past by the long upward surge of costs and prices at home and abroad, the utilization of both our human and material resources at present is below the level any of us would consider desirable.
As I have emphasized on a number of occasions, the government is deeply concerned about the current levels of unemployment existing in this country and the hardship this entails. But I am firmly convinced that, as a result of the strong fiscal and monetary stimulus progressively injected into the economy during the course of the past 10 months, the stage has been set for a substantial improvement in production, employment and real incomes.
In the budget which I presented to the House last month, I pointed out that a development of prime importance was that employment appeared to be rising in Canada and unemployment to be falling when seasonal factors were taken into account. In September of last year, unemployment on a seasonally adjusted basis reached a peak of 6.9 per cent. It declined to 6.6 per cent in October and 6.5 per cent in November. The figures for December, published only last week, show that adjusted unemployment during that month amounted to 6.6 per cent, which was also below the September peak for the third month in a row.
It is important to remember that this decline in unemployment was maintained during the balance of 1970 despite the fact that a substantial number of workers were jobless as a result of the impact on associated industries of the General Motors strike in Canada throughout the whole three-month period. Had that strike not been in effect or had it been settled sooner, unemployment would have been significantly less than that actually recorded. I might observe, in passing, that the General Motors strike south of the border, which also caused extensive unemployment in industries supplying the automotive company, had been settled by the time the labour force survey was taken last month. Nevertheless, unemployment in the United States rose from 5.8 per cent in November to 6 per cent in December, also on a seasonally adjusted basis.
For political purposes, Mr. Speaker, members of the opposition choose to ignore the real, underlying progress that is beginning to be made in reducing unemployment. It pleases them instead to concentrate exclusively on unadjusted unemployment rates and to totally ignore the fact that the actual number of people without work always increases sharply in Canada during the winter months even in the best of times, as I pointed out in my budget speech last month. During 1966, for example, average annual unemployment declined to the lowest level during the past decade at 3.6 per cent. In that year, actual unemployment varied between 2.6 per cent in September, when 205,000 workers lacked jobs, and 5.1 per cent in January, when there were 359,000 without work, a differential of 154,000.
[Mr Benson.]
The amount of work which can be undertaken in the tourist industry and by farmers, fishermen or construction workers, for example, is severely curtailed in winter by ice, snow and freezing temperatures. Over a period of years, the proportion of the labour force unemployed during the wintertime because of seasonal factors has declined quite markedly. In part, this is the result of the development of new methods that make possible continuation of some kinds of outdoor work. In part, it is the result of the fact that a growing proportion of the labour force is engaged in occupations less affected by seasonal changes. Nevertheless, it remains a fact that during our Canadian winter there are a large number of people who are unable to work at their occupations.
During 1970 as a whole, unemployment in Canada averaged 5.9 per cent, compared to 4.7 per cent in 1969. An important factor which contributed to this increase was the continued rise in the number of Canadians put out of work because of industrial disputes. Since 1962, the amount of time lost as a result of such disputes has been growing at an average annual rate of more than 25 per cent. In the second quarter of 1970 alone, more than three million man-days were lost as a result of strikes or lockouts. On the assumption that each person involved in an industrial dispute results in one other person in a related industry being laid off, industrial disputes in the second quarter alone accounted for some 50,000 persons being added to the ranks of the unemployed. This is quite apart from the strikers themselves, who are not counted among the unemployed. It is estimated that in the absence of layoffs resulting from industrial disputes, average unemployment during 1970 would have been reduced from 5.9 per cent to 5.5 per cent, which compares with the average rate of unemployment between 1961 and 1969 of 5 per cent.
Perhaps the most important single element in our manpower situation is the fact that Canada has by far the fastest growing labour force of any country in the industrialized world. It is, of course, obvious that during the past year the creation of new jobs failed to keep pace with the increases in the size of the labour force. Nevertheless, the increase in Canadian employment during 1970 of 1.3 per cent exceeded that in the United States by a third and was significantly higher than the average annual employment growth of every major European country between 1961 and 1968. In two leading European countries, Germany and Italy, average annual employment actually declined by .2 and .9 per cent respectively during this eight-year period of strong economic expansion.


Gerald William Baldwin: Why are people going back to Europe, then, from here?


Edgar John Benson: It is not to increase the labour force. Even in the period of moderate economic growth which we experienced last year, it is probable the figures will show that in relative terms Canada led the world in the creation of new jobs for its citizens.
Beginning with the budget last March, fiscal and monetary policies have been geared progressively to promoting
January 19, 1971

a major expansion of the economy as the dangerous pressures of inflationary prices have been brought under control. To refresh the memories of hon. members of the opposition, I would like to outline briefly the measures the government has taken to turn the economy around-


Gerald William Baldwin: Turn it upside-down!


Edgar John Benson: -during the past nine or ten months. Last March although the financial critic for the official opposition was wringing his hands about inflation and suggesting spending cuts and tax increases, we produced an expansionary budget, a switch on a cash basis of over $750 million. In June we increased outlays to the provinces by some $350 million. Another $73 million went into a summer employment program for students, and expanded social assistance programs. In August, we pumped an additional $100 million into the 1970 CMHC capital budget and a further $140 million in 1971 to finance an additional 15,000 units of low cost housing. Construction of these housing units is already under way in regions where the need is great and unemployment highest. At the same time there was a special program of $60 million for capital and other projects in regions of slower economic growth and for manpower retraining.
As I emphasized earlier, we did all these things in stages, as we found that we could responsibly take additional measures consistent wiih the maintenance of economic stability. By December we determined we could take further action, and we did so. The budget then provided for additional expenditures of $100 million this fiscal year, and $400 million in fiscal 1971-72, for a total of $500 million.
In the December budget I announced a 10 per cent increase in unemployment insurance benefits, an additional $23 million for capital improvement projects in areas of highest unemployment, another $20 million for the development of roads and other local services for the new Montreal International airport, another $40 million for CMHC for additional low cost housing construction on top of the 15,000 units mentioned earlier, loans totalling $150 million to the provinces for quick job-creating capital projects, an industrial incentives program for southeastern Ontario and southwestern Quebec, direct loans and loan insurance to the footwear industry, substantial assistance to the shipbuilding industry, and a capital cost allowance supplement to encourage an early expansion of capital investment in the manufacturing and processing industries. I said then the $150 million loan program was to encourage provinces immediately to undertake projects that they could not otherwise afford to finance at the present time.
Activity is moving ahead rapidly. We have reached agreement with Quebec on a full allocation of their $70 million share of the fund. Contracts are being let for sections of an auto route through the city of Montreal which will form part of the trans-Canada highway. Already, there are 1,000 men at work on the site and the Quebec government expects 2,400 men to be at work by
The Budget-Mr. Benson
April. Several times that number of jobs will be created in supplying and carrying material to the site. Our officials have agreed with the government of British Columbia on allocation of that province's $37 million share of the loan fund for municipal projects in the province. B.C. plans work on these to start immediately. We have been meeting with the other provinces in order to expedite projects and they will be submitting applications within days. There will be no delay in granting approval for qualified projects.
We are accused by the opposition of being complacent about unemployment. This allegation is pure nonsense. The Prime Minister (Mr. Trudeau) and his cabinet spend the bulk of their time studying and taking action aimed at improving the circumstances of Canadians.


Gerald William Baldwin: That is not what we see.


Edgar John Benson: That simply proves that as usual the opposition has not been listening for the last five minutes. We took the decisions which succeeded in bringing under control the worst peacetime spiralling of prices and costs, and we have and will take the decisions to achieve a substantial and sustained economic expansion.
The effect of all these changes in fiscal and monetary policy over the course of the past 10 months has been to provide a very large stimulus for expansion of the Canadian economy. Predictably, however, they have not satisfied members of the opposition. These opposition parties, Mr. Speaker, were totally devoid of any sound policies or programs for dealing effectively with earlier problems that plagued our economy and they are bankrupt of sound ideas in respect of our current needs. They are engaged, I believe, in a frantic scramble to outdo each other in their demands for massive tax cuts and increased government spending without the slightest consideration for the severe damage that could be inflicted on our economy if their proposals were adopted. The official opposition, the Conservative party, appears to have as many ideas about the economy as it has spokesmen. This should come as no surprise to anyone, for when they were in office several years ago-and some members of that government are still seated on benches opposite-the nation suffered through the longest and most severe bout of unemployment in the postwar period.
As an example of will-o'-the-wisp thinking of the Conservative party, we have only to look at the shifting position of the party's financial critic, the hon. member for Edmonton West (Mr. Lambert). Last March, when the government saw the time had arrived gradually to restimulate the economy, he complained about the $900 million increase in spending that was proposed. "That is not controlling expenditures," he said. "If there were to be real 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." In October, seven months later, he told us that the spending measures taken in March were not enough. He said that a "much more massive injection must be furnished by the government."

January 19, 1971
The Budget-Mr. Benson
Beyond suggesting for several months that the government should "do something", the Leader of the Official Opposition (Mr. Stanfield) had no concrete proposals to offer until only a few weeks before the December budget. At that time he decided that all our problems would be solved by slashing taxes, in addition to all the vague and undefined increases in federal spending he has also been proposing. The Leader of the Opposition sets off across the country proposing wholesale tax cuts that would cost the governments of this country up to a billion dollars. Since he pooh-poohed my calculation, let me just put on the record how this figure is arrived at. The removal of the surtax would cost $240 million; removal of the 11 per cent sales tax on building materials, $360 million; and a 6 per cent personal income tax cut would involve a loss in federal and provincial revenues of $445 million, for a total of $1,045 million. This would mean a loss to governments, because reductions in federal income taxes also reduce the revenues of provinces which the Leader of the Opposition says have not enough money now. I hope he drops in on the Conservative premier of Ontario as well as the Conservative premier of New Brunswick and tries that idea out on them.
Then, we have the hon. member for Prince Edward-Hastings (Mr. Hees), who was a senior member of that ill-fated Conservative government. He wants a massive but unspecified reduction in business taxes. I had hoped his leader would make it clear during this debate whether a corporate tax cut is official party policy. And if the Conservatives are talking about a corporate tax cut similar to their proposed 6 per cent personal tax cut, then they are talking about another $118 million.
I am sorry that the Leader of the Opposition did not find it possible to remain in the House for the continuation of this debate which was requested by his own party.


Gerald William Baldwin: He has gone to meet a few more of the unemployed.


Edgar John Benson: This indicates his obvious disregard for the House of Commons.


Gerald William Baldwin: He will be here to vote tonight.


Edgar John Benson: He is going to be like so many other Conservatives who only show up for the votes. I have a few suggestions I wanted to make to him before he continued his travels to central Canada and the Atlantic provinces.
For instance, he might tell people who call in on the hot line shows what he would do after cutting taxes. The one billion dollars has to come from somewhere. Perhaps he would cut some government programs like unemployment insurance, or social assistance programs. Or perhaps he would keep the programs at their present level, increase the deficit and borrow the money to cover the deficit. He might wish to explain how he would do this without shoving up interest rates at a time when we are trying to provide housing in regions where housing is poor and unemployment is highest.

If he proposes to maintain programs at their present level and increase the deficit, he should tell the Canadian people what this adds up to. Already, with our present programs, we are forecasting a deficit for the next fiscal year of about $600 million. So, if the Leader of the Official Opposition had his way, the Canadian public could look forward to a deficit of at least one and one-half billion dollars, and that is without one further cent of spending beyond what we now forecast. I hope the hon. gentleman will explain to Canadians the consequences of a budgetary deficit about double anything we have ever run in Canadian peacetime history.
The Leader of the Opposition might also like to explain on his travels who would directly benefit from his proposed tax cuts. Tax cuts would have a stimulating effect; I have never denied that. Nor have I said they would be unduly inflationary at the present time. Government spending also has a stimulating effect, and when it is aimed at industries and regions that need help results are achieved faster and more directly. But who would directly benefit from a tax cut? Normally, the people who benefit from a tax cut are those persons and regions that enjoy the higher incomes. It is not the unemployed, because their incomes are not high enough. And, of course, if government programs were cut to pay for the tax cuts, then those most in need would suffer even more.
The Opposition appears to have embraced the trickle down theory, the theory that if you leave enough money in the hands of the well-to-do it will eventually trickle down to the people who really need it. While it is not surprising, that this position has been adopted by the Conservative party, it is surprising to find members of the New Democratic Party rushing to adopt the same position for the first time only after I brought down my December budget. They called for tax cuts of 10 to 15 per cent, in addition to urging the government to spend billions of dollars more for social assistance, social capital and for economic development, the result of which would be an astronomical federal deficit, with the result I previously indicated.
Members of the Opposition parties are like the Bourbon kings of France, Mr. Speaker: They learn nothing and they forget nothing. Those responsible for governing the affairs of nations around the world have learned that attempts to accelerate economic growth too quickly and too hard are in the end self-defeating. The lesson has not penetrated the minds of members opposite, whose approach seems to be dominated by a lemming-like instinct for self-destruction.
The measures we have already taken to spur the growth of production and employment will require the federal government to raise a substantial amount of cash in the coming fiscal year, which in turn has an important bearing on the extent to which the monetary and banking system is expanded. As I said in my budget speech last month: There are limits to the extent to which the banks can be encouraged to increase their holdings of government securities without running the very serious risk that the expansion and increased liquidity of the
January 19, 1971

banking system will trigger inflation and expectations of inflation.
We have learned from hard experience that what is regarded by the public as an excessive increase in the money supply can play a major part in triggering such inflationary expectations. These expectations, in turn, can very well have the perverse effect of causing interest rates to rise sharply as lenders demand a higher return on their money to offset the anticipated erosion in the value of their money.
A reversal of the recent marked trend toward lower interest rates would have the effect of discouraging business capital investment, housing construction and many other forms of economic activity. Higher interest rates would also tend to set a vicious circle in motion. Funds from abroad would flow into Canada to obtain the higher return, putting further upward pressure on the value of the Canadian dollar and further reducing the competitiveness of Canadian goods at home and abroad. If the government took steps to restrain the increase in the value of the Canadian dollar by buying foreign exchange, its cash requirements would be increased still further and so would the upward pressure on interest rates, which is the last thing we want at the present time.
At the outset of my remarks, Mr. Speaker, I readily acknowledged that the performance of the economy generally over the course of 1970 was not as buoyant as we would like to see. Nevertheless, there are substantial elements of strength apparent that auger well for the future.
In the budget, I pointed out that real output in the economy has begun to rise again in the third quarter following a pause in the second. It will be some time yet before the national accounts for the fourth quarter are published, but it is encouraging that in November the industrial production index, an important indicator of economic activity, increased by 1.3 per cent over the previous month. This increase, which is the largest month to month rise since last February, occurred despite the serious drag on industrial output resulting from the General Motors strike.
A further sign of gathering strength in the Canadian economy is evident in the value of non-residential building permits issued in October and November, which were above the levels of a year ago for the first time in 1970. After lagging earlier in the year, housing construction increased sharply during the latter part of 1970 because of the heavy injection of funds provided by the federal government as part of the series of measures adopted to promote faster economic growth. During the fourth quarter of last year, the number of housing starts was running at a seasonally adjusted annual rate of 260,500, which is the highest rate recorded since the first quarter of 1969.
Only late last week, the DBS reported that as a result of a substantial increase in exports, Canada achieved a merchandise trade surplus with other nations of $2.95 billion. This is not only more than double the previous peacetime peak of $1.3 billion, in 1968, but also exceeds
The Budget-Mr. Benson
the 1945 wartime record of $1.7 billion by more than $1.2 billion.
During 1970, business capital investment lagged significantly behind the increase originally anticipated by private companies contributing to the moderation of economic growth. Despite this shortfall, however, it is encouraging that a recent survey of some 200 large corporations in Canada undertaken by the Department of Industry, Trade and Commerce indicated that these companies expected their capital investment during 1971 would exceed actual expenditures last year by approximately 11 per cent.
A major source of economic strength is the extraordinary progress made during the course of the past year in bringing inflationary prices under control. In December, the consumer price index declined by .4 per cent from the previous month. The year to year increase in the index for December of 1.5 per cent was the smallest rise since 1964. Between February and December, the consumer price index also rose by only 1.5 per cent on a seasonally adjusted basis, which is a substantially smaller increase than that of any other major industrial nation.
During 1970 there was a substantial decline in interest rates, reflecting the easing of monetary policy started last year when the opposition were still fighting inflation, and the growing confidence that inflation was being brought under control. By mid January of this year, the yield on 91 days treasury bills was 4.66 per cent, compared to yields of more than 7.5 per cent recorded in late 1969 and early 1970. Earlier this month there was a further reduction from 7.5 per cent to 7 per cent in the prime lending rates of the chartered banks which, during January, have also led a movement toward lower NHA mortgage rates. There has been a substantial decline in other long term rates as well. By the middle of this month, the rate on long term government of Canada bonds was down to around 6.7 per cent, compared to rates of more than 8.3 per cent at the turn of 1969/70. All of these developments on the monetary front will contribute in a very real way to economic expansion.


Lincoln MacCauley Alexander: When?


Edgar John Benson: I will get to that later.
In the budget which I presented to the House last month-


Gerald William Baldwin: We have been waiting for a year.


Edgar John Benson: But you have not been listening for a year. That is the problem.
In the budget which I presented to the House last month, I expressed confidence that the economy would grow at a healthy rate during 1971 and that unemployment on a seasonally adjusted basis would progressively be reduced throughout the year.


Mr. Bigg:: Can you bet on that?

January 19, 1971
The Budget-Mr. Benson


Edgar John Benson: Yes, I am willing to bet.
This forecast was, of course, greeted with scorn by members of the opposition who have vested political interests in painting the darkest possible picture of the state of our economy at all times.


An hon. Member:: What about Paul Martin?


Edgar John Benson: I can remember back in 1966 when unemployment was 3.6 per cent, but the economy was going to pieces according to the opposition.
It is worth noting, therefore, that a number of other, more objective sources are inclined to share our view of the economic outlook. In its most recent international survey, the Organization for Economic Co-operation and Development foresaw the prospect that the growth of GNP during the second half of 1971 would equal or perhaps even slightly exceed potential capacity in Canada. As they said "this would be consistent with a decline of unemployment after the early part of the year".
On December 10, the Globe and Mail reported that "a sharp acceleration of Canada's real economic growth rate in 1971 was predicted yesterday by participants in the annual business outlook forum held by the University of Toronto school of business". On January 12, the Gazette reported that the European Financial Society, a major international financial consortium, forecast that Canadian GNP would increase by 8.5 per cent and industrial production by 5 per cent during 1971.
I noted with interest that one of the aspirants for the Conservative leadership in Ontario, education minister William Davis, was reported in the Toronto Star yesterday to have expressed confidence that measures taken by the federal and provincial governments will soon ease Canada's unemployment problem.


Lincoln MacCauley Alexander: That was yesterday. Wait 'till you read his speech today.


Edgar John Benson: Only this morning, the Globe and Mail reported that the Ontario department of treasury and economics-and here I am quoting good Tory sources- expected the provincial economy to recover ground lost in 1970 by the middle of 1971 and, as the Globe and Mail put it, "to be on the way to a boom by year's end".
I am sure that this confidence in the renewed vigour of our economy will prove to be fully justified in the months ahead if we, as a nation, maintain our orderly course and refuse to be panicked into rash and ill considered actions that inevitably would do our economy far more harm than good.
Yesterday, when the Leader of the Opposition was speaking of the government he used the words "prideful" very often. He referred to us as a prideful government. If this means that we have pride in the accomplishments of the Canadian people, we have pride in being Canadian and we have confidence in the future of this great country, then we are pleased to be called prideful.


Some hon. Members:: Hear, hear!
[Mr. Bigg.l


Mr. Speaker:: I believe the hon. member for South Shore (Mr. Crouse) seeks the permission of the minister to ask a question.


Mr. Crouse:: Yes, Mr. Speaker. I listened very attentively to all that the minister had to say. With governments at all levels taking some 38 per cent of the gross national product, I would like to ask the minister how much higher this percentage rate will go and at what point the minister thinks rising taxation will retard the economy by discouraging both saving and capital investment.


Edgar John Benson: Without accepting the 38 per cent figure, which I think is debatable, I think the hon. member will find if he looks at it very carefully that the percentage of GNP taken out of the economy by all governments in Canada is slightly higher than that in the United States and lower than in almost all European countries.


Hon. J. A. MacLean (Malpeque):: It is not my intention to reply directly to what the Minister of Finance (Mr. Benson) had to say because when I collected my few throughts on this important budget debate I was unaware of the fact that the minister would be speaking immediately before me. However, one thing is clear from his remarks, and that is that he is not aware of the fact that national budgeting and the national monetary pol'cy are more complicated than balancing a household budget, or something of that sort. It is obvious to anyone that when tax levels become very high they sometimes pass a point of diminishing returns. I am of the opinon that some of our taxes have already passed that point under present conditions.
I wish to refer briefly-and my speech will be brief-to the budget on which this debate is based. The budget, in my opinion, is a budget of missed opportunities, a budget filled with sins of omission. The government has failed to take the opportunity offered to it on December 3 to come down with a budget which would have a beneficial effect on the economy at this time. I think the government failed because it did not have its eyes on the horizon. Instead, at best it had its ear to the ground or at worst its head in the sand.


An hon. Member:: And its rump in the air.


John Angus MacLean: Perhaps those were the only two choices it had because, as some cynic has said, you can only have your ear to the ground or your head in the sand when you are prostrate before your leader. Incidentally, a leader who, through no fault of his own, has no personal knowledge of want or privation, no doubt finds it difficult or impossible to have sympathy for and rapport with workers who find themselves out of work through no fault of their own and are therefore unable to earn the income which they and their families require.
If the government had had its eyes on the horizon on December 3, or even last summer, what would it have seen? It would have seen dark economic clouds on the horizon. It would have seen that by mid-December 538,000
January 19, 1971

Canadians would be unemployed. It would have seen that 133,000 Canadians would be losing their jobs in four short weeks from mid-November to mid-December. It would have seen that the ranks of the unemployed would be swollen by 162,000 in the same short period from mid-November to mid-December, the latest period for which we have figures. It would have seen 28,000 people lose their jobs in the Atlantic provinces in the same period. That is about 1,000 people a day, Mr. Speaker, with the ranks of the unemployed in that area swollen from 42,000 to 54,000 and the labour force reduced by 16,000, about 4,000 a week, through emigration from the Atlantic provinces because of total despair.
The government would also have seen that this was not a world-wide condition brought on by unknown forces affecting all countries alike disastrously, as was the case during the great depression of the thirties. It would have seen full employment in such diverse countries as Japan, South Africa, the United Kingdom, West Germany and many others, and in contrast would have seen unemployment growing at a disastrous rate in Canada. It should have divined that Canada was affected by some unique misfortune, and found that that unique misfortune likely was its own policies.
What did the government do in this situation, Mr. Speaker? Did it listen to suggestions from the business community? No. Did it seek the advice and guidance of its own supporters? Apparently not. Did it show anything but disdain and contempt for warnings repeatedly offered by all opposition parties? Again, the answer is no. Did it show any humanitarian attitude, or any humanity for those who were shortly to be unemployed? Again, the answer is no.
Only yesterday in this debate the Minister of Labour (Mr. Mackasey) said:
It takes courage sometimes to create unemployment. We have created unemployment in the textile industry and we will probably create it temporarily in other industries as we automate and as we rationalize these industries.
It does not take courage, Mr. Speaker, to create unemployment. It takes callous incompetence.


Some hon. Members:: Hear, hear.


John Angus MacLean: The Minister of Finance, and the government generally, have made a great deal about the fact that the figures we quote have not been seasonally adjusted. The experience of the unemployed people in my constituency is that that they do not find themselves any better off after they have been seasonally adjusted.
What did the government do, Mr. Speaker? It argued with irrefutable logic from false premises, and arrived irresistably at the wrong conclusions. What should the government have done? There are a number of things it should have done in this situation. It could have reduced or eliminated the surtax, and given some short-term tax relief which would have stimulated the economy. It could have eliminated part or all of the 11 per cent sales tax on building materials. It could have instituted an effective winter works program. As a humane move, it could also b=ve taken some immediate steps to extend temporarily
The Budget-Mr. MacLean
unemployment benefits to many who are now out in the cold. But, Mr. Speaker, all these are short-term programs. What about medium and long-range action?
It is my belief that the government must resist, contain and eventually reverse certain forces which, if allowed to continue, can only lead us to disaster. One of these forces is that flowing from the government's monetary policies, which is leading the Canadian people deeper and deeper into debt both for consumer goods and for government at all levels, municipal, provincial and federal. As a people, we cannot continue to go everlastingly deeper in debt at an ever-increasing rate. The federal debt is increasing relentlessly, and there is an insatiable appetite for borrowing money, with the result that interest rates are unconscionably high. Between the increasing cost of money and the increasing debt of Canada, we are now in the position where the Canadian taxpayer is paying more than $4 million a day in carrying charges on the national debt, not to mention the debts of the provinces and taxpayers' personal debts. The federal government must set an example of better financial management than that. Surely, Canadians deserve a better fate than to live life from the cradle to the grave in arrears.
Second, Mr. Speaker, the government must lead in a progressive approach to the objective of eliminating sales tax on consumer goods where it in any way increases the costs of the basic essentials, shelter, food and clothing. The cost of living cannot be anything but high when in many cases it is commonplace for the combined federal and provincial sales tax to make up 18 per cent, or an even higher percentage, of the total price of an article. We, as a country, must strive for higher productivity in order to be competitive, and the government has a responsibility in this field. It must lead the way. Labour and management must realize that they are in the same boat. They are a partnership whether they like it or not, and are not adversaries. Together, they must develop a common objective of successful competition, in world markets.
We must develop a tax structure that will encourage profit sharing by companies with their employees. Employees should have an opportunity to have some direct financial interest in the success of the company for which they work, to the benefit of the employees, of the company and of the country as a whole. Conversely, the attitude of employers, especially in large companies, should be that their employees are going to seek out a life career with their companies, that together they are in a life partnership for their mutual benefit. I know that profit sharing with employees is practiced in Canada by a few companies. It has worked in other places, with striking success. An added advantage would be that Canadians would be encouraged to invest in Canada. I believe that Canadians should be as willing to invest in Canada as Americans are. After all, it is our country. We must learn from other countries, from their successes and from their failures. For example, we have much to learn from the Japanese. They have the highest growth rate in gross national product in the world. Over the past decade the annual average rate of growth of the Japanese gross national product, in real terms and with full employment,

January 19, 1971
The Budget-Mr. MacLean
has been a little above 10 per cent. In contrast Canada's growth, although better than that of many countries, is only at about 5 per cent, which is half the Japanese rate, and we have had varying amounts of unemployment from time to time.
Unemployment, Mr. Speaker, is wasteful. Our failure to use to full potential the human resources and skills of our people not only is reflected in a lower standard of living but also in a lower standard of opportunity for all of us. It is a waste that we cannot afford. We must find the means and the determination to eliminate it. Perhaps in this northern climate we cannot entirely eliminate seasonal unemployment. Yet, we ought to succeed in eliminating the more permanent type of unemployment. Our economy should be such that everybody capable of working is fully employed during the spring, summer and autumn months. We must develop, I believe, industries employing a high degree of technology so that we may be in a competitive position in the world's markets and not be so dependant for our export trade on resource industries such as the pulp and paper industry, minerals, agricultural products, fish, and so forth. In all this, the federal government has a vital and important role to play. In addition to this, Mr. Speaker, the government, in common with all governments, has a great and vital responsibility.
I know that the ambition of those who support this government has been achieved. Their party has acquired power. Nevertheless, their responsibilities have not been fulfilled. This government is presently the custodian of a great trust on behalf of the Canadian people. It is responsible to a great degree not only for the immediate economic welfare of the Canadian people but also for the future well being of our great nation. That great future cannot be realized in a climate of economic uncertainty in which everyone becomes, sooner or later, the victim of economic vicissitudes flowing from the fickle whims of an incompetent government. In these trying times, even our economic system is on trial. All those whose future depends on its and on its well-being, and that is everyone, should realize that. If it fails, then it provides rich soil for the growth of every kind of extremism. Economic distress such as we have at present, Mr. Speaker, creates the troubled waters in which the professional agitators who wish to see our system destroyed love to fish.
In closing, Mr. Speaker, I ask the government to repent some of its ways, to reconsider some of its actions, to keep a more open mind to advice, from whatever source it comes, to weigh that advice, and to consider it. To the Canadian people generally I say, although this is the new year, that I cannot be too hopeful about the short run. I say this because of present conditions. Yet I believe, with the Minister of Finance, that our country has a great future and that if Canadians learn to work together towards economic prosperity and the acquisition of other forms of the good life, we can all go on to a great future. I say to the Canadian people, be patient. Though we have the most incompetent government in memory, even that will pass.


Thomas Clement (Tommy) Douglas: Mr. Speaker, having taken part at an earlier stage of the budget debate, I had not intended intervening again. Nevertheless, the unemployment situation has grown ever more serious since I spoke in this debate on December 8, last. I think the Canadian people are aroused and appalled at the extent of unemployment in this country, and I think they are even more appalled at the government's indifference to meet this situation. Yesterday the Minister of Labour (Mr. Mackasey) said that nobody on his side of the House is happy about the unemployment rate. But, Mr. Speaker, it is not a matter of being either happy or unhappy about the unemployment rate. What we are asking for now is, first, who and what is responsible for this crisis; second, what immediate steps and what long term measures does the government propose to adopt in order to cure the unemployment crisis confronting the Canadian people?


Mr. McCleave:: The answer is, none.


Thomas Clement (Tommy) Douglas: Mr. Speaker, there can be no doubt as to who is responsible for this situation. There, on the treasury benches, sit the guilty men. They must accept the responsibility for the fact that between 500,000 and 600,000 are unemployed in Canada. In addition, 100,000 persons who are taking manpower retraining are also unemployed but are receiving training allowances. The government is responsible for the situation in which we now find ourselves. They are the men who deliberately set out to create an economic slowdown and unemployment because those were the only means they could think of to curb inflation. The government turned a deaf ear to all advice relating to the consequences of their austerity program and their fiscal and monetary policies. They refused to take the necessary steps to prevent the unemployment which they knew would flow from their policies. After all, the Prime Minister (Mr. Trudeau) himself said that they were so anxious to defeat inflation he was even prepared to accept an unemployment rate of 6 per cent. It has now reached a rate of 6.6 per cent, seasonally adjusted. The Prime Minister and his colleagues knew that the policies they were following would bring about massive unemployment, yet they prepared no programs to remedy the crisis which they themselves created.
The first mistake was in accepting the thesis that the government had to choose between inflation and unemployment. They paid no attention to the recommendations which were made year after year by the Economic Council of Canada. These recommendations pointed out that by planning our economy, and with proper fiscal, monetary and investment policies, it was possible to have an economic growth rate of 5.5 to 6 per cent as well as to keep unemployment at three per cent or less. At the same time, price stability could be maintained and price increases kept to two per cent or less. The government paid no attention to this. Instead, they proceeded with their austerity program. The New Democratic Party warned the government that unemployment would be the result.
January 19, 1971

We urged the government not to fight inflation by creating an economic slowdown. We urged them to set up machinery tor capital investment and for some control of investment on the basis of social priorities and for employment creating purposes. We urged them to establish a prices review board in an endeavour to stop unjustified increases. We said that if that was not successful, we were prepared to support selective mandatory price and income controls. We warned the government that the methods they were using to combat inflation would inevitably result in the kind of economic recession in which this country now finds itself.
It is interesting to note that Mr. John Young, the chairman of the Prices and Incomes Commission, said, as reported in the Toronto Daily Star of January 16, that the price paid for victory over inflation, massive unemployment, was too high. He said and I quote:
"There is a way to fight inflation and save jobs,"-
Young said the best method of fighting inflation is to get voluntary support for mandatory price and wage restraint, then force adherence to the voluntary guidelines through legislation or government pressure.
This is preferable to the alternative of forcing a slowdown in the economy, which inevitably involves higher unemployment,-
We certainly welcome the change in attitude by Mr. Young. It is precisely what we have been saying for the past two years. We cannot stop inflation by periodically creating economic recessions. There are tools which this government did not have the courage to use. Today, this country is paying the price of a government that was short-sighted, incompetent and lacking in moral courage to deal with the problem of inflation without putting half a million people out of work. As the Economic Council of Canada has been pointing out for the past four or five years, Mr. Speaker, what we need in this country is a greater measure of economic planning designed to promote full employment, economic growth and a high level of national income while at the same time maintaining a relatively stable price structure. This requires some changes in our institutions for governmental planning.
The government should establish an economic planning board or a department of economic affairs to plan the economy of this country. It could co-ordinate the work of the Department of Finance, Bank of Canada, the Department of Industry, Trade and Commerce, the Department of Manpower and Immigration and the Department of Labour. In this way, we would not have the kind of program that we have had for the past five or six years. We have had a stop and go program. In one budget, the Minister of Finance (Mr. Benson) put his foot on the gas, in the next budget he put his foot on the brake and in the next budget he again puts his foot on the gas. A stop-go policy will only lead us into more trouble.
If we accept the premise of the government that the choice is between inflation and unemployment, are we to assume that the steps that are to be taken now, too late, to put money into economy, merely means that in 12 or 18 months from now we will again have inflation? Once more we will be putting on the brake, and once more we will have unemployment. Surely, in this day and age
The Budget-Mr. T. C. Douglas
with our sophisticated economic tools, our knowledge of Keynesian techniques, it is possible, as demonstrated in other countries, to avoid periodic booms and busts. We should be able to plan an economy which will meet the needs of our people without terrific and catastrophic changes in the business cycle.
The attempts of the government to cope with this crisis are, as Winston Churchill said of certain activities during the war, too little and too late. In the budget which the Minister of Finance brought down on December 3, he proposed some of the things which should have been in his budget of last March. Moreover, he refused to bring down some of these things and ridiculed us during the debate on the budget of last March. The fact that he had to bring in a second budget in December is proof that the budget he brought down in March was completely incapable of coping with the problem of unemployment, which even then was beginning to manifest itself.
In March, the Minister of Finance ridiculed those of us on this side of the House who talked about winter works programs and assistance to the provinces and municipalities in order to assist the unemployed in finding work, particularly in the winter season. In December, when it was too late for the provinces and municipalities to make use of financial assistance to help solve unemployment this winter, the minister announced a $150 million loan fund. A loan fund of $150 million is totally inadequate. Approximately $70 million will be loaned to the province of Quebec. The rest will be spread over the other provinces. The individual provinces, including Quebec, will not receive sufficient money to even begin to cope with the problems which are facing the provinces and municipalities. It has come too late to help this winter. It is too little to be effective for the coming year.
Premier Bourassa of the province of Quebec, at the federal provincial conference, asked the federal government to set up a fund which would be partially on a loan basis and partially on a grant basis. The amount of the contribution that would be grants would increase on the basis of unemployment in each province. Apparently, the government has rejected that suggestion. The entire $150 million will be in the form of loans to the provinces, if I remember correctly, at 7.91 per cent interest. When a province borrows from the federal government, that debt becomes a contingent liability and this directly affects the ability of the province to borrow money on the open market to meet its other responsibilities and obligations. If the government really wanted to help the provinces and the municipalities this fund should have been a fund from which grants would be made to the provinces and it should have been of a size many times the $150 million the government is offering.
We have heard from the government statements which indicate they are taking refuge in the time lag between the point at which money is pumped into the economy and the point at which jobs result. Of course, the government must take responsibility for that time lag. Yesterday, the Minister of Labour said the Minister of Finance

January 19, 1971
The Budget-Mr. T. C. Douglas had taken the appropriate steps and that these would bear fruit in the spring. Well, it is great consolation for the unemployed to know they will bear fruit in the spring. But why has the government procrastinated? Why did they not do last year some of the thing they are talking about doing now?
As we have pointed out in this debate, there are certain things which could be done immediately. Unemployment insurance benefits could be increased and the number of persons entitled to benefit could be enlarged. When I asked whether the government would do these things, the Acting Prime Minister (Mr. Sharp) said I must have overlooked the fact that the government had already raised the amount of benefit by 10 per cent. So, a man drawing the maximum of $53.34 would get $5.30 more. Yet the white paper says the maximum should be not $53 a week but $100 a week. We have asked that the categories should be enlarged and that persons who have exhaus ed their right to benefit should have that right extended. If we do not take action of this kind, many of these people will find themselves in extremely difficult circumstances.
We have pressed the government to amend the manpower training regulations so that young people who have not spent three years on the labour market will be able to take training. When are these young people to get training when we exclude them from the benefit of training allowances until they have spent three years on the labour market? Are they to be perpetually unemployed because they are untrained and cannot qualify as a result? If the government really wants to cope with the problem presented by unemployment among young people-218,000 below the age of 25-they ought to be prepared to amend the regulations so that these young people will be covered.
We have suggested the government should have allowed the 3 per cent surcharge on personal incomes to expire. Criticizing us today for making this proposal, the Minister of Finance said it would cost money. I want to point out that last March he said with great pride that the 3 per cent surtax would be dropped at the end of December. Why is it a bad thing, now, when it was a good thing last March? If the government was able to wipe out the tax in March, 1970 as a means of stimulating effective demand, why, in January of 1971, does it suddenly become disastrous to suggest that the government drop it? The government should have allowed the tax to expire, as was originally announced, and this would have done a good deal to leave a little more money in the pay envelopes of every worker so that he could buy more goods and create the demand the economy needs at the present time.
We have pressed the government to increase old age pensions and veterans pensions and to make the increase effective on January 1 for the same reason; this also would help to create effective demand. It is interesting to recall that last March, and since then, when we talked about increasing pensions, the Minister of Finance or the Prime Minister would say we were trying to foster inflation. Now, the government decides it can be done, but not
[Mr. Douglas (Nanaimo-Cowichan-The Islands) .1
in time to be of help this winter. It can be done on April 1 next.
We have pressed for the removal of the 11 per cent sales tax on building materials, particularly in housing, and today the Minister of Finance complained about the loss of revenue this would entail. I want to point out that this tax was imposed not for the purpose of increasing revenue but for a different objective. When Mr. Walter Gordon introduced that tax, he told the House it was a question of slowing down building in this country because there was a shortage of both building material and construction workers. At that time, there may have been some need to cool off the amount of construction under way but surely if the sales tax was imposed for that reason, now is the time to take it off. I think the effect would be that instead of falling short of its housing target by 20,000 dwellings, the government could reach its objective next year besides putting a great many more people to work. There is no greater multiplier in the whole economy than housing construction.
I want to suggest something the government could do without waiting for next spring when housing construction will start. Our party has for a long time been agitating that the government, either on a permanent basis or as a temporary measure this year, should offer interest-free loans to individuals for home improvement. There would have to be a ceiling, of course, but there are literally hundreds of thousands of people with old homes that need to be renovated, that need alteration, that need improvement, that need to be made weatherproof, and this would provide all kinds of jobs for carpenters, plumbers, electricians and plasterers across this country. Such a program could be put into effect even in wintertime if the government were prepared to shake itself out of its lethargy.
In addition to short term measures the government ought, of course, to be giving the House details of the long term measures it proposes to take to develop a policy of economic growth and full employment accompanied by relative price stability. The government has to take action so that the country may know we are not going to oscillate constantly between boom and bust, between periods of affluence and periods of economic depression. I must say that in this debate I have been extremely disappointed that the two ministers who have replied on behalf of the government have completely failed to tell us of one concrete measure the government intends to take to relieve the misery and the hardship experienced not only by the 538,000 unemployed but probably by another 750,000 or a million, of their dependants.
Yesterday, the Minister of Labour followed the old debating technique of attacking the other side rather than tackling the problem. He began by saying there was nothing fresh from the opposition. Then he, himself, proceeded to reiterate the old catalogue of pathetic alibis in an attempt to explain why the government has done nothing about unemployment. When the minister was telling the House all the things he has told us before, about why the government could not do anything to fight
January 19, 1971

unemployment, it was like listening to a cracked record. His main comfort to those who are out of work was that conditions were much worse in 1959 and 1960. It should certainly make the unemployed feel better to know that ten years ago the people who were unemployed had it just as tough.
I am not going to get into the argument whether unemployment in 1960 was worse or better than it is today; I think that is totally irrelevant. Nevertheless, let me tell the Minister of Finance that in spite of his optimistic statement this afternoon, some of the best economists in this country are now predicting that the unemployment figure this winter will peak in February at 740,000. This does not take account of the 100,000 who are taking manpower training but are also unemployed. Nor does it take account of those who have dropped out of the labour force.
Then, the Minister of Labour fell back, as did the Minister of Finance this afternoon, on the old defence that governments always adopt. He talked about the psychological effects of the gloom and doom that are being created by the opposition. He stated that any investors sitting in the gallery listening to the speeches of opposition members would certainly not be interested in investing in this country. This, of course, is the line taken by the Secretary of State for External Affairs (Mr. Sharp).
According to the Globe and Mail for Saturday, January 16, the Acting Prime Minister criticized the labour min-nister of Quebec, Mr. Jean Cournoyer, because the latter had said that unemployment would undoubtedly cause further outbreaks of violence. According to the press, the minister said:
This kind of talk is not going to encourage the establishment of new industries. There has been some loss of confidence in Quebec since the FLQ trouble-
Does the government think that the people of Quebec are children? Does it think that investors are simpletons? Does it think that investors and business tycoons are not as aware of the unemployment statistics as anybody else? Is the government asking all of us to enter into a conspiracy of silence and not tell anybody that unemployment in Canada is the highest in the western world? Are we supposed to keep quiet about unemployment? Does the government think we will create public confidence by putting our heads in a hole and hoping that the unemployment problem will go away?
The Minister of Labour talked about foreign investors being frightened away. Does the minister think that foreign investors do not read the reports of OECD which indicate the degree of unemployment in Canada? I say that this is a specious type of appeal. Instead of trying to sweep the problem of unemployment under the rug, the government ought to be going to the people of Canada today and admitting: "We goofed. We started out to fight inflation and we have created something that is much worse. Like Frankenstein, we have created a monster that we cannot control. But we are now prepared to try
The Budget-Mr. T. C. Douglas to remedy the situation, and we ask your co-operation". Instead of that, we have had nothing but pathetic alibis. Finally, the Minister of Labour tells us that it takes courage to create temporary unemployment intentionally. Perhaps it does take courage, but it also takes a good deal of stupidity to create unemployment unless at the same time you have created the necessary programs to take care of the unemployed and to provide other jobs for those affected.
The Minister of Finance made the statement today, for which we had all been waiting. But it is not going to provide any consolation for those men and women walking the streets of this country in search of work. It will provide no comfort for the old age pensioners and veterans who are trying to eke out an existence on an amount which the government admits is totally inadequate. It will provide no encouragement whatever for the provincial and municipal governments that are now burdened with a great load of welfare payments which they cannot meet. Problems that are not of their making are now being dumped on their doorstep.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but I do so to advise him that his time has expired.


Some hon. Members:: Continue.


Mr. Deputy Speaker:: Is there unanimous consent that the hon. member continue?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I thank the House for its long suffering patience and I will draw my remarks to a conclusion very quickly.
The minister took refuge in the fact that the high rate of unemployment is the result of winter conditions. Everybody in Canada knows that it is much more difficult to provide jobs in the winter than it is at other seasons of the year. But let me point out that the unemployment figures for December 1970 are higher by 155,000 than the December 1969 figures. And working conditions in December of one year are much the same as working conditions in December of any other year. The Minister of Finance also trotted out the old bogeyman when he said: "If we carried out some of the programs that the opposition has been suggesting, where would we get the money?" This statement is really not worthy of a Minister of Finance who lives in a period when the Keynesian philosophy and techniques are so well known. The fact is that unemployment and the lack of a full utilization of our productive capacity is costing this country $100 million a week, or over $5 billion a year. If the government has to deficit finance to get the economy rolling again, then it will get this money back many times over by creating full employment and promoting economic growth.
I just want to close by saying that unemployment is a human tragedy. It is a human tragedy because of the

January 19, 1971
The Budget-Mr. Corriveau suffering and hardship it imposes on those who are unemployed and on the families who depend upon them for maintenance. It involves a loss of self respect, a loss of human dignity and eventually a loss of hope, and that is the most serious thing of all. As long as people have some hope that conditions will be better, they can hang on. Once they have lost hope, they become the material out of which social unrest is created.
A man who once sat in this House and for whom I have great respect, J. S. Woodsworth, often used to quote Edwin Markham; the long, long patience of the plundered poor. I think this government should be warned that there is a limit to the patience of the plundered poor and that the people will not forever be made the victims of the government's economic errors, of its arrogance and its indifference. I hope if this debate has done nothing else it will have shaken the government out of its lethargy, and within the next few days we will see it bring down some measure which will at least partly alleviate the suffering which it has brought upon the people of Canada.


Mr. Leopold Corriveau (Fronienac):: Mr. Speaker,
Canadians are now faced with a choice between a brilliant economic future and poverty, namely a choice between priorities and means to fight inflation.
How will they ever come out of this cluster of needs and aspirations?
Mr. Speaker, this is the question I would like to submit to the House. I would not want to be taxed with parochialism but since I am relatively a newcomer here, I would rather deal with matters I am closely concerned with because they condition the life of the whole community in my constituency of Frontenac.
As I mentioned earlier, there is presently a confused cluster of aspirations and needs which are merely impossible to implement or to satisfy completely and simultaneously because of the limited financial resources of the government.
In its first report published in 1965 the Economic Council of Canada set its goal very clearly, namely a maximum annual price increase of 2 per cent and a maximum unemployment rate of 2 per cent also.
It would be ludicrous to remind hon. members that these two objectives have never been fulfilled. This may be the reason why this agency gives such importance to the fight against poverty in its last report. Would this tend to prove that the Canadian economy did not operate as expected?
The Canadian government, being aware of this situation, has enacted legislation creating the Department of Economic Regional Expansion, which has already produced tangible results across the country, and my area is no exception. Indeed, grants of the order of $715,810 to seven industries have helped create 482 jobs. At the present time, several other projects are under way and should straighten out the situation, economically and socially.

Evidently, we have new goals to reach, but to succeed we must see what the reality is, according to some indicators.
On October 1, 1969, Quebec's population stood at 6,002,000 inhabitants, that is 28.3 per cent of Canada's population.
In 1961, Quebec included 28.8 per cent of the country's population, as compared to 28.9 per cent in 1941. Therefore, Quebec's population does not grow according to an ascending curve consistent with today's requirements.
In 1969, the gross provincial product, according to market prices, amounted to $19.88 billion, that it to 25.4 per cent of the gross national product. In 1965, the corresponding figure was 25.9 per cent, and in 1961, 25.7 per cent. Also in this field, we can note a decreasing curve, lower than the population curve.
The unemployed are distributed over a large territory, made up of 1,600 municipalities. Paralysis, the reason of the ultra-conservatism prevailing among so many workers, is a serious problem, a source of trouble and of social unrest. Hon. members are looking for solutions; technocrats are preparing programs; economists are studying and analyzing; intermediary bodies are demanding and condemning; editors are talking and thinking. Mr. Speaker, the need is for people-for us and for those ready to accept the challenge-to find the clue to the riddle.
It is high time that we located the evil and made a diagnosis implying practical solutions. Everybody can contribute part of the solution through a humane approach to the problem.
Mr. Speaker, knowing our situation, we are now more determined than ever to take the necessary corrective steps and turn our liabilities into assets. The Canada of tomorrow will be as we shall build it, starting in 1971, since we are able to conceive our future society. All the issues I have raised become determining factors.
In fact, anyone listing the dangers to be fought, anyone examining the conditions required for our economical and social development, anyone looking at the experience gained by other countries to find a policy that would fit Canada will understand that our industrial development has top priority since it means employment and productivity. To this end, we have understood we should increase our production so as to reach not only our domestic market but also the world markets.
Although our industrial structure is weak and our production ill-oriented, we sell our surplus to certain sectors. For example, Quebec is producing 64 per cent of clothing, 57 per cent of textiles, 57 per cent of hosiery, 54 per cent of tobacco, 46 per cent of leather and 37 per cent of furniture. We should be glad of such statistics. However, because of dumping of foreign products and our faulty marketing organization we find competition very hard and this implies quite low salaries which do not correspond to the requirements of our consumption society.
For instance, in the footwear industry, the Minister of Regional Economic Expansion has initiated the creation
January 19, 1971

of a sales agency known as Faber which should enable our factories to sell more easily their present production while increasing it by finding new customers.
In that field as in many others, our Quebec industries are mostly primary and traditional. Our production surpluses are often subsidized. One needs only to look at the agricultural sector for instance to see that milk production is being subsidized while by-products like cheese are imported.
A good number of farmers in my riding are engaged in dairy production. Many of them dread the report of the federal task force on agriculture, suggesting the phasing out of subsidies for industrial milk production before 1976. I am sure that to a great extent the problem related to the sale of that product could be solved with the co-operation of our universities, by stimulating research at the marketing level and the discovery of new byproducts. Provided there would be co-operation between researchers and producers, who seem to establish voluntary quotas on their production, and with the assistance of their associations such as the C.F.U., we could together find a fair solution for everyone.
We recognize that would call for new outlooks and new methods of production. We should assume also that producers presently engaged in that field will inevitably have to head for some other economic sectors. That is why I consider the agricultural problem as the that of all of us.
The farmer produces. The city dweller buys and consumes those products. A dialogue leading to understanding between individuals would enable the farmer to get a fair price for the outcome of his labour, which would bring him closer to the industrial worker. Indirectly, the consumer would protect himself against abusive increases in the price of food products. The strengthening of the industrial structure would permit to absorb labour surpluses from the farm sector.
Efforts are being made already in the Manpower Centres. Indeed, courses are being provided to upgrade the schooling of all workers, thus enabling them to adjust to the world of technology. Apart from technology, another move is under way which will gather momentum, so as to group industries together, in order to make them more competitive in the face of giant American concerns.
In this regard, competition from foreign products must be analyzed, before launching into production. The cost of manpower and its training affects the decision to specialize our production. However, it is mainly our determination which will affect our capacity to conquer the world markets and to join the ranks of post-industrial countries.
Our region is already playing a more important part in the conquest of world markets. The greater part of the production of our asbestos mines is sold outside the country, because the Canadian consumption represents 70,000 tons, that is 5 per cent of the total production. The balance is exported to 75 countries. Canadian asbestos
The Budget-Mr. Corriveau
exports have increased by 72 per cent during the last decade. The demand on the world market seems excellent for the next ten years. In fact, this helps provide some stability for the 3,000 workers engaged in this field, who now earn an average weekly salary of $133.75. Moreover, in view of the changes which will probably be made in the white paper on taxation, increased investments in the mining sector are to be expected.
In the past few years, thanks to the sustained efforts of some leaders in this area, we were successful in innovating in the field of secondary industry. Indeed, the manufacturing of snowmobiles, camping equipment, sports clothing, domestic products enables us to face the future with much greater hope. The sale of our asbestos and of our snowmobiles on world markets contributes to improve Canada's trade balance. Therefore, thanks to the investments made by the Department of Regional Economic Expansion with a view to improving and modernizing the harbour facilities in Quebec City, our shipments will make those investments profitable.
In 1969, the shipments of asbestos from Quebec harbour amounted to 235,284 tons, or 9.6 per cent of the total shipments. Re-organizing the CN and CP rail networks would bring about a decrease in rates, and improvements in the services which would open a door to the world.
Apart from shipping which will resume in a couple of months, we will, thanks to the co-operation of the federal Department of Transport, be able to use an airport which will have a favourable influence on the development of the whole of our area. Far from avoiding the challenge, we meet it resolutely, abiding by modern development standards which will result in social progress for us through economic growth.
We must be bold and resort to a rational utilization of the knowledge gained and also to a rational manpower development policy in terms of new requirements and the development of vocational training. According to this resolutely progressive philosophy, the curricula of our general and vocational education institutions are designed to enable the students to master new techniques better and, through automation, to adjust constantly to industrial progress.
At the College d'enseignement general et professionnel in my area, we have a mining techniques department which offers students from every part of the province courses on new mining techniques. Moreover, these students benefit from the very important advantage of practice through the co-operation of our mining companies. Aside from training future citizens, academic institutions must also develop a creative spirit in the student. Our destiny will depend on our qualities of ingeniousness, initiative and constructive imagination.
In our competitive system, we appraise an individual's worth not only by his attitude and his performance, but also by the diplomas he can produce. And yet, one prerequisite to productivity in a technological society is the optimum utilization of human resources. Let us think of all these men and women whose experience of life and of the working world, as well as their cultural background,

January 19, 1971
The Budget-Mr. Lundrigan
if they could be translated into figures or percentages, would be worth many degrees. We can no longer afford to deprive ourselves of the intellectual and economic capabilities of this multitude of adults who are unable to attend the regular courses which would sanction their actual knowledge. We must use the talents and the potentialities of our adults in order to check "intellectual capitalism". Our youth realizes that the object of studies is not only education, but also teaching how to learn, teaching methodology.
Since money is the motor of economy, savings should be channelled and humanized through being used to foster economic and social recovery. We no longer believe capitalist philanthropists and expect them to alleviate poverty. Besides, capitalists see their revenues being heavily saddled with taxes of all kinds so they too must humanize. Our joint commitment is assuredly the best way to clear the air. Its most meaningful result will be economic recovery.
Now that we are collectively aware of what we want to become, all Canadians, whether they are federalists or separatists will have to achieve the future I have just outlined.
Mr. Speaker, let us hope that all will want to contribute to prosperity, which is an essential factor for the creation of a just society.


John Howard Lundrigan: I would first like to congratulate the hon. gentleman who just spoke. Certain of the ideas which he put forward in his maiden speech were very acceptable, and I am sure they will be well received in his riding and in his province.
A few minutes ago we had a rather unusual experience in the House of Commons during a debate on what is certainly the most critical and chronic problem facing the Canadian nation at present when the Minister of Finance (Mr. Benson), made a speech in order to fill in 30 or 40 minutes for his party, rather than accepting the challenge of every Canadian, and certainly of the 538,000 unemployed, that the government present some positive or encouraging statement to try to offset the serious psychological depression as well as the actual depression in Canada at present. Five hundred and thirty eight thousand people are waiting at the proverbial door of the government for the minister to make a statement which would give them a little encouragement. A tremendous number of people in the business community of Canada were anticipating a statement which would be positive, encouraging, rational, sensible, and not arrogant. Mr. Speaker, we have had a bitter disappointment. The Minister of Finance indicated that his government accepts the unemployment problem in Canada, that unemployment always exists in the winter, and that it is nothing new. It existed in the thirties, and even existed in the sixties.
We also heard about the fact that the government recognized the problem last March, and the minister

went on to say that the government started to do something about it in December, 1970. I believe it was the mayor of Edmonton, Mayor Dent, who summed up the feelings of all Canadians when he said it was unrealistic for any government to expect that announcing a loan fund pittance of $150 million in December, 1970, with the proviso that work under it start immediately, would have an effect on an unemployment problem which is so vast now that in excess of half a million Canadians are seeking employment.
The Minister of Finance went on to point out in great detail that he did not agree with the position of the Leader of the Opposition (Mr. Stanfield). He ridiculed our leader for lining up with the 3,000 to 5,000 bread seekers in Vancouver who assemble on the welfare lines twice a month. He ridiculed the fact that the Leader of the Opposition visited the soup kitchens in Vancouver, attended the unemployment offices in Winnipeg, and tried to console the 17 per cent unemployed in Kelowna. Today, Mr. Speaker, our leader is visiting Montreal which was the highest rate of unemployment among young Canadians of any part of Canada. The Minister of Finance was also going to advise the Leader of the Opposition on the proposals he could offer to eastern Canadians when he swings down that way in the coming days. He ridiculed our leader's proposal for a reduction in taxation. At the end of all these comments, he put an exclamation mark and a full stop, but left a question mark in the minds of all Canadians with regard to his proposals for alleviating the serious trend toward a critical unemployment problem for the rest of the year.
The minister talked about the fact that the government could continue to keep the screws on the economy in order to tighten it up. Our leader referred to this as a mechanistic approach to economic development. The minister said that things will get better by and by. Mr. Speaker, it would not be as tragic if that kind of attitude did not pervade the whole cabinet, and perhaps the whole of the Liberal party. We can tolerate one minister of the Crown having that kind of attitude. We can pass it off as a political move on his part, but having heard the Minister of Labour (Mr. Mackasey) yesterday, and having listened to the Prime Minister (Mr. Trudeau) during the last couple of years, one has to wonder whether this is not a really serious, calculated plan. Perhaps it could be described as election economics. I do not know if that is included in the new economic theories or not, but this is what one must try to determine.
I sat in the House of Commons all day yesterday, Mr. Speaker. Seriously I wanted to hear the Minister of Labour speak. In the past, he appeared to be a man with a big heart and soul, and some conscience. Then yesterday he talked about the courageous creation of unemployment in his own province of Quebec, and bragged about the fact that governments in the western world will have to have a great deal of courage in future in order to undertake the creation of unemployment in view of the need to automate and rationalize certain industries. That statement of the minister's is reported on page 2507 of Hansard. I hope each Canadian gets a copy of Hansard and reads it.
January 19, 1971

The Prime Minister has also been talking about the need to create unemployment. We have been ruled out of order when we asked questions on this statement. I am not questioning the ruling of Mr. Speaker but apparently it is difficult, even for Mr. Speaker, to accept the fact that the Prime Minister has bragged about the need to create unemployment in this country. On a CTV W-5 program back on June 28, 1970, the Prime Minister said that they were going to continue to create unemployment, that unemployment was necessary, and the Canadian people could either like it or lump it. I could not believe it, Mr. Speaker, when the Prime Minister said, "If you don't like my approach you can lump it. That is your choice. We are going to go ahead with our policies to kill inflation." This statement seems to imply that inflation is tucked away in one corner of the economy, and unemployment is to be used as a weapon to kill it.
Last evening on the national television network the Minister of Labour referred to the fact that in the winter of 1971 we were going to continue to have unemployment, that it was not new, so why should we worry about it? Why should we get all upset about the unemployment problem this year? For comparison, he used the figures for the 1958-62 period when a Conservative government was in power. As a Canadian who has not lived as long as the Minister of Labour or the Minister of Finance I tell you, Mr. Speaker, that I am not too concerned about what unemployment was like back in 1962, or what it was like back in 1932, 1933 and 1934. The fact is that the
538.000	Canadians who are unemployed, plus 100,000 who are in trade and vocational schools, plus perhaps another
100.000	who have gone out of the labour market, plus many other people who will never find their way into the statistics-and it must be remembered that these statistics are really a guesstimation of the seriousness of unemployment-are little concerned about conditions as they existed a decade ago. They are faced with a bleak, distressing problem in 1970-71.
As was mentioned by the leader of the New Democratic Party in this debate, the Minister of Labour said we need not worry because we have the dole in 1971 and we did not have the dole in 1960. That is the most disgraceful statement I have ever heard in the House of Commons from a member of the Privy Council. This afternoon the Minister of Finance is probably appearing before the television cameras in the Commonwealth Room. Perhaps he is still there. As a matter of fact, I hope he will be there for the next six or seven months, because if he stays there we may be able to do something about this problem. But, Mr. Speaker, this afternoon he was beaming and smiling as if he were attending a garden party, when in fact we are having a funeral in Canada. There he was, smoking his pipe, and telling the
538.000	unemployed, "Yes, we have a problem all right but it will go away one of these days."
The Minister of Finance, in his usual tricky way, like his Prime Ministerial friend, uses statistics to great advantage to minimize the seriousness of the problem.


An hon. Member:: You mean cold facts.
The Budget-Mr. Lundrigan


John Howard Lundrigan: An hon. member over in the corner refers to cold facts. I hope he gets on his feet and tells us about unemployment in his region of Canada. But, Mr. Speaker, we have members in this party who will start talking about unemployment in their regions. I will give you the facts now.
The Minister of Finance talks about seasonally adjusted figures every time the seasonally adjusted figures are convenient for him to use. I know that there are very few Canadians, including Members of Parliament, who are conversant with the seasonally adjusted figures. They are very complex statistics and very useful statistics, which have been used for the last 30 years, but if you start comparing various months you can create a tremendously false impression. For example, Mr. Speaker, the Minister of Finance said that we have had a decline in unemployment since September because in September the seasonally adjusted unemployment figure was 6.9 per cent; in October it was 6.6 per cent; in November it was
6.5	per cent and, speaking quietly, he said it was 6.6 per cent in December. But what he did not point out was that if we go back to June, 1970, we had 6.6 per cent unemployment, seasonally adjusted, in that month.
Does that mean that there was the same amount of unemployment in June, 1970, as there was in December 1970? That is the impression the minister was trying to create. Why doesn't the minister go back to 1965 and tell Canadians that during December that year we had 3.5 per cent unemployment, seasonally adjusted; that we had
3.6	per cent in December, 1966; 4.7 per cent in December, 1967; 4.8 per cent in December 1968; 4.8 per cent in December, 1969; and 6.6 per cent in December, 1970? That is a comparison the minister did not place before the people of Canada when he spoke in the House of Commons. But, we are not worried about these seasonally adjusted figures. As the hon. member for Malpeque (Mr. MacLean) pointed out, it is little consolation to an unemployed Canadian whether he is seasonally adjusted or an actual unemployed unit if he has to go on the dole to carry his family through the winter months.
During the month of December we had 320,000 people over the age of 25 unemployed, compared with 231,000 during the same month last year. In the under 25 age group we had 218,000 unemployed, as compared with
152,000	previously. Can anyone even begin to imagine the effect on 538,000 Canadians, plus the 200,000 more Canadians who do not show up in these unemployment statistics? Can anyone imagine what the effect has been on their outlook? Can anyone imagine the psychological depression that comes from living in a community in which there is no hope for the future and the outlook for 1971 is bleak. The Prime Minister has talked about the just society for Canadians. The Prime Minister, who is at the Singapore conference, may talk about the just society but many Canadians are wondering just when the just society will be born in Canada.
Yesterday the Minister of Labour said that the Leader of the Opposition was creating a tremendous psychologi-

January 19, 1971
The Budget-Mr. Lundrigan
cal depression in this nation. I know the Leader of the Opposition is competent. I know he is a man of great integrity and capability, but I did not realize he had such all pervasive powers as to instil in all Canadians the psychological depression which is now sweeping the country. Yes, the Minister of Labour is absolutely correct about psychological depression. There never has been a period, since I have been a Canadian, in which there has been less incentive for people to engage in certain forms of economic endeavour. The Leader of the Opposition has not created this tremendous psychological depression. The Minister of Labour did not men'.ion that there has been a severe increase in taxes since 1968. I am sure that had no effect on the psychological depression of Canadians-oh, no. The middle income Canadian is terrified about his future; he does not even want to look at his pay cheque any longer. I am talking about people earning between $10,000 and $20,000 a year, who comprise a healthy chunk of the Canadian population. They are the people with incentive, who are developers and promoters on a private, individual level.
The taxes of these people have been increased, and are to be further increased, because family allowances for those earning more than $10,000 are to be eliminated. This represents a substantial loss to anyone with five or six children. To such a man, the family allowance means an income of about $500 a year. Actually, it represents an earned income, if you consider the tax structure, of about $1,000 a year. That will be the extent of his loss, and that will be the extent by which his taxes are to be increased.
Again the Minister of Labour never mentioned the white paper on tax reform. We shall never know what effect that white paper has had as a disincentive to Canadians, especially those who make up the business community. We shall never know what the effect was, not only on those in the business community but on small investors who might have invested moderately in the stock market. Again, what about people who wanted to own their own home and hoped to be able to acquire an equity in a modest home and later to buy a better home? The white paper has acted as a disincentive to such people. It has had a detrimental psychological effect on Canadians because it seeks to revolutionize our social system through the taxation structure.
Housing starts have been down. The housebuilding industry has had an important effect on our economy. I do not know the correct term to use, but, I think it can be said that that industry has an important multiplier effect on the economy. Housebuilding is a catalyst for other development.
Let us for a moment look at other disincentives that face Canadians. I am not an economist; I am just an average Canadian who has tried to size up what has been going on in Canada. Unemployment has created tremendous disincentives in the economy. I wish to refer to statistics which I have not heard quoted in the House so far, and I do not mind taking a minute to do so. For example, in December, 1970, there were 124,000 people who were unemployed for less than one month. I will not talk about people who were temporarily unemployed. If

one examines these statistics one will find, I think, that
43.000	were temporarily unemployed. They are not classified among the unemployed. They know that they will be recalled to work in about a week or a month and that their condition will improve. Let us assume that the
124.000	unemployed persons would each have earned $500 in that month. Their loss of income, therefore, represents a loss to the economy of $72 million.
In December 1970, 203,000 people were unemployed for between one and three months, as compared with 149,000 people who were unemployed in December 1969. If those people had each made $1,000 during that period, we can see that there has been a direct loss to the economy of about $203 million. In that month of December, 1970,
84.000	Canadians, as compared with 49,000 in December, 1969, were unemployed for between four and six months. If each of them had earned $1,500 during that period, and I do not think we are being very generous with them, we can see that the economy has lost $126 million. In that same month, December 1970, there were also 84,000 Canadians who had been unemployed for more than six months. Assuming that those Canadians would have earned on the average $3,000 each, one can see that their loss represents a loss of $252 million to the economy. About 46,000 Canadians were unemployed for that length of time in the previous year. These losses to the economy represent a massive disincentive. We are looking at a loss of about half a billion dollars that is to be attributed to the losses of these unemployed groups. I know that these figures can be picked apart, argued about, and criticized.
We are now talking about 538,000 unemployed people. Mr. Speaker, let us try to calculate how much those
538.000	people would have lost by being unemployed for three months, and we can calculate the extent of the disincentive in our economy. We are not talking only about the effect of unemployment on these people, and on the productive aspect of their labour. We are not talking only about the fact that there has been a serious impairment of Canadian productivity, and that we have to dish out large chunks of cash to help the unemployed to survive. We are not only talking about that.
The Minister of Finance, Mr. Speaker, has taken great pride in picking apart our proposals. The Leader of the New Democratic Party has supported us right down the line, almost to a "T". He supports the positions we have taken. We have recommended immediate changes in the unemployment insurance regulations in order to modify the periods and conditions to qualify. We have recommended the establishment of a ministry that would deal with the unemployed. We have recommended the lowering of taxes and the elimination of the 3 per cent surcharge. The retention of the surcharge is tantamount to a tax increase. We have recommended the elimination of the 11 per cent sales tax on building materials and a reduction in the levels of personal income tax. The Minister of Finance said today that if the government were to remove that tax and listen to our other proposals the government would lose about $1 billion in revenue and that this loss would be felt by the provinces. I do not know whom he is trying to fool; he is much more bril-
January 19, 1971

liant than that. Is he trying to mislead the House and the people?
We have made good proposals which I submit are sound and rational. We are not saying that there should necessarily be an across the board reduction of taxes for all Canadians. We are offering a number of proposals for the government's consideration. Removing the 11 per cent sales tax on building materials alone would mean an impetus to the Canadian economy of about $200 million. Removing the 3 per cent surtax would add about $150 million to the economy. Also, there are at least five or six ways by which personal income tax could be reduced. Such a reduction would have a beneficial effect on the economy. Our proposals, depending on which ones and how many are adopted, would mean, an injection into the Canadian economy of between $200 million and $1 billion or more. They should not be ignored.
In the present circumstances we cannot, because of the time factor, develop our suggestions in any great detail. Nevertheless, we feel that our suggestions are worthwhile. If the minister is not prepared to accept the proposals of the opposition, perhaps he will be prepared to outline to the Canadian people what the government proposes to do so the Canadian people can judge how effective they will be. If the minister is not willing at present to accept the proposals of the opposition, then we challenge him to come forward now with concrete proposals. Let him advance them to the House of Commons and to the Canadian people. Let us assess their value in terms of their potential for reducing unemployment.
In summing up, in my opinion, Mr. Speaker, there is one basic need over and above everything else which is needed in this country at the present time. This need has little to do with dollars and cents, building material tax, surtax or a reduction of personal income tax. I contend that the Canadian people believe the biggest need in our country today is a change in the attitude of this government. This is more important than anything else. Even cabinet secrecy is not able to hide the fact that the government has a cold, calculated and planned approach to the economy. This message is coming through from the Minister of Finance and the Minister of Labour. It has been preached by the Prime Minister (Mr. Trudeau) throughout the years. The government is not prepared to deviate for one moment.
None of the ministers, including the Minister of Finance, has travelled around the country recently. They have not visited the bread lines. They have seen the effects on the unemployed. They are not aware of them. I cannot think of a more adequate phrase to describe the attitude of the government than that used by the Leader of the Opposition. He said the government has a mechanistic approach to the economy. This is sad. The government is not concerned about the effect this is having upon 538,000 Canadians.
I find it hard to accept the attitude of the Minister of Finance. Many Canadians, including some of my con-
The Budget-Mr. Lundrigan stituents, cannot believe that he has adopted this attitude. The minister appeared on television with his pipe in his mouth and stated "I would like to tell the people of Canada that 538,000 people are unemployed. There is no problem. The government is considering it. We recognized the problem last March. We are going to loan $150 million in December." This is an unbelievable attitude.
The Leader of the Opposition said something yesterday which struck home to every member of this House and to many people outside it. He talked about the bitterness reflected in the attitude of between 3,000 and 5,000 people in the bread lines of Vancouver. This bitterness was not necessarily directed toward the Prime Minister or the government. The bitterness was toward the institutions of government and Parliament-for their inability to handle the unemployment problem in Canada. These people have given up hope; there is a tremendous amount of despair. This holds true for every province. It is even permeating the attitude of many people in the province which I consider to be the most peaceful in Canada.
A couple of years ago the Canadian people purchased what I considered to be a pig in a poke. I suppose we all made that mistake. We must accept a democratic decision. At that time Canadians were promised a just society which was to be on the platters of all Canadians for Christmas that year. Since that time there has been an apprehended insurrection in the province of Quebec. Canadians felt that the government at least took action in bringing in the War Measures Act. The fact is that the apprehended insurrection occurred during the reign of this Prime Minister. Last week Mr. Cournoyer, the Quebec Minister of Labour, stated that there is an apprehended revolution in that province. I do not know the gentleman. He must be reasonable and responsible, because he was appointed to the cabinet of that province by the Premier.
In my opinion we have had an increase in regional disparity and in taxes. I contend that also we have had an increase in separatism. There has certainly been an increase in the length of the bread line. The unemployment rate is now 6.6 per cent. It is almost one per cent higher than in the month of November. I contend that this is a planned effort on the part of the government. One minister of the Crown stated last week that we will probably have to tolerate a rate of 10 per cent unemployment in Canada.


Some hon. Members:: Shame!


John Howard Lundrigan: The Minister of Finance said, "We accept that." The Minister of Labour asked what was different about unemployment in 1969, 1970 and 1971. The Prime Minister stated the government will create unemployment regardless of circumstances or results. Another minister, a real heavyweight, indicated we might have to tolerate a 10 per cent rate of unemployment in this country. The Prime Minister is misjudging the mood of the Canadian people. He is relying on experience gained while visiting some of the eastern countries in the last couple of decades. I think it is possible to plan an

January 19, 1971
The Budget-Mr. Otto
approach to the economy of a grossly underdeveloped nation and have a very authoritarian approach to the economy, politically and otherwise. However, I do not think the Canadian people will accept this kind of solution.
Recently, it has been widely stated that the Prime Minister is using a system of election economics. This is probably closer to the truth than anything I have heard in recent weeks. We in this party have offered suggestions. From what I have read and heard, these suggestions are widely accepted by the economists of this nation and by many politicians. We challenge the government to accept our suggestions or, in the few hours remaining, to offer proposals which will at least encourage the Canadian people and will offset the great psychological depression and real problems of unemployment in Canada today.


Mr. Steven Otto (York East):: Mr. Speaker, in this debate I had hoped to hear concrete suggestions with regard to the problem of unemployment. It is obviously a serious problem. This problem affects not only the 538,000 who are unemployed but an additional 400,000 or
500,000	Canadians who are apprehensive about losing their jobs. I had hoped that politics would not play the major part which they have played to date.


Some hon. Members:: Hear, hear!


Steven Otto: I watched the Leader of the Opposition (Mr. Stanfield) on television when he was interviewed in Vancouver. I was unfavourably struck by the vicious treatment of those who attacked him, as well as by their frustration. I do not think he deserved it; I believe he was sincerely trying to get at their problem. That attack was one against every member of this House. We have lost face. We have lost all meaning to the people who are unemployed. They do not blame us. They say there is no sense blaming the members of the House of Commons, because they have nothing to do with it. They say we are meaningless. These people did not even attack the government.
Between 1959 and 1962, particularly in 1962, I received a great deal of correspondence and many telephone calls from those who were unemployed. Today other people are receiving this correspondence and these telephone calls. I refer to provincial politicians, local politicians and businessmen. Hon. members must examine themselves. How many hon. members feel they have a real entente with the people? The people of this country, especially the unemployed, have demonstrated their attitude toward the Leader of the Opposition and this House. We probably deserve it.
I had hoped to hear many new ideas in this debate. Instead, the government has been condemned for what it has done, even though it has admitted it may have made a slight mistake. What do opposition members want the government to do? Do they want the government to kneel and flagellate themselves and say, "Mea culpa, me a culpa"? That will not solve the problem of unemployment.
[Mr. Lundrigan.l
I think the government has quite logically answered the suggestion made by members of the opposition about tax cuts. Tax cuts are of no concern to the unemployed who will be paying no tax anyway, and the person who has work is so happy that he does not mind the tax. And where would the government get the money to finance these programs, without taxes? I believe the answer the minister gave deserves some logical comment from the opposition. There have been two speakers since then, but we have heard nothing constructive.


An hon. Member:: The minister does not want to listen.


Mr.   Olio@: He does. He would be happy to hear good suggestions. He has answered the proposal concerning the tax reduction in a logical way, because this is a problem to be faced now, not later.
Then there is the question of the 11 per cent building tax. I am glad that members opposite so anxiously want this tax removed. I have been in the housing business for about 20 years and I can tell them that the removal of the sales tax will not cause land prices to go down at all.


An hon. Member:: So what?


Steven Otto: The tax does not apply to the land. The cost of land is half the cost of housing. More starts are being made this year than in previous years. I am not saying the housing picture is perfect; I have had some tough things to say to the minister about our housing programs. But I do not think removal of the sales tax would put more people immediately to work.
As I indicated, the debate has been lacking in constructive proposals. We have been hearing nothing but political strife back and forth, instead of ideas for immediate and long-term measures. We are wasting our time, and it is no wonder the people of this country, employed and unemployed, are dissatisfied with us and give us no credence whatsoever. We can examine these things until doomsday, but until we come up with an idea of what the facts really are we shall not be able to deal with them effectively.


Joseph Adrien Henri Lambert: Vous vous reposez.


Steven Otto: Ah, oui. Attendez une minute. Ecoutez. The real problem is still one of inflation. The government has explained that if we allow inflation to continue, it will price us out of the export markets in which we are so heavily engaged. It is as simple as that. When we do so, we are no longer employed. The Prime Minister (Mr. Trudeau) unfortunately made a remark to the effect that if we do not agree with restrictive policies, we are for inflation. That is not true. I agree with the government that the ultimate problem is inflation. But inflation was not caused because too much money was chasing too few goods: it was caused because we are not very productive in Canada.
Among all the industrialized nations in the world we stand ninth in productivity although we enjoy the second
January 19, 1971_____________________COMMONS DEBATES	2561
highest standard of living. We are behind Greece, France and Spa.n. We are living high off the hog through the sale of our resources. We are mortgaging our resources to maintain a standard of living which we do not deserve. So the ultimate problem lies with our efficiency, our productivity. This is what we should be addressing ourselves to, not restrictive policies. But those are yesterday's potatoes and we shall not eat them again.
We have to examine the situation as it is now and decide what to do about it in the future. If we were to adopt some of the concepts advanced by hon. members opposite, we would be facing another cycle of inflation within ten months. If we return to the easy money idea, as has been proposed-tax cuts along with the costly support programs the government is already engaged in to create expansion in many areas-we shall be faced later with the responsibility of getting this money back. And where shall we find it? We shall have to get it from the taxpayers, who in turn will get it from the employers, in most cases, who in turn will charge higher prices to the public. Again, it is a vicious circle.
We ought to be extremely selective in our policy decisions and adjustment processes. This is not to say for a moment we should belittle the unemployment crisis. But we should remember that we still have to submit to an accounting in the future. One of the problems I believe we face is that regardless of what the government may have in mind, our financial institutions will not always go along with them. I have been studying this question for some time. There is a tendency to believe that because we have a responsible banking system there will be a reciprocal entente between the government and the banks; that the banks will consider government policy as part of a national policy. But this has not been the case. The Bank of Canada has reduced its interest rate very considerably, but I do not see any move by the banks and the financial institutions to put money out where it is needed, that is, in business. It is being put out in convertible loans at 18 per cent; it is being put out in bond issues across the border. I could give instances where a bank recommended an investment involving short-term money in the United States rather than one which would help build up an inventory for a company in Canada.
So we do not have a responsible banking system. I have regretfully come to the conclusion that the government ought to consider carefully the nationalization of our banking system. I hate to say this because I have always been opposed to the nationalization of any industry, but I believe our banking and financial institutions have been so irresponsible, so much out for their own ends, that we should carefully consider whether we should nationalize them.


Gilbert F. Rondeau: Credit!


Steven Otto: Well, I once voted with hon. gentlemen in that party when I voted for debt-free money.


Some hon. Members:: Oh, oh!


Gilbert F. Rondeau: You did not know about credit.
The Budget-Mr. Otto


Steven Otto: That is quite true. But in a serious vein, if hon. members opposite do not agree with nationalization of our financial institutions, perhaps the government should exercise a much stronger voice in their policies. Maybe we should hit their reserves. This would be a strong weapon. When the government has decided that certain policies should be followed or certain directions taken, it appears that the banks and other financial institutions have said: That may be good for some people, but as far as we are concerned we are part of a great international business, and if you do not lay down rules which we like we shall put our money elsewhere. We have to contend with this. Therefore, I do not think we can go very far without giving serious consideration to placing more severe restrictions or tighter controls upon our banking institutions.
The next problem, one that we are still facing, is labour. Labour problems have not disappeared merely because we have unemployment. We still have greater emphasis on labour problems than we had before. Hon. members will notice that during the last two weeks two companies have had to adopt ultimatum tactics-I think they have done so sincerely-because they are in a complete quandary as to what to do. These two firms have told their employees they must either stabilize their wage demands or the companies will close their plants and go out of business. This was not said for publicity reasons or for purposes of bargaining. I know the management of one of the companies, and this was a serious statement. So both labour and management have now been driven to the position where there is no longer room for negotiation; it becomes a question of ultimatum. Either the employees do this, or the company shuts up shop. Ultimatum tactics have never paid off and they never will.
I suggest the government seriously consider the whole complex question of devising a labour policy, because eventually, whether it be this year, next year or the year after, wage demands will have to be geared to productivity. I do not care which way you slice it, Mr. Speaker. This policy could be applied industry by industry, plant by plant, right across the nation. But eventually we must face the position that if labour wants a 6 per cent wage increase, it will have to show at least a 6 per cent increase in productivity on a per man-hour basis. If labour wants a 10 per cent increase in wages, then it will have to show a 10 per cent increase in productivity. Only in this way will we stabilize inflationary pressures.
If we do not adopt this policy, I predict that a year from now we will experience a 10 per cent inflationary cycle more severe than any we have had. Costs are still increasing. We speak of stabilizing the cost of living, but the fact is that many entrepreneurs and business ventures are selling off their goods and inventories at cost, even less than cost. When these inventories are replaced, they will be replaced at higher cost and the cost will have to be paid by the public. The over-all remedy, therefore, is not to have a political debate along these lines: We told you what was going to happen. You did a

January 19, 1971
The Budget-Mr. Otto
bad job; you should not have done so and so. Hindsight is very easy.


Gilbert F. Rondeau: The proof is there.


Steven Otto: I agree with the hon. gentleman, but does that put people back to work?


Gilbert F. Rondeau: No.


Steven Otto: I am glad my hon. friend agrees.


Gilbert F. Rondeau: You must have solutions.


Steven Otto: I hope to see a continuation of this debate that reveals concrete policies outlining what could and should be done. If that is the case, I am sure the minister will consider all ideas. To say that the minister is not listening is just nonsense.
Let me just summarize what I have been trying to say. The final solution must be one of gearing production to the increase in the standard of living or, if you like, to increases in wages. We must also be very selective during the next four or five months in regard to how we ease credit or the money supply. If it is eased right across the board, then inflation is bound to follow. But we can still be selective and employ more and more people.
I think the minister was on the right track in his budget when he gave certain incentives to industry as a tax write-off for replacement of capital goods. I think at least he should have doubled those incentives. The government should spare no effort in inducing industry to replace its antiquated capital equipment, because Canada is a country with some of the most antiquated capital equipment in the world. It has been said that Canadian capital goods are older and less efficient than those in some of the new countries of Africa and Asia. It has also been said that if there is a concerted effort by our banking system and by government to induce industry by means of tax write-offs, by forgiveness grants, in matter of replacing capital equipment, we could increase productivity by approximately 28 per cent.


Gilbert F. Rondeau: Fantastic!


Steven Otto: Yes, it is a fantastic figure; I am glad my hon. friend agrees. I think this can be done. It would be selective in approach because it would still keep Canadian companies making new equipment and machines and constructing new plants. But in the long run it would be to our benefit because we would gain from the increase in productivity and inflationary pressures would not be nearly so severe. A great amount of money is being spent-though I think more should be spent-on the retraining program.


Gilbert F. Rondeau: You will create more inflation.


Steven Otto: No. My hon. friend does not understand, so let me explain it to him carefully, if he will listen. One out of seven Canadians needs retraining now, but they are hanging on because there is still an opening for their type of effort. The fact is that they should be retrained

during the next two or three years. This is one direction in which we could use our retraining program money. A much larger share of the budget should be devoted to the retraining program to enable it to encompass more people. Then, over the course of a year or two years, we would get the benefit of their productive capacity.
This involves more than those who are now out of work; it involves those who are really unemployed even though they are still drawing wages. Many companies are keeping on key staff for reasons of seniority and other factors, but these people are really unemployed. They have not yet created a problem, though they will eventually because each company has a reserve. When the reserve is exhausted, these companies will have to tell these people that their talents or skills are no longer required, that the companies cannot afford to keep them on staff any longer. By placing a greater emphasis on retraining we will be able to And a solution to those inflationary pressures that are bound to break at a later date. In addition, we must break up the financial establishment by introducing new ideas, by having more control over the banks.


Gilbert F. Rondeau: Who are these people?


Steven Otto: I told hon. members who listened to me. Most of our banking and financial institutions are controlled by a very small number of people.


Gilbert F. Rondeau: Is that a fact?


Steven Otto: It is a fact. They are controlled by a small number of people who are extremely conservative and apprehensive.


Gilbert F. Rondeau: How do you know that?


Steven Otto: Because I know them. They are reactionary and will not accept new ideas unless they are hit over the head.


The Acting Speaker (Mr. Richard):: Order. It being six o'clock, this House stands adjourned until eight o'clock this evening.
At six o'clock the House took recess.
The House resumed at 8 p.m.


Steven Otto: Mr. Speaker, before the dinner hour I outlined some of the ideas I hoped to hear from members of the House, especially new ideas as to what might be done from now on. I said that I anticipated this debate would take the form of a presentation of ideas rather than of recriminations in respect of what has happened and an indication of who has been at fault. I also outlined some of the prime aspects of the financial crisis, inflation and unemployment in this nation.
In the next few minutes I should like to deal with the immediate problems facing those who are unemployed. The unemployed in this country fall into three groups.
January 19, 1971

There are those who have lost their jobs and are on unemployment insurance or welfare as a means of gaining an income. There are also those who are still working -that is a very important segment of the population- and being paid but their employment depends largely on the confidence their employers have in the future economy of this country. We must also consider the third group, which is comprised of young people who have just entered the labour force.
It is most important for this House, not just the government, to indicate that we in Canada have a great deal of confidence in this country in respect of the ensuing months and years. If the business community gets the idea that we in this House lack confidence, this feeling will prevail throughout industry and will induce our entrepreneurs and businessmen to restrict enterprise and curtail inventory build-up. As a result, the whole economic situation could become very critical. I suggest that in the next few months the government should enlarge its retraining program by including the many young people who have not been part of the labour force for three years or more. It is essential that we include as many people as we can in this program because their contribution to our economy will be of great benefit.
The government should reconsider instituting a special measure to indicate to our financial institutions that we mean business when we say they must encourage and finance business enterprise, particularly for the young people in Quebec but also those in the rest of Canada, who desire to enter this field. If these institutions fail to give an indication of their willingness to go along with government policy, more severe controls should be imposed. I encourage the government in the program it has outlined to provide employment for young people during the summer months, in pollution control and other fields in which they can become engaged. This is of prime importance.
The Minister of Finance (Mr. Benson) and the Prime Minister are exuding confidence in our business community. We should encourage this attitude. If we can convince our commercial and industrial communities that we are behind them and that we have confidence, I think businessmen will act accordingly. We must convince them that if it takes $2 billion, $3 billion or $4 billion we will put this might behind them even though things do not look rosy. I think then we will be well on the road to recovery. This is what the House should be doing, rather than recriminating about what has taken place up to now.
I commend the government for its thinking and its confidence. I emphasize that it does not matter very much what we say in this house, or whether we take political, partisan viewpoints; we will not be doing a service to Canada unless we get behind the government in this time of crisis by showing confidence in Canada and its people. If we do that, I am sure we will manage very well.


Joseph Adrien Henri Lambert: Mr. Speaker______
The Budget-Mr. C. H. Thomas


Mr. Speaker:: Order, is the member rising on a question of privilege or an a point of order?


Joseph Adrien Henri Lambert: Mr. Speaker, I merely wished to put a question to the hon. member-


Mr. Speaker:: Order. The time allotted to the hon. member has expired and as several other members wish to speak before the end of the debate, I think that the House would like me now to recognize the hon. member for Moncton.


Mr. Charles H. Thomas (Moncton):: Mr. Speaker, the most disturbing aspect of the budget presented to the House in December is the complete failure of the Minister of Finance (Mr. Benson) to recognize the real nature of this country's economic problems, his stubborn insistence that he and his advisers are right and everyone else is wrong and his refusal to admit that this country is now faced with the greatest economic crisis in its history, that is, mass unemployment brought on deliberately by employing woolly, nineteenth century, classic economic theories which are outdated and discredited by most economists. I wish to read from an editorial which appeared in the Montreal Gazette of January under the caption "Wrong way Benson". It reads in part as follows:
the government marches determinedly along the wrong route to recovery. What is wanted are tax reductions which, by restoring a measure of profitability to business, offer attractive incentives to new growth; tax reductions which, by leaving more of the individual's money in his pocket, give him the means to increase his spending.
The Minister of Finance this afternoon laughed off the opposition's suggestions for tax cuts by saying this would cost the treasury over $1 billion. I say to the Minister of Finance that if he would take some action to get the economy moving again and to produce full employment, perhaps he would recover most of the $1 billion about which he is worrying today. The editorial continues as follows:
What is presented, instead, is a stubborn insistence that Ottawa knows best how to prime the pump-by spending tax money on public works which provide, at best, only temporary employment and that at the expense of more productive sources of employment.
The editorial goes on to point out that it is time the Minister of Finance and his advisers realized that this country has almost reached its capacity in regard to the amount of money the taxpayer can cough up for federal government expenditures which are doing nothing to increase the economic output of the country. The editorial concludes by saying
Hopefully by spring, when, just possibly, Mr. Benson may be
persuaded to do what he should have done in December____cut
taxes.
This party has consistently proposed such a course of action. We have been pleading with the Minister of
2564

January 19, 1971
The Budget-Mr. C. H. Thomas
Finance lor almost a year to change the direction of government policy to implement selective tax cuts which would encourage the private sector ol business and industry to expand, provide more growth and more jobs. But all these suggestions have been laughed off by the Minister of Finance and his colleague, the Minister of Labour (Mr. Mackasey). We have been told that we are spreading gloom and doom. We have been accused of doing a great disservice to the nation. We have been told our so-called gloomy prophesies will discourage businessmen from investing in this country.
Here again we have the arrogance of a government that has come to believe itself omnipotent and all-competent, that goes sailing blithely along on a course which, in their words, "must be right because we say it is right", a government which refuses to change its course even though most of the country's best business minds and best economists are condemning its policies as outdated and inadequate.
It was interesting to hear the Minister of Labour yesterday in his historic apology for government policies. He spent most of his speech talking about the 1950s and 1960s but had very little to say about the 1970s except to condemn the opposition and chastise us for spreading gloom among businessmen. They created the gloom which now they are unable to dispel. The Minister of Labour said that if he were a businessman sitting in the gallery today listening to the speech of the Leader of the Opposition (Mr. Stanfield) and of other speakers, he would ask what kind of country this is and would say to himself, "If they have no more confidence in our future than that displayed in their speeches, why should I invest my money in such a country?"
I think all of us have the responsibility to create the right psychological climate for investors to invest. I am glad that the Minister of Labour appreciates the importance of decisions by the private sector of the economy, even though his colleague the Minister of Finance will not recognize them. It is interesting to hear the Minister of Labour when he talks about the opposition spreading gloom among our businessmen. It is interesting to hear what some of these businessmen have been saying about the government's policy. Mr. G. Arnold Hart, the chairman of the Bank of Montreal, said in a recent interview:
The most effective and least risky route to take toward expansion of the economy in present circumstances is tax reduction.
Many economists interviewed last weekend by the Toronto Daily Star urged the government to embark upon a system of tax cuts to combat unemployment. One of them, Professor Abraham Rotstein of the University of Toronto, called for a substantial cut in personal income tax. Charles Neapole, president of the Montreal stock exchange, said:
Take the surcharge off; give some relief in the corporation income tax. Give people more confidence, give business more confidence, and they will be going back to work.
I have heard many people on this side of the House make that plea to the Minister of Finance many times in the past six months. John Meyer, financial writer for the Montreal Gazette, when referring to the widening credi-
[Mr. Thomas (Moncton).)
bility gap between government and business said the fact that business has no more faith in the government is because it does not know what this government intends to do. They have lost all confidence in government policies. Mr. Meyer said:
Something of that confidence might have been restored by bold and imaginative tax reduction but, in Canada at least, that course was rejected in favour of more government spending.
Are these the mouthings of a futile opposition? These are statements from some of our best business leaders. Yet the Minister of Finance and the Minister of Labour laugh them all off. The minister said that this is just the opposition proposing cockeyed schemes that will cost the country a lot of money. There is not much to be gained now by deploring the situation, by pointing out what should have been done or by saying that the government could have combatted inflation, not by deliberately creating unemployment in the vain hope that it would keep wages down but, rather, by employing selective fiscal and monetary measures.
For example, when there was a serious housing shortage and mass unemployment in the construction industry, firm, strong action could have been taken to increase housing starts. This would have put the unemployed carpenters, labourers and all that sector of the business community which the construction industry affects, back to work and certainly it would not have contributed to inflation. But the government refused to accept the suggestions offered by the opposition and by business leaders. The Minister of Finance continued to bask in that false optimism so aptly portrayed in his repeated statements that all is well and that all that is needed is faith. I think the unemployed have pretty well lost all faith in the Minister of Finance.


Eldon Mattison Woolliams: So has everybody else in Canada.


Charles Humbert Thomas: True. Even in his budget he is carried away by his stubborn insistence that father knows best. He says, "Don't complain; you do not know what you are talking about". In his budget speech he bragged about employment rising in Canada and said that unemployment, on a seasonally adjusted basis, appears to be falling. Here we go again! The minister gets so caught up between seasonal and unseasonal, adjusted and unadjusted, that we cannot even get a true picture of the employment situation in the country.
We all know what has happened to his prophecy of December 3 that the situation was improving. We heard many times in the House yesterday and today about the
62,000	more unemployed as of mid-December, only a little more than a week after the minister made his optimistic forecast. We heard about the drop of over 100,000 in the number of employed. These figures have been mentioned over and over again and I hope the minister is now aware of them.
I will not dwell further on the national picture but I would like briefly to speak on the effect this government's policies have had on the outlying regions of Canada, those areas of slow growth to which the government, through its Minister of Regional Economic Expan-
January 19, 1971


Mr. Warren Allmand (Nolre-Dame-de-Grace):: Mr. Speaker, I listened to the speeches in this debate yesterday and most of today and have found that the analysis by this House of the very complex problem of unemployment has been, for the most part, an ultrasimplistic one. Opposition members have repeatedly stated that the unemployment we are now suffering in this country has been due completely and solely to government policies.


An hon. Member:: You are so right.


Lincoln MacCauley Alexander: That is true for 99 per cent of the unemployment.


William Warren Allmand: It seems to me this is just not true, and I am not saying that because I am a government supporter.


An hon. Member:: I suppose the hon. member is going to set us straight.


William Warren Allmand: I say that because a great many other causes occur to me which have something to do with the problem. The policy of the government has been one cause, but I do not feel we shall do much toward solving this problem in the long run by continually ranting that the entire problem has been caused by government policy. If we look at countries which have governments of a different colour we see that they, too, have been faced with cyclical unemployment. Right now the United States faces a growing problem of unemployment. I should like to put before this House some of the other causes which have occurred to me and which I think should be considered.


An hon. Member:: Primarily, people are unemployed because there are no jobs.


William Warren Allmand: First of all, it occurs to me that we have an economic system which is not flexible enough to adjust its cost factors when economic conditions change, particularly the cost of capital and the cost of labour. Second, we seem to have developed an economic situation which, contrary to the classical prototype, has been faced with increasing prices combined with increasing unemployment.


An hon. Member:: And bigger profits.


William Warren Allmand: Third, we have an economic system in which there is a shortage of money for jobs and for
January 19, 1971

investment, while the banks continue to make large profits.


Some hon. Members:: Hear, hear!


William Warren Allmand: Mr. Speaker, these situations which we observe in our economic system lead me to ask further questions. What has been the role of our financial and credit institutions which have unduly promoted a dislocation in investment and spending priorities and have promoted long-term, inflexible fiscal obligations causing unemployment? What has been the role of large unions which have pressed for higher wages than their productivity would warrant and have insisted on wage parity and other demands out of line with existing economic conditions, causing unemployment?
I am putting these questions to the House because I feel they are important and should be considered. For two days I have listened to this debate, and only one cause for unemployment has been put forward by the opposition. I do not pretend to have the answers to these questions. I am merely suggesting that we investigate these things. They should not be sacred cows. We should not treat them as cliches which should not be looked at. For too long conventional wisdom has given us its opinions, as if their correctness is beyond question. I shall speak of other things that occur to me, but I say let us look at this problem honestly. I agree with the opposition; it is a most serious problem, especially in my city of Montreal. I wonder how many men have either not been hired or have been laid off because of conditions which have been imposed by strong unions and strong industries.


An hon. Member:: Give us some examples.


William Warren Allmand: It is fine for those who are working to receive ever-better wages and to enjoy ever-better working conditions. But what about those who are not working, either because they have been laid off or because they have not been hired? I say this not as one who is anti-labour but as one who is an observer of a system in which only part of our working force is unionized and in which those outside the unions are often victimized by the actions of the unions.
Furthermore, I ask: What has been the role of technological change in bringing about unemployment, and how does this factor relate to government and to union policy? What has been the role of international trade in causing unemployment? How does the change in the value of our dollar fit into this situation? What has been the role of our educational institutions? Have they been directing the right people into the right areas of study? Have we overproduced people in the arts field and in the teaching field, and have we produced too few people who could be of great help in the areas of production, investment and employment?
What has been the role of our three-tiered tax system, the tiers of which do not always work in co-ordination? I
The Budget-Mr. Allmand
refer to the federal, provincial and local taxing powers, including municipal governments and school boards. Have the contrary actions of the different levels of government in Canada caused unemployment? What has been the role of the central banking system? Is it too central? As the previous speaker said, should we have a more decentralized banking system in Canada?


William Arnold Peters: With all these questions you sound like my constituents.


William Warren Allmand: Unfortunately, I still do not hear many brilliant comments from the other side.


Paul Yewchuk: Neither do we.


William Warren Allmand: I listened to you for two days. Keep quiet for a while. Have our welfare and income support programs been a cause of unemployment? I suggest that we must do much more, if we are really interested in investigating the cause of unemployment, before we can come forward with answers. We should know more about the background of those who are unemployed. From what industries do they come? How long have they been unemployed? What are the regions with most unemployment? In what types of industry or commerce were these people formerly employed? I ask these questions because I feel the analysis of unemployment has been far too shallow up to this time.
Some programs have been implemented to help the unemployment situation on a short-term basis. Some of these programs have already been started by the government, others have not. There has been a public works program, an increase in unemployment insurance, and tax cuts. All these are short-term solutions. There should be an intensive study-into the causes of unemployment and programs for full employment and price stability.
The other day the hon. member for Winnipeg North Centre (Mr. Knowles) suggested that a committee of this House be set up to study the problem. He gave the impression that this committee would only hear grievances. I support him in the establishment of such a committee; however, I do not think the committee should merely hear grievances. I think that a committee of this House, embracing all parties, should be set up to study and identify the basic causes of unemployment at this time and to suggest solutions. In addition to hearing grievances, the committee should hear witnesses, question conventional wisdom, slogans and cliches of both the right and the left. It should attempt to solve this serious problem. In addition to Canadian experts, the committee should interview experts from abroad. I would like to see the committee examine such people as John Kenneth Galbraith.


William Arnold Peters: Maybe he could answer some of your questions.


William Warren Allmand: I wish to suggest a few short-term solutions. Although they may appear to be simple, I offer them to this forum for discussion. The suggestions are not new. The government should negotiate with labour,

January 19, 1971
The Budget-Mr. Allmand
industry, business and local governments in an attempt to reduce the work week by 10 per cent and increase the work force by 10 per cent. In other words, the work now available should be spread around in order to encompass more people. This would mean a 36-hour work week instead of a 40-hour work week, or a seven-hour day for five days a week instead of an eight-hour day. If such a program were adopted, one additional man could be employed for every seven men now working.
There have been objections to such a suggestion. Some people say it would be inefficient. I do not understand that. Inefficient for whom? I do not think it is more efficient to have eight men working seven hours a day rather than seven men working eight hours a day. It has been suggested that this would decrease the weekly pay packet by five hours a week. That is true. However, if the work force was increased by 10 per cent, taxes could be reduced because social and welfare payments, manpower training payments and other payments could be decreased. This would result in approximately the same take-home pay as at present. It has been suggested that the problem of unemployment could be solved by economic growth. We are achieving economic growth today without employment growth. Our economic growth is due to technology, not labour-intensive industry.


An hon. Member:: It is also due to the Liberals.


William Warren Allmand: There is also a trend from productive industries to service industries as well as service industries on a higher level. Those who say we should provide jobs tend to think that productive capacity can be expanded indefinitely in the work force. According to what I have read, this is not the case. This type of program could be carried out by negotiation or by government incentives. I wish to suggest another solution. This might also appear to be very simple, and there may be arguments against it. I offer it to this forum for discussion.


Eldon Mattison Woolliams: We will not have time to discuss it.


William Warren Allmand: Preference for new jobs should only be offered to the chief breadwinner of a family unless he is earning less than $6,000 a year. I know of many cases in my own city, as well as here in Ottawa, where the head of the family is earning in excess of $10,000 a year and his wife is earning $6,000 or $7,000 a year. Something should be done about changing jobs which are either man-oriented or woman-oriented. Many secretarial and other types of jobs in the House of Commons, some of which pay fairly well, are held by women. Many other jobs are held exclusively by men. The system should be more flexible. Many of these jobs could be held by people who support a family, rather than by people who are supplementing a family income. These two proposals are minor to my first proposal that a special committee be established to study in depth the problem of unemployment.
Many members suggested a tax cut. I think that should be considered further. However, at this point I am not convinced that it would solve the problem. If personal and corporate taxes were cut, would that money be used

to create new jobs? I am not convinced that it would. It may help the rich much more than it would help the poor. People with low incomes pay a low rate of tax; I doubt whether a cut in taxes would stimulate the economy sufficiently to create jobs for them. I understand that a few years ago in the United States taxes were cut and that money did work its way into the economic system quickly and it did create jobs. However, I am not sure whether in this case it would do so.
I wish to close my contribution to this debate by expressing the hope that what we have been saying in the last two days will result in action helpful to the unemployed. When I listen to these debates I often wonder whether they are of any value; I have the impression they are used by members on all sides of the House just to score political points. I would hope we could all make a contribution to the solution of this problem which is beyond politics.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, during the last two days we have heard in this debate analysis after analysis, but when all is said and done we are left with the cold fact that there is mounting unemployment. There are today in Canada about 600,000 people unemployed, and the number is steadily increasing. We ask ourselves: When will the end come? There are many more who are not even on the list. Many of them are young people who have never been on the labour market before. They receive no benefits and they may not even be eligible for manpower training because they have not been in the labour force for three years.
This is not a negligible factor. Nearly 50 per cent of the unemployed are 25 years old or younger. Nearly 20 per cent are less than 20 years of age. They are to be found across Canada, mostly in the cities. Some of them hold university degrees. Some are bitter and disillusioned. They were told that if they were well trained and educated the world would be at their feet. They have heard the story of the just society. If some of them are now bitter and disillusioned, can you blame them, Mr. Speaker? They are young, they are willing, and there is no work for them.
Many of them are single and are not eligible, in a number of places, for welfare. Many are going around begging. In all the time I have practiced medicine I have never had so many people coming to me for help, and a great many of them are young people, some with university degrees. The interesting thing is this: the only way you can aid these people who are not eligible is by giving it yourself or by getting it from somebody else, for example, from the Salvation Army. The government does not cover these young people who have not been in the labour market. They put me in mind of the doctor who had a sick patient. He said, "I can cure this patient's disease; there is no question about that. I can give him the right medicine. All that bothers me is whether the patient will survive long enough to benefit from it." In this young group the seeds of dissent and revolution can easily be planted. The present situation is worse than it
January 19, 1971

was during the great depression because most of these people know only an affluent society.
This is the personal side, the suffering and the disenchantment of the unemployed. What about the goods and services they would have provided had they been working? The economists tell us that had these people been at work last year they would have produced about $5 billion worth of goods. These are goods which could have been sold in the marketplace. What about the taxes which would have been paid by these 500,000 people had they been employed? It would have amounted to perhaps another $1 billion in income tax alone. As it is, we have to pay them welfare or unemployment insurance and they are obliged to buy less in the marketplace because they do not have the money to spend.
The government stands condemned for completely ignoring the fiscal and social programs it should have introduced a year ago. Just last summer the Prime Minister (Mr. Trudeau) stated he would not change his policy; people could like it or they could lump it. Well, the lumps are hurting, Mr. Speaker, yet no one in the government will admit that its economic record is a tragic one. The Minister of Finance (Mr. Benson) is like the boy who stood on the burning deck whence all save he had fled, but he does not realize it. Yes, they were going to cure inflation.
I was interested in an article which appeared this month in a paper which has been quite friendly to the government, the Financial Times. It reads as follows:
Back in 1965, governments at all levels got along with less than one-third of the gross national product. Many people thought that was already too much. By 1967 the government's share had grown to 35 per cent. In 1970 it was just over 38 per cent.
In terms of personal income alone, the average Canadian in 1967 contributed $15 to governments for every $85 that he was allowed to keep for himself and his family. In 1970 the governments took $19 and left him $81.
Many Canadians, of course, gave up a much larger share of their income to governments. A majority of the active population with earning capacity kept far less than 80 per cent. A minority with low earning power kept a higher proportion. The substantial minority with little or no earning power drew from the pot contributed by the rest. And a growing army of government employees lived on it.
The average figure understates the burden of government which every productive citizen is carrying. Corporation and business taxes compound the understatement because in the last resort they are all paid by individuals too. They may be paid by consumers in higher prices, by employees in lower wages or by investors in lower dividends. But they all come back to individuals.
Governments love these taxes which they like to call "hidden". They are like dentists-experts in the art of painless extraction. That is why they cling to devices like the manufacturers' sales tax which forms part of the final price paid by consumers (and, incidentally, escalates at every stage of distribution). That is why they like "hidden levies" such as payroll deductions for pensions.
The supposedly "hidden" taxes, under the innocent name of "contributions", are now approaching one-tenth of the individuals' payments to governments. For businesses they may be even higher. At this level it is an illusion for any government to imagine that they remain either painless or hidden.
The Budget-Mr. Rynard
What has been forgotten is that productive Canadians-in every walk and at every level of income-are determined to offset the growth of inflation and taxes. The thing that concerns them is the real income which they have left to spend; and that has grown less than either prices or taxes.
This is why wage increases have been necessary. The government was going to cure inflation, even at the cost of unemployment. Although the government has dampened the fires of inflation a bit, it has also created the highest level of unemployment in a decade. Is that an accomplishment of which they should be proud, Mr. Speaker? The government has crimped economic growth and industry has been slowed down. As a result, jobs have been lost. On top of this, we have had the worst unemployment record of any developed country in the world.
Welfare rolls have multiplied in number across the country, to a point where the municipalities are hard put to handle them. In despair they tend to scrimp and scrimp, to the discomfort of the individual. What is the government going to do to remedy the situation? It is the government that has placed us in this difficulty. If the government did not know the answers before administering the treatment, then it should have known. With a record which is the worst of any western country, the government stands condemned at the bar of justice.
What is the cure? In the United States the government cut corporation and personal income taxes. This was also done in Great Britain, Australia, New Zealand and Germany; but not in Canada, Mr. Speaker. Our finance minister stood like the boy on the burning deck and refused to cut corporation taxes or personal income tax. I ask the government why it refuses to cut taxes. As a matter of simple mathematics, if a man's take-home pay is increased by the removal of taxes, he does not require as large an increase in his wages. Indeed, there would not be the same pressure to ask for more wages. The same is true of corporation taxes. Immediately corporation taxes are lowered, businesses are placed in a better competitive position in the marketplace of the world. But the government has refused to take either step, even though, as I have said, a similar step has been taken by the United States, Great Britain, Australia, New Zealand and Germany.
In failing to remove the federal sales tax the government stands condemned by a newspaper that has generally been favourable to government policy, the Financial Times. With regard to low-cost housing there are many hidden taxes, and these are very well described by the Financial Times. For example, I was talking to a man the other day who had had a simple little board made up with an inscription upon it. This board had cost him about $9. He had to pay the federal government $1.08 tax, which brought the price of the board up to over $10, and on top of that had to pay 5 per cent provincial tax. This amounted to about 55 cents. In other words, he had to pay $10.63 for an article that he should have been able to purchase for $9. This is why the working man, members of the work force, the professions, and so on, require more money; and it is why we have inflation. The Minis-

January 19, 1971
The Budget-Mr. Rynard
ter of Finance raised taxes, not lowered them, and this policy has been a dismal failure.
If income tax is cut, pressure is taken off wage demands. If corporation tax were cut, there would be money for expansion and goods would become more competitive in the marketplace. It would give the people back their own businesses. Yesterday I attended the election of a warden in one of the biggest counties in the Dominion of Canada. One of the speakers said it was about time government was given back to the people, because the people knew when money was getting scarce and made the necessary adjustments; the people knew how to handle it.
I want to dwell for a moment on the subject of regional government. I know of an industry that wants to build a factory under the government's incentive legislation but cannot afford to do so because in this area there are no incentives and taxes have been too high. There is just not enough money left over from business activities to build and expand. The government should offer assistance in the building of this factory because it would create employment. Instead, regional government is running wild and we have a sort of balance of payments between the various provinces-in effect, a stabilization fund.
Since the government's guidelines have been unsuccessful and have only depleted profits, I suggest the government should use public funds to create public works. One of the suggestions made yesterday at the County of Simcoe's meeting was to establish a work program directed toward the removal of dead elm trees that stand out stark across the country. Such a program could be commenced in each province. Dozens of similar projects could be initiated.
So many people are living on fixed pensions. While the government boasts about beating inflation, I suggest they examine some of the rents these pensioners are paying. To show the House how benevolent this government is, Mr. Speaker, about two years ago they introduced the national medicare scheme across Canada. But no provision whatever was made for the poor who could not afford to pay for drugs prescribed by doctors under the medicare scheme. If that is not a national disgrace, I do not know what is. Since the government brought the program in, it should have completed the job by introducing a drug care bill, because there are hundreds of thousands of people in this country today who cannot afford to buy drugs prescribed by their doctor. Another matter of a humanitarian nature is the standard of continual care of patients in nursing homes following intensive care in hospitals. Those who are chronically ill and require nursing care receive no assistance at all from the federal government.
Those are the things I am advocating to the government today. It must show its humanitarian principles in looking after those who are unable, under present circumstances, to look after themselves and provide work wherever it can be provided. I have suggested one project. There are others. The government must lower taxes immediately and cut the sales tax in order that people will be able to purchase more goods. In the final analysis, the government must bring the value of the Canadian dollar down from 97 cents or 98 cents to 93 cents or 92 1/2 cents in order that we can again become more competitive in world markets and have the trading advantage that we need. Let us hope that before we have more serious problems the government will act.


Mr. Ray Perrauli (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, as many members have pointed out, the present level of unemployment is distressingly high. There is no disagreement on that from this side of the chamber. No one concerned about people can fail to be unhappy about the situation. The Minister of Finance (Mr. Benson) has pointed out that there are encouraging economic indicators which show improving trends. I think that we welcome these indicators, regardless of party affiliation. There is real encouragement in our export position and we can draw heart from Canada's price performance in comparison with other trading nations.
However, I agree with hon. members in the opposition when they say that this is very small consolation to the family man who may have been working for years and been a good worker, a man with youngsters and a mortgage who is out of work through no fault of his own. Let me say, this, Mr. Speaker: I would be delinquent in my responsibility as a former member of the opposition if I did not commend the opposition for speaking out and commenting on the situation. That is their job, as much as we on this side of the House may resent some of that criticism.
Some hon. members in the opposition have presented alternative ideas, and I have marked some of them down. As in other debates, some of the ideas appear at least to some of us to have more merit than others. But ideas have been expressed during this debate and that is good. In my view, some of their statements have been unfairly critical. I agree with my minister when he said last night that psychology is important in assisting the economic readjustment we all seek. The Leader of Her Majesty's Loyal Opposition (Mr. Stanfield) has pointed this out in many speeches across the country during the past few months and I agree with him and those who have echoed this position.
We do not need statements in Canada which seek to alarm or disconcert for purely political reasons. They render a notable disservice to our country. Hon. members opposite know, as we on this side know, that the longterm prospects for Canada are simply magnificent, regardless of present difficulties. We all know that. We need reassurance and confidence in the Canadian economy so that normal growth patterns can be restored as fully as possible. Again, I say that this does not mean the opposition has no right to criticize. Churchill said on January 27, 1940, during one of his great speeches to the House of Commons:
We do not resent the well-meant criticism of any man. We do not shrink from any fair criticism-that is the most dangerous

January 19, 1971

of all. We take it earnestly to heart and seek to profit by it. Criticism in the body politic is like a pain in the human body. It is not pleasant but where would the body be without it? No health or sensibility would be possible without correctives and warnings of pain.
We have had many warnings of pain here, particularly in the last few hours. What are we facing? The figure of 6.6 per cent unemployment has been bandied around this House of Commons and speakers have quoted this figure at great lenglh. The figure of 6.6 per cent is a high per cent. About 40 per cent of it, however-the economists on the other side of the House know this is true-represents frictional and structural unemployment. Unemployment of about 2.5 per cent or 3 per cent is inevitable. Hon. members know this, and we know it. Let us not attempt to inflate these figures in order to frighten the Canadian people into the belief that we have some kind of a depression from which it is impossible to emerge.


Some hon. Members:: Oh, oh!


Raymond J. Perrault: I am simply giving the opposition some facts. They know that they are facts and they know that this is accurate information I am dispensing. The problem, and it is a difficult one, relates to the remaining 3.3 per cent or so of the work force. I repeat, under present highly-developed technological conditions we will have, even in good times, something like 3 per cent unemployment. This is a fact which has been admitted by opposition members during some of their statements in the House of Commons. So we are talking about 3.3 per cent of the work force.
Everything possible must be done for those people now. We cannot afford any fatalistic or passive acceptance of this figure. Indeed, the percentage of unemployed may be expected to increase if the seasonal trend continues to manifest itself. We know this. It can be expected that unemployment will increase in January and February, as it always has. There is reason to hope, however, that a significant improvement will be registered soon and that by summer levels of unemployment will be at least within a respectable distance of the 10 year norm.
Whose responsibility is unemployment? There has been an earnest attempt by the opposition to grasp this issue as something it can race to the electorate with, saying that the big bad government in Ottawa is responsible for it all. This afternoon the leader of the Socialist party in this House commenced his speech by saying the government is responsible. He said the government was responsible for inflation a few months ago. I have some comments from the NDP council convention and I should like to share them with the House. This is what occurred at the New Democratic Party Council meeting:
Economists Jack Weldon and Rosalind Blauer told the New Democratic Party council during the weekend that efforts to control U.S. generated inflation in Canada are worthless.
The NDP has been blaming the federal government these many months. The report continues:
David Lewis, NDP Member of Parliament for York South, said it would be politically impossible for NDP in its present position to say: "Full employment and we don't care where the prices go".
The Budget-Mr. Perrault
If in power, the party could take measures to keep prices reasonable.
I ask whether there has been fair NDP criticism of the government during recent months. They level a full measure of blame at the government and then in their inner council party meeting say it is a U.S. generated inflation. I think we have done very well to control this "U.S. generated inflation" in Canada-indeed, the best of any nation in the western world.
Our Socialist friends, and many of them are good, personal friends of mine, profess to be friends of the working man. May I read into the record of the House this quotation from "The Annals of the American Academy." This is an article by the learned Mr. C. Canby Balderston, a man with impeccable credentials; indeed, he has been quoted by some members of the Socialist party. He writes as follows:
Inflation is not an effective long-run means of creating job opportunities. Eventually inflation endangers and disrupts job stability for it is during inflationary booms that the seeds of deflation are sown.
Nor will inflation cure structural unemployment that stems from shifts in the use of resources. A dynamic economy forsakes the old for the new, and so one may expect rapid economic) growth to bring about some unemployment of a structural sort.
Even though further expansion will tend to put more people to work, an unemployment percentage higher than that reflecting frictional unemployment might lead to the question of whether job opportunities would not be greater if certain prices were lower.
It has been the effort of the government to keep prices under control. In saying this I want to advance some ideas on how we can improve the present situation. There has been a great volume of comments from the hon. member from the great province of Alberta. I want to ask him about a statement made by the financial critic of his party, because so many members of that party have been critical of what they allege is a fight against inflation which the government has designed to deliberately create unemployment. I ask because I am confused. I cannot reconcile the statement made on November 4, 1969, with what we have been hearing during the past few hours. The following is from the record of the House. It was said then by the financial critic of the Conservative party:
If the national effort against inflation results in an underkill on the score of inflation, it will be far worse than the overkill; because if we have a national underkill in this fight against inflation, we will have to start all over, and I think the square of zero is going to be much further back again.
So in 1969 the Conservative financial critic said, "Even if it is overkill, even if we create unemployment, we have to fight inflation." I wonder if the members of this House, indeed the Canadian public, have a right to question exactly what the opposition really believes to be the line of attack against unemployment and inflation, because the fine changes so frequently.
In so far as the government was given a mandate to govern in 1968, it has certain responsibilities to attempt to influence the development of the economy. But Cana-
2572

January 19, 1971
The Budget-Mr. Perrault
da's economic welfare is everyone's responsibility, including that of the opposition. It is in part the responsibility of other levels of government, provincial and municipal. We do not have in Canada a unitary state of the kind they have in Britain, for example. We do not have a unitary state of the type they have in Sweden. It is impossible under the constitutional powers vested in the government for Ottawa unilaterally to bring into effect all the economic measures they would wish.


Stanley James Korchinski: Bring that up in the next federal election.


Raymond J. Perrault: I asked a question about my own province of British Columbia. Is Ottawa responsible for the 300,000 man-days of labour lost in British Columbia last year in industries primarily under provincial jurisdiction, and the 11,800 man-years of work because of strikes under provincial jurisdiction? Not a word has been said by the opposition here about the responsibility of the trade union movement in Canada, of business, of municipalities and of provincial governments. There is an inspired attempt to blame Ottawa for everything that is wrong, but when times are good the provincial governments and other levels of government take the credit.
It is in part the responsibility of the business community, some of whom talk about the need for rugged, free enterprise during prosperity and actively seek government intervention when the economy slows down. This fight against unemployment is in part the responsibility of the trade union movement and their leaders who represent the labour force of Canada. Inordinate demands on the economy by labour and management act to retard economic progress.
In a free society, one which all of us profess we would like to maintain, a society with a maximum degree of freedom, even national governments with their powers are not able to decree full employment. The opposition knows this; they said so in 1961 and 1962. I am not going to go back to those days, but the speeches are on the record. We could have full employment overnight if Canadians would accept the kind of direction over their lives which would be unacceptable to the great masses of them.


Eldon Mattison Woolliams: Don't talk nonsense.


Raymond J. Perrault: Does the opposition assume that the Canadian people would like to have a national work force office established, giving orders directly to the unemployed men and saying to them; "You are going to a job in the Northwest Territories on the six o'clock train, or else"? Is that the way to solve unemployment? There is full employment in certain dictatorial states. Is that what we want? Does the opposition assume that a national government is able to pull magical financial levers to bar U.S. inflation from Canada, the kind of inflation which the NDP council of economists admits comes from the U.S.?
Do we really believe that federal efforts can affect the amount of lumber required for houses in the republic to
the south? Does the opposition really seriously suggests that there are not good workers out of work in many parts of eastern and western Canada because housing starts are down in the country to our south? I know that my friends directly opposite me, the Socialists, talk about Sweden being the home of social democracy. Let me read the following into the record.


Stanley James Korchinski: Your leader is one.


Raymond J. Perrault: It reads:
This Scandinavian country once put full employment first- and paid no heed to resulting inflation.
Now, in a dramatic turnabout, Sweden thinks it is better to let unemployment rise than to risk heavy inflation that could lead to a money crisis.
Reasons for a switch to a new policy become clear when you look at Sweden's inflation problem in recent years-
Result: higher costs, which quickly were reflected in higher prices. Inflation pace in Sweden climbed to nearly 5 per cent a year-
Sweden's labour government, faced with a looming crisis that could force a devaluation of the Swedish currency, decided to put its currency first-and accept a higher jobless rate.


An hon. Member:: What is their rate?


Raymond J. Perrault: It goes on to read:
As expected, the clamp down took hold. The jobless rate has risen ... double that of past years and the highest unemployment in Sweden in the postwar period.
And yet government officials and labour leaders have accepted it all with scarcely a whimper.
Reasons for the acceptance are very easy to find. Labour costs have come under control. Prices are almost stable.


An hon. Member:: Tell us how much.


Raymond J. Perrault: It continues:
Main idea behind the new employment policy is to create job opportunities by making labour more mobile-transferring workers from districts with unemployment to area where employers need workers-
In these and other ways, social hardship due to higher unemployment has been held to a minimum.
A social democrat from Sweden said as follows:
You can't really cure or prevent unemployment by inflationary policies. We know that from our own experience. A much more subtle approach is needed to avoid both inflationary overemployment and chronic underemployment.
I am not saying that because they have had a certain experience in Sweden we should sit on our hands and say that everybody is in the same boat. I think that much of our unemployment today stems from an increasingly automated industry.


Some hon. Members:: Oh, oh!


Raymond J. Perrault: Increasingly, I think, the fear exists that automation, the new technology and cybernation have not as yet led to the evolution of a system which enables benefits which flow from these processes to find their way into the pockets of all these people. When large numbers of men and women are laid off because of automation, and a slack economy exists which does not

January 19, 1971_____________________COMMONS DEBATES	2573
permit them to be absorbed in another sector of the economy, these men and women have a right to ask, "What's in automation for me?"
Why should the lives of Canadian workers, whether they be in London, Ontario, in Saskatchewan, the Mari-times, B.C., Ontario or Quebec, be dislocated by what is supposed to be an economic boon and a blessing? Why should long-term employees be dismissed without adequate notice? Believe me, this is a concern of the government and, hopefully, something will be done about it. In some countries unemployment levels are very low because a deliberate and conscious effort is made to bar automation: wages are low as well. We in Canada know that in order to remain competitive in today's world, efficiency is required and the latest technological techniques. But all of us fail, whether we are in government, labour, management or the professions, if we cannot resolve the challenge of distributing the undoubted benefits which automation brings. This is the challenge with which we are faced.
If we believe Canada is a land of opportunity, then there must be opportunity for a job and the income that goes with it. And if in our pursuit for more sophisticated technology all the Canadian work force, excluding the unavoidable 2J or 3 per cent, cannot be absorbed into the economy, we must remove the economic penalties and the social stigma associated with this unemployment, and it has to be done now. Mr. Speaker, the good ideas which have been advanced from the various sectors of this House should be considered seriously by the government and studied by members of the civil service, and if they are good ideas let us not be partisan. Let us adopt them if they are good.
Now I want to say a word about the Unemployment Insurance Commission. I know that some members are receiving complaints about late cheques. May I say to hon. members, and through them to their constituents, that if there are delays in receiving UIC cheques, or other problems with the UIC, these problems should be referred immediately to the minister's office and the best possible service will be provided to expedite matters. I have looked into the situation so far as many claims are concerned and I am able to give the House this information: In spite of the high volume of claims, over 79 per cent are now ready for payment in the second week and claims, of course are payable after three weeks. Benefits are payable after three weeks. Some 96 per cent are ready for payment or are paid in the third week.
Understandably, Unemployment Insurance offices across the country are having a very difficult time. Their staffs are to be commended for the work they are doing in meeting a very heavy workload. But I say to hon. members that wherever you sit in this House, you and your constituents have a right to good service from the department and from the UIC. If there are allegations of delays for no good reason, you should contact the minister's office immediately-yes, contact me. Each case will be investigated. It is difficult enough to be unemployed,
23786-22i
The Budget-Mr. Perrault
let alone to be one of those in the small group unable to secure benefits because of one problem or another.
There are three main reasons for delay. One is that the employer has failed to submit a record of contributions which he is obliged to make on behalf of his employees. We undertook over 160 prosecutions last year alone against employers for this offence. The second reason is that the employee may have filed an incorrect claim and some mistake has been made. I point out that service offices and information offices are now being established in some constituencies. To hon. members I say that if they believe the volume of claims in their areas requires this kind of office, I hope they will let the department know immediately. The third reason is that clerical mistakes may have occurred. All sorts of things could have happened.
I also want to point out, Mr. Speaker-I think hon. members are aware of this-that very soon changes will be proposed in the House with respect to unemployment insurance-


Eldon Mattison Woolliams: Let us get on with them now.


Raymond J. Perrault: Certain members of the opposition were most helpful to the government in framing some sections of the labour committee's report on unemployment insurance. They should be commended for this. I confidently believe that after the legislation comes before the House, Canada undoubtedly will have the finest unemployment insurance system in the entire world, designed not only to cope with the contingency of an interruption in earnings resulting from unemployment but a plan to assist those unemployed because of illness, to assist working wives who are unable to work because of pregnancy-a plan not only to cope with unemployment but one which will see the UIC working with other agencies engaged in social development. There will be co-operation with manpower programs. There will be co-operation with provincial and municipal bodies. It will be a plan concerned with helping those who have lost a job to become reemployed as quickly as possible. It will be a plan which will allow benefit rates and contributions to adjust automatically to fluctuations in employment and changes in average earnings.
In addition to a more flexible and responsive benefit structure, the government proposes to assist the unemployed worker more effectively by providing a claimant assistance program. I know that hon. members who have asked for increased assistance for the unemployed will not in any way impede this program and that we will receive their co-operation when the new legislation comes before the House.
In conclusion, I want to take issue with some remarks made by the hon. member for York South (Mr. Lewis) last night, which were printed in the newspapers today. These were some of the words that he used to describe the alleged attitude of the government, "unnecessary, indefensible, disastrous, cruel, heartless, inhumane, smug, complacent, arrogant," and so on.


Mr. Knowles (Winnipeg North Centre):: Read on.

January 19, 1971
The Budget-Mr. Alexander


Raymond J. Perrault: A government which invested over $1 billion in housing last year-is that a "heartless" government?


Some hon. Members:: Yes.


Raymond J. Perrault: A government which has spent $245 million on manpower training-should that be described as a "disastrous" program?


Mr. Orlikow:: Yes.


Raymond J. Perrault: What about the creation of 17,312 jobs last year through regional expansion, and thousands of additional jobs which resulted from the establishment of these basic jobs in the economy? What about $96 million spent on bringing about jobs for the constituents of every member of the opposite side of the House? Is that a "cruel" program?


David Orlikow: Yes.


Raymond J. Perrault: Tell that to Reilly, and say it to your constituents.


David Orlikow: I will say it to the unemployed.


Raymond J. Perrault: What about the $50 million which the Canada Pension Plan paid out in the 1969-70? Presumably this is a "reactionary" and "technocratic" plan.


David Orlikow: It is.


Raymond J. Perrault: And a 10 per cent increase in unemployment insurance benefits?-I could continue this list of helpful government measures. I have another list of adjectives for our friends on the other side of the House, Mr. Speaker, to describe their kind of descriptive statements. These words, too, are to be found in the Thesaurus near the pages from which the hon. member for York South assembled his list. They are, "void, vacant, hollow, vacuous, blank, devoid, destitute, depleted, desolate".


Lincoln MacCauley Alexander: Mr. Speaker, I never thought I would be fortunate enough to have an opportunity to take part in this important debate. I would just like to bring the government back to earth. I would advise the ministers that I, too, have had an opportunity to talk to our manufacturers, particularly in the city of Hamilton. If they think these manufacturers show a great deal of confidence in the government's fiscal and monetary policies, they are absolutely wrong.
Mr. Speaker, I want to give you some indication of what these manufacturers have been telling me, what makes them so concerned and so worried about the policies of the government, policies which are strangling our secondary industries to such a point that right at this particular time they do not have a great deal of faith in what is occurring in terms of this country's progress, economically speaking, particularly with reference to the near future. I just want to mention five or six items about which manufacturers are very concerned. One is

the freeing of the Canadian dollar, which has certainly affected our exports. Then there is the dumping of goods on the Canadian market and other actions by foreign countries. There are the increased costs of government in Canada, and the high corporate taxation rate, vis-a-vis Japan, of 26 per cent.
Manufacturers are concerned about research and development policy in Canada having an impetus toward government and universities and not toward industry. They are concerned about non-tariff barriers to exports. Let me explain what that means. I refer to an article in the Hamilton Spectator of January 16, written by James Carr, business editor, which leaves no room for doubts. In it he says:
The problem today Is not tariff harriers but non-tariff barriers-a much more subtle form of trade discrimination designed to keep certain Canadian products from competing in other countries.
This is a familiar problem in the electrical industry, which is also being pushed hard by imports. Yet when a Canadian company tries to bid on electrical equipment in countries like Japan, West Germany, France and Britain, the bid is ignored in favour of a domestic manufacturer-even though the bid may be substantially lower.
Mr. Carr continues:
The big job creators are our manufacturing industries and until their products are given an equal chance at home and abroad, Canada will always have an unemployment problem.
Do I need to read any more? I now wish to talk about another area. I found out, as a result of participating in the work of the special joint committee of the Senate and House of Commons which travelled west, that there is a considerable amount of alienation in western Canada. This has been epitomized by an editorial in the Edmonton Journal of January 15, 1971, known as "Comment". The headings is, "Lumping it". I quote from the editorial as follows:
When May unemployment figures showed 513,000 people still without jobs, Mr. Trudeau was even more emphatic about the policy which was fighting inflation at the expense of jobs and growth.
The article then quotes what the Prime Minister (Mr. Trudeau) said on television as follows:
'If the Canadian people don't like it, you know they can lump it,' he said on television.
The editorial continues:
The time to have done something about this winter's unemployment was last summer, when Mr. Trudeau was telling Canadians that he wouldn't change his policies and they could like it or lump it.
We're lumping it now. And the worst thing about it is not the misery, heartbreak and human tragedy of this winter's unemployment. It is the fact that the government shows no awareness that there has been anything wrong with its economic record or that better, more effective, and less brutal policies are needed in the future.
This afternoon I listened to the Minister of Finance (Mr. Benson) and to my friend the hon. member for Burnaby-Seymour (Mr. Perrault).
January 19, 1971


Gerald William Baldwin: The minister's speech was terrible.


Lincoln MacCauley Alexander: It was a disastrous speech. There were people in the press gallery waiting in great anticipation to hear something, but all he did for 15 minutes was berate the loyal opposition. He also berated the New Democratic Party. I have discovered that this government is good at rhetoric but is no good at actions or deeds. I stand here and say confidently that in my opinion the Canadian people have no faith in this government. In the Hamilton district alone, which has a population of approximately 200,000, almost 19,000 people were unemployed on December 30. What the government must do is create a climate which encourages human endeavour and initiative and does not discourage them.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: We must create a climate of hope as opposed to one of despair and frustration. We must create a climate for economic growth in which the talents and expertise of the Canadian people can bring about the betterment of Canada.
What are the facts, Mr. Speaker? The Economic Council in its recent annual review gave what I would call a backhanded, scathing and sarcastic condemnation of this government. It said that Canada probably has the highest rate of unemployment of the more industrially advanced nations. Do you know what this means, Mr. Speaker? It means the loss of our valuable human resources, the loss of productivity and the loss of taxes. And what did the Minister of Finance say?


Mr. Deputy Speaker:: Order, please. It being 9.45 o'clock p.m., it is my duty, pursuant to Standing Order 60(7) to interrupt these proceedings and put forthwith the question on any amendment before the House. All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.
The House divided on the amendment (Mr. Lambert,
Edmonton West) division:	which was negatived on the following
 YEAS Messrs:
Alexander	Brewin
Asselln	Burton
Baldwin	Cadieu
Barnett	Coates
Beaudoin	Comeau
Bell	Crouse
Benjamin	Danforth
Bigg	Dionne
Division
Messrs:
Douglas (Nanaimo-	McGrath
Cowichan-The	McIntosh
Islands)	McKinley
Downey	Matte
Flemming	Mazankowski
Forrestall	Monteith
Fortin	Moore
Gauthier	Muir
Gilbert	Murta
Gleave	Nielsen
Godin	Noble
Grills	Nowlan
Gundlock	Ny strom
Hales	Orlikow
Harding	Paproski
Harkness	Peddle
Hees	Peters
Horner	Ricard
Howard (Skeena)	Ritchie
Howe	Rodrigue
Knowles (Winnipeg	Rondeau
North Centre)	Rose
Knowles (Norfolk-	Rowland
Haldimand)	Rynard
Korchinski	Saltsman
Lambert	Schumacher
(Bellechasse)	Scott
Lambert	Simpson
(Edmonton West)	Skoberg
Laprise	Skoreyko
La Salle	Southam
Latulippe	Stanfield
Lewis	Stewart (Marquette)
Lundrigan	Tetrault
MacDonald (Egmont)	Thomas (Moncton)
Maclnnis (Cape	Thomson
Breton-East Richmond)	(Battleford-Kindersley)
Maclnnis (Mrs.)	Valade
MacLean	Woolliams
Macquarrie McCleave	Yewchuk-89.
 NAYS Messrs:
Alim and	Emard
Anderson	Faulkner
Barrett	Forest
Basford	Forget
Bechard	Foster
Beer	Francis
Benson	Gendron
Blair	Gervais
Blouin	Gibson
Borrie	Goode
Boulanger	Goyer
Breau	Gray
Brown	Guay (St. Boniface)
Caccia	Guay (Levis)
Clermont	Guilbault
Cobbe	Haidasz
Corbin	Hogarth
Corriveau	Hopkins
Cote (Richelieu)	Jamieson
Cote (Longueuil)	Jerome
Cullen	Kaplan
Cyr	Laflamme
Davis	Laing
Deachman	(Vancouver South)
Deakon	Lang (Saskatoon -
Douglas (Assiniboia)	Humboldt)
Drury	Langlois
Dube	LeBlanc (Rimouski)
Dupras	Lefebvre
Duquet	Legault

January 19, 1971
Lessard (LaSalle) Lessard
(Lac-Saint-Jean)
Lind
Loiselle
Macdonald (Rosedale)
MacEachen
Mackasey
Major
Mareeau
Marchand
(Kamloops-Cariboo)
Morison
Murphy
Noel
Olson
Orange
Osier
Division
Messrs:
Otto
Ouellet
Pepin
Perrault
Pringle
Prud'horame
Richard
Richardson
Roberts
Robinson
Rock
Roy (Laval)
Serre
Sharp
Smerchanski Smith (Saint-Jean) Stafford Stanbury
Stewart (Cochrane)
Stewart
(Okanagan-Kootenay)
St. Pierre Sulatycky Sullivan Thomas
(Maisonneuve-
Rosemont)
Trudel


Mr. Speaker:: I declare the amendment lost. It being after ten o'clock, this House stands adjourned until two o'clock tomorrow afternoon.
At 10.10 p.m. the House adjourned, without question put, pursuant to Standing Order.
Messrs:
Turner (London East)
Turner (Ottawa-Carleton)
Walker
Watson
Weatherhead
Whelan
Whicher
Whiting
Yanakis-108.

Wednesday, January 20, 1971