1971-06-28

ROUTINE PROCEEDINGS


[Stage Direction]
Fourth report of Standing Committee on Miscellaneous Private Bills and Standing Orders, in the two official languages-Mr. Forget (Saint-Michel).
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, it was agreed at the constitutional conference held in Victoria last week that the governments there represented would advise the secretary of the constitutional conference by Monday, June 28, whether they accepted the Canadian constitutional charter, 1971. I wish to advise the House that the government of Canada has today advised the secretary that the charter is acceptable to it.
While the government is prepared to accept the charter and to recommend its approval to the two Houses of Parliament, I want to make it clear that the federal government regards it as a compromise. The provisions of the charter do not, in several respects, represent what the government would have preferred. This is the nature of all negotiated agreements where there are substantial differences of opinion to be accommodated. The essence of agreement is concession and the federal government, before and at Victoria, made concessions on a number of matters which it regarded as important in order that agreement might result. This was equally true, I think, in the case of the provincial governments. I think one could say that the charter is a good compromise in the sense that, even though no government got exactly what it wanted, every participant felt that Canada and Canadians generally would be better served with such a document than without it. That being the nature of compromise, and therefore the nature of the charter, it is a matter of particular disappointment and regret that the government of Quebec has decided that it is not prepared to accept the charter as it stands.

There is perhaps some slight ground for encouragement in the fact that the statement by the Prime Minister of Quebec suggests that the reason for the rejection by the Province relates to one part of the Charter only- what he referred to as "uncertainty" in relation to the meaning and effect of Articles 44 and 45 of the Charter which constitute the revised version of section 94A of the British North America Act. I made it clear, in reply to questions by the press in Toronto on Wednesday, that if the Government of Quebec has specific suggestions to remedy whatever uncertainty concerns them, the Federal Government will receive them with an open mind and will, if necessary, communicate with the Premiers of the provinces to see whether there might be any means of meeting this problem that would be acceptable to all concerned.
I must, of course, at the same time emphasize that one cannot consider that the Charter is indefinitely open for acceptance. Parties to a compromise cannot be considered to be bound by it, or to any part of it, unless the agreement that it was intended to achieve emerges within a reasonable time.

It will of course be a matter of disappointment if the charter does not eventually complete the course that was contemplated for it-with debate and approval by legislatures and both Houses of Parliament. I am convinced that it would constitute a major advance for Canada. I think too that it would provide a means gradually and progressively to adapt our total constitution and build a better future for all provinces and for the country as a whole. But if the charter is not accepted, our country will still go on. As I said at the opening of the constitutional conference at Victoria, constitutional revision is a formidable undertaking: a challenge of great dimension for all Canadians. It will be achieved only through mutual understanding, patience and compromise. But whether it is achieved early or late, one day it will be completed. In the interim-and after its achievement-our task in government and in Parliament is to make real the great promise of our future within a united Canada.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I trust the House will forgive me, in my almost impromptu response to the Prime Minister, if my remarks are not as polished and finished in form as they usually are. Nevertheless, I should like to make two or three comments on the Prime Minister's statement.
I am encouraged by the suggestion in the statement that discussions on constitutional reform can and will continue whether or not what has been named the Victoria charter is adopted. I make no comment this morning
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as to the contents of the charter or as to how satisfactory they are. The Prime Minister himself has expressed some disappointment, and it may be exaggeration to some extent to describe this package as a charter. However, what I really wish to call to the attention of the House this morning are one or two ambiguities in our present situation.
First, is the Prime Minister of Canada in his statement extending the June 28 deadline, or is he indicating that as far as his government is concerned it is prepared to extend the deadline? This is not clear, I suggest, in what the Prime Minister has said this morning.
Second, in commenting outside the House the Prime Minister made remarks which suggested that in his opinion constitutional reform was not very important. I might say that in view of that I was rather surprised to find him making a statement on the subject this morning. I ask him, however, to consider very earnestly the effect of the impression he gave outside the House that constitutional reform is, after all, not very important and that we can continue to get along without it. I ask him to consider what effect this impression will have upon the importance the people of Canada as a whole attach to continued discussions, the effect it will have upon the importance that the provinces generally attach to continued discussions and, indeed, the willingness of provinces that do not attach too much importance to constitutional reform to continue to be involved in the laborious process of constitutional discussions. If the Prime Minister believes continued discussions and the achievement of reform are important he should without hesitation make this abundantly clear to the people of this country.
I say without hesitation that I believe constitutional progress is important in Canada. I was not at Victoria but from what I have heard I have the impression progress was made in the discussions there. I think it would be a pity if this were lost. I repeat that I believe it is important that these discussions continue. I believe it is important that the Prime Minister make this clear.
I recognize there are other urgent matters for us to consider in Parliament and to which the government of Canada and other governments should devote attention. I believe we can do both. I do not believe we should defer these other important matters for constitutional discussions. But I say in all earnestness that in my opinion, while I understand fully the impatience felt in many parts of the country about the time being spent on constitutional discussion and while I understand fully the regret with regard the decision of the government of Quebec, for the future of this country it is important that we recognize the importance of continuing these efforts and it is important that we press forward and discharge our responsibilities.


Mr. David Lewis (York South):: Mr. Speaker, it is of course regrettable that agreement could not be reached at Victoria. I want to emphasize the precise words I have used because I think the people of Canada may have received an incorrect impression. There was not agreement reached at Victoria. That is why it was necessary to
have some time for the respective cabinets to consider whether or not they would agree to the document prepared in Victoria. The real regret is not that the Prime Minister of one of the provinces of Canada has said no to the charter. The real regret is that at Victoria no agreement was in fact reached among the 11 heads of government. No agreement was reached by the 11 heads of government for reasons that I, of course, do not know even though I was in Victoria, because I was not able to attend the closed sessions.
I say, Mr. Speaker, I do not entirely blame Mr. Bou-rassa for hesitating to agree to the so-called charter because I suggested to some friends of mine in Victoria that the revised 94A was pretty confusing in that the language left entirely in doubt which level of government would in fact have priority in the legislative fields indicated even in the suggested amendment to 94A. I read a few days ago in a western paper-I do not have the clipping with me but I think my memory is correct- that in an interview the Prime Minister in reply to a question by Claude Ryan, said that he was not quite sure how the court would decide if there were a federal law dealing with family allowances and a legislated Quebec plan of family allowances and the two conflicted. He was not sure exactly what would happen if a court had to decide the issue. I think the Prime Minister said that. He nods assent to my statement. If that is the case, then it must be obvious to any thoughtful Canadian that it would not have been very easy for Mr. Bourassa to accept the charter if the Quebec government was seeking, as it was, priority in the fields that were added. I am not saying whether it should have it, although personally I have great sympathy with their desire in that direction. But if that is what it was seeking and it was abviously not getting it, it would have been far too silly to expect the government of Quebec to say yes to the charter, having no absolute certainty as to precisely what it had in the amended 94A and the possibility that in fact it had nothing at all.
The Prime Minister said in his statement-and of course one agrees with him-that in any such difficult job as rewriting a constitution, compromise and give and take are necessary. I suggest respectfully that that does not mean deliberately confusing, uncertain and ambiguous language, because if there is one thing that our constitution should try to avoid, or it will never succeed, it is deliberately ambiguous language.
The Prime Minister has said, not in the House but outside, that Mr. Bourassa was faced by a very small opposition. He paid the compliment to the few hundred members of my party in Quebec that they were heading the opposition. I wish they were strong enough to do that. I appreciate the compliment. But the fact is-and it must be obvious to all Members of Parliament and to all the people of Canada if we are to write a new constitution and retain a united country, as I and all members of the House want to do-that the opposition to this so-called charter appears to be unanimous apart from some of the

June 25, 1971

federal members of this House. The fact is that the document brought from Victoria has been opposed by the Liberal party of Quebec-the Prime Minister's friends, much more important than my friends in Quebec, I am sorry to say-by the Liberal government in Quebec, by every opposition party in the legislature and, so far as I have been able to ascertain in the time I have had to read the Quebec press, by every French language newspaper and even in an editorial in the Montreal Gazette. So it is lighthearted and, I suggest, not very responsible to dismiss the opposition to the charter in Quebec as coming from little groups like the NDP and from the intellectuals of whom the Prime Minister was a member until he declared otherwise.
I think this matter is of great importance, and I do want to take a minute or two to express these thoughts because they concern-


Mr. Speaker:: Order, please. I realize the matter is important as suggested by the hon. member, but there still has to be a limitation on the statements made by hon. members in response to a ministerial statement. I am sure the hon. member will want to take that into account.


David Lewis: Thank you, Mr. Speaker. It is less than responsible, I repeat, to dismiss the opposition to the charter in Quebec as coming from little groups when it obviously reflects almost unanimous opposition in that province.


Some hon. Members:: Oh, oh!


An hon. Member:: No, Sir. You don't know anything about that.


David Lewis: Mr. Speaker, if it does not reflect the majority of the members in Quebec then there should either be an election, or all the members of the Quebec Legislature, with very few exceptions, know nothing about their province and these wise men across the aisle know everything, and I doubt that.


Pierre Elliott Trudeau: Is the hon. member suggesting an election on this issue?


Mr. Speaker:: Order, please. May I remind the hon. member of the terms of the Standing Order. Another hon. member reminded the Chair the other day that statements by ministers or statements in response to ministerial statements should be limited, as much as that is possible in this House, to statements of the facts, should not be argumentative, and should not be presented in such a way as to provoke debate. I would again ask the hon. member to take that into account.


Pierre Elliott Trudeau: Again, are you suggesting an election on this issue, a federal election?


David Lewis: No, I wasn't suggesting that.


Pierre Elliott Trudeau: It sounded like it. You had better correct the blues.


David Lewis: Mr. Speaker-


Mr. Speaker:: Order.
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David Lewis: -if you want me to observe the rules-


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


David Lewis: Mr. Speaker, I suggest (a) that the constitutional discussions must be continued, and (b) that the situation in Quebec and the attitude toward the charter by all political parties in Quebec at least, if not of the majority of the people as I think is the case, must be taken into account in drafting constitutional changes. There must be understanding of both of those objectives, and accommodation made to them, if Canada is to remain a united country.
I want to conclude by saying that I agree with the Leader of the Opposition (Mr. Stanfield) that the word charter, applied to the document arrived at in Victoria, may be an exaggeration. But in any case I hope the discussions will continue and that they will from now on be based on economic and social programs instead of merely language and legalisms of that sort. I suggest that we ought to have known what it is that Quebec wants these powers for, what programs it has in mind-perhaps the other provinces might have agreed, perhaps the federal government might have agreed-and, instead of spend !ng time mainly on constitutional language, discuss the programs that the constitutional language is aimed at. In my view a constitution should not be written in a vacuum. It should arise out of the circumstances and programs and purposes of the nation as a whole.
I want to emphasize on behalf of my party, Mr. Speaker, that the constitutional discussions should continue and that we should realize, as we can realize, the great potentials of this great country.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, the right hon. Prime Minister (Mr. Trudeau) has just announced that the federal government has accepted the Victoria charter. Any other decision would have astonished me, but he showed some concern that one province, Quebec, vetoed this charter. The question is who said no. I wonder if it was not the Prime Minister himself who vetoed the charter in Victoria by refusing to heed Quebec's requests, specifically as regards section 94A of the constitution.
In any event, Mr. Speaker, it seems to me the problem concerning the proposed charter or the amending formula boils down to a financial issue. The province of Quebec claims power in social security but the federal government refuses. In my opinion, it is not a question of knowing if and how the constitution may be amended, for, if it has already been changed, this can be done again in the future. In fact, one has but to read the sections of the British North America Act to find that, for the past 20, 25 or 30 years, especially as relates to the field of social security, agreements have been made between provinces and the federal government so as to amend the constitution, but that these agreements have always been oriented toward centralization of powers, whereas presently the trend is to decentralization.

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Student Militia Program
As for granting powers that provinces are claiming, I must recall that it is not only Quebec that has a bellyfull of centralization by the federal government. Indeed, we hear some pretty strong comments from other provinces, especially from British Columbia, Alberta and Saskatchewan, regarding this.
Thus the province of Quebec must not only claim the power to distribute social security allowances but, at the same time, the financial power to do so. It is well and good to talk about the provinces' self determination but, at the same time, they must be assured of having the power to apply that principle of self determination and I believe that the core of the problem at this time is a financial one.
I feel, Mr. Speaker, that the doors are still open for discussions and negotiations, but the federal government should advise the province of Quebec and all other provinces that it is prepared to yield certain central powers. We have said in the past and again recently that Canada will be a strong country if the provinces are strong and I still believe it. As a matter of fact, I believe we shall have strong provinces if we have strong Canadians inside these provinces.
I think that contrary to what has been understood, the Premier of Quebec has not surrendered to the threat of these Marxists who last Wednesday claimed that should Quebec's answer be affirmative, there would be blood and fire on June 24, a national holiday for French-speaking Canadians. I do not think that this was the case as far as Mr. Bourassa is concerned. I would venture to say that the "No" originated during the Victoria conference.



NATIONAL DEFENCE


Mr. Jack Marshall (Humber-St. George's-Si. Barbe):: Mr. Speaker, I request the unanimous consent of the House to propose a motion under Standing Order 43 in a case of urgent and pressing necessity.
This matter concerns the government's reduction of the student militia program which was a tremendous success last year. Over 90 per cent of the 7,850 students who participated in the program and were canvassed thought it worth while and beneficial. Despite these favourable results, the government has cut the program this summer instead of increasing it, as the success of last year's program and continued high student unemployment should dictate. I therefore move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That this House orders that the Minister of National Defence appear this day before the Standing Committee on External Affairs and National Defence to explain the reduction in this year's expenditures on the student militia program.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Humber-St. George's-St. Barbe.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity and the motion cannot be put.



PROPOSED FLOODING OF SKAGIT RIVER VALLEY-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I ask for the unanimous consent of the House to present a motion under Standing Order 43. I feel it is very urgent and something we should attend to immediately. I move, seconded by the hon. member for Vancouver East (Mr. Winch):
That this House express its unanimous opposition to the proposed flooding of the Skagit River Valley in British Columbia and that this decision of the House of Commons-


Mr. Speaker:: Order, please. My impression is that the hon. member has proposed this motion on a previous occasion. I have serious doubts whether it is in order and in keeping with the spirit of the rule or of parliamentary procedure that a member should stand in his place and move in the same motion day after day. In any event, hon. members have heard the motion proposed by the hon. member for Kootenay West (Mr. Harding). Without making a ruling at this time on the propriety of making the same motion from day to day, I ask whether there is unanimous consent.


Some hon. Members:: No.


Mr. Speaker:: There is not.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: In
view of the Prime Minister's statement I think I should ask him whether his statement indicates any change in his position with regard to the deadline for the acceptance of the Victoria charter. Does this mean that the government of Canada is prepared to extend the deadline, and does it mean that, if consent can be achieved from the province of Quebec within what the Prime Minister describes as a reasonable time, the government of Canada will try to reopen the whole question of acceptance?
June 25, 1971


Pierre Elliott Trudeau: The
answer, Mr. Speaker, is that it does not represent a change in position. The Leader of the Opposition knows that the deadline is not something which was imposed by the federal government on anyone else. It is something that all the first ministers agreed to at Victoria. Indeed, it was made at the request of governments other than the federal government. Our understanding was that, having discussed the matter in February, the first ministers would be able to state their position clearly in Victoria, but some governments requested a delay of ten or 12 days. The federal government agreed to that delay and we gave our answer within that period. There is no change in the federal position on that.
In the hypothetical case where some province might ask for an extension of the deadline, I can only say that I would consult with the other first ministers to see if they want to recognize such a delay. I have no preconceived notion on that, but I do know that it would be reopening the agreement reached at Victoria to have until June 28 to give our answers.



FINANCE


Robert Lorne Stanfield: Mr. Speaker, with regard to the conference that is to take place between the government of Canada and the provinces on economic matters on July 12, can the Prime Minister indicate whether an agenda has been settled for this conference and whether it includes discussions with regard to the reallocation of revenues and possible preparations for the next tax-sharing arrangements?


Pierre Elliott Trudeau: Mr. Speaker, it is my understanding that the meeting in July does not contemplate discussing those things which the Leader of the Opposition latterly mentioned. The meeting in July would be essentially to acquaint the provinces with the final form of the tax reform bill that the federal government has brought before the House. The meeting will be used essentially to canvass the reactions of the provinces to that bill and to help them, if they so desire, to prepare for introducing bills in their own legislatures in the future to tie in with the federal bill if they desire to continue the tax collection arrangements. I might add, Mr. Speaker, that the tax-sharing agreement and the other matters which the Leader of the Opposition is concerned about will be the subject of another meeting in the fall, on an agenda to be arrived at. The matter was discussed in Victoria. It was realized that we would be meeting on that, but the July meeting is not going to be essentially on those matters.
Inquiries of the Ministry CANADIAN CONSTITUTION



REFERENDUM ON PROPOSED CHARTER SUGGESTED BY MINISTER OF INDUSTRY, TRADE AND COMMERCE-GOVERNMENT POLICY

Robert Lorne Stanfield: Mr. Speaker, will the Prime Minister say whether the Minister of Industry, Trade and Commerce was expressing government policy when he said in London, Ontario, a day or so ago that a referendum should be held with regard to the acceptance of the Victoria charter? If the Prime Minister wants my opinion on this matter, I will be very happy to give it, but I should like to know whether this is the view of the government?


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of the statement. I have not seen it. If a statement was made along those lines it does not represent government opinion, although I understand the hint is that it might be the opposition's opinion.


Robert Lorne Stanfield: Mr. Speaker, if the Prime Minister wants my opinion, it is that it would be a very serious mistake and subject the country to very grave risks.


Mr. Speaker:: Is the hon. member for Saskatoon-Biggar rising on a supplementary?


Mr. Gleave:: No, Mr. Speaker, on another subject.



FINANCE


Hon. Marcel Lambert (Edmonton West):: I wish to ask a question, Mr. Speaker, about the points raised by the Leader of the Opposition regarding the meeting on July 12. Is it the intention of the Minister of Finance to discuss with his counterparts the revision of sales and excise taxes and so forth, in the spirit of tax reform, and in which their full co-operation is required?


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of the details of the agenda of the July meeting. I repeat what I said earlier. It is essentially to discuss the tax reform proposals which were put before Parliament a few days ago.



IMMEDIATE IMPLEMENTATION OF TRANSITIONAL ACREAGE PAYMENT APART FROM STABILIZATION LEGISLATION

Alfred Pullen Gleave: Mr. Speaker, may I direct my question to the Prime Minister. In view

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Inquiries of the Ministry
of the strong opposition of Prairie farmers to the stabilization feature of Bill C-244, will the government now bring in a separate bill providing for the transitional payment of $100 million, which could be passed without debate.


Pierre Elliott Trudeau: No, Mr. Speaker.


An hon. Member:: Split the bill.


Alfred Pullen Gleave: Will the Prime Minister ask the government House leader to consult with the other House leaders before a final decision is made in this matter?


Pierre Elliott Trudeau: I would, Mr. Speaker, if the hon. member's party were clear on what they want. If they are against the stabilization feature of the bill and want the whole matter to be withdrawn, I will discuss it with the House leader. But the hon. member is not clear to me.


Alfred Pullen Gleave: In view of the repeated expressions of opinion on this matter on this side of the House, is the government prepared to ignore the express wishes of those who are to be affected by this unpopular and harmful legislation?


Mr. Speaker:: Order, please. The hon. member's question is not acceptable in those terms.


Mr. R. R. Soulham (Qu'Appelle-Moose Mountain):: have a supplementary question, Mr. Speaker. In view of the fact that this morning's Dominion Bureau of Statistics figures indicate a net farm income loss for the province of Saskatchewan from $402.9 million in 1969 to $195 million in 1970, what specific action does the government intend to take to meet this emergency?


Mr. Speaker:: Order, please. That is not a supplementary question. The hon. member's question may be legitimate, but it cannot be asked as a supplementary to the question asked a moment ago. I will recognize the hon. member in a moment.


Richard Russell Southam: On a point of order, Mr. Speaker, I ought to have said that my supplementary question is related to the question asked earlier by the hon. member for Saskatoon-Biggar.


Mr. Speaker:: That only makes the matter worse. I will return to the hon. member in a moment. If he has a legitimate supplementary I will recognize the hon. member for Regina East.


Mr. John Burton (Regina East):: May I direct a supplementary question to the Prime Minister. Inasmuch as prairie farm net income dropped by over $300 million in 1970, what more has to be done to get the government to provide a more adequate response-


Mr. Speaker:: Order, please. That is not a supplementary question. It is argument or a speech or debate, but it is certainly not a question.



ANNOUNCEMENT OF DATE OF ASSINIBOLA BY-ELECTION BEFORE SUMMER RECESS

Mr. A. C. Cadieu (Meadow Lake):: Mr. Speaker, my question is for the Prime Minister. Can the Prime Minister assure the House that the government will announce the date of the Assiniboia by-election before the House recesses?


Pierre Elliott Trudeau: I will
consider that, Mr. Speaker.



ST. LAWRENCE SEAWAY CARR REPORT-REQUEST FOR STATEMENT BY MINISTER

Gérard Laprise: Mr. Speaker, I wish to direct a question to the Minister of Transport.
Would the minister indicate whether he has perused the Carr report on the St. Lawrence Seaway Authority and if he contemplates making a statement on the matter before the summer recess?


Mr. Speaker:: I have the impression that the question was asked the day before yesterday, but if I am wrong, maybe the minister could answer the hon. member for Abitibi.


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, virtually the same question has been asked on a number of occasions. I do not anticipate that it will be possible to make a statement before the House rises next week, primarily because we are still awaiting representations from various interested groups in the country. I have assured them that they will have adequate time to make such representations before I make any statement with regard to government policy.


Mr. Speaker:: Perhaps this might be the time to allow the hon. member for Qu'Appelle-Moose Mountain to ask his related question.



DECLINE IN 1970 IN SASKATCHEWAN FARMERS' NET INCOME-GOVERNMENT ACTION

Richard Russell Southam: Mr. Speaker, I should like to direct my question to the Prime Minister or to the Minister of Agriculture. This is a very serious matter. This morning's DBS figures reviewing prairie farm income indicate that Saskatchewan farmers' net income went down from the 1969 figure of $402.9 million to the figure of $195 million in 1970. This indicates the serious economic plight of western farmers. May I ask the Prime Minister or the Minister of Agriculture what emergency steps are going to be taken?

June 25, 1971


Mr. Speaker:: Order, please. I suggest to the hon. member that this is a rather general question, important though it may be, which should be replied to by way of a statement on motions. The minister might want to consider that.



BRITISH ENTRY INTO EUROPEAN COMMON MARKET-EFFECTS ON CANADIAN EXPORTS TO UNITED KINGDOM

Mr. H. W. Danforlh (Keni-Essex):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce, but in his absence perhaps the Prime Minister might be gracious enough to answer. Now that agreement has been announced on Britain's entry into the European Common Market, can we expect a statement from the government before the summer recess on an assessment of the general effects of this agreement on Canada's future trade with Britain?


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, a number of statements have been made by the Minister of Industry, Trade and Commerce concerning specific negotiations that have taken place with Britain in connection with that country's entry into the Common Market. I would not anticipate that a further detailed statement would be made before the session adjourns since the Minister of Industry, Trade and Commerce is now on a trade mission to the People's Republic of China.


Harold Warren Danforth: A supplementary question, Mr. Speaker. Is the government attempting to arrange for either Canadian or Commonwealth talks with the British government for an in-depth assessment of future trade patterns? If so, has a specific date been established for such a conference?


Bruce Andrew Thomas Howard: Mr. Speaker, there have already been a great many talks with the government of the United Kingdom in regard to this subject and these talks will continue as is appropriate.
Mr. A. D Hales (Wellington): Mr. Speaker, I wish to ask a supplementary question of the Minister of Agriculture. Since Great Britain has received assurances before entering the European Common Market that New Zealand's exports to Great Britain will be protected and, as a matter of fact, even increased by 5 per cent, what position has the Minister of Agriculture taken with respect to Canadian products being shipped to the United Kingdom?


Hon. H. A. Olson (Minisier of Agriculture):: Mr. Speaker, the main commodity going in, of course, is grain, and as I, the Minister of Industry, Trade and Commerce and the minister responsible for the Wheat Board have replied in the House on a number of occasions, we have had many meetings and discussions with the United
Inquiries of the Ministry
Kingdom respecting the assured continuation of that market, although we do not have in specific terms a reply that they will be-


Mr. Hales:: A supplementary question, Mr. Speaker. Is the government taking steps to become an associate member of the European Common Market?


Mr. William Knowles (Norfolk-Haldimand):: In view of the fact that in terms of dollar value leaf tobacco is the second most valuable export to the United Kingdom, will the Minister of Agriculture take similar steps to ensure the continuation of the sale of that product to Britain under the terms it now enjoys?


Horace Andrew (Bud) Olson: Representations have been made respecting that commodity too.


Alfred Pullen Gleave: May I ask the
minister whether the discussions in connection with grain exports to which he referred have been going on in recent weeks and whether they are continuing at the present time?


Horace Andrew (Bud) Olson: Representation is made at every
opportunity.



FINANCE


Mr. Eldon M. Woolliams (Calgary North):: I want to return to the question of the revenue-sharing agreements between the provinces and the federal government. Having regard to the fact that the budget abolished estate taxes and in light of the further fact that Alberta, British Columbia and other provinces have abatement arrangements under which three-quarters of the revenue goes back to the citizens of these provinces, have there been any complaints or suggestions or representations with regard to the loss of revenue to Alberta and British Columbia as a result of this constitutional change made in the budget?


Pierre Elliott Trudeau: I know of no complaints having been made yet, but I rather suspect that the provinces will, as the hon. member suggests, want to raise this point when we do meet to discusss whatever new equalization formula might be put forward or discussed.


Eldon Mattison Woolliams: Was there consent on the part of the provinces to agree to the abolition of this tax having regard to the revenue-sharing agreements with Alberta and British Columbia and in light of the fact that it actually changes the agreement under the constitution?


Pierre Elliott Trudeau: Without agreeing that it changes the agreement under the constitution-I do not see how such a conclusion could be reached-may I say that it was impossible to acquaint the provinces or anybody with the provisions of the budget before they had been made known to the House. I repeat that I expect the meeting in

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July will be used by the provinces to raise this point, at least, and it will certainly be considered, if they desire to discuss it further, at the time the whole tax-sharing agreement, which is due to expire next year, is discussed in the coming months.



AGRICULTURE


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: May I direct a question to the Minister of Agriculture arising out of the representations which were made to him on May 4 by the sheep and wool producers of Canada? In view of the fact that this industry has received much less consideration from the government than have either the beef industry or the man-made textiles industry, may I ask whether a firm decision has yet been made with respect to the deficiency payment program which the producers fear the government intends to discontinue?


Horace Andrew (Bud) Olson: I have advised the Canadian Wool Growers' Association that we are discontinuing the deficiency payment which has been made for the last 12 years under the wool program. This is for a number of reasons. One is, of course, that there has been a significant increase in the returns to sheep producers from the sale of lamb because prices have increased in the last two years. Taking a longer term view we do not think it would be advisable for sheep producers to enter that market on premise that the wool market will improve, because that has not been the experience.


Thomas Clement (Tommy) Douglas: In view of the fact that a 10 per cent duty is imposed to protect against importation of man-made fibres whereas wool enjoys no such protection, is the government prepared to reconsider this matter and continue for another year the deficiency payment made to wool producers?


Horace Andrew (Bud) Olson: There is very little wool processed in Canada, whether it is Canadian-produced wool or raw imported wool. Therefore I do not see the relevancy of the question.



HOUSING


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, I ask this question of the minister responsible for housing and urban affairs. Since cost consultants associated with the Housing and Urban Development Association of Canada estimate that by mid-1972 construction prices will be 20 per cent higher than they are today in the residential field and 15 per cent higher in other construction fields, what specific action does the minister intend to take to keep construction costs within reason?


Mr. Speaker:: I suggest to the hon. member for Spadina and to the minister that the question as asked invites a reply of a kind which normally ought to be given to the House by way of a statement on motions.


Sylvester Perry Ryan: May I ask, then, that the minister make a statement on motions in connection with this important matter as soon as possible, certainly before the House rises? Will the minister consider recommending to the government in the interim the removal of the sales tax on construction materials?


Hon. Robert K. Andras (Minister without Portfolio):: The only comment I would make is that I hear the hon. member's representation loud and clear.



TRANSPORT


Mr. Paul St. Pierre (Coast Chilcotin):: I have a question for the Minister of Transport arising out of the report of the Standing Committee on Indian Affairs and Northern Development on icebreaking services, filed a few days ago. What action is the minister's department taking in light of its recommendations?


Donald Campbell Jamieson: The
short answer is that we accept the report. We believe the recommendations are sound. As far as the recommendations regarding the crewing of vessels and the like are concerned, we are examining them immediately. We are also in the process of deciding how we should proceed with regard to the design of icebreakers and related questions in light of what is contained in the report.



NATIONAL PARKS


Mr. Craig Stewart (Marquette):: I wish to direct a question to the Minister of Indian Affairs and Northern Development. Can the minister tell the House whether the government plans to hold public hearings in Manitoba in connection with the master plan for Riding Mountain National Park and Clear Lake townsite? If so, when will these meetings be held?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, we intend to hold public hearings concerning the Manitoba national park, just as we did for other parks in Canada. As for the date of such hearings, I cannot set it today since the master plan has not yet been completed, but as soon as it is, we will announce them to the public.

June 25, 1971


Donald Craig Stewart: Until these public hearings are held will the minister put a freeze on any future closures, such as the roller rink at Clear Lake, until public opinion has been obtained?


Joseph Jacques Jean Chrétien: I will look into that matter, Mr. Speaker. [English]



RIDING MOUNTAIN-MASTER PLAN-REQUEST THAT DELEGATION BE HEARD

Hon. W. G. Dinsdale (Brandon-Souris):: I have a supplementary question for the Prime Minister. Has the right hon. gentleman received a request from the mayor of Brandon to hear a delegation in connection with these matters and, particularly, to consider the question of recreational opportunities for youth at Riding Mountain National Park, which are being phased out at a time when they are more urgently needed than ever before?


Mr. Speaker:: The hon. member knows he cannot simply ask a minister whether representations have been received. Perhaps the Prime Minister might reply to the question in another way. My suggestion to the hon. member is that he should ask whether action has been taken or is contemplated. It is not sufficient to ask only whether a message has been received.


Walter Gilbert Dinsdale: Perhaps I might rephrase my question in light of Your Honour's admonition.


Mr. Speaker:: It was not an admonition, I can assure the hon. member, and I am sure the Prime Minister will assume the question was asked in the manner I have suggested. That would save us two minutes.


Pierre Elliott Trudeau: I know of no such request having been made but I will check my records; perhaps it has escaped me.



UNEMPLOYMENT INSURANCE


Mr. Thomas S. Barnett (Comox-Alberni):: My question is directed to the Minister of Labour. It arises from the fact that Royal Assent was given on Wednesday to a new Unemployment Insurance Act, with most of the provisions becoming operative a few days from now. What can be done to restore eligibility for benefits to certain fishermen in Nova Scotia disqualified on the grounds that certain regulations applicable to fishermen override the provisions of the act which are designed to ensure that the Commission shall be neutral with respect to membership or otherwise in an association of workers?


Hon. Bryce Mackasey (Minister of Labour):: There are a lot of allegations in that question which I cannot accept. As far as the case of the fishermen in Nova Scotia
Inquiries of the Ministry
is concerned, that appeal is before an umpire and I would not wish to seem to pass judgment on the merits of their case by any public statement. As for the regulations pertaining to the new act, they should be published very early next week. The hon. gentleman's representations are noted, and I can assure him that we will take every precaution to see that in future the regulations do not in any way limit the intent of the present act or, indeed, expand on that act.



THE CANADIAN ECONOMY


Mr.  R. Gordon L. Fairweaiher@Fundy-Royal: Mr. Speaker, I have a question for the Minister of National Revenue. In light of the near record inflow of $285 million of direct foreign ownership investment into Canada during the first quarter of 1971, when is the government going to outline a foreign investment policy, as has been promised for well over a year?


Hon. Herb Gray (Minister of National Revenue):: Mr. Speaker, I am not in a position to give a date yet.


Mr. Fairweaiher:: Is the cabinet now in possession of a draft report authored by the minister?


Herbert Eser (Herb) Gray: Mr. Speaker, I feel I should continue to take the position I adopted in reply to previous questions of this sort that I am not in a position to comment on matters of cabinet business.



TRANSPORT


Albert C. (Bert) Cadieu: Mr. Speaker, my question is for the Minister of Transport. Can the minister assure the House that the inquiry into the grievances of the Great Slave Lake railway contractors will be speeded up as it is over a year and a half since the committee made its recommendations?


Donald Campbell Jamieson: Mr. Speaker, I am happy to tell the House that after a great many futile efforts to get a judge of a Superior Court to handle this inquiry, which was the main reason for the delay, we now have a nominee and I believe that the inquiry has already started.



FINANCE


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the right hon. Prime Minister. Was
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June 25, 1971
Inquiries of the Ministry
the Prime Minister aware, when the Minister of Finance presented the recent budget, that Canada's real domestic product returned to a downward trend in April, to decline by .2 per cent from slight increases in February and March and, if not, is the government reassessing its projected GNP for 1971?


Mr. Speaker:: I have some very serious doubts as to that question. The hon. member is asking the Prime Minister whether he was aware of certain facts at the time the budget was presented to the House. I really do not see how that question is in order at this time.



OPPORTUNITIES FOR YOUTH PROGRAM-ACTION ON SMOOTH ROCK FALLS PROJECT

Mr. Ralph Stewart (Cochrane):: Mr. Speaker, I have a question which in the absence of the Secretary of State I shall address to the Acting Secretary of State. I have given notice. In view of the commitment on the part of the government, which was signed by the Secretary of State, approving the project in Smooth Rock Falls under the Opportunities for Youth program and the subsequent refusal to accept the project, what action does the government now intend to take?


Mr. Speaker:: Obviously the matter is under
consideration.


Ralph Wesley Stewart: A point of order, Mr. Speaker-*


Mr. Speaker:: The hon. member is rising on a point of order.


Ralph Wesley Stewart: If the matter is under consideration, Mr. Speaker, since time is of the essence and is running out, I should like to ask that the decision be taken before July 1.



SUGGESTED MAKING OF TRANSITIONAL PAYMENT AND WITHDRAWAL OF BALANCE OF STABILIZATION BILL

Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to address a question to the Prime Minister. In light of the very serious decline in the incomes of Saskatchewan farmers, as indicated in the question asked by the hon. member for Qu'Appelle-Moose Mountain, and in light of the opposition to Bill C-244, as indicated by the hon. member for Saskatoon-Biggar, in a spirit of compromise would the Prime Minister consider the possibility of a little give and take and give us the $100 million and keep the bill?


Mr. Speaker:: Order, please.



HOUSING


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question for the minister in charge of housing. In view of the great need for day-care centres across Canada, as emphasized by the national day care conference held this week in Ottawa, is it the intention of the minister to consider the provision of loans under the National Housing Act for the construction of day-care centres?


Robert Knight Andras: Mr. Speaker, this idea has been suggested before. We are examining it but no conclusive decision has yet been reached.


Mrs. Maclnnis:: A supplementary question, Mr. Speaker. Would the minister also consider making such loans available for day-care premises not directly connected with the provision of housing facilities?


Robert Knight Andras: Mr. Speaker, that variation is already under consideration. But I am sure the hon. member will realize that if we did move in this direction it would very likely require legislative change.



AGRICULTURE


Mr. Henry Laiulippe (Compton):: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
Will he say to the House whether he has received representations concerning the steps taken by the government to repeal the sales tax on margarine? Have the dairy producers or their organizations protested against that decision?


Horace Andrew (Bud) Olson: Mr. Speaker, there has not been any great protest. We have been aware of the position of some farm organizations representing dairy producers, but even some of these realize that there was an appropriate time to remove that tax and that perhaps the time was this year.



LABOUR CONDITIONS


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister of Labour. Has the government yet taken a decision with respect to inclusion of employees of Canadian National hotels within the federal minimum wage laws? I ask the question realizing
June 25, 1971

Inquiries of the Ministry PRICES AND INCOMES COMMISSION



CONTINUANCE AFTER DECEMBER, 1971

[Stage Direction]
that this matter has been under consideration since last fall.
Bryce Stuart Mackasey: Yes, Mr. Speaker, I sympathize with the questioner-let me start at the beginning again so that I will not be ambiguous. I feel that the employees hired by the CNR should be covered by the federal minimum wage legislation. As the hon. member knows, the hotels have opposed this. At my recommendation the Department of Justice was ordered or requested that action against the CNR proceed. When the Minister of Justice returns on Monday, I will ask him about the precise position of the case at the moment.



AGRICULTURE


Mr. Murray McBride (Renfrew-Lanark-Carlelon):: Mr. Speaker, my question is either for the Minister of Indian Affairs and Northern Development or for the Minister of Agriculture. In view of reports or a significant outbreak in western Canada of the disease anthrax, does this represent a significant threat to any livestock growing areas, first of all, and, second, can the House be assured that the disease is being contained?


Horace Andrew (Bud) Olson: Very briefly, Mr. Speaker, the facts are that ten animals have died. The cause of death has not been confirmed but anthrax is suspected. Veterinarians from the Department of Agriculture and officials from the Department of Indian Affairs and Northern Development have been dispatched to the scene to obtain specimens so that a proper diagnosis can be made. This will take perhaps two days.



CONSUMER AFFAIRS


Walter Gilbert Dinsdale: Mr. Speaker, in light of the recent upsurge in food prices and the impact on the cost of living, may I ask the Minister of Consumer and Corporate Affairs whether he has looked at this phenomenon with a view to seeing whether there is any collusion between the food marketing chains in order to recoup the losses they incurred during the recent price war?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, their activities are under surveillance by the Director of the Combines Investigation Branch on an almost continuous basis. They are also reporting periodically to the Prices and Incomes Commission. However, if the hon. member has any evidence of collusion that is not available to me, I wish he would pass it along.


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, has the Minister of Consumer and Corporate Affairs recently held meetings or discussions with the chairman of the Prices and Incomes Commission with a view to continuing its role after December 1971?


Stanley Ronald Basford: There have been discussions, yes, Mr. Speaker.



AGRICULTURE


Mr. Lee Grills (Hastings):: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. Would the minister explain the wisdom of moving or phasing out the entomological research laboratory in Belleville, Ontario? This research lab is serving a wonderful purpose for agriculture and horticulture and is known widely throughout the world for its good work.


Mr. Speaker:: I suggest to the hon. member that this question is of the type that would normally be placed on the order paper. I realize that, if it were placed on the order paper today, since we shall be gone for two months, it would be a long while before the hon. member received a reply. In view of this, the minister might reply briefly.


Horace Andrew (Bud) Olson: Mr. Speaker, the work being done at the Belleville laboratory is not being phased out but it is being consolidated in other laboratories we have, particularly at the entomology lab in Winnipeg. I would advise the hon. member that this is one of the steps in consolidation of specified research that has been going on for some time.


EXTERNAL AFFAIRS
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, in the absence of the Secretary of State for External Affairs, perhaps 1 could direct my question to the right hon. Prime Minister. Has the minister or the government had any further discussion with the United States government with regard to the forthcoming needless, and possibly extremely dangerous, Amchitka nuclear test in October?


Pierre Elliott Trudeau: I will inquire, Mr. Speaker.
24171-44*

June 25, 1971
Inquiries of the Ministry


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Minister of Transport. Can he tell the House why at the recent international conference of harbourmasters in Montreal, at which Canada was the host, the members of this international organization who came from Nationalist China were refused entry permits in order to attend this convention and thus were prevented from entering Canada?


Mr. Speaker:: The Chair has serious doubts as to whether that kind of question should be allowed. The hon. member for Red Deer will appreciate my position in that, when an hon. member asks why such and such an action was taken by the government, he is really referring to something which has occurred, and it is normal to ask the question by way of the order paper. However, as I pointed out a moment ago, because of the fact we will be adjourning for a while the minister might be allowed to reply briefly.


Robert Norman Thompson: Mr. Speaker, I would simply ask whether it is true that officials of the minister's department gave orders that such delegates were to be denied entry to Canada?


Mr. Speaker:: The question as asked now is clearly out of order. The hon. member is inviting the minister to deny or confirm a statement made outside the House. In these terms the question is out of order.




Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to address my question to the Minister of Agriculture and it relates to the importation of beef products from New Zealand and Australia. In light of positive indications that duties levied on Oceanic beef imports are being reclaimed as a drawback by balancing these imports against exports of similar domestic products, thus making the tariff provisions ineffective, will the minister consult with his colleagues, the Minister of National Revenue and the Minister of Industry, Trade and Commerce, and report to the House on this urgent and important development which affects the beef producers of Canada?


Horace Andrew (Bud) Olson: Mr. Speaker, I will take the question as notice, although I do not believe there have been any changes in these tariff and import duties for some time.



NATIONAL DEFENCE


Jack Marshall: Mr. Speaker, my question is for the Minister of National Defence. In view of the concern and the disappointment expressed across the country by parents, militia commanders and students, will the minister make a statement on motions before the House closes indicating the reasons for the cutback in this very successful program?


Hon. Donald S. Macdonald (Minister of National Defence):: Mr. Speaker, if the hon. member will read the answer I gave to his question last week he will understand the reasons.


Jack Marshall: I have had different answers, but the program is cut back from 6,850-


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


Mr. Baldwin:: 

AIR TRANSPORT


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct my question to the articulate Minister of Transport and it is in reference to the upcoming meeting of IATA. Can he advise whether the Canadian delegation will be pressing for reduction of international passenger rates especially on Canada-Carribean routes?


Donald Campbell Jamieson: would expect that to be the case, Mr. Speaker, but I would have to know the particular routes and so on to which the hon. member refers. The basic objective, as I believe he is aware, is to achieve significant changes in the fare structure, and I hope they will be lower.



INDIAN AFFAIRS


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct my question to the Minister of Indian Affairs and Northern Development. Will he discuss with his colleague, the Minister of Manpower and Immigration, an expanded and aggressive program for recruiting Indians living near Thompson, Manitoba, to work at Inco, in view of the statement of the Prime Minister a couple of days ago that there are lots of jobs at Inco and as there are many Indians near there who need jobs?

June 25, 1971


Joseph Jacques Jean Chrétien: Mr. Speaker, I was unaware of the fact that jobs are not given to Indians who are looking for employment in Thompson. If there is some evidence of discrimination against Indians at that place, I can assure the hon. member that I will make the necessary representations.



AGRICULTURE


Harold Warren Danforth: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. In view of the serious damage caused by corn blight in Ontario and other parts of Canada last year, can the minister indicate whether there are any reported instances of blight in Canada this year and inform us as to the progress of the northern sweep of this blight in the United States?


Horace Andrew (Bud) Olson: Mr. Speaker, there have been no recent reports or, indeed, any at all of the outbreak of this blight in Canada, although there have been recent reports that it has been found in 11 states and there is a high risk it could spread rapidly.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE


Donald Stovel Macdonald: Mr. Speaker, I rise on a point of order. Certain discussions have taken place in respect of Monday's business and I think it will now be found there is agreement to the following proposals. While the budget debate will be adjourned at 6 p.m. on Monday, the vote on the debate would be deferred until 9.45 p.m. Between the hours of 8 and 9.45 government business would be called. The first item would be the motion in respect of the ministry of state for urban affairs. Following that, the second item to be dealt with will be government order No. 75 in respect of the Judges' Act. If my understanding is correct in respect of deferring the vote from 6 until 9.45, I wonder if that could be made an order of the House.


Gerald William Baldwin: On the point of order, Mr. Speaker, the minister anticipated what I was going to say. In light of the same situation which prevailed earlier this week, would the minister try to arrange for opposition parties to have copies of the proclamation as soon as possible in order that members who will be participating in the debate on Monday will have some knowledge as to the terms of reference of the new ministry of state?


Donald Stovel Macdonald: Mr. Speaker, I would be glad to exercise my best efforts in that regard.


Gerald William Baldwin: That may not be enough.
The Budget-Mr. Orlikow


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, we agree to an order of the House that the vote on Monday be taken at 9.45.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, June 23, consideration of the motion of Hon. E. J. Benson (Minister of Finance) that this House approves in general the budgetary policy of the government, the amendment thereto of Mr. Lambert (Edmonton West) (page 7229).
David Orlikow: Mr. Speaker, the people of Canada expected the Minister of Finance (Mr. Benson), when he made his budget speech, to answer two important questions which are facing Canadians. First of all, they expected a positive program instead of proposals by the government to deal with the inordinately high rate of unemployment we have at the present time. Second, they expected from the minister some proposals which would begin to implement in Canada an equitable tax system to wipe out the kind of inequities which were dealt with so effectively and in such great detail by the Royal Commission appointed by the former Conservative government, headed by Mr. Kenneth Carter. The minister did not really address himself to either of these questions. On the basis of the minister's speech, the people of Canada must assume that the government has no intention of dealing seriously with either of these problems.
The number of unemployed in Canada in May, as given to the country by the Dominion Bureau of Statistics, was 543,000. The Minister of Finance has taken a great deal of satisfaction from the sharp reduction in the number of unemployed between April and May. If one compares, and one must, the rate of unemployment for May 1971 with May 1970, one can see very quickly that there has been in fact a worsening rather than an improvement in the situation. In May 1970, there were only 513,000 unemployed. In May 1971 30,000 more were unemployed, for a total of 543,000. In May 1970, the seasonally adjusted rate of unemployment, as calculated by the Dominion Bureau of Statistics, was just 5.6 per cent. In May of 1971, it had risen to 6.3 per cent. Indeed, the seasonally adjusted rate used by the government and by the Dominion Bureau of Statistics has not fallen below 6 per cent in any month in the last year, yet the minister has the unmitigated gall to tell the people of Canada the situation is getting better. In May 1971, we

June 25, 1971
The Budget-Mr. Orlikow
had a situation in which 270,000 of our young people between the ages of 14 and 24 were unemployed. We had a situation in which 126,000 people were unemployed for more than six months and in which 112,000 had been unemployed for between four months and six months.
I have one last statistic, Mr. Speaker. In the most prosperous, the largest, province in Canada, the province of Ontario from which the Minister of Finance comes, 5.6 per cent of the labour force, calculated on a seasonally adjusted basis, were unemployed in May. In fact, this year the rate of unemployment in Ontario is higher than it has been for probably ten years, yet the minister tells us things are getting better. Our unemployment is not an accident. The very high percentage of unemployment is part of a deliberate government policy fostered by the Prime Minister (Mr. Trudeau) who, in December 1969, said that in order to meet the threat of inflation he would implement policies of restraint; that he would hold back necessary public works projects, even if this meant an unemployment rate of 6 per cent. Well, we have it. The Deputy Minister of Finance, in a briefing session on the day the minister presented his budget, told the members of the press who were present that to him and to the government full employment meant 5 per cent unemployed.


Mr. Benson:: I rise on a point of order, Mr. Speaker. I have checked this particular matter with the Deputy Minister of Finance and he assures me that he made no such statement. He merely referred to what had happened over the past 16 or 17 years in Canada.


David Orlikow: Mr. Speaker, today is not the time to talk to the minister about the intemperate speeches of his deputy minister; I can do that on another occasion. Let me say to the Minister of Finance that I was not at the briefing session but I can send the Minister of Finance, if he has not seen these, at least two reports in the newspapers by responsible newspaper reporters and columnists to this effect. So, the deputy minister should watch what he says, because all these reporters did not hear him incorrectly.
The fact is that the kind of unemployment we have is a result of the deliberate policies of this government. This government decided that the increasing cost of living was so serious the economy had to be cooled down. If necessary I can place on the record innumerable speeches by the Minister of Finance, innumerable comments by the Prime Minister, statements by the Prices and Incomes Commission and statements by the Governor of the Bank of Canada, all pointing out the dangers to this country if we did not stop the rising cost of living. The government asked for that advice, but it ignored the advice of virtually every academic economist in this country and for the last 18 months made its first order of business the combatting of inflation. The results were predictable and inevitable.
Canada-and the Minister of Finance has taken great pride in this fact-had probably the lowest rate of increase in the cost of living of any country in the western
world. This rate was less than 2 per cent in 1970. Compared to the countries to which we are often asked to look for a good example, such as West Germany, Japan, France and Great Britain, our increase in the cost of living was very good. However, the results were predictable and inescapable. Along with the United States, we have the highest rate of unemployment of any industrialized country in the western world. In Great Britain, where the Conservative government which was elected a year ago has been following the same kind of policy, unemployment has gone over 3 per cent. The recent local elections in Great Britain resulted in the largest number of losses for a national political party in British local elections. There was a shift of 1,500 or more council seats from the Conservative party to the Labour Party. That Conservative government followed precisely the policy which has been followed by this government.
Now, we are told the government realizes unemployment is important. Now, we are told the government intends to move to deal with unemployment. Now, we are told this expansionary budget will put people back to work. The minister says he is confident the rate of unemployment will drop from month to month in the next year. The figures, however, do not bear out that statement. I have already referred to the figures, but it will take only a few seconds to place them on the record. Let us place on the record the seasonally adjusted figures for Canada since last June. The figure for June was 6.6 per cent, for July 6.7 per cent, for August 6.7 per cent, for September 6.9 per cent, for October 6.6 per cent, for November 6.5 per cent and for December 6.6 per cent. Then we come to this year. For January, 1971 the figure was 6.2 per cent, for February 6.2 per cent, for March 6 per cent, for April 6.7 per cent and for May, the last month for which we have figures, 6.3 per cent.
Where is the reduction about which the minister has been telling the people of Canada for so long? As if that were not bad enough, a couple of days ago during the swing he made through southern Ontario, the Prime Minister again revived the bogeyman that the dangers of inflation were so great the government would have to consider the most drastic kind of measures. I do not know whether he meant price and wage controls or just wage controls, voluntary or by law. If the government intends to deal with inflation as the major thrust in its economic policy, then the people of this country are in for a very serious 12 or 15 months.
When I say that the policies followed by the government will not lead to a solution, certainly not a rapid solution of the problem of the unemployed, the minister can of course say that I am being partisan. If I were to quote economists such as Professor Weldon who was the head of the department of economics at McGill, or Professor Blauer at Brock university, the minister of course would reject the things which they said because they are fairly well known supporters of the party to which I belong. However, I want to quote a few paragraphs from the submission made to the Senate Finance

June 25, 1971

Committee by the Institute for Quantitative Analysis at the University of Toronto, a very highly respected organization whose figures have been used consistently by the minister and the deputy minister in trying to bolster their point of view. Here is what they say, as reported in the Toronto Star issue of June 9, 1971:
The economists predicted that the unemployment rate this year will be higher than last year's 5.9 per cent rate. Unless policies are changed the seasonally adjusted unemployment rate will still be above 6 per cent at the end of the year, they said...
They told the Senate's national finance committee, which yesterday began its six weeks of hearings into ways to improve Canada's economic performance, that the government's policy of "cautious expansion" is not enough to push the unemployment rate down fast enough. A tax cut would help reduce unemployment without bringing on more inflation, they calculated ...
"We believe that there are policy instruments which can be used to move the economy ahead more rapidly while without increasing and perhaps reducing, the rate of price inflation in the short run"...
Either personal income taxes or the federal sales tax should be cut, they said, stating their own preference for a cut in the federal sales tax. Such a cut should cover all federal sales and excise taxes, except the tax on tobacco and alcoholic beverages, and the tax on building materials, they said.
Of course, the minister has done none of the things which were proposed by the Institute for Quantitative Analysis of the University of Toronto.
Now, I want to deal with the second question with which I think the minister should have dealt in his budget speech, namely, the desire of the Canadian people to see a major reform of our taxation system. It was almost 10 years ago that the former prime minister of Canada, the right hon. member for Prince Albert (Mr. Diefenbaker), appointed a royal commission to deal with the question of the inequities in the tax system. We had their report in 1964. Some 18 months later we had a white paper on taxation presented by the minister which indicated a sharp watering down of the proposals made by the Carter Commission. Now, we have the budget and the tax proposals of the minister, which supposedly implement the kind of tax reforms which the people of Canada expected. Do they?
Again, because I do not want the minister to think that this is purely a political and a partisan speech, let me quote just a couple of things said by some people who are not members of our party. Here is what Ronald Anderson, the financial columnist for the Toronto Globe and Mail, said in a column which he wrote on Saturday, June 19 for the Toronto Globe and Mail. I quote just the first couple of paragraphs which read as follows:
The tax bill brought down last night by Finance Minister E. J. Benson represents a major retreat from the proposals advanced in the 1969 white paper on tax reform.
The capitulation, on almost every proposal that had met substantial opposition, was more complete than even the most vigorous critic of the white paper could have foreseen.
All the key proposals-the integration of personal and corporation taxes, taxation of capital gains at full rates, five year revaluation of common shares, and the intended distinction between widely held and closely held corporations-have vanished without a trace, as has the plan to allow small corporations to be taxed as a partnership.
The Budget-Mr. Orlikow
I hope that the hon. member for Grenville-Carleton (Mr. Blair), who gave us a passionate speech the other day in which he said this was the most fundamental change in the tax system that we have had in the last 50 years, is listening. I hope, too, the hon. member for Don Valley (Mr. Kaplan) is listening because he gave us the same kind of nonsensical argument the other day. Here is what the hon. member for Duvernay (Mr. Kierans), the former minister of communications, said in an article which appeared in the Toronto Star on June 21, 1971.


Murray Arndell McBride: Did you always support him?


David Orlikow: I support him when he is right, and on this he is right. Let me say to the hon. member in the back row that when the hon. member for Duvernay made a speech, which I hope I will have some time to refer to, on tax policies to the Canadian Economic Association, 300 of the top economists in this country, something unprecedented happened: he received a 12 minute standing ovation. That is a hell of a lot more than the Minister of Finance (Mr. Benson) would get from those people.


Murray Arndell McBride: They must have been your party
supporters.


David Orlikow: I know that we are growing in strength, but I did not realize that the 300 top economists, academics and business and labour economists, in the country who were attending the Canadian Economic Association meeting were all supporters of the NDP. I did not realize that our support had grown that much.
Let me put on the record one paragraph from the speech by the hon. member for Duvernay. He said:
Except for those whose special position and advantages were being threatened-and isn't that what the commission was all about?-
He was referring to the Carter Commission.
-the report on taxation was universally acclaimed as a model tax system, unique in its attention to fairness. The terms of reference were scrupulously followed while paying full attention to the need to maintain, not increase, government revenues.
Then, in analysing what this budget does, the hon. member for Duvernay said that this budget, and the proposals in the tax bill, simply do not begin to measure up to the principle of equity as expressed either in the Carter Commission report or in the white paper.
What does this budget do, what will it actually mean? I hope the hon. member for Grenville-Carleton, who has some people who are not in the $100,000 a year income bracket in his constituency, will listen to exactly what these proposals do. The tax proposals of this government and of the Minister of Finance mean that an inequitable, regressive and inefficient tax system in Canada with unjust, special privileges existing in many areas will continue as it has for lo, these many years. The proposals fail to shift the basic burden of taxation from those of the lower incomes more proportionately to those at the higher income levels. The federal government is, there-

June 25, 1971
The Budget-Mr. Orlikow
fore, perpetuating the basic defects of the existing tax system, since their tax proposals are not based on the ability to pay, the principle that taxation should be determined by what a person earns and not by how he earns it.
The most astonishing tax proposal by the federal government is the elimination of estate and gift taxes, which will allow wealthy people to pass on from generation to generation their great accumulations of inherited wealth, untouched and intact. For as long as there has been an income tax system in modern industrial countries, a basic principle has been that a good time to begin to redistribute the wealth that people have accumulated is when they die. I am not the greatest defender of the so-called free enterprise system, but I am prepared to argue that one should not stop a person who has intelligence, who is aggressive, who has good ideas and who wants to work hard, from producing wealth and keeping part of it for himself. But surely, Mr. Speaker, we do not want a tax system where not only can a man make a great deal of money by working hard but can turn it over intact to his heirs without paying any tax at all on it.
Let us take the case of a man who accumulates an estate of $1 million. If he has four children, on his death he can turn over $250,000 to each of them. They can invest their $250,000 very conservatively to produce an annual income of between $20,000 to $25,000 a year. They will never have to work a day in their lives. That is the proposal which the Minister of Finance is putting forward in this so-called tax reform bill, and which the hon. member for Grenville-Carleton (Mr. Blair) and the hon. member for Don Valley (Mr. Kaplan) are supporting. Well, Mr. Speaker, they can support it, but the people of Canada sure as hell won't.
Let me deal with some specific illustrations of how these tax proposals will work. Salary and wage earners, including the civil servants whom the hon. member for Grenville-Carleton represents, will be taxed at 100 per cent of their earnings, whether these be the $5,000 which some of the people working in this building make, or the $50,000 which the Deputy Minister of Finance will be making if the Clyne Committee recommendations are implemented. But, Mr. Speaker, capital gains earned by other people, in Ottawa, Toronto or Montreal, will be taxed at only half the amount of those gains. Windfall gains will not be taxed at all. Unemployment insurance benefits and manpower training allowances will be taxable, but business entertainment and related expenses will continue to receive the same favourable treatment as hitherto as deductions from taxable income.
An electrician in Ottawa who must travel to Kingston every day, because that is the only place he is able to get work, will be able to deduct travel expenses. But up to how much, Mr. Speaker? Only up to a maximum of $150. What about the lawyer, the doctor or businessman in Ottawa? Are there any restrictions on what they can deduct for expenses? There are none at all. They will
remain in exactly the same favoured position as that in which they have always been.
The three year tax relief for new co-operatives has been withdrawn, but the business tax credit granted to shareholders is increased from 20 per cent to 33J per cent. That is equity, according to the Minister of Finance.


Mr. Mahoney:: Now it is taxable; it wasn't before.


David Orlikow: The individual receiving a salary of $100,000 a year will now pay $1,000 less in income tax, compared with a person earning $5,000 in wages, who will save only $14 in tax. But the person earning $11,000 will be paying $78 more under the new proposal. There are a lot of civil servants who make $11,000 a year. Let the hon. member for Grenville-Carleton and the hon. member for Don Valley tell them why they are going to pay more income tax while the man making $100,000 will be paying less. As I have already said, a wage earning employee is limited to $150 in the amount of expenses he can deduct when calculating his income tax, but the high income executive, the type we can see in every expensive and classy hotel, night club and restaurant in every Canadian city will be permitted to deduct expenses in the same generous way as he has always been able to do.
Many Canadians will be paying personal income tax whose incomes are well below the poverty level set out by the Economic Council of Canada, which is $2,000 for a single person and $4,000 for a married couple. But, as I say, an individual will now be permitted to transfer his $1 million estate to his heirs and friends without paying any taxes at all. Of course, the minister will say that he is leaving the field of estate taxes to the provinces. How can you create a more inequitable system than that? How can you create a tax jungle faster than doing just that? Alberta, the province from which the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) comes, has eliminated estate and inheritance taxes. Any person living in Alberta who has $1 million can expect, as long as this government is in power, not to have to pay taxes on the inheritance that he leaves to his children.
I think I have given enough illustrations to make it clear that, while there have been tax changes proposed in the budget and in the tax bills brought forward by the Minister of Finance, there are certainly no tax reforms. If there is any movement towards greater tax equity, more than we have had in the years about which the Carter Commission spoke so eloquently, the rate of that movement is so small it would take the highest powered microscope available in the Dominion of Canada to measure it.
I think that the budget presented on June 18 was a disaster. It was a disaster for those people who are unemployed, the more than half million who are unemployed, and for their families. It was a disaster for every Canadian who, for ten or more years, has been looking forward to real tax reform. Anyone who says that the minister's proposals mean real tax reform is simply not telling the truth. Mr. Speaker, if it were permissible in

June 25, 1971

Parliament to use stronger language, I would say that a person who says this is real tax reform is lying.


Patrick Morgan Mahoney: Mr. Speaker, before starting my comments on the debate as it has progressed up to this point, I should like to pay particular tribute to the members of the Standing Committee on Finance, Trade and Economic Affairs with whom I have had the pleasure of working, not only for the past year but also as a member of the committee during the period when it had the white paper under review. I will particularly express my thanks, and indeed my admiration, to the chairman of that committee the hon. member for Gatineau (Mr. Clermont). I rather doubt that any standing committee of this House has ever been asked to undertake over so long a period of time such a sustained load of work, and to have done it well, and produced a report which very obviously forms a basis of many of the decisions which the government has made in presenting its tax reform legislation. This is indeed an accomplishment for which all members of the committee can take credit, but I must say particularly the chairman, who was responsible for seeing that the work was done well and efficiently.
I had not intended to refer in any detail to the capital gains aspect of the tax reform proposals. However, I could not help but note that the hon. member for Winnipeg North (Mr. Orlikow) made a great deal out of the proposed abolition of the federal estate and gift taxes, without on any occasion mentioning that the capital gains tax proposal involves deemed realization on death.


Mr. Francis:: He doesn't understand it.


Patrick Morgan Mahoney: Perhaps when his favourite newspaper writers deal with that aspect of the legislation he will become more knowledgeable on it. I shall be dealing with the dividend tax credit later in my remarks, but I should note that the hon. member religiously avoided mentioning that while it will be increased to 33 J per cent from 20 per cent, the 33J per cent tax credit will be taxable whereas the present 20 per cent credit is not taxable.
One of the major objectives of tax reform is provincial acceptability. We do not want a tax jungle in Canada, we want a tax system that the provinces can and will use. In two or three weeks time the Minister of Finance (Mr. Benson), together with provincial ministers of finance and provincial treasurers will be meeting in Ottawa to discuss economic affairs, and I suspect that prominent in those discussions will be the new income tax system.
I cannot help but note with a certain degree of nostalgia the passage of the integration proposals of the white paper. It was a system that would have effectively and practically eliminated the double taxation on corporate income as it flowed through to the shareholder. I do not know what the result would have been had opposition to this come only from the corporate community but I think corporate sociologists, writing in the light of
The Budget-Mr. Mahoney
history, may be able to do an interesting case study on the divergence of interest that obviously existed between corporate management on the one hand and corporate shareholders on the other and the attitude of the business community toward integration. It is hypothetical to ask what might have happened had the opposition come only from the corporate side. Some of the provinces, particularly those where corporate activity is the heaviest, waded in in a very emphatic way against integration. In order to try and achieve a system that the provinces can and will use, it was necessary to abandon the proposal in favour of a very much improved dividend tax credit system.
When anybody asks where the money comes from to achieve the things put forward in the new tax proposals, I cannot refrain from mentioning that the estimated cost to the treasury of the integration proposal ranged through $140 million in the first year to $230 million in the fifth year of its operation.
The taxation of capital gains will necessarily reduce savings in the private sector. Experience in other jurisdictions indicates that while the amount available for private investment will be reduced, the capital gains tax in itself is not a disincentive to saving and investment provided the rate is significantly more favourable than that on income. There are also in the new system numerous incentives to encourage increased savings, capital formation and investment.
The new system provides for very important economic objectives, while recognizing the social goal-the need of the individual to provide for his own retirement. I should like to discuss this for a moment or two. There is the increase in limits on contributions to registered pension plans and deferred profit sharing plans to $2,500 and on registered retirement savings plans to $4,000 per year. There is also the increase in the special exemption for older taxpayers to $650 and its extension to all taxpayers age 65 and over, rather than age 70 and over as in the past. Thus, savings for retirement will be encouraged by special tax deductions during the working years and rewarded by a special exemption at the generally accepted retirement age.
The increased limits on contributions to pension, profit sharing and registered retirement savings plans will generate more investment capital, but to assure that this capital will serve Canadian purposes, the plans will themselves be subject to tax unless Canadian investments make up at least 90 per cent of their assets, on the basis of cost. The dividend tax credit, of course, continues to be a major incentive for the Canadian taxpayer to invest in Canada, even though it will no longer be supplemented by the special 4 per cent tax on foreign investment income.
Canadian corporations will be permitted to deduct as an expense the interest on moneys borrowed to purchase shares in other corporations. This will place Canadian companies on as favourable a basis as some foreign companies presently enjoy as a result of their own countries' tax laws. The low rate of tax on corporate earnings will be available only to Canadian owned corporations and

June 25, 1971
The Budget-Mr. Mahoney
will be recoverable if the company passes into foreign hands.
I think we in Canada must appreciate that in encouraging Canadian investment in Canada we cannot dictate to other nations how they will treat their own taxpayers who invest here. How attractive a foreign country makes it to invest here is not only beyond our control, it is irrelevant in terms of our own tax policy. To encourage our own taxpayers we must make it more attractive for them to invest here than elsewhere. We can encourage domestic savings and investment through the tax system but we should not use the tax system as a vehicle to ration capital inflows.
Mr. Speaker, may I call it one o'clock?


Mr. Deputy Speaker:: Order, please. It being one o'clock, I now leave the chair.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Patrick Morgan Mahoney: Mr. Speaker, when we recessed at one o'clock I was discussing some of the ways in which the tax reform proposals will achieve the express goal of steady economic growth and continuing prosperity. Most wage and salary earners will pay less and thus have more money to spend. There will be some shift in the over-all tax burden, in view of the capital gains tax, to higher taxation of those who are generally believed to save and away from those who are generally believed to spend their extra cash. On the other hand, the progressive reduction of the corporate rates, the elimination of the federal gift and estate taxes, the reduction of the top personal rate by over 20 points, the averaging provisions and the increased incentives to save through pension, profit sharing and retirement savings plans all militate in favour of savings and investment. The new system will leave more money in the hands of all lower income Canadians to spend. It will leave more money in the hands of all married wage earners to spend. It will leave more money in the hands of many of our small, growing corporations. On balance, I am confident that the new system will better serve the goal of steady economic growth and continuing prosperity.
Another goal is equity, or the fair distribution of the tax burden based on ability to pay. The inclusion of the capital gains tax is, of course, one of the major steps towards equity. Also, the changes in personal exemption rates that were last set in 1949 are a major step towards equity. If the $1,000 personal exemption rate was right in 1949, it obviously is not right in 1971. However, Mr. Speaker, this is not simply a matter of applying the increase in the cost of living index to that $1,000 exemption figure and saying that the figure ought to be 170 per cent of what it used to be. The fact is that in the interval
new social programs at the provincial and federal levels, as well as joint programs such as medicare, hospitalization, family allowances and so on, have relieved a great many Canadians, including our low income Canadians, of the need to provide for many of the essential expenses that they had to meet back in 1949.
Accordingly, I contend that the increases in the exemptions are, indeed, sufficient. Without being prodigal, they are certainly fair and equitable in meeting the purposes for which they were designed. We do not cure poverty through the tax system. What the tax system can do is relieve low income Canadians of their tax burden, and I believe the exemption changes achieve a great deal here.
I dealt before lunch with the misleading statements which had been made by the hon. member for Winnipeg North (Mr. Orlikow) who spoke immediately before me. I now wish to deal with some of the statements made by the Leader of the Opposition (Mr. Stanfield) in his speech to the House on Wednesday. Some of his objections to the tax reform proposals were as fatuous as those of his hon. friend from Palliser (Mr. Schumacher), who objected to the elimination of the federal gift and estate tax because-and I quote his words from Hansard of June 22 at page 7249-"with the abolition of that tax there will not be any exemption." That is truly a wonderful reason for objecting to the removal of a tax.
One cannot divorce rates from exemptions. They go together. As reported at page 7309, the Leader of the Opposition said:
A person with $1,000 of taxable income who now pays $150 will pay $227.50, and a person with $2,000 of taxable income who now pays $351.50 would pay $474.50.
He followed that with a carefully constructed legalistic argument in which he was talking all the time about taxable income and trying to argue he was not misleading this House and the country by so doing. The Leader of the Opposition talked about the man with a taxable income of $2,000 a year as not having very good entry to the jet set. But who is this man? If he is a married wage-earner with two or three children he will not be the same taxpayer as the taxpayer with $2,000 of taxable income under the existing system. He will be a man earning a gross income of $1,000 more under the new system than under the old. If he is a single wage-earner he will be earning about $600 more under the new system than under the old. If he is a retired pensioner aged between 65 and 70, he will be receiving $1,500 more if married and $1,150 more if single; if he is over 70, $1,000 more if married and $650 more if single.
A man with a taxable income of any given figure under the old system is not in the same position as the man who has the same taxable income under the new system. There is no magic in the tax system. With the changes made, a given amount of taxable income applies to a different and higher total income under the new system. Under the new system, every married taxpayer whose income comes from salary or wages will pay

June 25, 1971

less income tax. Every single taxpayer in similar circumstances will pay less tax if his income is under $8,000. Every retired taxpayer aged between 65 and 69 inclusive will pay less tax whether single or married. Every retired taxpayer over 70 will pay less tax under the new system than under the old system if he is married and less tax as a single taxpayer if his income is less than $8,500. The point which seems to have escaped the Leader of the Opposition, is that taxes are not paid in percentage points but in dollars. The impact of taxation depends not only on the rate of tax levied at a particular level but also on the amount of income which goes untaxed. This is why the increased exemptions must be taken into account along with any changes in rates in order to permit an accurate calculation concerning the effect of the system. A person who today has $1,000 taxable income will not be the same taxpayer who will have $1,000 taxable income under the new system. This is the point the Leader of the Opposition missed.


An hon. Member:: Shame on old Bob!


Patrick Morgan Mahoney: There are a number of other items designed to bring about greater equity in the business field. The effective elimination of the "incorporated pock-etbook" will be yet another important measure in this field. The term is applied to a situation in which a person, through a corporate fagade, is able to manipulate an investment portfolio so as to take advantage of low rates of corporate tax, tax free passage of dividends from one taxable Canadian corporation to another, the 15 per cent tax on tax paid undistributed surplus and the absence of a capital gains tax, so that he receives investment income on payment of a fraction of the tax he would have paid had he owned the portfolio personally. Along with the capital gains tax and other changes, the denial of the low corporate rate to private companies on portfolio investment income, other than dividends, and the special refundable tax on their portfolio dividend income, will prevent the tax deferral and tax avoidance heretofore favouring the owner of an incorporated pock-etbook as against other taxpayers. Elimination of this loophole is expected to increase revenues by $50 million in the first year of the new system.
Two major changes are proposed affecting the taxation of corporations and their shareholders, each designed to improve the fairness of the system and to encourage economic growth. First, with respect to small business, the present low tax rate of 21 per cent on the first $35,000 of all corporate income is to be replaced by a 25 per cent rate on the first $50,000 of corporate income earned by small corporations which have a need for internally generated capital. This small business incentive will not be available to public or foreign owned or controlled corporations. I regret that no satisfactory way was found of extending this incentive to unincorporated as well as incorporated small businesses. However, from a practical point of view, there are few, if any, businesses likely to need the incentive which do not have the option of incorporation open to them.
The Budget-Mr. Mahoney
A corportation will be considered small until it has accumulated $400,000 of taxable income under the new tax system. As long as its accumulated taxable income is less than $400,000 it may benefit from the low rate. Thus, by paying dividends it may reduce the accumulation and continue its eligibility indefinitely. Earnings in excess of $50,000 in any year would not benefit from the low rate but would, to the extent they are not distributed to the shareholders, constitute accumulated taxable income. Thus a very large private Canadian company would in all likelihood exhaust its eligibility in the first year.
The low rate of tax will be available with respect to business income only-not investment income, except for interest on short term debt securities. Portfolio investment income will be taxed at the full rate in the hands of the company or, if in the form of dividends, at the rate of 33J per cent fully refundable on distribution. It is intended by this system to direct the benefit of the preferential tax rate to small, growing Canadian companies having a bona fide need to generate more of their own capital rather than to their more substantial competitors, and to discourage the build-up of surpluses not needed for business purposes. Since the purpose of this arrangement is to help Canadian businesses, any company which, having benefited from the low rate, passes into non-resident hands, will be required to pay, in addition to regular taxes, the amount of the tax saved.
The other major change is the conversion from the present 20 per cent tax free dividend tax credit to a 33J per cent taxable dividend tax credit. While not achieving the same measure of equity that the abandoned integration system envisaged, it is a substantial improvement on the existing system and goes a long way toward relating the credit for corporation tax paid to the circumstances of the individual shareholder in a progressive income tax system.
The 20 per cent tax free credit increased in value to the shareholder as the shareholder's marginal tax rate increased. The new system will be of the same net benefit as the old to a taxpayer with a 40 per cent marginal tax rate; $11,000 to $14,000 of taxable income under the new system, or, say, $15,000 to $18,000 total income for a married taxpayer with three children under 16-in any case, well into the middle income group. The new rate will be of more net benefit than the old to persons with a lower marginal rate and of less benefit to those with a higher marginal rate. This is not only a major step toward equity in taxation, but it is a major step toward encouraging middle income Canadians to make equity investments.
During the next several weeks tax lawyers, chartered accountants and concerned taxpayers will be studying the bill to ascertain that the amendments do in fact carry out the intention expressed in the budget and as summarized in the summary of 1971 Tax Reform Legislation that hon. members have had delivered to them. We are looking for their help in correcting any errors and noting

June 25, 1971
The Budget-Mr. Mahoney
any omissions, because, notwithstanding the competence of all those from the public service and the advisers from the private sector who assisted in this monumental drafting task, it would be little short of miraculous if there were not some technical errors or omissions.
The budget and summary represent government policy. The government has made the decisions necessary to bring the decade-long tax reform debate to an end. The government will have to account to the electorate for its decisions and for the reformed income tax system.


Gerald William Baldwin: You will need a lot of red ink for that.


Patrick Morgan Mahoney: That grand old man on the front bench of the Tory party, the hon. member for Prince Edward-Hastings (Mr. Hees), has referred to this as an election budget. I suppose that that is just about the highest compliment that can be paid to any budget. Although it is not an election budget, we on this side of the House would be proud to take it to the electorate if that eventuality occurred.
There is, of course, a body of political thought that denies that the measures constitute reform at all. This view has been expressed by our socialists and their masters in the hierarchy of organized labour. They feel that the white paper was an undesirable retreat from the Carter commission report, and that the new legislation is yet a further retreat from the white paper.
For its part, the official opposition seems, typically, to be riding both sides of the fence. They have not yet decided whether they should claim credit for having "Mau-Maued" the government into an acceptable reform package or whether to attack the package as being neither acceptable nor reform. Having regard to the established speed of their thought processes, we are not likely to learn what the Progressive Conservative position, if any, is going to be in the near future. However, we are learning bit by bit.
My hon. colleague from Don Valley (Mr. Kaplan) noted that these hon. gentlemen had up to Tuesday identified three prongs of their tax reform proposals, namely a 6 per cent across the board tax reduction, tax credits instead of exemptions, and the abolition of the 11 per cent sales tax on building materials. Then, on Wednesday we were pleased to have the leader of the Official Opposition (Mr. Stanfield) disclose two more prongs of the Progressive Conservative tax reform policy. He would not have stuck with the $150 ceiling on employee expense allowances. We do not know how high he would have gone, but he would have gone further than that. Also a Progressive Conservative government would improve child care expense allowances.
At the present time, I am afraid we have to deal with the position taken by the academics and members of the New Democratic Party. They may not like the reform, but that is beside the point. They cannot deny that it is reform. It institutes Canada's first capital gains tax; it abolishes federal gift and estate taxes; it alters fundamentally the basis on which small Canadian corporations
are assisted through the tax system; it changes significantly the way corporations and their shareholders will be taxed; it permits and encourages Canadians to set aside substantially more tax free and low tax dollars for their retirement; and it increases both the number and the effectiveness of incentives to Canadians to invest in and to own Canadian enterprise.
This may not be reform by the standards of the socialists who feel not only that a buck is a buck but that it is the government's buck. It certainly is not revolutionary, but it is reform by any rational standard. It is a reform that is supported by unparalleled research, expert comment and input over a ten-year period. It is a reform founded on an unprecedented process of public participation during the white paper debate-a process of good democracy, good politics and good government. It is, Mr. Speaker, responsible reform.


Elmer MacIntosh MacKay: Mr. Speaker, it is a great privilege at this time for me to have the opportunity of speaking in this honourable House. I want to assure all hon. members that, mindful of the important matters embodied in the contents of the budget, and conscious as well that time is a factor, this will not be a long address.
Before speaking in specific terms regarding my constituency, I should like to comment on the administrative changes in the proposed tax reform legislation contained in the budget. I want to commend the minister and the administration for placing the onus of proof on the Crown to establish facts necessary to support a penalty under this legislation. For far too long, the trend has been in the other direction with respect to many different types of legislation, federal and provincial. In my opinion, the government deserves full marks for taking a step in the right direction. I also like some of the other administrative changes made by the minister, but I feel that the change of onus is a fundamental change in principle and one that is long overdue.
The man whom I had the honour to succeed as member for Central Nova, Russ MacEwan, served as a Member of Parliament for 14 years.


Some hon. Members:: Hear, hear.


Elmer MacIntosh MacKay: May I convey his best wishes to all members of this House and report that he is doing a fine job in his present position as a Judge in the Nova Scotia Magistrates Court. His appointment by the government of Nova Scotia was a fine example of bipartisan support, an appropriate recognition of talent and it was a very popular appointment as well.
My constituency of Central Nova, as most of the cabinet know from personal experience, contains many facets of industry. It is my sincere hope that the interest evidenced in it during the recent byelection by this administration will not wane, and in all seriousness may I say that if the very real needs of Central Nova had been recognized and dealt with on a more consistent and constant basis, and the visits from hon. members of the

June 25, 1971

cabinet had taken place over a longer period of time, then suspicion of pure political expediency as a motive for the attention given to us would not have been so prevalent.
I do not, of course, want to leave the impression that we in Central Nova do not appreciate the attention we received from government, and we hope and trust we will receive further evidence that this government continues to be interested in us. We look forward to many more visits from representatives of this administration to help implement needed changes and improvements.
There have been recent specific moves made by the administration, however, which are causing us in Central Nova real concern. Our Unemployment Insurance Commission facilities in New Glasgow are being partially curtailed. In Stellarton, jobs affecting approximately 20 CNR employees are being phased out. Our freight and passenger service between Pictou and Magdalen Islands is being downgraded. These are truly items of concern, and we want more specific consideration given to the necessity and to the effect of these decisions.
As mentioned before, Central Nova has many types of industry. We have a diversity of interests there, such as coal mining, lumbering, pulp and paper, shipbuilding, steel making, secondary manufacturing, tourism, and service industries, all contributing to the over-all economy. The same may be said, of course, of those engaged in our primary industries of fishing and agriculture. There are many professions and skills employed in the Central Nova economy. Our people deserve to be encouraged. They are industrious, hard working, and want the opportunity of improving their lot and of enjoying a favourable economy in which to build their homes and raise and educate their families. They are true Canadians who want desperately to play their part in building a better country, and who are playing their part even when, at times, the way was made difficult by federal policies which appeared to us rather insensitive.
Those who control the money, control the economy. The government of Canada is clearly in a position to take steps to change its policies, which were admittedly designed to create a certain amount of unemployment, and which caused a great deal of hardship in this nation and discouraged people from pursuing a course of ambitious action. I hope to be able to represent all of the people in Central Nova to the best of whatever ability I possess. In so doing, I solicit the sympathetic co-operation of government and, if I may, I would like therefore to draw a few items of importance to the attention of government at this time.
The question of off-shore mineral rights is of vital concern to all Nova Scotians, Mr. Speaker. I find it hard to accept any proposition that the provinces must be subservient to the Federal Government in this regard. Rather, I feel that the primary benefits, the lion's share if you will, should belong to the provinces-that the provincial rights in regard to potential revenues from off-shore mineral and oil reserves be paramount.
The Budget-Mr. MacKay
On Friday, a week ago, the right hon. Prime Minister (Mr. Trudeau) stated in this House that the Federal government was still awaiting from the provinces answers to the plan that was put to them more than a year ago. To me, as a Nova Scotian, this is rather disheartening. I think that our province should have by this time made its recent position clear. Having said this, Mr. Speaker, one can hardly blame the Federal government if its proposals, put forth some time ago, have not yet been answered, if there has been no dialogue because of delay by the provinces. And in this regard I am thinking particularly of Nova Scotia. Whatever the cause of delay, whether it be federal or provincial, I would earnestly request the hon. Minister of Energy, Mines and Resources (Mr. Greene), as well as any other members of the administration who have direct or indirect responsibility in this regard, to expedite immediate consideration of this important matter.
Agriculture in Central Nova consists principally of mixed farming. The farmers are, for most part, engaged in farming in a small way, but one of their big concerns is poor markets for their produce. They are very disturbed about the implications and possible effects of Bill C-176.
The regimentation which is implicit in this piece of legislation causes them misgivings. Our farmers are also conscious that they have a weak, or if you prefer, a small market base in their own native province. They realize that it is imperative that their produce have free access to markets in other provinces, particularly in central Canada. Bill C-176 does nothing to guarantee any such access, and I would urge this government to consider this particular point. The marketing board which, as I understand it, will be created when this bill becomes law, purports to represent both producers and consumers. It seems to me that this is a difficult task for one board to do as it represents a built-in conflict of interest.
In passing, I would like to comment that I have not as yet seen in the information surrounding the budget any estimate of how much, if any, extra revenue farmers will contribute in taxes to the federal treasury as a result of changes in rules relating to the depreciation of their equipment, etc. I think this will be of interest to hon. members of the House when it becomes available.
The ferry service between Caribou, Nova Scotia, and Wood Islands, Prince Edward Island, is a vital link between these two provinces, and another ferry is presently under construction by the Ferguson Industries at Pictou. But, when this vessel is complete, which will not be for some time, yet another is required to take care of the congestion which, during the height of the tourist season, presents serious problems. Now is the time for the government to take steps in this regard. Better installations and arrangements are required to expedite the freight and passenger service between Pictou and the Magdalen Islands.
Another matter of urgent concern is that when the new Michelin Tire plant gets into production there will be a problem in respect of increased requirements necessary to expedite transportation in the Port of Pictou, and

June 25, 1971
The Budget-Mr. MacKay
urgent consideration should be given to establishing rollon and roll-off wharf facilities there or there will be further difficulties.
As far as the fishing industry is concerned in my constituency, one of the things that is required is better bait freezing and storage facilities along the east shore of my constituency in the Sheet Harbour area. The Minister of Fisheries, now of Environment (Mr. Davis), I had been informed, has been to the area at least on one occasion, accompanied by the Minister of Highways of the province of Nova Scotia, as he now is, and is well aware of the problems involved when fishermen have to sell bait fish for a small price and buy them back at a much higher price when needed, simply because they have no way of preserving them during the interim. As far as I know, nothing has been done in this regard.
Fishermen require more efficient facilities for wharves in our constituency. There is a need for improved lighting, and in some cases for improved hoisting devices, so that fishermen can use these wharves to the best advantage. These are not extravagant things which we are requesting, but things that could be done at a minimum of expense which would make life a lot easier for these people who have to use these facilities.
The problem of McBain Mine in the Thorburn area is one which this government has recognized and dealt with to some considerable extent. There is a feeling, however, that although the $750,000 allocated to keep the mine in operation is a worthwhile step, there still must be a decision made and communicated to those most concerned about the basic policies involved in the ultimate future of this mine. I suggest that if the McBain Mine, which appears to be basically a good one, is to be kept in operation, development work must be undertaken at once to open another wall or face. If the mine is definitely to be phased out, so that this course of action would not be practical, then it is time the miners knew, so that some of them at least could make other arrangements as individual opportunities become available. I would ask the government to remember, however, that these men like mining coal. They are proud of their work and proud of their fellow miners. They have a team spirit and they want to make a success of the McBain operation. This is also true of the Drummond, the other mine in Pictou County. So, these miners should be told what the future holds for them now, not when we are in the midst of another election campaign.
It should also be noted that coal is still a factor in considering fuel reserves and requirements, and it would be very difficult at a future date to replace the expertise of these miners and management if it became necessary to consider mining coal again in volume in Pictou County.
The situation as far as minority groups are concerned in my constituency can certainly be improved with help from this administration. Federal moneys, I am sure, can be found to assist in upgrading living conditions for our black people. Many of them, Mr. Speaker, need extra assistance in order to upgrade their position in society.
By a joint effort with local government, the federal authorities can remedy a crying need.
Our Indian people are likewise not satisfied with their living conditions. The hon. Minister of Indian Affairs and Northern Development (Mr. Chretien) might be so kind as to have some of his staff check into the general situation at Boat Harbour to see if some extra funds can be allocated to improve the adverse conditions created by the Boat Harbour pollutants. These pollutants have had several side effects directly affecting the people living nearby on the Pictou Landing Indian Reserve.
I believe it is correct to say that the provincial government, as compensation to the Department of Indian Affairs and Northern Development for the land expropriated and the other adverse conditions created, paid a fairly large sum of money to the Federal Government at the time the Boat Harbour project was being initiated. It seems only fair that some of this money at least should be directly distributed to the people affected by it, and on whose behalf it was paid. I respectfully urge the minister to look into this matter at his early convenience.
The problems of unemployment have affected many of our people. This situation has not been to the liking of government, I fully realize, but it was this government which, as a necessary evil in their opinion, initiated policies to combat inflation which directly caused it. People in this country must not be deprived of employment in such a calculated manner, even if the excuse is to cure the disease of inflation, because, Mr. Speaker, such a cure, in my humble opinion, is worse than the original disease.
I believe it was H. L. Mencken who once said, in his inimitable style, that "Democracy is what most people want, and they deserve to get it-good and hard!" But this is not the type of democracy that this country, the Atlantic region, and especially Cenral Nova, wants if one equates democracy with hardness in the sense that it is hard to get a job, hard to make a living, etc. In fact, hard times in the Maritimes is a cruel catch phrase for those of us who live there, who really care, and who, like all other Canadians, want to progress.
Problems relating to pollution are all too familiar in Central Nova. Whether the cause be effluents from pulp-mills, fish processing plants, or emissions from industrial smoke stacks, the effect is the same-damage to the ecology and restrictions in the use and enjoyment of our environment. We have flowing through our most populous area a very scenic and potentially useful river known as the East River of Pictou. This river could be of great benefit to the citizens in the immediate area and a great asset in many ways, but now its main use is as an open sewer, at least until one reaches a point several miles from its mouth. The widely publicized pollution of Boat Harbour and the Northumberland Strait is another sore point among the people concerned with our environment in Central Nova. We are looking hopefully to the government to implement some of the provisions of the Canada Water Act and thus, in co-operation with the

June 25, 1971

other levels of government concerned, take some protective and remedial action.
On the subject of forestry, Central Nova contains hundreds of thousands of acres of forests, some of which are of little value because of poor cutting practices followed in the past and, may I say, in some cases continuing. There has been pitifully little reforestation done and, while the Provincial Department of Lands and Forests is primarily responsible in this field of endeavour, I am sure there is a need for federal participation and technical assistance in keeping with a national forest policy.
Not only in Central Nova, but all across the nation, forestry is a mainstay of economic wellbeing. In the Atlantic region, forest products provide an economic lift in excess of $100 million each year. Besides this direct benefit, there are related effects in transportation, sales and processing. Some concerned organizations, like the Maritime Lumber Bureau, have claimed that since 1949 progressively inflated costs of production in the forest industry have amounted to 40 per cent. I, personally, feel that this figure is too low. While the industry has been able to absorb most of these costs in different ways, such as new manufacturing uses of waste products and more efficient cutting, the more efficient methods of cutting and harvesting trees have had a terrible effect on the woodlands themselves. Under so-called new and modern harvesting methods the areas involved are often totally devasted. I suggest, Mr. Speaker, that this very important primary industry and natural resource must be developed. At the same time, however, it must be protected and there is a definite role for the federal government to play in supervising the preservation of this nation's forests.
Some relief has, in fact been given in the last budget to the forest industry in that certain types of duties on imported equipment have been removed and fuel oil has been made slightly cheaper. However, the 11 per cent federal sales tax still remains and this is a real and continuing impediment to the forest industry, certainly in our area.
Education is a topic of universal interest and concern in my constituency. Central Nova is certainly not unique in having problems relating to high property taxes resulting from the escalating cost of education. Nova Scotia, generally, has always had an excellent reputation in the field of education. Many students come to our province from all parts of Canada to be educated, and not only on the postgraduate level. I think it is fair comment that our province has on balance contributed a great deal to Canada in sending well educated persons all over this country. We recognize that the federal government is making an increasing contribution to the costs of education in our province. Participation in the fields of post secondary education programs and on other levels as well, such as vocational training programs, has been in effect for some time and has been welcomed. We ask that these policies be continued and escalated so that our high standards can be maintained without imposing a crushing burden on property owners.
Although the area of Central Nova is a designated one, as is all of Nova Scotia, the incidence of industrial
The Budget-Mr. Clermont
expansion has been rather slow, except possibly in a few selective areas. Moreover almost none of that expansion can be attributed to the Department of Regional Economic Expansion.


Some hon. Members:: Hear, hear.


Elmer MacIntosh MacKay: In fairness, however, it must be pointed out that the Department of Regional Economic Expansion has given a grant under its Regional Development Incentives Act to the Trenton Steel Works at Trenton. This grant for modernization amounted to $569,364. The total approved capital cost for that modernization of the Trenton Steel Works was $2,846,824. What is required, Mr. Speaker, is more grants of this nature and, at this point, the entire region should, I suggest with deference, be classed as a growth area under the required designation of the Department of Regional Economic Expansion so that we could enjoy the special benefits implicit in that type of classification.
Pictou County, like Sydney, is one of the traditional areas where manufacturing and mining have always taken place in Nova Scotia, and we need all of the assistance possible in order to maintain the gains that have been made in recent years. The Scott Paper complex, which has been in operation since 1967, unfortunately was not eligible for regional development incentive grants because at that time regional development incentive assistance was not available to primary producers. However, I would hope, as I say, that the government would consider taking steps to recognize our special needs in the constituency in this regard.
Perhaps before closing, Mr. Speaker, I might again make reference to the recent campaign in Central Nova in the spirit of traditional Nova Scotian political competitiveness. I should like to say with all deference to the President of the Privy Council (Mr. MacEachen) that he should not worry so much in future about the people of Nova Scotia sending one more Tory to Ottawa, as he admonished them not to do, but that in future he should worry rather about the very real possibility of them sending one less Liberal.


Some hon. Members:: Hear, hear!


Mr. Gaston Clermont (Gatineau):: Mr. Speaker, at the outset, I would like to acquaint hon. members and the public with the work done by the Finance, Trade and Economic Affairs Committee when it studied the proposals for fiscal reform.
The document was referred to the Committee on December 19, 1969, and the same day, a press release invited taxpayers to send us their briefs and comments on the subject. In all, we received 524 briefs, as well as 1,093 letters and other evidence.
The first public meeting was held on January 15, 1970, the witnesses being the hon. Minister of Finance (Mr. Benson) and a group of officials from his department. The closing session was a public meeting with the hon. Minister of Finance held on August 4, 1970.

June 25, 1971
The Budget-Mr. Clermont
During the study, the Committee met 146 times and examined 211 briefs submitted by 820 persons. In addition to the briefs presented during its hearings, the committee studied many other written briefs.
pjn.)
The committee sat in Ottawa for two weeks in July- during the summer recess-and then toured Canada from the Atlantic to the Pacific in the first week in August to hear the public, the Minister of National Revenue (Mr. Gray) and the Minister of Finance. It also sat in Ottawa during the first two weeks in September to draft the report tabled in the House on October 5, 1970.
I must point out that the members did not receive any additional remuneration for attending the sittings of the committee during the summer recess, nor any allowance for their expenses for food and lodging while they sat in Ottawa. This gives you an idea of the tremendous amount of work the members of the committee did. As chairman, I take this opportunity to thank them for their co-operation, at all times, and to thank the staff of the committee, the members of the translation and interpretation services, the tax experts and the civil servants of the various departments.
Now, I would like to comment a little on the tax reform legislation and on the budget. In some quarters, Mr. Speaker, they claim this reform, as regards income tax, is weak and incomplete since it does not deal with all the reforms recommended by the Royal Commission on Taxation, particularly on sales and excise taxes. However, I think that the income tax changes have been closely studied. I would like to quote in this connection an excerpt from an editorial published on June 21, 1971 and signed by Mr. Claude Lemelin, editorialist at Le Devoir, who has not always been tender toward the monetary and financial policies of the Minister of Finance. Here it is:
But it is mostly the fiscal reform stated to come into force on January 1, 1972 which should retain the taxpayers' interest. This reform is so far-reaching-
I repeat, Mr. Speaker,
-so far-reaching that its analysis is impossible in one single stage.
Here is another excerpt from an article published by the Ottawa Citizen on June 19, 1971. It was written by Charles Lynch, chief of Southam News Services. I quote: [English]
It is a massive achievement, offering a nice balance of logic, efficiency and political appeal, both long and short term.

Further on he says:

There is an emphasis on people throughout the massive budget papers, and Mr. Benson manages to sound as though he cares for low-income, middle-income and high-income Canadians in equal measure...
His tax reforms are not so extreme as business and industry had feared, or as the Royal Commission on Taxation, chaired by Kenneth Carter, had hoped.
The Carter recommendations were too sweeping to be practical in a stable society.
The white paper proposals were too tough to be acceptable. [Translation]
To all those who complain that the reform is incomplete, I answer by saying that the Commission recommended amendments to the Income Tax Act, to the Estate Tax Act and to the Excise Tax Act. As far as the recommendations having regard to fiscal reform are concerned, first reading of a bill will be moved on Wednesday, June 30, 1971.
In 1968, the federal legislation on gifts and estates was amended, and it will be abolished on December 31, 1971, if Parliament accepts the changes recommended by the Minister of Finance.
Besides, the Minister of Finance recently suggested that the following step would be related to sales and excise taxes.
Mr. Speaker, I think that two hits out of three is a pretty good score.
I should like to deal with another aspect of tax reform, namely, the participation of the public in the development of this reform. I read in the June 17, 1971 issue of the Montreal La Presse an article based on a Canadian Press release, in which I noted the following two sentences which I quote:
The first outcome of the major experience gained by the Trudeau government in participatory democracy will be realized tomorrow as a piece of legislation to change the income tax system.
When the government published its famous white paper on tax reform on November 7, 1969, inviting the public to express criticisms of its contents, he aimed at starting a heated debate on the pros and cons.
Doubts and criticisms have been voiced on this type of participation. It was alleged that the Government was not serious in calling for these contributions and that the decision to entrench the White Paper proposals in a new legislation had already been taken. Some even suggested that the relevant bill had been printed, although the Right Honourable Prime minister (Mr. Trudeau) or the Minister of Finance had repeatedly given assurances to the contrary.
I would like to refer to paragraph 1.1, Chapter I, at page 5 of the White Paper which reads:
In this White Paper the Government of Canada places before Parliament, the Canadian people and the provincial governments its major proposals for reform of the income tax structure. The government wil welcome public discussion of the proposals, particularly in the parliamentary committee considering them. Detailed discussions are also planned with provincial government representatives.
Another quotation, this one from the hon. Minister of Finance (Mr. Benson) from a speech he made at a public meeting in Montreal on March the 8th, 1968:
The government has started the debate on tax reform with the White Paper announcing our proposals, and I insist on the word "proposals", because we were aware of the fact that we did not know all the answers to prepare the best tax system possible for the country. The government was sure

June 25, 1971

Canadians could be counted on to examine and comment on these proposals in a reasonable way. There was a little hysteria and some exaggerated and fallacious publicity in the headlines. But we also received many judicious letters, full of good ideas from individuals. We will examine them when we come to the briefs presented to the parliamentary committees and the conclusions of these committees. One of the most encouraging aspects of the debate, and this proves that the White Paper process is a useful one, is the number of letters indicating that their authors had taken time to think about our proposals and were trying to submit ideas to improve or modify the White Paper.
To those who still have doubts I suggest they read, if they have not already done so, the reports of the Senate and House of Commons committees. They will see if that kind of participation produced tangible results. Furthermore, the hon. member for Edmonton West (Mr. Lambert) in his television comments on the budget last Friday is reported to have said that at least two thirds of the recommendations included in the report of the House of Commons committee had been included in the tax reform.
Another criticism we hear about public participation is that the witnesses who appeared before the committee were there to defend vested rights. This is undoubtedly partially true, but those people should tell us whether they consider as being on the same level the representatives of the following organizations, who appeared before the committee: The Canadian Bankers' Association, The Canadian Pulp and Paper Producers' Association, The Canadian Manufacturers' Association, the Rio-Tinto Zinc Corporation Ltd., the Canadian Bar Association, the Canadian Construction Association, the Canadian Medical Association, the Public Service Alliance of Canada, The Saskatchewan Wheat Pool Employees Association, The Canadian Labour Congress, The Canadian Federation of Agriculture, The National Cancer Institute, The Family Vanier Institute, The National Farmers' Union, the Ontario Government, the Saskatchewan government and the Canadian Welfare Assistants Association.
Mr. Chairman, my remarks will now deal for a few minutes with the tax reform as concerns personal and corporations income tax and capital gains tax.
Many changes concerning the personal income tax are included in the bill tabled last Friday and I should like to indicate a few of them.
First, the $1,000 basic exemption was increased to $1,500 for single people, which represents a 50 per cent increase. Moreover, married people will get a $2,850 exemption instead of $2,000, which represents an increase of 42.5 per cent. A special annual $650 exemption, instead of $500, was granted persons of 65 or over, contrarily to the present system which helps only people of 70 or more.
This innovation as well the income supplement exemption, as of January 1, 1971, will be welcomed by old age pensioners and guaranteed income supplement recipients.
The Budget-Mr. Clermont
Blind persons and disabled persons confined to a bed or a wheelchair will also be entitled to special yearly deduction of $650 instead of $500.
Secondly, when two married people are working or when only one working parent is left in the family, the bill provides for the deduction of child, care expenses up to $500 per child under 14. This benefit also applies to older children mentally retarded or physically handicapped, with a ceiling of $2,000 per family, however.
Thirdly, further changes are recommended in the bill with regard to the travelling expenses of workers, medical expenses and charitable donations, the limit on which is increased to 20 per cent of the taxpayer's income from the existing limit of 10 per cent.
Salaried people will also be able to deduct their professional expenses up to 3 per cent of their employment income, with a yearly maximum of $150 and without a voucher being required. Certain moving expenses may also be deducted from income when the taxpayer moves to a new job.
As of July 1, 1971, the 3 per cent surtax will be removed and taxpayers with a taxable income under $500 will be tax exempt.
A highly controversial white paper proposal recommended the removal of the 21 per cent tax rate on the first $35,000 of corporation profits. The committee received many briefs asking that this low tax rate be maintained at least for small corporations. A number of suggestions were put forward but the problem was to define a small corporation. I welcome the proposal whereby 25 per cent of the first $50,000 of Canadian-owned private corporations income are not taxable. The government also found a formula defining small and medium businesses, that is a taxable income of up to $400,000. Thereafter the low tax rate no longer applies.
Similarly, the income to which the low rate applies must be reinvested in the company or paid to shareholders as taxable dividends. Otherwise, the benefit of the low rate will be curtailed. This is why I would have some reservations on that amount of $400,000, were not those conditions mandatory.
Another proposal that was much questioned is taxation of capital gains. Considerable reservations and earnest objections were raised on the taxation of capital gains deriving from the sale of principal residence, personal property, deemed benefits on a five year basis of widely-held corporations, and so forth.
Among the reasons given for not considering capital gains as income, was that Canada was a young country and would need all its capital. Moreover, this additional taxation would reduce savings and eliminate the risk feature.
Mr. Speaker, as the study was progressing, I felt among the witnesses the conviction that following the tax reform the capital gains would be considered as income, and some apprehension of the rules that would govern them.

June 25, 1971
The Budget-Mr. Clermont
Here is what Mr. Christopher Young, editor of The Ottawa Citizen, had to say in an article on capital gains that was published on June 17, 1971:

In terms of fundamental reform, the greatest change is the capital gains tax. Few could seriously argue that it has been fair to allow money earned from the appreciation of capital assets to go untaxed while money earned by sweat or by hard brain-twisting was assessed at ever heavier rates. Rather the argument was that a capital gains tax would inhibit the growth of an underdeveloped economy.
That position has been dubious for many years and has now been finally abandoned. To this extent, the philosophy of the Carter commission that "a buck is a buck" has been accepted, even though the impact of the new tax has been softened for both administrative and political reasons.

I consider that the Minister of Finance proposed an acceptable policy when he recommended adopting a general rule whereby 50 per cent of capital gains will be included in income, taxed at regular rates for personal or corporate income tax; allowing taxpayers to deduct 50 per cent of capital losses from half of capital gains; waiving tax on the sale of a principal residence together with one acre of land; making gains subject to taxation and losses deductible when a taxpayer sells property, makes a gift of it, or leaves it in his estate upon his death; deferring capital gains in case of gifts or bequests between spouses; and, because of deemed realization at death, abolishing federal taxes as from December 31, 1971 on estates and gifts.
I should now like to discuss budget provisions which will further facilitate our economic development which started over 18 months ago through various provisions such as, in the field of monetary policy, a considerable increase of the money supply, which has been felt since last spring. This increase resulted in a considerable decrease of interest rates, including the prime rate of chartered banks, and mortgage rates.
Between last April and February of the present year, there have been six successive reductions of the Bank of Canada discount rate bringing the 8.5 per cent rate back to 6.5 per cent. The interest rate on long term government bonds has decreased from 8.3 per cent early in 1970 to 6.85 per cent in February 1971, in the field of fiscal and financial policies. The hon. Minister of Finances introduced in his budget speech of December 3, 1970 new programs featuring additional incentives to help people, areas and industries affected by the slowing economic growth.
Let me point out a few: a 10 per cent increase in unemployment insurance benefit, until the coming into effect of the new program on July 1, 1971; a $23 million program designed to improve public buildings in areas severely hit by unemployment; a program through which $20 million were earmarked for the construction of roads and the development of services at the Montreal International Airport; funds to the Central Mortgage and Housing Corporation; a special loan program whereby an
amount of $160 million was provided for undertaking immediate labour intensive projects.
In the field of social security, the increase in the guaranteed income supplement came into effect on April 1, 1971. This increase has raised by almost $200 million the benefits to persons who receive this supplement.
In his budget speech last Friday, the Minister of Finance proposed policies to maintain and further economic expansion. The 3 per cent surtax on personal and corporate income tax is abolished as of July 1, 1971. The 12 per cent sales tax will be removed as of now from all anti-pollution equipment. This exemption will apply to all machinery and apparatus bought by manufacturers and producers for the detection, prevention, elimination and reduction of water, soil and air pollution.
The duty-free entry of production machinery not available in Canada and considered to be in the public interest will extend to sawmills and logging operations in order to help the lumber industry. The suspension for a period of two years of the J of a cent per gallon duty on heavy fuel oils will help offset sizeable price increases incurred by pulp and paper producers and power utilities. The last three measures will serve as an incentive to the pulp and paper industry which is now facing a very delicate situation involving several thousands of plant and bush workers and, in many instances, farmers.
The immediate elimination of the 15 per cent excise tax on recreational equipment such as television sets, radios and high-fidelity systems will no doubt relieve consumers in an area which has greatly suffered from the recent economic situation.
In concluding, Mr. Speaker, I would like to call the attention of the government and especially that of the hon. Minister of Industry, Trade and Commerce (Mr. Pepin) who, I believe, will be travelling to China from June 25 to July 4. He will be accompanied by a delegation of federal and provincial government officials and by representatives from the private sector, one of them being delegated by the pulp and paper industry, and I hope the party will meet with people who will be interested in purchasing pulp and paper products.
It is well known, Mr. Speaker, that the pulp and paper industry has been experiencing difficulties for some time. Several explanations are put forward, but it seems to me that our decreasing exports are one of the main reasons. Our exports to the United States have diminished by more than 5 per cent during the first four months of this year and we are well aware of the significance of our exports, especially when in the province of Quebec 72 per cent of that production goes abroad. Our exports to Europe have decreased by 19 per cent during the same period.
I hope that this delegation will do its utmost to interest the Chinese in buying our pulp and paper products, thus enabling the workers in that industry to view the future with more confidence, because I know that on a few occasions since January 1, 1970, in various industries throughout Quebec-and I believe that the same situation prevails in other provinces-some workers have been

June 25, 1971

asked to stay away from work for one or two weeks. I hope that this delegation will be in a position to bring back good news to the pulp and paper industry.


Gérard Laprise: Mr. Speaker, the budget speech on June 18 brought but very minor tax relief. The Minister of Finance (Mr. Benson) obviously wanted to have it both ways.
The basic income tax exemption, as proposed, does not meet the requirements of the cost of living which increased constantly since the last war, and nothing indicates that this will stop since solutions tried by governments are the same which have generated this inflationary run.
The poor who make up one third of the people have little hope, and each budget and each session leave them more deceived.
The minister has announced the elimination of the 12 per cent sale tax on margarine. Yet, I have heard no cry of joy from the dairy producers, especially those from the east. The margarine trust is more powerful and, no doubt, contributes more to election funds.
The hon. minister also announced the removal of the 15 per cent excise tax on television sets, radios and high fidelity equipment. This is all very well for those who can afford them. I think however that it would have been preferable to make it possible for low income families to have a house of their own.
The budget statement does not make many proposals on housing. The sales tax on building materials should have been repealed in the first place. Indeed, in my opinion-and this opinion is shared by my colleagues of the Social Credit-our principle should be: to each family its own house. It has been found in many walks of our society that a high number of our Canadian families, because of a clearly inadequate income, cannot have decent housing and have to live in chicken coops and pay inflated rents. When I say chicken coops, Mr. Speaker, I refer to high-rise buildings where people must live, without sun, space or fresh air. Those public housing projects are not suitable for human beings, who are not meant to be fattened and slaughtered like poultry. On the contrary, everywhere where such chicken coops have been built, the children's health was found to be worse than elsewhere, because they don't get any sun, exrcise or fresh air. In multiple housing, the mothers' health is affected and, according to recent surveys, the suicide rate is the highest there, due to nervous breakdowns.
Mr. Speaker, the federal government is primarily responsible for our banking system and our monetary and tax policies. Therefore, it should see to it that each family has a house to live in. To achieve this purpose, it must first of all abolish the 11 per cent sales tax on building materials.
The Minister of Regional Economic Expansion (Mr. Marchand) is distributing here and there some rather important subsidies for the construction of sawmills specifically designed for building materials. However, the Minister of Finance is levying an 11 per cent tax on
The Budget-Mr. Laprise
those building materials thus preventing the consumers, workers and family heads to purchase a house, because that 11 per cent tax considerably increases the cost of housing and the down payment on a house is higher. So low income people-those we have been trying to help in the last few months-find it difficult to buy a house even though the interest rates on loans have been somewhat reduced.
And at this stage, Mr Speaker, I would like to say that when a small wage earner applies for a loan either with Central Mortgage & Housing Corporation or with an authorized lender, he commits himself, as everybody else, to pay a rather high interest for 20, 25 or even 35 years, not only on the price of the house, but also on the 11 per cent tax on building materials. So it is obvious that this 11 per cent tax cripples the construction industry. In fact, its removal should have been a priority in the budget brought down by the Minister of Finance.

There is no mention in either the budget speech or the tax proposals of that 11 p. 100 tax.
Moreover, a fund should be set up to provide for the housing needs of everyone and especially the low income groups. Low interest bearing loans should be granted to those wishing to buy their own home. The present rate of interest for people earning up to $6000 a year is 7J p. 100. This is a lower rate than for other loans, but then again, Mr. Speaker, it is clear that for those with a yearly income of $4,000 to $6,000, that rate is still too high and requires them to make large payments.
The Minister without Portfolio responsible for housing (Mr. Andras), has announced, some time ago, that p. 100 loans would be granted to those earning less than $6,000 a year. As can be seen, poor people as always, are looked after last. But they also have to contend with a shortage of funds and red tape.
The cost allowed for a single dwelling is so low, taking into account the requirements like salaries, taxes and charges for services, that contractors almost have to build rows of poor quality houses. A few weeks ago I visited a housing development in Pointe-Gatineau and I was scandalized to see the kind of shacks that had been built there during the winter. Five years from now, these houses will be in a worse state than those they have replaced. Worst of all, the municipalities are now objecting to the construction of low-cost housing.
The mayor of Laval, Mr. Jacques Tetreault, stated recently that this low-cost housing program is not viable for municipalities because the cost for installing the infrastructure, that is drains, sewers, water lines, streets and lighting, is higher than the revenue in taxes from theses houses. Many municipalities prefer $30,000 to $50,000 houses to $11,000 or $12,000 houses for construction. That is obvious since the tax rate is much higher and the services required are much greater. So, the municipalities obviously prefer that houses worth $50,000

June 25, 1971
The Budget-Mr. Laprise
be built, rather than $11,000, $12,000 or $15,000 houses, as is intended for low income groups. According to the mayor of Laval, the infrastructure for multiple dwellings is less expensive because they can shelter more families in less space.
This is why they recommend building those high-rise chicken coops to accommodate low-income families, which only deprives them of space and fresh air. It must be recognized that a family which lives in its own house is in a better position to educate its children. For instance, if I own a garden, a lawn, flowers, I must see that my children do not destroy these flowers and this garden. If I bring up my children in such conditions, I am almost sure that they will not destroy the neighbour's garden or flowers. But if the children do not know what planting and cultivating a flower means, they do not know its value and they destroy the neighbour's, because they have not had the proper education.
Low-income families cannot own their homes because the municipalities cannot balance their expenditures and revenue.
Mr. Speaker, we all know in what situation municipalities are now because of the high cost of credit.
The Laval mayor added that the substructure to allow
for the construction of 128 new houses would cost $287,880; that $37,425 would have to be paid annually to reimburse capital and interest, that is a total of $748,508 or $460,925 in interest, in other words almost twice the amount of the $287,880 loan.
This means that under the present system, to plan for the construction of 128 homes in Laval for low-income families, the municipality would have to pay financiers $460,925 over the next twenty years. A system that forces a municipality to pay double the value of the services it must provide for 128 low rent housing units is ridiculous. Meanwhile, people with low income will have to pay back twice or three times the price of their houses.
That is surely profitable for lenders or financiers, but I think the population, not the financiers, should get the most out of it. That is why the Social Credit has been urging the government for a long time to grant interest-free loans to municipalities, particularly when the minister in charge of housing has obtained from the cabinet permission to make funds available to building contractors for houses designed for low-income families.
The minister should have obtained at the same time permiss on to make interest-free loans to municipalities that will have to provide services and a substructure for construction, at least for new developments.
The municipalities would not have had any reason for complaining in this respect about the program proposed by the minister responsible for housing. They would rather have fully accepted this program, but on account of the expenses in which the municipalities are thereby involved, it happens that quite a number of them are concerned because these expenses will have to be borne out by other homeowners.
Sometime ago, the Canadian Federation of Mayors and Municipalities submitted a brief to the government and, among other things, they said and I quote:
Be it resolved that the Federal and Provincial Governments be asked to undertake, after consultation with the municipal associations, the establishment of a specialized municipal credit institution or institutions to facilitate municipal borrowing for capital works.
It is made quite clear in the Minister's response that the Federal Government rejects the Resolution and is not interested in pursuing the matter any further. Unfortunately this constitutes a rejection of the principle of tri level co-operation in the most important area after taxation. We recognize, and it is recorded in the resolution, where Local Government sits in relation to the Federal Government. We are forced to ask whether the Federal Government is justified in rejecting our suggestions in the manner that has become traditional. Further, we are forced to ask how the Federal Government can reconcile the creation of a Ministry of Urban Affairs through which it "seeks, by making rational efforts in these fields, and through consultation with those most directly concerned, to help Canadians reach and implement the decision that will determine their urban future" with its rejection of tri level co-operation in the area of capital financing.
I continue the quotation.
We ask as well how the Federal Government can extend interest free lending privileges to under developed nations while refusing to extend those same privileges to underprivileged municipalities that are so numerous in Canada.
Mr. Speaker, this quotation speaks by itself.
Considering the great number of low income families that do not own a home, one realizes that this is to the advantage of slum owners in the province of Quebec. The government decided last year and again this year to grant further subsidies for the building of homes for low income people.
As I said a while ago, municipalities have to cope with financial problems. As a matter of fact, I know that in some cases especially in Quebec, 50 per cent of their budget goes to pay the interest on the municipal debt. In such conditions, they can no longer look after development especially housing development. That is why we are justified in calling for interest-free loans to municipalities so that they may set up the infrastructures required for housing development.
Secondly,-and the Minister of Finance should have mentioned it in his speech last Friday-we call for the removal of the 11 per cent sales tax on building materials since, by encouraging the construction industry, we would fight unemployment. Moreover, as a result of a booming building trade, families could get better homes, find employment and participate in the development of their country.
I deeply regret that the budget speech and the proposed tax reform do not contain anything in that connection. Even though in some parts of this speech, the Canadian people are led to believe that taxes have been cut, when one considers the whole speech, one realizes that the same old tax formula has been shuffled and that the Canadian taxpayer will end up paying more than before.

June 25, 1971

Even if this budget seems to bring relief to some, it is disappointing for the Canadian people.


Mr. Derek Blackburn (Brant):: Mr. Speaker, it is with a great deal of pleasure that I make my first intervention in the debates of this House as the member for the constituency of Brant.


Some hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: The constituency of Brant has been well described as a microcosm of Canada. It combines urban and rural areas. It uniquely reflects the critical interdependence between the industrial and agricultural sectors of our economy. It is also a riding which has suffered disastrous blows from the failures of the federal government's policies. Ottawa's war against inflation has produced a level of unemployment in Brant which is well above the national average. At the present time between
3,000	and 4,000 people are seeking employment in my constituency. At every turn their efforts to build a future based upon secure employment or to pick up the pieces after a ruinous lay-off are being hamstrung by the federal government's policies.
The strangling of Brant's economic growth because of the war against inflation has been bad enough. But Ottawa's failure to grapple with the critical issue of foreign ownership has made matters worse. Branch plant jobs in my constituency have simply been scrapped and have been exported to the United States. Student unemployment has received absolutely no federal attention at all. The hastily glued-together Opportunities for Youth program has seen fit to accept only three projects from Brant which will employ, at a maximum, only 20 students. The result is that the unemployment situation in Brant continues to be critical. Given all the economic forecasts, it is not likely to fall below 3,000 in the next 12 months and will rise sharply again this winter.
A dramatic reversal in our country's economic and agricultural policies is desperately needed if the problems of Brant and of Canada are to be solved. I would like to highlight the need for change in this country's agricultural policies. One of the major industries in Brantford is the production of farm machinery. To a considerable extent, the economic fortunes of the city are determined by how well things are going at the Massey-Ferguson plant and the White Farm Equipment plant.
When agriculture in western Canada is backed up against the wall, when wheat farmers are paid not to produce, when the federal government deliberately sets out to force people off the land and shut down farms, when prairie farmers are given stabilization payments which merely act as severance pay for their exit from the industry, when Ontario farmers face the squeeze to get out of business and receive only indifferent price support, industrial workers in my constituency are in trouble. All industrial workers suffer indirectly from a decline in agriculture, but Massey-Ferguson workers and White Farm Equipment workers are hit hard, and direct-
The Budget-Mr. Blackburn
ly, in the teeth. The federal government's task force report on agriculture does not only spell trouble for rural Canada, it spells trouble for all of Canada, and the industrial workers of my constituency are sharing the brunt of Ottawa's program to downgrade rural Canada and lower the boom on the family farm.
I wish to emphasize this point. The insecurity being generated in the agricultural sector of our economy leads directly to insecurity in much of the manufacturing sector. This troubled atmosphere is in turn reinforced by the incomprehensible economic policies of a government obsessed with the interests of bankers, oil companies, mining companies, insurance companies and, as the hon. member for Duvernay (Mr. Kierans) has pointed out, its own electoral fortunes at the expense of rational economic development.
In the name of widows and orphans the government has embarked on an anti-inflationary policy which it knew would bring misery and havoc to the lives of hundreds of thousands of Canadians. In the name of preserving our export markets it embarked on policies it knew would drive the Canadian exchange rate higher, threatening the jobs of workers in the pulp and paper industry, the petrochemical industry and, in my own constituency, a Westinghouse plant in the electronics industry. There is no consolation at all to the people of Brant in the budget proposal which removes the excise tax on television, stereo and other electronic equipment now that Westinghouse has irrevocably decided to close its plant this summer. This much needed tax relief has simply been too slow and has come too late to save this particular plant and the hundreds of jobs involved.
The government has employed its trained mandarins, particularly John Young of the Prices and Incomes Commission and Louis Rasminsky of the Bank of Canada, running around the country creating false concern about runaway inflation. There is no support for the oft expressed view of the government that inflation builds on itself. On the contrary, unemployment, especially deliberately created unemployment, leads to further stagnation, to further unemployment and to further misery. All of this is well known in Brant, particularly to the workers at Massey-Ferguson, White Farm Equipment and Stirling Action Keys Limited. When lay-offs and unemployment are the order of the day, it is apprehension and uncertainty that build on themselves. No one knows who will be next. No one knows which American-owned company will sacrifice its Canadian operation, scrap Canadian jobs and set up production elsewhere.
The Minister of Finance (Mr. Benson) cited with some satisfaction the fact that personal savings are at a record high. The minister should ask himself why this is so. In the kind of atmosphere his policies have created, a person who does not know whether he will have a job next week or next month is not going to take the little money he has left over after paying the bills to buy a new television set or a refrigerator or perhaps some little luxury that his family has been looking forward to. At a

June 25, 1971
The Budget-Mr. Blackburn
time when jobs are not secure, people save their money in case they are next to join the unemployed. You do not buy luxuries or other things you can do without for the time being when you are not even sure you will be able to pay for necessities if you are laid off. The fact that personal savings are high and that lots of consumer credit is available may seem like the best basis for an economic recovery to the minister but not to the voter, who knows that it is really a measure of the misery the minister has created.
On reading the budget presentation of the Minister of Finance I was impressed by his use of the word "confidence"-the most used and abused word in his repertoire. Everyone will agree that confidence is necessary. The Canadian people have a right to expect that their government is pursuing policies of full employment and vibrant growth. They have a right to be confident in this expectation. Unfortunately, all the minister does is talk about confidence. He does little to inspire it. Confidence is not created by saying the word over and over again. Confidence is created by clear and decisive action, not by continually asserting that up is down and black is white. Who can be confident about a government that runs away from tax reform with its tail between its legs after being bludgeoned by the American oil companies and the mining companies?
In the by-election campaign in Brant we called for tax reform. We called for the elimination of loopholes that enable big business to avoid paying their fair share of taxes. The results of the Brant by-election should have assured the minister that he need not have been afraid of the people of this country. They support tax reform. Yet what have they been given? Even the feeble half measures of the white paper on taxation, that might have been a beginning of reform, have been dropped. The corporate lobbies have been doubly successful, not only in the lavish sums of money they spent on their special interest, which is pleading "tax deductible", but they influenced the minister beyond their wildest expectations.
Low and middle-income Canadians have received a few breaks, such as the increased exemptions, the $150 deduction for working expenses, allowances for working mothers and the exemption of family homes from the capital gains tax, but the fact of the matter is that this is not tax reform. It does nothing to shift taxation on to the basis of ability to pay. It does nothing to eliminate corporate freeloading. It does nothing to close business and mining loopholes. The average Canadian will continue to pay more than his fair share of taxes. No wonder big business is smiling these days-all the way to the bank.
The economic policy section of the budget is disappointingly no more than a defence of the past policies of the government. The minister should have introduced a budget designed to achieve full employment. The people of this country want the government to demonstrate in action, not words, that it is committed to full employment. The Prime Minister (Mr. Trudeau) should have recognized this on his recent trip to Toronto. He was greeted by a group of workers who had been laid off at Northern Electric just last Friday. They were part of a
group of 500 workers that have been laid off in the midst of the Minister of Finance's "mythical recovery".
According to reports in the Toronto Globe and Mail and the Montreal Gazette, the Prime Minister offered jobs to the men and women who presented him with their problems, with all the aplomb of Marie Antoinette passing out cake. "I can find a job for you in Thompson", he said to one worker. "I can get a job for you in Subdbury", he said to another. If nothing else, the Prime Minister appears to have developed connections during his three years in office. If he has 4,000 more connections,
I have that many unemployed workers in my constituency who I would be happy to refer to him. One of the things he has not developed is sensitivity. To a girl who asked how he proposed she should pay her way to northern Manitoba in order to get a job, the Prime Minister replied, "Get a job as a maid." Apart from the insulting nature of his comment, surely the point is that her grievance was that she did not have a job. Advising her to solve her problem by getting a job is certainly the depth of something.
The Prime Minister also knows that Thompson, Manitoba, and Sudbury, Ontario, are not immune from lay-offs and unemployment, though I think there is probably more hope in Manitoba. Canadian workers are not lazy, as the Prime Minister would have us believe, nor do they lack initiative, as he constantly implies. They are unwilling to pack up all their belongings and leave their homes in Brantford, or Paris or elsewhere to go to Thompson and Sudbury if they are just as likely to be laid off there as they are in their own home towns. They will not trade one form of insecurity for another. The American-owned corporations of Manitoba are just as capricious as those of southern Ontario, and subject to the same pressures from abroad.
It is interesting that the Prime Minister should immediately think of Canada's resource frontier when it comes to jobs. If he would allow his thinking the freedom of moving one step further on its own, he might come to share the concern of increasing numbers of Canadians that this is precisely the area where jobs are being thrown away, or exported-largely to the United States, to be more precise.
In the long-run, structural unemployment in Canada is going to creep higher and higher unless our rich heritage of resources is processed and manufactured right here in Canada instead of being shipped abroad in their raw state giving others the jobs involved in turning them into finished products. If Canada is ever to undertake this project of using our own resources to create long-term employment for our own people, the federal government will have to get on with the job of repatriating our economy-which is even more important than the Constitution-so that we, rather than foreigners, have control over the disposition of our birthright.
In conclusion, Mr. Speaker, Canadians both urban and rural are becoming increasingly aware that the sacrifices they have been asked to make by the federal government do not make sense. They are right. They know they do not have to put up with these sacrifices, and they are not.

June 25, 1971

They are saying no to Ottawa at every available opportunity. I plead with the government, on behalf of the voters of Brant and of all Canadians, to listen to their demands for a change of direction and for full employment now, not two or three years from now.


Mr. Prosper Boulanger (Mercier):: Mr. Speaker, 1 should like to congratulate the hon. member for Brant (Mr. Blackburn) who has just made his maiden speech. Being a very polite member, I am not going to start attacking what he said. Although his speech was very good, I must say it was not all from his heart; rather, it must have come from the Socialist party and its researchers. I am sure that life in Canada is not as bad as he is trying to make out. I am also sure that some of us Canadians still like living in this country and are happy about it. As the hon. member says, we do have to keep improving things, but I think in his first speech he should have been a little more optimistic and it would have been much nicer. I congratulate him, anyway.


Donald Stovel Macdonald: He needs a better speech writer than Orlikow.


Prosper Boulanger: Mr. Speaker I am pleased to report about what happened in the House this week. Therefore I would like to deal with two matters that seem very important to me.
First, I shall deal with the financial statement the Minister of Finance (Mr. Benson) made last week in the House. Thus, we will be able to appreciate the efforts made by our government in order to establish a just society.
Secondly, I shall deal with the parties across the floor which are more eager to get at the government than to support its policies. So let us look together, Mr. Speaker, at the contents of this budget which the opposition has started criticizing even before reading it.
First, it has two very distinct parts: the budget itself and then the tax reform with which I shall deal.
It is suggested that the personal exemption be increased from $1,000 to $1,500, for the single citizen. Since every taxpayer will still be able to benefit from the $100 deduction, he will therefore deduct a total amount of $1,600 when he completes his income tax return. As for the individual who is married, he will be able to substract $2,950, which is quite a lot, for the time being at least.
Mr. Speaker, we have often noted that the opposition was accusing the government of neglecting senior citizens. However, the old age pension and the guaranteed income supplement were increased. Furthermore, in order to improve the situation of the aged, the government proposes that older people who are single have a personal exemption amounting to $2,250. And to those who are married, the government would eventually grant a personal exemption of $3,600.
Mr. Speaker, in order to help those families where both parents work, or the married couples of which only
The Budget-Mr. Boulanger
one partner is working, the government propose a deductible amount of $500. Such an exemption would permit a deduction for the cost of child care.
If we take a quick look at the government proposal, we find once again that the liberal party, at the federal level, is working towards an objective that has always been dear to it, that is justice and welfare for all.
Whatever some hon. members of the opposition may think, those are our views.
Mr. Speaker, the government has often been attacked with impunity, on the grounds that its policies were designed for the benefit of one class of society only, the well-to-do. It is primarily the Socialists who were constantly repeating this. Nothing is further from the truth. The provisions now brought forward attest the extent of the federal government's concern with the plight of low wage-earners. It should not be thought that the Socialists alone are anxious to protect the small wage-earner: we constantly have him in mind, whatever the opposition may say to the contrary. When I say "the opposition", I am excluding the official opposition which seems, to my view, somewhat less fanatical than some Socialists and Creditistes, although they nevertheless are the opposition.
But the Socialists, with their twaddle, deserve to be told our way of thinking from time to time and that is what I am trying to do. In my view there are different classes in the opposition, when you compare the Conservation opposition and smaller parties, such as Socialists and Creditistes.
There are differences in class between members of the House, among whom there are specialists, experts and men of responsibility.


Some hon. Members:: Oh, oh!


Prosper Boulanger: Can't you take it? I was afraid they could not take it. But Socialists are supposed to be tough, so just listen to me.


Mr. Peters:: The same sort of phonies!


Prosper Boulanger: Some time ago, Mr. Speaker, the government hastened to elaborate policies for the purpose of creating jobs-

Regardless of whether you believe it ot not.

The budget presented before this House on December 3, 1970, contained a series of measures and programs designed to stimulate the economy both on a short- and a long-term basis. They were all aimed, Mr. Speaker, at improving the conditions of those who are entitled to benefit from this society of plenty, like anyone else.
When we hear socialists claiming to be able to solve our country's problem with a single stroke of a pencil or by coming to power, as they have been dreaming of
June 25, 1971

The Budget-Mr. Boulanger
doing it for a long time, it becomes apparent that they are not always telling the truth.
This budget then should be considered as an expansionary budget which gives satisfaction to all Canadians, since it involves a reduction in the tax burden. Thanks to this budget, we will be in a better position to help increase the taxpayer's purchasing power and hence to promote our economic growth.
In this budget, Mr. Speaker, the government suggests a change of definition for income, so that our fiscal policy be more equitable to the taxpayer in general. We suggest that more so far untaped elements of income be included in the definition, including deduction of new expenses from taxable income.
Taking a close look at those proposals, Mr. Speaker, we observe that the reform of the tax system applies mostly to salary and wage earners who constitute the greatest number of taxpayers. It is then only reasonable that the salaried man should have a word to say in this matter. This is not the view of the socialists alone; we think so too.
The federal government, as always, aims at easing the burden of low income people.
In the same line of reasoning, he insists that small businesses should also take advantage of their Canadian "citizenship". In fact, the government of Ottawa is of the opinion that the tax system should support the ventures of free enterprise.
Let us remember that the Canadian economy depends on the vitality and aggressiveness of small but developing concerns. The reduced rate of taxation now applicable to part of their income is insufficient as an incentive. However, the proposed adjustment of this rate can be useful in encouraging initiative by helping small companies to accumulate enough capital for their expansion.
In conclusion, I would like to say that this tax system seems more effective and more equitable. As the Minister of Finance once said, if we start from the principle that our society is undergoing a deep change, we cannot but agree that the tax reform answers the changing needs. Mr. Speaker, the very foundation of our society lies on private enterprise, whatever the socialists may say. Those whom we call the small wage earners must be made to benefit from the principle of justice in Canada. This is why I think the budget brought down by the Minister of Finance is the result of a sustained effort to strike a balance between justice and free enterprise.
As for the oppositon, I think it is less a real opposition to the proposed measures than a traditional negative criticism lacking any sense of co-operation. I sincerely think the government could introduce any kind of measure and the opposition would immediately start crying blue murder without even asking themselves if it is needed legislation. This is why I have no intention of prosecuting the opposition for I would only be playing their own game.
When I talk of the opposition, I mean particularly the little opposition-the socialists and the Creditistes. I shall
restrict myself to quoting figures and examples showing that the opposition parties quite often direct more or less serious criticisms at the government and, often, at the Prime Minister (Mr. Trudeau). That will be the conclusion of my comments.
It is unfortunate that the member for Abitibi (Mr. Laprise) left the House. There is one Creditiste member remaining, who is a good friend, and I hope he can accept my remarks. The famous official leader of the Social Credit, the member for Temiscamingue (Mr. Caouette), seems to possess the necessary qualifications to be a politician and to be devoted to his work in the House, which he never leaves. By his own account, he is always here to accomplish a never-ending task. I am going to give you some information that may surprise many, Mr. Speaker, including the Creditistes on the other side. For the past few months, opposition parties, particularly-and I mean "particularly"-the Ralliement Creditiste, which we now call Credit social in French and Social Credit in English, to avoid confusion with the party of the Premier of British Columbia, have tried to create the impression that the Prime Minister is not in Ottawa often enough and that he travels too much.
I hope hon. members are paying special attention to my remarks. I conducted a little survey of my own, as assistant government whip, and I found in Hansard the following statistics: out of 250 votes taken in the House from the 1968 election to June 1971, the Rt. Hon. Prime Minister, member for Mount Royal, participated in 190, which represents an average attendance in the House of 76 per cent. The Leader of the official Opposition, the hon. member for Halifax, (Mr. Stanfield), participated in 183 votes, or an average of 70.3 per cent, and the new socialist leader, the hon. member for York South (Mr. Lewis) participated in 170 votes, for a 68 per cent average. As far as the miracle worker is concerned, the leader of the Ralliement Creditiste, he took part in 44 votes out of 250 that is an average attendance in the House of 17.6 per cent. Those are the exact figures, and no nonsense. The famous leader of the Ralliement Creditiste always throws to our faces: You are never in attendance in the House, you, government members! This is an example of his famour work in the House.
For a member who continually talks about the banking system and who, as a member of the Committee on Finance, Trade and Economic Affairs, has studied the banking system reform and is supposed to be an expert in the matter, he attended none of the committee meetings during the previous Parliament. This means that the Social Credit leader is no more thoughtful in the House than he is elsewhere. It is high time we stopped taking him seriously.
Here is a further example of statements by another member of the Creditiste opposition. Hardly a few days after the election in Trois-Rivieres-I was waiting for a special opportunity to reply and I am taking advantage of the debate on the budget statement to do so-the hon. member for Shefford (Mr. Rondeau), whom I call the whip-socket and the train-bearer of the Social Credit leader-took the floor to express another platitude. He
[Mr. Boulanger.)
June 25, 1971

started a silly rumour to stir some members or provoke laughter because he finds his platitudes so funny that he laughs about them as he tells them. It was on my return from the by-election in Trois-Rivieres where I had the honour to work for our candidate, now member for Trois-Rivieres (Mr. Lajoie), who has won, in my opinion, a well deserved victory. The hon. member for Shefford rose in one of these early morning moods, not quite awake, yet bright enough to think of telling this House a good joke. He asked the Minister of Indian Affairs and Northern Development (Mr. Chretien): Is the hon. member for Mercier going to have the hot pants that he promised delivered to the ladies in Trois-Rivieres?
Let me say that the ladies are truly pretty in Trois-Rivieres. I did see some of them in hot pants, and they were a sight for sore yes. But, unfortunately, I never thought of making such a deal. So, this is a lie, a falsehood and a platitude such as the hon. member is capable of.
I know that the platitude he said is a lie, because I never at any time pronounced a public speech, first of all because there was no meeting. We had society meetings, and we made door to door calls, but never such platitudes as those were uttered by me or our new House member. However, I can say to the hon. member for Shefford that if I ever have to offer hot pants, I would offer him a pair which would fit a three year old child, because I suppose his intellectual quotient is about the same as a child's that age.
Here is the way some of those so-called defenders of the Canadian race, experts in everything, behave-in English we would say: Jack of all trades, master of none. I took this opportunity to answer them. It is not in my nature to make personal remarks, but I have been attacked falsely, first by the leader of the Social Credit, who accuses me of never being present in this House. In fact, I have always been here, except last year when I had a car accident. If I answered back, it was to make him and the member for Shefford understand that platitudes or lies should not be made publicly.
In conclusion, I will try to be a little nicer and point out that some members should at least in the House be more serious than they have been for some time. I agree that opposition is necessary in the House, but we should not witness the things to which I referred.
I hope that the members opposite, especially the Socialists, will refrain from playing politics, that they will try to be a little more serious and stop discrediting other members. Whether we are Socialists, Creditistes, Conservatives or Liberals I know that we are here to help the Canadian people and not to say platitudes we hear all day long. By criticizing the government in this way we contribute to depreciate the House of Commons and the representatives of the people. I hope that my advice will be followed once and for all.


Mr. Ambrose Hubert Peddle (Grand Falls-White Bay-Labrador):: Mr. Speaker, the budget as it pertains to what is left of 1971 is virtually of no consequence. The consen-
The Budget-Mr. Peddle
sus of almost every expert in the country who has looked at this budget and the very modest measures embodied in it is that it will have virtually no effect upon the desperate employment situation we now have in the province of Newfoundland.
To begin with, the removal of the 3 per cent surtax would mean for the vast majority of the wage and salary earners in that province a tax reduction that would barely equal the cost of a bottle of Newfoundland screech. Since it is 3 per cent for only a half year and not for a full year, I doubt very much, if a half bottle were obtainable, that it would buy a half bottle of screech; but since many people in Newfoundland cannot afford it now because one-fifth of them are on welfare, it means virtually nothing.
It is obvious that the Minister of Finance (Mr. Benson) should have cut taxes last December. Instead, he chose to greatly expand government spending, which is typical of the Liberal approach to things, that the government knows better how to spend the people's money than the people do themselves. In my province, whenever we have any money we do not need anybody to tell us how to spend it. The trouble is that the Minister of Finance has kept the tax rate so high that he has not left anything to spend anyway, even if the people of Newfoundland had any jobs.
As for the so-called tax reform, in Newfoundland we have an expression for a big noise that does not mean anything, that is, a great big thunderstorm with very little rain. It is fair to say that the minister's tax changes for next year are a lot better than those proposed in the white paper but, as someone has said, it is somewhat like the relief one feels when one thinks he has cancer in both lungs and the doctor tells him it is only in one.
What started out as a catastrophe in the white paper finally wound up as just more of the finance minister's patching and painting of the same leaky, old hull. He can keep fixing, stitching, patching and scratching until Moby Dick comes in again, but the old ship ain't going to float any better. I could compare this government to the old vessel, the Avalon Voyageur, that plied the route between the island part of Newfoundland and Labrador last summer. Much needed to be done to her; she was in bad shape. The Department of Transport insisted that so many alterations needed to be done that the owners decided there was only one sensible thing to do and that was to scrap her. I am suggesting that the only thing the people of Canada can do today to this leaky old government is scrap it.


Some hon. Members:: Hear, hear!


Ambrose Hubert Peddle: All these changes, these so-called tax reforms, are hardly worth, as we say down our way, a bucket of caplin at the height of the season. The minister could easily have done this three years ago. There is no reason in the world why any time since the Liberals took over and mismanaged our economy they could not have
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June 25, 1971
The Budget-Mr. Peddle
given relief to such people as old age pensioners who are receiving a guaranteed income supplement, and those in the very low-income bracket. It certainly did not require ten years to raise the basic exemption and to give relief to the working man while continuing a tax system that gives every break to the corporations.
I have in my hand the budget and the documents that support it. I took the trouble to weigh the budget and the various documents and explanations that were appended to it, and I find that the whole package weighs five pounds and one ounce.


Mr. Osier:: It is good for the paper industry.


Ambrose Hubert Peddle: I am sure it was not devised for that. What I am suggesting is that as we go on, the budget gets heavier and heavier. It is the typical Liberal outlook. When times get tough and the obvious explanations will not suffice, you offer a little more and a little faster, you put in a few more inches and pounds of paper and the poor, unsuspecting public will think it is a great thing.
Today we celebrate, for want of a better word-"celebrate" is not the word I would like to use, but the right word escapes me-the third year of the emperor's reign. In 1968 he convinced the multitudes that following June 25 of that year their society would become pervaded by sweetness and light and, above all, by justice. He convinced them, also, that their various regions, by the simple expedient of a fair distribution of the nation's great wealth, would be cleansed forever of that pestilential curse known as regional disparity. So the multitudes, with some exceptions from the far east and from the far west, flocked to the polls to register their approval of this saviour who had so skillfully appeared to promise nothing while promising everything.
I will not quote his exact words but will paraphrase what he said. He said, "I will not be browbeaten and intimidated into making promises. Other, lesser politicians have been guilty of that and I despise that type of dishonest approach to the electorate." What he said in effect was, "I will simply promise a just society and the unceasing efforts of my government toward the elimination of regional disparity." So three years ago today the electorate pondered this and came to the conclusion that no one in Canada could possibly wish for anything more than complete justice and equality.
The Prime Minister (Mr. Trudeau) promised the moon, at the same time deploring the lesser politicians who had made promises of more industries, highways, social security, employment and such mundane things. We know the results. Following June 25, 1968, the multitudes waited with bated breath for the society to become more just and for regional disparity to disappear. Some expected that some of the things would come to pass on the morning of June 26, but alas, three years have passed and what do we find? We find that unemployment, which for a number of years was a really serious problem only in certain pockets or areas of the country, has become a desperate problem all across the country. We could say, in a negative sense I suppose, that regional disparity has been decreased in that now the unemployed in Newfoundland can take great consolation from the fact that thousands now are unemployed in British Columbia, Ontario, Quebec, and so on. That is very small consolation.
We know what happened to the just society. The Prime Minister himself would now rather avoid that expression. He admits it was only a slogan, and right now he does not believe too much in slogans. But it was a pretty serious business about the month of June, 1968. It was not labelled then as only a slogan. I have not given any particular thought to this question but it might be a good time now to deal with in a cursory way the accomplishments of the government which is three years old today.
One of the things that stands out is the emasculation of Parliament, the spreading of Parliament all over this area known as Parliament Hill-all the different offices, and so on. It is part of the system of checks and balances. As part of that system the Prime Minister introduced participatory democracy. The Prime Minister considerably legalized abortions, and as a part of his checks and balances system he recognized the Vatican, and later on arranged for family allowances to be increased. He recognized Red China, visited Russia and signed a protocol, whatever that is. He completely ignores the United States, or does almost the next thing to it.
He recognized the status of women. He gave some recognition to it anyway, and shortly afterwards he married. If anybody asks him now, he says, "The wife is home working, washing the dishes"-just what a good wife should be doing. He deliberately increased unemployment-that is a fact by his own admission-and to balance that we have an increase in unemployment insurance coming up. One could go all the way down the list and find this system of checks and balances; that is the only way I know how to describe it. Somebody said that this budget was a cosmetic job. Well, it is quite a mud-pack; but I say that on close scrutiny, which it is receiving now from the Canadian people, it will be found that many wrinkles have not been covered. The hon. member who preceded me dwelt a good bit on hot pants. I do not know what that has to do with it.
We had a great furore the night the so-called budget, the tax reform documents were delivered. Hon. gentlemen who backed the Minister of Finance figured "This is it." Had an election been called that night it might very well have been it because the people of Canada might not have been given an opportunity to give any kind of analysis to this five pounds of political pap.
The budget mentions margarine. I do not want to play on words but I cannot help but feel it is a budget with something for everyone and very little for anyone. The word "margarine" conjures up the idea of something to spread and it is my honest opinion that this budget, while it offers something for everybody it is spread pretty darned thin and by the time next year comes around there will be many people having second thoughts. So despite his protestations to the contrary, I think it might be a good idea if the Prime Minister did

June 25, 1971

call an election this fall before people really start to analyse this budget and see it for what it is worth.
While it is not an election budget, as some people have said, I think that it could be. The Prime Minister, his cohorts, helpers, and what have you, are going all across the country now. He has started to try to gauge the reaction of the people to this budget. Recently we watched the Prime Minister. As I say, he is travelling the country trying to repeat the magic of 1968. I have been watching television. I do not think it is my party prejudice that is responsible, but I notice a difference in the ages of the people gathering around the Prime Minister when he goes into school areas and shopping plazas. I will admit that there are still squeals, but I suggest they are halfhearted. I suggest they have a hollow ring to them.
Most hon. members will remember when they stopped believing in Santa Claus but did not feel quite ready to let their parents in on that fact. They did not want their parents to feel bad. Their parents were enjoying the idea of Santa Claus, so the children said, "We will let them go on believing that we believe in Santa Claus for another year." This is how I figure out the type of squeals that are now coming.


Mr. Deachman:: On a point of order, Mr. Speaker, I wonder if the hon. member could give us a halfhearted squeal so that we could have it on the record.


Ambrose Hubert Peddle: Mr. Speaker, if that is the professional heckler who has been appointed to look after my remarks, I suggest somebody go back and have another go. I was trying to say that obviously the Prime Minister is at it again. He is out across the country. He is going to see just what is the feeling of the people. The squealers are much younger than they were in 1968, and I say there is much less spontaneity to them. I think it is the old Santa Claus bit and that in the coming year there won't be any squeals. If there are any squeals in the coming year it will be as a result of the Prime Minister seeing that some of his cohorts are dispersed around crowds with hat pins.
He is the great projector and he is at it again, projecting images. In the past three years the government has been very active in psychoanalysing people. We see countless young men roaming through the corridors of this building and in the other buildings on the hill, on all six floors. Most of them are bearded. I have nothing against beards, but his particular type, the most dangerous ones, have little spots of beards and they have gold-rimmed glasses. Some of them look down at the floor as if deep in prayer, and others are gazing up to heaven as if for inspiration. These are the people who are attached to the Prime Minister's office and who are in other departments of government psychoanalysing people. They are identifying friends and studying behaviour patterns. They are getting ready to fly more "white paper" kites. This is what they are up to-subtlety, trickery, arrogance, contempt of tradition, all sponsored by the government.
The government, in my humble opinion, has done everything in the last three years but govern responsibly.
24171-45J
The Budget-Mr. Peddle
This is a government of so-called sweeping reform. Every reform it brings in is sweeping. This has been a government of omnibus bills, legislative measures about two inches thick, on the old principle that if you want your ice cream you have to take your cod liver oil, trying to put the opposition in the position that if it wants to accept the little good that is in a bill it has to accept the bad that is in it. Hon. members across the way know what I am talking about-and I say it is not fair, it is not right and it is not just.
In his budget speech the Minister of Finance said that a tax system not only has to be fair but it has to appear to be fair. I suggest there was more emphasis on the "has to appear to be fair" than concern for whether it was fair or not. This is the idea: If this five pounds of stuff appears to be fair long enough to get us through the next election, that looks after everything.
p.ra.)


Some hon. Members:: Hear, hear!


Ambrose Hubert Peddle: There is no doubt about it, Mr. Speaker, this is deliberate confusion. In the first newspaper reports this was called a happy budget, a "something for everybody" budget. I have already pointed out, as have others, that while there may be something for everybody, there is indeed very little for anybody in this budget.


Prosper Boulanger: You thought it was so good last week that we were to fight an election on it.


Ambrose Hubert Peddle: I would have the hon. member who just interjected know that I am one of those who is putting up some of the fancy scotch on the fact that the Prime Minister would not dare call an election this fall.
This is a government of sweeping reforms, omnibus bills, deliberate confusion almost too bold to comprehend. The idea is: We will do what we want. The people of Canada expected more and in 1968 they were led to believe they would get more. They did not expect the Prime Minister to follow the old line of politics that has been going on since time immemorial-three or four years of doing what they like and then a buttered-up budget that says: Though we have done everything we could to hurt you in the last three years, now we have given you relief in taxes and you will give us another mandate so that we can do it all again.
The people of this country expected more, Mr. Speaker, and I expected more. For some time I had a little admiration for the Prime Minister because he gave the impression he was going to give the Canadian people something different. However, he has turned out to be one of the same old gang, only worse. There is nothing but political trickery-lure the voters, get their votes and then after three or four years turn around and do the same thing. Right now they are going to give the pensioners a break, those who are getting the guaranteed income supplement. If it is unfair at this point, what of July 1 or January 1? If it is unfair to tax that supple-
June 25, 1971

The Budget-Mr. Dupras
ment, surely it has been unfair every year since its introduction.


Some hon. Members:: Hear, hear!


Ambrose Hubert Peddle: If it is unfair now to give some tax relief to the low-income people, surely it has been unfair for a number of years. Why must they wait 5i years? There is no reason in the world, Mr. Speaker, except the one that I have mentioned: If you want ice cream you have to take your cod liver oil. What about the $500 extra exemption? What about the people who paid tax on that all those years: are they now supposed to automatically support this government? Absolute nonsense!
The results of the seven provincial elections in the last year or so show that people are not going to start thanking the government for a measure introduced just before an election. They are going to develop memories and kick out any government trying to play that kind of game. If a business corporation engaged in such deliberate confusion, such blatant deception, such misrepresentation such blindfolding of the devil in the dark, the Minister of Consumer and Corporate Affairs (Mr. Basford) would move in and have the principals in jail before you could say Jack Robinson.
In my opinion, the only way this government could be re-elected is if all the voters in Canada went on pot on polling day and voted in a rosy, love-everybody stupor. They could not be expected to return this government from any practical, common sense considerations.


Mr. Maurice Dupras (Labelle):: Mr. Speaker, I wish to commend the hon. member for Grand Falls-White Bay-Labrador (Mr. Peddle) for his enthusiasm in reminding hon. members of this House of the great event that took place three years ago today, the election of the party I represent.


Harold Warren Danforth: That was a national tragedy.


Maurice Dupras: Mr. Speaker, it is an honour and a privilege for me to take part in this debate on the budget brought down on Friday, June 18th, by the Minister of Finance (Mr. Benson). This document was anxiously awaited by all Canadians because it follows the White Paper which was an important step in the evolution of the Canadian democracy.
The White Paper was tabled almost 18 months ago. Its object was to propose the required tax reforms through which the prosperity of the whole population could be ensured. The White Paper was the result of a popular consultation which gave rise to many comments, and even criticisms, some useful, constructive as well as considered suggestions likely to help the government in elaborating a tax policy for and by Canadians. It must be repeated here, for some may have already forgotten, that the White Paper was only a popular consultation, and not a draft bill changing the tax policy.
The new budget will ensure a better distribution of the tax burden Canadians must accept in order to keep
enjoying all the services provided by the federal government.
Mr. Speaker, I hope that my contribution to this debate will influence those who were unfavourably impressed.
During the entire speech of the Minister of Finance, the faces of opposition members, who seemed to undergo a Chinese torture, expressed very well the feelings that came over them as the tax measures in the budget were announced, and what the opposition considered a hardship was greeted by all Canadians with enthusiasm and relief.
One needs only to read editorials and see the general public's reaction to realize that the popular and realistic budget measures will bring prosperity to Canada, but that will not prevent the people opposite, who seem to lack of imagination, to reel off their aggressive nonsense.
The Canadian people already look upon them without sympathy. They are greatly disappointed by the favorable response expressed by the Canadian people.

Let us examine some of the measures, particularly those that are going to benefit the average worker, that is, the majority of the taxpayers; the measures which will bring to every working Canadian a larger share of the wealth of the nation.

of heavy fuels and which represents for the pulp and paper industry a saving of over $3,500,000.
The reduction of the taxes applying to petrochemical raw materials will also assist this industry. The petrochemical industry has deserved the support and admiration of Parliament; it is among those which have made the greatest technological progress in Canada. It is therefore important that this industry should keep on making progress and remain in the forefront of modern industries.
It is a disgrace that the leader of the opposition (Mr. Stanfield) should refuse to realize the numerous possibilities offered by the budget to fight unemployment. Well before the budget debate is over and even before we can benefit from all the budgetary measures, I am sure we will be blamed for pump-priming economy, for creating new employment and for restoring consumers' confidence just to create inflation.
The budget contains several measures which will gradually deal with our unacceptable and unfair unemployment situation to the benefit of the many citizens who want to contribute to their country's prosperity.

In their speeches, opposition members keep on forecasting that unemployment rate will sustain no decrease. Their speeches are a tissue of lies. One might wonder whether they want unemployment to increase rather than decrease.
The Quebec government has already expressed satisfaction about the federal government's recommendations concerning the tax reforms put forward in the budget, saying that the federal government has taken into account the recommendations made throughout the consultations. Such a statement is a faithful interpretation of the feelings of most Canadians in my province, which was confirmed when I had an opportunity to approach a large number of my fellow citizens on the matter since the introduction of the budget.

The 4,700,000 taxpayers, Mr. Speaker, who will see a reduction of their share of taxes do not agree with the Leader of the Opposition (Mr. Stanfield) who claimed on television that the budget is a washout. The one million taxpayers who would have paid taxes next year but who have been removed from the tax rolls because of greater exemptions do not share the opinion of the opposition parties when they call the budget a flop.
All taxpayers who claim married status and derive their income solely through wages and salaries will pay less taxes in 1972 than they are now paying. Also, all those filing as single taxpayers and making $8,000 a year or less as income from their employment will be paying less tax. The measures that favour working mothers will have the effect of making it easier for them to rejoin and remain in the labour force if they wish. That is a widespread practice of the seventies which brings in first-class labour. All the measures enumerated in the budget will mean improvements in personal disposal income,
The Budget-Mr. Dupras
thus creating a greater demand for goods and services and, undoubtedly, an increase in personal savings.
Many people will not agree with those who resist progress for the sake of being against the government and, for the sake of gaining political popularity, resist any evolution in the administration of this great country of ours. The opposition is saying that the Liberals only look at figures and graphs and not at people, yet in the same breath they call this an election budget. They should make up their minds; they cannot have it both ways. As they have said, you can't have the best of two worlds. Perhaps we should accept the fact that a party which has been away from power as long it has tend to develop a negative approach to everything that is progressive, and becomes deplorably hopeless.


An hon. Member:: How true.


Maurice Dupras: Of course, the parties that never have exercised power, and never will, can promise almost anything and continue to live in a make-believe world. This budget has permitted Canadians to rediscover the acrobatic talents of the Leader of the Official Opposition and other opposition parties which have admitted in public their approval of a good number of the budgetary measures. The Leader of the Opposition even ventured to say that the budget contains many good features. Of course it does. The people of Canada know it and the media know it, as do all of us here; however, not all will admit it.
Now, Mr. Speaker, I would like to deal with another subject, which has to do with the answer given by the Premier of the province of Quebec on the proposed charter of Victoria. The leader of the New Democratic Party should be reminded that he is not authorized to speak on behalf of the population of the province of Quebec.


Some hon. Members:: Hear, hear!


Maurice Dupras: He should respect the will of the province that sent his party to pasture in the election of 1968. His party will suffer the same fate in that province in the next general election.


Prosper Boulanger: It will be worse; they will gain even fewer seats.


Maurice Dupras: That is no wonder when we consider who leads that party in Quebec, Mr. Speaker. The intervention of the leader of that party today was in very bad taste and I deny him the right to speak for a population that has so strongly rejected his party.

Mr. Speaker, before concluding, I would like to make some sense-if possible-out of the statement made by the hon. member for Prince Edward-Hastings (Mr. Hees), which has bewildered the members of his party, as usual. Recognizing the great popularity of this budget, he forecasts general elections in the fall.
May I be allowed to take advantage of his great generosity and have my name put on his long list of future beneficiaries?

June 25, 1971
The Budget-Mr. Thompson
Other statements from other members of his party, and as bewildering, remind me of Chantecler, the rooster which held that his vocal morning performances caused the sun to rise.


Robert Norman Thompson: Mr. Speaker, in the few minutes left at my disposal this afternoon I want to make a few pertinent comments about the budget. I must say that this budget is a lawyer's and accountant's dream, because its full impact and all its intricacies and complications will not be known to taxpayers until accountants, lawyers, Members of Parliament and officials of the Department of Finance have become more familiar with the many proposals that the budget presents.
There are a few points on the positive side for which I should like to give credit. The raising of the personal allowances to $1,500 and $2,850 is long overdue and is a good step forward. After all, it is 22 years since the former tax allowance of $1,000 was established, and the cost of living has more than doubled since then. The increase in the level of deductions applicable to senior citizens and the lowering of the qualifying age to 65 are also good moves. However, they are of little benefit to those who are not subject to income tax; they do not help those in the low-income bracket who pay no tax anyway.
I believe, also, that the dropping of the 3 per cent surtax is a positive step. I only wish there had been a measure of relief extended to those who are in greatest need as far as the working poor are concerned. I have in mind the four million or five million people whose earnings barely enable them to cope with the increased cost of living. There is not a member of this House who is not aware that many of his constituents are working for wages of between $60 and $100 a week. They have jobs, they are working, but they are nevertheless living in a measure of poverty.
I should like to compliment the minister on having doubled the deductible allowance in connection with charitable giving-the percentage has been raised from 10 per cent to 20 per cent. This is an incentive measure which helps the private sector to support many worthwhile organizations whose efforts obviously contribute to society and even save the government money. Even at the proposed new level I note we are still behind the United States, where the rate is 30 per cent, but the 20 per cent rate will be of great help to a large number of people and to church organizations and it represents a good step forward.
I think it is logical that organized sport should be included in the category qualifying as the recipients of charitable giving. This is a way of helping organized sport and athletics without increasing government handouts to a greater extent than at the present time. At the appropriate time I intend to move an amendment to include gifts given for international development or aid in this category of charitable giving. A new organization has been set up with CIDA; it is now called the non-government organizational department. I believe the money which the government spent last year and during the present year in sharing international development and relief costs with the private sector has resulted in better value being obtained than would otherwise have been the case. 1 do not think there is a better way of encouraging the private sector to share in the cost of international development or emergency aid than by allowing it the same kind of incentive as far as the tax deduction permitted for charitable giving is concerned.
There seems to be in the budget another important aspect, the fact that 750,000 people have been struck off the tax rolls. That appears a great step forward on the surface, but really the amount of money collected in the past from this group of taxpayers at the bottom of the tax rolls has barely been sufficient to defray the cost of collection. Thus, the Minister of Finance (Mr. Benson) has taken a step which is, after all, only logical. The removal of the estate tax is also, seemingly, a wise step to take especially bearing in mind the debates we have had in the House concerning this tax.
However, when one considers that the capital gains tax will produce more for the government from estates than the estate tax ever did, removal of the latter tax is not the positive step forward it appears to be on the surface. Then again, in my home province, as is the case in Saskatchewan, the provincial share, the 75 per cent of this tax collected, is refunded to the estate itself. Unless provision is made within the forthcoming legislation to allow for these circumstances, Parliament will be discriminating against the people who live in these two provinces and are entitled to this deduction according to provincial law.
With regard to the gift tax, it would seem good that it has been eliminated but as far as I can understand from the budget, so has the whole question of gifts. Thus, as the government takes away the gift tax it also takes away the allowances which might have been deductible for gifts under the old system and it really is of no advantage whatsoever. In fact, the opposite is the case.
I cannot help being concerned about the situation as it relates to the farmer. I know the basic herd concept will be allowed to continue until the end of the year. After that the capital gains arrangement will take over. It seems to me a type of legislation which has had good effect and which has been helpful to farmers in the past will be neutralized by the livestock farmer having to pay more taxes.
Another aspect I wish to mention concerns the arrangements for straight line depreciation. While it is true it will apply to assets acquired before the new system starts, depreciation will be calculated on a diminishing balance system with respect to assets acquired after the new arrangement has come into effect. In the recapture of appreciation, capital gains proposals will apply, so when he purchases equipment a farmer will find he is subject to capital gains tax on the recaptured depreciation.
Mr. Speaker, I see it is five o'clock. As we are nearing the end of the day, might I ask for five minutes more in

June 25, 1971

which to finish my remarks so that we shall be free to begin with a new speaker on Monday?


Mr. Deputy Speaker:: Is the House agreeable to allowing the hon. member to continue for five minutes?


Some hon. Members:: Agreed.


Robert Norman Thompson: I shall not take time in which to illustrate this contention, but in the buying of a farm tractor and allowing the permissible depreciation to be taken off each year, when the tractor has finished its usefulness and is turned in for another tractor the recaptured value will be subject to capital gains tax. As far as I can see, in the example I have given it would cost a farmer as much as $500, $700 or even $1,000 in capital gains tax representing tax he has not paid before.
Under present-day estate tax arrangements all farm land valued at less than $100,000 is free of estate tax. However, under the capital gains tax proposal, if the land increases in value after valuation day the farmer will be called upon to pay a capital gains tax of 50 per cent at his going rate of tax at that time. So I do not think this legislation is likely to improve the position of the farmer. In fact, as far as I can see this budget will continue to work hardship by increasing the amount of tax taken from farmers who are in a difficult enough situation whether in the Maritimes, central Canada or the west. I am most concerned in this regard.
In the over-all picture of the budget I should like to say that while we can give credit for the reduction of certain types of taxes, the general "take" of the government, on the other hand, will be much more than it was before. Obviously, you cannot take more and at the same time expect to lower the over-all amount of taxes, as the government tries to give the impression. In this regard, moving into the capital gains area, I find that the budget is certainly not as basically sound in the matter of what is called tax reform as it ought to be. I do not believe that a capital gains tax is a type of tax that we should have had at this time in Canada.
In an industrialized economy I believe it is a fair tax, but we are a long way from being industrialized. Tremendous resource development must take place if our economy is to be viable. This is why I do not think the time has come when we can enjoy the luxury of this type of tax. But if it had to come, it seems to me that the government would have been far better advised to have given a lower rate of tax recognition to long-term investment as compared to quick profit, speculative gain.
We want to encourage the Canadian people to invest their savings in the development of this country. We already have one of the highest rate of savings of any developed country in the world. It seems to me there should be a greater direct participation on the part of Canadian citizens in investment in industry and resource development in Canada. Therefore, if there had to be a
The Budget-Mr. Thompson
capital gains tax it seems to me the government would have been well advised to assess capital gains earned from long-term investment at a much lower rate than the rate applied to speculative gains and quick turnovers. I think a distinction should have been made.
I am also concerned that the budget will not give the incentive to the economy of this country that it should have given. The statistics we have received for the month of May show a greater number of Canadians working than in April, with a somewhat comparative decrease in the number of unemployed, giving the picture that we are solving unemployment, and I do not think this is the case. At the present time, the seasonally adjusted rate of unemployment is 6.3 per cent, way above the average figure of 4 per cent that the Minister of Finance said was acceptable in this country. There ought to have been ways devised whereby there would be a greater incentive to the economy of the country than that given by this budget. In fact, even the parts of the budget for which I commend the government are not going to give any genuine incentive to the economy as a whole.
I could go on to discuss other aspects of the budget, but time today does not really permit me to do so. However, in closing I do want to mention the situation relating to the over-all budgetary position of the government in the fiscal year 1970-71. As far as the estimates contained in the budget papers before us are concerned, we find the Minister of Finance budgeting for a $417.6 million deficit. If this forecast deficit is like the previous budgetary forecasts of the Minister of Finance, it will prove to be much more than this figure. He had expected a surplus of $300 million. This kind of deficit spending, for the return that we can expect from the budget, seems to me to be entirely out of reason.
Thus, although to fully understand and to see the effects of the budget will require time, I do not believe the picture is nearly as rosy and optimistic as the Minister of Finance has said it is. However, as I have said, compared with the white paper the budget is a good one. Certainly the retraction of a number of tax reform policies outlined in the white paper has given a greater sense of encouragement to Canadians across the scene. On the other hand, compared with the present system of taxation it is my opinion that this budget does not really represent any basic tax reform. We are still trying to shore-up the old approach toward equitable taxation, and it is a tragedy that the budget really did not get down to the genuine tax reform that our taxation system requires.


Mr. Reid:: Mr. Speaker, I think with unanimous consent there would be agreement to proceed with government order No. 84, which is Bill S-14, an act respecting the construction of an international highway bridge between Fort Frances, Ontario, and International Falls, Minnesota, and put it through the complete proceedings.


The Acting Speaker (Mr. Richard):: I take it the present debate is adjourned. Is it the wish of the House to revert to government order No. 84?


Some hon. Members:: Agreed.

June 25, 1971
Fort-Falls Bridge Authority Act FORT-FALLS BRIDGE AUTHORITY ACT



PROVISION FOR ESTABLISHMENT OF AUTHORITY

John Mercer Reid: Mr. Speaker, I wonder whether I could move, seconded by the hon. member for Ottawa West (Mr. Francis), that the motion be amended to read that the bill be referred to committee of the whole House.


The Acting Speaker (Mr. Richard):: Is that agreed?


Stanley Howard Knowles: Should not the motion itself first be moved, and by a minister?


The Acting Speaker (Mr. Richard):: Order. I was going to point out to the hon. member that first the motion should be put and then it could be amended.


Donald Stovel Macdonald: that Bill S-14, respecting the construction of an international highway bridge between Fort Frances, Ontario, and International Falls, Minnesota, be read the second time and referred to the Standing Committee on Transport and Communications.


John Mercer Reid: Mr. Speaker, I move that the motion be amended by deleting therefrom all the words after the word "referred" and substituting therefor the following: "to committee of the whole House".


[Stage Direction]
Motion agreed to.
Stanley Howard Knowles: Mr. Speaker, would you put the motion as amended?


The Acting Speaker (Mr. Richard):: Mr. Macdonald (Rosedale), for Mr. Sharp, seconded by Mr. Richardson, moves that Bill S-14, respecting the construction of an international highway bridge between Fort Frances, Ontario, and International Falls, Minnesota, be read the second time and referred to committee of the whole House.


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Richard in the chair.
Clauses 2 to 36 inclusive agreed to.
On clause 37-Canadian labour and materials.
Stanley Howard Knowles: Mr. Chairman, we are putting this bill through rather speedily because it does seem desirable that the bridge be built, but I should like to ask a question that applies jointly to clause 37 and clause 38.
May I say I welcome subclause 1 of clause 37 which requires that, if available, 50 per cent of the labour and materials to go into the construction of this bridge shall
[The Acting Speaker (Mr. Richard).]
be Canadian. I note also that in subclause 2 it is stipulated that the Fair Wages and Hours of Labour Act applies to Canadian labour employed by the authority. I take it this reference is to the period when the construction work is actually in progress.
While I am on my feet speaking to clause 37, may I save time by asking a question about clause 38 which is related? Does clause 38 imply that when the bridge has been completed, it having been declared to be for the general advantage of Canada, the Canada Labour (Standards) Code and the Canada Labour Code generally will apply to people who work for this authority, as is the case at the present time at Hudson Bay Mining and Smelting Company at Flin Flon, Manitoba?


Donald Stovel Macdonald: I would answer affirmatively the hon. member's first question. I would confirm the second part to the degree that this will apply to the project to the extent it is in Canada.


Stanley Howard Knowles: That is about as far as we can go, I suppose.


Donald Stovel Macdonald: That is right.
Clause 37 agreed to.
Clauses 38 to 41 inclusive agreed to.
Clause 1 agreed to.
Schedules 1 and 2 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Donald Stovel Macdonald: that the bill be read the third time and do pass.


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


Gerald William Baldwin: Mr. Speaker, I should like to make sure that when legislation does not get into the House as quickly as it should because of administrative incompetence, hon. members know that the House of Commons is always prepared to facilitate passage.


Donald Stovel Macdonald: Let me say, on the other hand, that when legislation gets to the House as the result of competence, the hon. member is prepared to block it.


Stanley Howard Knowles: May I also point out that if a bill proposing the favourable feature of Bill C-244 were brought to the House we would deal with it with the same expedition.
Motion agreed to and bill read the third time and passed.
June 25, 1971



BUSINESS OF THE HOUSE

Donald Stovel Macdonald: Mr. Speaker, I rise on a point of order regarding the business for next Monday. I wish to amend the announcement I made earlier today. The first item of business at eight o'clock will be the motion in respect of the ministry of state for urban affairs. I understand the item to follow that is to be a matter of discussion at a House leaders' meeting to be held Monday morning.


John Mercer Reid: Mr. Speaker, before calling it five o'clock, may I express my appreciation to hon. members of the House for giving speedy consideration to this bill.
Business of the House


The Acting Speaker (Mr. Richard):: The House stands adjourned until eleven o'clock Monday morning, June 28, 1971, pursuant to the order made on Wednesday, June 16, 1971.

I hope hon. members will take advantage of the good weather and the outdoors to restore their vigour and enjoy a pleasant and restful weekend. I am sure there will be immediate agreement to so improve our own constitution.
At 5.15 p.m. the House adjourned, without question put, pursuant to special order.
7359

Monday, June 28, 1971



PRIVILEGE


Stanley Howard Knowles: Mr. Speaker, I rise on a question of personal privilege. On Tuesday, June 22, as recorded in Hansard at page 7210, I sought leave of the House to present a motion asking that the Deputy Minister of Finance be called before a certain committee to explain his assertion that an unemployment level of 5 per cent of the labour force is acceptable.
On Friday of last week I received a letter from Mr. S.
S.	Reisman, Deputy Minister of Finance, in which he referred to this motion of mine and then said:
I want you to know that I have never at any time made such an assertion, in public or in private.
Although I had checked with others concerning the alleged statement, I did not have direct knowledge of it myself. Therefore I felt it was my duty to place this statement of Mr. Reisman's on record. I have done so. I accept it.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Heath Nelson Macquarrie: Mr. Speaker, I ask unanimous consent of the House to move a motion under Standing Order 43.
The motion arises from the extremely serious and urgent conclusion and revelations of the Science Council of Canada report on fisheries and wildlife resources. The report claims that statements by two members of the cabinet about the environment research into the Mackenzie pipeline proposal are not accurate and that government environmental research is unacceptably inadequate and secret in this area. Therefore I move, seconded by the hon. member for Peace River (Mr. Baldwin):
That this House instruct the government to table its research papers on the environmental problems of constructing a Mackenzie oil pipeline; and that the Department of Indian Affairs open its research flies to Science Council researchers.


Mr. Speaker:: The hon. member's proposed motion under the terms of Standing Order 43 requires unanimous consent. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity and the motion cannot be put.



OPPORTUNITIES FOR YOUTH PROGRAM-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Mac T. McCulcheon (Lamblon-Keni):: Mr. Speaker, I ask the unanimous consent of the House to present a motion under Standing Order 43. This major and pressing matter is of concern to both sides of the House. It involves the Opportunities for Youth program and more particularly the accusation by the hon. member for Cochrane (Mr. Stewart) that the Department of the Secretary of State is full of "odd-balls, kooks, radicals and even communists".
I therefore move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That this House request the Broadcasting, Films and Assistance to the Arts Committee to immediately inquire into the administration, staffing and security procedures of the Opportunities for Youth program and the Secretary of State Department; and that this House require the Secretary of State and appropriate officials to appear before the committee to facilitate its investigation.


Mr. Speaker:: This motion also requires unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity and the motion cannot be put.
*	:5s	*



PUBLIC WORKS


Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, I wish to lay on the table a petition signed by over 1,000 residents of South Western Nova wishing to have a permanent crossing across Petit Passage connecting two pieces of land on the Bay of Fundy. I hope, Mr. Speaker, you will examine it and proceed accordingly.
24171-46J

June 28. 1971
Proposed Legislation PROTECTION OF PRIVACY ACT



MEASURE RESPECTING PROTECTION AND INVASION OF PRIVACY

Hon. John N. Turner (Minister of Justice) moved: for leave to introduce Bill C-252, to amend the Criminal Code, the Crown Liability Act and the Official Secrets Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


Bryce Stuart Mackasey: for leave to introduce Bill C-253, to amend the Canada Labour Code.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


Sylvester Perry Ryan: for leave to introduce Bill C-254, respecting the establishment and administration of a fund for the mutual aid of children and older persons (Foster Grandparents).


Some hon. Members:: Explain.


Sylvester Perry Ryan: Mr. Speaker, the purpose of this bill is to help provide, at small cost, the touch of compassion which, of necessity, cannot be legislated into our statutes that provide expert care and custodial treatment, at great cost, to those of our children who are dispossessed of the kingdom that should be theirs: the handicapped in mind, body or spirit, the deserted, the neglected or the parentless. The bill proposes to establish a fund out of which expenses for transportation, meals and the like would be paid to retired citizens who could thus spend some of their time and share some of their love with children who are robbed or bereft of their birthright. The emotional and psychological enrichment to both age levels is obvious.


Mr. Speaker:: Order, please. The hon. member cannot make a speech at this time. He can make his presentation to the House when the bill comes up for second reading, but he knows that under our Standing Orders he is limited to a brief explanation to indicate what the bill is about. I think he has done that to the satisfaction of the House.


Sylvester Perry Ryan: I have finished, Mr. Speaker.


Mr. Speaker:: Is it the pleasure of the House that the hon. member shall have leave to introduce the said bill?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


Hon. Otto E. Lang (Minister of Manpower and Immigration) moved: for leave to introduce Bill C-255, to amend the Canadian Wheat Board Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


[Stage Direction]
On the order: Government Notices of Motions:
June 25, 1971-The Prime Minister: That the following address be presented to His Excellency the Governor General of Canada:
To His Excellency the Right Hon. Roland Michener, C.C., C.D., Governor General and Commander-in-Chief of Canada.
May it please Your Excellency:
The House of Commons, having considered the proposed text of the Order in Council laid upon the Table of the House on June 25, 1971, in relation to the establishment of a Ministry of State for Urban Affairs, prays that the. making of the said Order in Council be approved.
Mr. Speaker:: Pursuant to section 2 of Standing Order 21 this notice of motion is transferred to and ordered for consideration under government orders later this day.



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Orlikow: What are the names of (a) the two importations in 1969 (b) the importation in 1968 that were prohibited entry into Canada under Item 99201-1 Schedule C of the Customs Tariff Act on the grounds that they were of treasonable or seditious nature, as stated in the answer to Question Number 1,979 of the past Session?


Herbert Eser (Herb) Gray: So far
as the Department of National Revenue is concerned: (a) 1969, two importations, first importation titled "The Movement", February 1969. Second importation, 20 items titled, "Huey Newton Talks to the Movement"; "Essays from the Minister of Defence-Huey Newton"; "Black Workers in Revolt"; "The Black Panther", Volume 3, No. 9; "The Black Panther", Volume 3, No. 11; "Black Manifesto"; "Challenge", Volume 6, No. 4; "Bad Moon Rising", No. 5; "The Red Papers"; "An Introduction to S.D.S.";
[Mr. Comeau.l
June 28, 1971

"The Village Voice", July 3, 1969; "The Movement", Volume 5, No. 6; "The Movement", Volume 5, No. 7; "Old Mole", No. 17; "S.D.S. New Left Notes", Volume 4, No. 23; "S.D.S. New Left Notes", Volume 4, No. 24; "Shakedown", Volume 1, No. 1; "Shakedown", Volume 1, No. 5; "Shakedown", Volume 1, No. 6; "Bring the War Home", (b) 1967, first importation, titled "We Will Survive".
Note: As stated in the answer to Question Number 1,979 of the past session, there were no prohibitions in 1968 but there was one importation in 1967.



DEPARTMENT OF SUPPLY AND SERVICES-MAN-HOURS SAVED AS A RESULT OF USE OF COMPUTERS

Mr. Robinson: How many man-hours have been saved as a result of the utilization of computers by the Department of Supply and Services and Receiver General of Canada during each year since computers have been used?


Hon. James Richardson (Minister of Supply and Services):: The Department of Supply and Services became a Department on April 1, 1969 as a result of the Government Organization Act (1969). The new Department is composed of the former Department of Defence Production, the Comptroller of the Treasury, Department of Public Printing and Stationery, the Bureau of Management Consulting Services and the Central Data Processing Bureau.
Records of man-hour utilization were not kept by these various components in sufficient detail to enable this question to be answered.
However, the following statistics of the office of the Comptroller of the Treasury from the time of the first use of computers in 1961 until 1967 may be helpful in determining the workload volumes of major computer applications. For example, the personnel strength of the Comptroller of the Treasury in 1961 was 4,467 and this staff was increased in six years by only 47 persons to bring the total to 4,514 personnel. The workload growth for the number of cheques issued and reconciled annually increased from 53,000,000 in 1961 to 87,697,000 in 1967; the number of transactions processed into accounting statements was 2,520,000 for 1962 and rose to 10,176,000 by 1967.
As a result of the Government announcement in July, 1968 and the coming into force on April 1, 1969, of the Government Organization Act (1969) the Comptroller of the Treasury, the Central Data Processing Bureau and the Bureau of Management Consulting Services formed the Services Administration of the new Department of Supply and Services. Accordingly, it is not possible now to relate the workload statistics by computers to the utilization of man-hours of this new component of the Department of Supply and Services to the above statistics.
In the other areas of the Department, namely, the Data Processing Branch of the Printing Bureau of the Supply Administration, together with the Computer Services Bureau, the Data Processing Bureau and the Management Consulting Branch of the Services Administration, com-
Questions
puters have been and are being used for a variety of functions, many of which would probably not have been undertaken had the computers not been available.



DEPARTMENT OF SUPPLY AND SERVICES-LAY-OFFS AS A RESULT OF USE OF COMPUTERS

["The government's proposals in this regard were stated in the budget presented on June 18, 1971.\n*"]
James Armstrong Richardson: See answer to Question No. 577; (a) Nil; (b) The present strength of personnel in computer activities in the Department is 244.



Mr. Yewchuk: 1.	For the year 1969, how many corporations in Canada, on taxable income in excess of $35,000, are Canadian-owned?
2 How many now have subsidiaries abroad?


Bruce Andrew Thomas Howard: Statistics Canada (Dominion Bureau of Statistics) reports that: 1. This information is not available. Canadian ownership data, under the Corporations and Labour Unions Returns Act, to date have been related to corporations' size of assets and size of sales. The relation to taxable income is under development and will be available for the year 1969 by next fall for the first time.
2.	At the end of 1968 there were a total of 713 Canadian enterprises with subsidiaries and branches abroad, of which 416 were Canadian controlled.


PUBLIC WORKS-REPLACEMENT OF ROOFS, CARTIER SQUARE BUILDINGS, CONTRACT No. 8C-01576
Mr. Paproski: 1.	Were tenders called for contract 8C-01576, June 5, 1968, Replace roofs, A, B and C Buildings, Cartier Square and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Hon. Arthur Laing (Minister of Public Works):: 1. Yes, (a) Six tenders were received and openend on May 28,' 1968; (b) Highest tender, $90,000; lowest tender, $48,000;
(c)	Lowest tender; (d) Public advertisement, Newspapers: Ottawa and Hull.
2.	Not applicable.

June 28, 1971
Questions
3.	Heather and Little Limited.
4.	(a) (i) $2,190, John J. Lunz (Roofing Consultant), (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost breakdown by trades
Replace roofs, A, B and C buildings, Cartier Square- Contract 8C-01576
Administration,	$ 4,000
Roofing,	38,000
Sheet metal,	6,000
PUBLIC WORKS-FOREST PRODUCTS LABORATORY ALTERATIONS, CONTRACT No. CR 67-2784


Mr. Paproski: 1.	Were tenders called for contract CR-67-2784, February 21, 1968, Alterations, Forest Products Laboratory and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Arthur Laing: 1. Yes, (a) Seven tenders were received and opened on February 6, 1968. (b) Highest tender, $199,348; lowest tender, $172,523. (c) Lowest tender, (d) Public advertisement, Newspapers: Montreal, Toronto, Ottawa and Hull, La Voix de la Construction, Montreal, Daily Commercial News, Toronto, Heavy Construction News, Toronto.
2.	Not applicable.
3.	M. P. Lundy Construction Ltd.
4.	(a) (i) $5,214, Edward J. Cuhaci, Architect, (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the General Contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the General Contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost breakdown by trades
Alterations, Forest Products Laboratory, Montreal Road-
Contract CR-67-2784

Bonds, Permits, Insurance, etc.	1,800
Supervision and General Expense	5,000
Excavation and Backfill	1,500
Concrete, Forms and Reinforcing	1,500
Structural Steel (Zagerman)	13,000
Miscellaneous Metals (Carleton Iron)	7,803
Carpentry and Millwork	13,000
Fire Doors (Ambico)	1,000
Drywall	3,500
Painting	5,000
Finishing Hardware	1,500
Lab. Furniture (Essex Cabinet)	24,000
Fume Hoods (Essex Cabinet)	12,000
Conveying Systems	5,000
Mechanical (Rene Cleroux)
(a)	Plumbing	17,500(b)	Heating	9,500(c)	Sprinkler	2,800(d)	Controls	3,800(e)	Ventilation	23,220
Electrical (D. A. Servant)
(a)	Lighting and Electrical Heating	5,500(b)	Motor Controls and Transformer	6,000(c)	Relocation of Fixtures	900(d)	Branch Circuit Wiring	7,700
PUBLIC WORKS-CHAUDIERE CROSSING-BRONSON CHANNEL BRIDGE, CONTRACT No. CR-67-2785
Question No 1,142-Mr. Paproski:
1 Were tenders called for contract CR-67-2785, February 2, 1968, Reconstruction of Chaudiere Crossing, Bronson Channel Bridge and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?

June 28, 1971


Arthur Laing: 1. Yes, (a) Five tenders were received and opened on September 16, 1967. (b) Highest tender, $176,672.50; lowest tender, $128,053. (c) Lowest tender, (d) Public advertisement, Newspapers: Ottawa, Hull, Toronto and Montreal Daily Commercial News-Toronto Heavy Construction News Toronto, La voix de la Construction-Montreal.
2.	Not applicable.
3.	Cooper-Ellis Limited.
4.	(a) (i) None, (ii) $10,458.90, Wyllie & Ufnal Limited.
(a) and (b) (iii) to (x) In very few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost breakdown Contract C.R.-67-2785
(1)	Excavation for Structures,
(2)	Concrete and Grout,
(3)	Reinforcing Steel,
(4)	Steel Pier Nosing,
(5)	Asphalt Concrete Pavement,
(6)	Superstructure,
(7)	Demolition of Existing Deck
(8)	Temporary Supports for Existing
Conduits,
(9)	Field Laboratory,
Subtrade
Required to be listed Prestressed Deck for Superstructure, Francon (1966) Ltd.


PUBLIC WORKS-LANGUAGE CENTRE ALTERATIONS, CONTRACT NO. CR-67-2775
Mr. Paproski: 1.	Were tenders called for contract CR-67-2775, January 3, 1968, Alterations to Public Service Language Centre and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?

Questions


Arthur Laing: 1. Yes, (a) Twelve tenders were received and opened on December 21, 1967. (b) Highest tender, $238,670; lowest tender, $179,447; (c) Lowest tender; (d) Public advertisement, Newspapers: Montreal, Toronto, Ottawa and Hull, La Voix de la Construction, Montreal, Heavy Construction News, Toronto, Daily Commercial News, Toronto, Hebdo-Construction, Montreal.
2.	Not applicable.
3.	Baldock Engineering & Construction Ltd.
4.	(a) (i) $7,189.-Langlois and St. Denis, Architects; $2,415.-Clerk of Works, (ii) None.
(a) and (b) (iii) to (x) In every few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost breakdown by trades Alterations, Public Service Language Centre-
Contract CR-67-2775 Bonds, Permits, Insurance, etc.	$3,547
Supervision and General Expense	12,000
Excavation and Site Work	1,500
Concrete, Forms and Reinforcement	4,500
Exterior Masonry	8,000
Interior Masonry	7,000
Misc. Metals, Interior (Trudel and McAdam)	10,000
Disc. Metals, Exterior (Trudel and McAdam)	7,000
Carpentry and Millwork	9,000
Roofing, Sheet Metal and Caulking (T. P. Grawford)	1,000
Doors and Frames	2,500
Glass and Aluminum (Hull Glass)	26,000
Painting (Presley Painting and Decorating)	4,000
Plaster and Stucco	1,500
Drywall	3,000
Hardware	4,500
Chalkboards	1,600
Toilet Partitions	300
Movable Partitions	7,500
Mechanical and Sprinklers (Gendron	Plumbing and Heating) (a) Removals and Roughing	2,287
(b) Plumbing Fixtures	1,500

June 28, 1971
Questions
(c)	Heating	1,200(d)	Ventilation	1,500(e)	Outside Work	1,733(f)	Fittings	2,500(g)	Plan M 1 piping	4,100(h)	Plan M 3 Piping	3,800(i)	Plan M 5 Piping	3,000(j)	Plan M 6 Piping	3,500(k)	Plan M 7 Piping	3,880
Electrical (Ultra Electrique)
(a)	Lighting Fixtures	9,760(b)	Branch Wiring	4,160(c)	Fire Alarm	777(d)	Emergency	4,800(e)	Labour	5,503Removals	2,000Cutting and Patching	9,000


PUBLIC WORKS-POULTRY LEUKOSIS HOUSE, CONTRACT CR-67-2776
Mr. Paproski: 1.	Were tenders called for contract CR-67-2776, December 28, 1967, Construction of Poultry Leukosis House, Greenbelt Farm and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (lii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Arthur Laing: 1. Yes, (a) Six tenders were received and opened on December 12, 1967. (b) Highest tender, $97,530; lowest tender, $81,900. (c) Lowest tender, (d) Public advertisement, Newspapers: Ottawa and Hull.
2.	Not applicable.
3.	Cooper-Ellis Limited.
4.	(a) (i) $850. Estimated cost of Architectural Supervision by Department of Public Works, (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance

for subcontractors is the sole responsibility of the general contractor.
Cost Breakdown by Trades Poultry Leukosis House, Animal Diseases Research Institute, Greenbelt Farm Contract-CR-67-2776
Excavation and Backfill	$5,000
Outside Utilities-Septic Tank	3,000
Concrete	7,800
Trusses and Framing	9,000
Finish Carpentry, doors, etc.	5,000
Metal Roofing and Siding (Ideal Roofing
Ltd.)	2,000
Masonry and Terrazzo (Federal Tile-
Terrazzo only)	700
Misc. Metal, Wire partitions, lockers
(Trudel & McAdam)	4,000
Insulation	600
Painting and Epoxy (F. Grodde)	2,000
Plumbing, Heating and Ventilation)
(Lemay Plumbing & Heating Ltd.)	25,000
Electrical (Federal Electric Contractors)	10,000
Paving (McFarland Construction Ltd.)	3,600
Fencing	4,200


PUBLIC WORKS-CONSTRUCTION OF BUILDINGS. GREENBELT FARM. CONTRACT NO. CR-67-2762
Mr. Paproski: 1.	Were tenders called for contract CR-67-2762, November 3, 1967, Construction of Buildings 2B, 2D, 2AC and 55, Greenbelt Farm and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Arthur Laing: 1. Yes, (a) Five tenders were received and opened on October 17, 1967. (b) Highest tender, $377,777; lowest tender, $332,549. (c) Lowest tender, (d) Public advertisement-Newspapers: Montreal, Toronto, Ottawa and Hull.
2.	Not applicable.
3.	Taplen Construction Limited.
4.	(a) (i) $6,878.-Fisher, Tedman and Glaister, Architects. (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including
June 28, 1971

the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the General Contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost Breakdown by Trades
Buildings 2B, 2D, 2AC and 55, Animal Research Institute Development, Greenbelt Farm Contract-


CR-67-2762
[Stage Direction]
Move on Site, Permits, Bonds, etc. $ 3,568 Excavation and Backfilling: General	7,080
Excavation and Backfilling: Services	1,925
Formwork	10,842
Concrete: Work	20,062
Concrete: Hardware and Floor Finishing 3,157 Masonry Work	1,257
Rough Carpentry Work	26,206
Insulation and Vapour Barrier	1,954
Drywall	450
| Plywood Wall and Ceiling	11,809
Install Metal Siding	4,054
Install Steel Arches	3,850
Install Millwork	2,118
Steel Trusses (Truspan Ltd.)	33,768
Reinforcing Steel (Dominion Bridge Ltd.) 4,775 Place Reinforcing Steel	1,100
Structural Steel (M. Zagerman Ltd.)	4,715
Metal Cladding and Steel Deck
(Westeel-Rosco Ltd.)	20,764
Misc. Metal	1,784
Millwork	5,227
Caulking	862
Roofing and Sheet Metal	3,660
Overhead Doors	7,450
Kalamein Doors and Frames	265
Misc. Glass and Glazing	150
Painting	5,689
Toilet Partitions	255
Mesh Partitions	1,775
Weight Scales (Toledo Scale Co.)	8,053
Metal Lockers	1,192
Metal Shelving	3,954
Finishing Hardware (G. T. Green)	2,284
Chalk and Tackboard	150
Fuel Service and Pumps and Hoist
(Ottawa Valley Pump)	8,065
Work Benches	1,301
Paving (H. J. McFarland Ltd.)	18,461
Electrical Work (Federal Electric Ltd.)	27,650
Questions
Mechanical Work (Roger Lemay Ltd.)
Exterior Plumbing	5,000
Interior Plumbing	17,330
Ventilation and Heating	26,650
Winter Conditions	5,000
Overhead and Profit	16,888

Mr. Paproski: 1.	Were tenders called for contract CR-67-2748, September 1, 1967, Construction of Building 140, Central Experimental Farm and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Arthur Laing: 1. Yes,
(a)	Five tenders were received and opened on July 4, 1967;
(b) Highest tender-$158,000, lowest tender-$132,220; (c) Lowest tender; (d) Public advertisement-Newspapers: Ottawa and Hull, Daily Commercial News, Toronto.
2.	Not applicable.
3.	Herbert Brune Construction Ltd.
4.	(a) (i) $1,400-Estimated cost of Architectural supervision by Department of Public Works; (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the General Contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the General Contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the General Contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the General Contractor.
Cost Breakdown by Trades
Construction of Building 140, Central Experimental Farm Contract CR-67-2748
Excavation and Backfill	$ 4,100
Grading and Sitework	1,780
Formwork	1,200
Concrete	1,470
Masonry	13,700
Reinforcing Steel	890
Miscellaneous Metals	3,900

June 28, 1971
Questions
Glass and Glazing	700
Roofing and Sheetmetal	3,000
Structural Lumber	1,400
Millwork	8,200
Concrete Finishing	1,270
Resilient Floor	280
Carpentry	5,700
Insulation	1,780
Caulking	220
Finishing Hardware	1,100
Toilet Partitions	185
Metal Door Frames	100
Mechanical	39,580
Electrical	29,250
Drywall	1,180
Painting	950
Bonds, Insurance, Permits	1,700
General Conditions	8,585


PUBLIC WORKS-ADDITIONS TO BUILDING M-22, NRC,- CONTRACT NO. CR-67-2725
Mr. Paproski: 1.	Were tenders called for contract CR-67-2725, July 20, 1967, Additions to Building M-22, NRC, Montreal Road and, if so (a) what was the number of bids received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?


Arthur Laing: 1. Yes, (a) Seventeen tenders were received and opened on July 11, 1967. (b) Highest tender, $1,227,400.; lowest tender, $964,000. (c) Lowest tender, (d) Public advertisement, Newspapers: Montreal, Toronto, Ottawa and Hull, La Voix de la Construction, Montreal, Daily Commercial News, Toronto, Heavy Construction News, Toronto.
2.	Not applicable.
3.	A. N. Bail Company Limited.
4.	(a) (i) $22,987.-G. E. Bemi & Associates, Architects.
Inspection Services:	Steel-Donald Inspection-$4,486.
Footings & soil-McRostie, Seto & Genest-$2,437. Waterproofing-J. Lunz-$400. Roofing-J. Lunz-$850. Clerk of Works-$8,500 (ii) None.
(a) and (b) (iii) to (x) In very few cases does the Department require the general contractor to list on the tender form all the names of the subcontractors they propose using. A cost breakdown by work subdivision, as provided by the general contractor, is attached including the names of those trades which were required to be listed.
5 and 6. The contractual arrangements are directly between the Department and the general contractor. Consequently the matter of performance bonds and insurance for subcontractors is the sole responsibility of the general contractor.
Cost Breakdown by Trades
Additions to building M-22, NRC, Montreal Road-
Contract CR-67-2725
Field Organization and Installation, $ 12,500. General Conditions and profit,	35,000.
Demolition, Excavation, Grading and
Services,	20,000.
Asphalt Paving including compacted fill, 3,500. Crushed Stone Roadways and Parking
Lot,	7,500.
Concrete,	100,000.
Reinforcing Steel,	25,000.
Precast Wall Slabs (Siporex, Ottawa),	20,000.
Masonry,	55,000.
Structural Steel (Leeds, Montreal),	215,000.
Roof Deck (T. Welch, Ottawa),	15,000.
Miscellaneous Metals,	17,500.
Millwork, Carpentry, Caulking,	5,500.
Roofing,	32,500.
Damproofing and Waterproofing,	4,500.
Aluminium Doors, Frames and Windows -Glass and Glazing (Pilkington, Ottawa),	11,000.
Painting,	17,000.
Resilient Flooring,	6,500.
Ceramic Tile,	300.
Lathing, Plastering and Stucco,	57,500.
Stone Dust Floor and Fill,	9,000.
Finishing Hardware (Builders Sales Ltd.,
Ottawa),	4,400.
Specialties,	10,000.
Mechanical (John Coif or d Construction
Ltd., Ottawa),	160,800.
Electrical (Bedard Girard Ltd., Ottawa), 119,000.


OPERATION OF UNITED STATES AIR CARRIERS INTO CANADA
Mr. Dinsdale: 1.	Can foreign based air operators obtain ATC licences to fly into the wilderness?
2.	How many such licences have been granted each year for the past ten years?
3.	What measures are taken to protect Canadian artifacts when these licences are granted?


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: The Canadian Transport Commission

June 28, 1971

advises as follows: 1. Yes. United States air taxi carriers using aircraft up to 18,000 maximum weight may upon application be licensed to operate charter services into not more than 2 contiguous provinces of Canada, except that in Northwestern Ontario they are restricted to making two traffic stops, one at customs point of entry and the other at a licensed base of a Canadian charter commercial air carrier.
2.	1961, 28; 1962, 16; 1963, 0; 1964, 54; 1965, 26; 1966, 41; 1967, 51; 1968, 26; 1969, 45; 1970, 14.
3.	The Canadian Transport Commission has no authority from Parliament in this field.


RECYCLED PAPER CONTENT REQUIREMENT FOR PURCHASE BY DSS
Mr. Anderson: Does the Department of Supply and Services have a minimum recycled-paper content requirement for its paper purchases?


James Armstrong Richardson: No. The Canadian Government Specifications Board standards do not restrict the use of recycled paper.


ADJUSTMENT ASSISTANCE BOARD
Mr. Robinson: Will the federal government consider the advisability of extending the activities of the Adjustment Assistance Board beyond the expiry date of June 30, 1971?


Bruce Andrew Thomas Howard: The Automotive Manufacturing Assistance Regulations have been extended until June 30, 1973.


CPR-INQUIRY INTO PASSENGER RATE INCREASES
Mr. MacDonald (Egmonl): With respect to recently announced passenger rate increases for Canadian Pacific Railways (a) will there he an inquiry by the Prices and Incomes Commission (b) what reasons were given for this rate increase (c) on what date will it go into effect?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by the Prices and Incomes Commission and the Canadian Transport Commission as follows: (a) During 1970 the Prices and Incomes Commission undertook a detailed review of increased railway rates under the 1970 price restraint program. This review which included all the increases implemented in 1970 was published in late July and showed that the increases instituted by the railways came clearly within the criteria of the program. The Commission is keeping the situation under continued surveillance but does not propose at this time to undertake a full-scale review of proposed rail fare increases; (b) Canadian Pacific stated that the increases were designed to reduce financial losses sustained in the operation of certain intercity passenger-train services, particularly the sleeping and dining car services; (c) June 1, 1971.
Questions


CHARGES LAID UNDER NARCOTIC CONTROL ACT AND FOOD AND DRUGS ACT
Mr. McQuaid: 1.	Since January 1, 1968 to date, how many charges have been laid in King's and Queen's Counties, respectively, in the Province of Prince Edward Island under (a) the Narcotic Control Act (b) the Food and Drugs Act?
2.	Of the charges laid under each Act, how many (a) have resulted in convictions (b) have been dismissed (c) are still pending?
3.	What was the name of the lawyer or lawyers representing the Crown in each case?
4.	What was the total amount paid to date to the attorney or attorneys representing the Crown?
5.	How many accounts, submitted to date by the Crown Attorneys, have not been paid and what is the amount of the unpaid accounts?


Hon. John C. Munro (Minister of National Health and Welfare):: 1.
Charges Laid
Queen's County King's County
(a) Narcotic Control Act	39	2(b) Food and Drugs Act	7	12.	Disposition of Charges
(b)
Dismissal
(a)	or	(c)
Laid Conviction Withdrawal Pending
(i)	Narcotic Control
Act	41	23	15	3
(ii)	Food and Drugs
Act	8	2	2	4
3.	Existing records do not enable the connection of a particular lawyer to a specific case; however the names of lawyers representing the Crown in the above cases are:
Mr. Joseph A. Ghiz )
Mr. D. F. Sigsworth } All of Charlottetown, P.E.I. Mr. Bert Campbell )
4.	Total amounts paid to these lawyers to date are:
Mr. Joseph A. Ghiz	$ 3,039.70
Mr. D. F. Sigsworth	18,838.00
Mr. Bert Campbell	165.00
5.	No Crown Counsel accounts for Prince Edward Island are pending.


ASBESTOS, QUE.-CONSTRUCTION OF NEW POST OFFICE
Mr. Beaudoin: 1.	Will a new post office be built in Asbestos, Quebec and, if so, on what site?
2.	What amount has the government allocated to this project?
3.	On what date will construction (a) start (b) be completed?
4.	What services other than a post office will this building accommodate?


Arthur Laing: 1. Yes, on a site N.W. of Olivier Blvd. with frontages on St! Hubert Street and First Avenue.

June 28, 1971
Questions
2.	$325,000. has been allotted in the Main Estimates.
3.	(a) August 1971, (b) January 1972 (Estimated).
4.	Manpower and Immigration Department and the Unemployment Insurance Commission.


SAINT-ANSELME (BELLECHASSE), QUEBEC-CONSTRUCTION OF FOYER SAINT-ANSELME INC.
Mr. Lambert (Bellechasse): Has the government provided any financial help for the construction of Foyer Saint-Anselme Inc. in Saint-Anselme (Bellechasse) Quebec and, if so (a) what was the amount (b) what were the conditions?


Robert Knight Andras: (a) (b) Central Mortgage Housing Corporation has not provided any financial help for the construction of Foyer Saint-Anselme Inc., in Saint-Anselme (Bellechasse), Quebec.


CBC-PRODUCTION OF FILM FOR SENIOR CITIZENS
Mr. Mather: 1.	Is CBC giving consideration to the production and televising of a specific program for the enjoyment of senior citizens?
2.	Is consideration being given to involving senior citizens in such programming?


Hon. Gerard Pelletier (Secretary of State):: I am informed that the Canadian Broadcasting Corporation is conscious that it should reflect the life and interests of senior citizens. No specific program series exists or is being planned, but the CBC is aware that it has a social responsibility in ensuring that elderly people do not lose their sense of participation in Canadian society. It is felt that the national broadcasting service of the CBC provides a balanced program fare of information, enlightenment and entertainment to meet the widely varying tastes of all ages, classes, geographical and other groups, in reasonably fair proportion. Some of the program series which have featured material of special interest to elderly people include "Voice of the Pioneer", "Matinee", "Concern", "Gerussi", "A votre service", "Un homme vous ecoute", and "Present", on radio, and "Take 30", 'Tuesday Night", "Weekend", "Man Alive", "Format 30", "Format 60" and "Femme d'aujourd'hui", on television. There are many other programs and program items of course, which are appreciated by adult audiences as a whole including the older adult age groups. CBC production personnel have been asked to keep in mind the contribution that can be made to national broadcasting by elderly persons because of their past experience and knowledge.


CANADIAN WHEAT BOARD-SALE OF FEED BARLEY
Mr. Lambert (Bellechasse): 1.	From May 1, 1970 to May 1, 1971, how much feed barley did the Canadian Wheat Board sell on the export market and at what prices?
2.	During the same period, how much feed barley did the Canadian Wheat Board sell in the Province of Quebec and at what prices?


Otto Emil Lang: 1 and 2. As a matter of commercial practice it is not the policy of the Canadian Wheat Board to divulge the price at which specific quantities of grain have been sold.


CANADA WATER ACT-ESTABLISHMENT OF WATER QUALITY MANAGEMENT AREAS
Mr. Harding: 1.	How many water quality management areas have been established under the Canada Water Act to date and what is the location of each?
2.	How many water quality management areas are now being negotiated and what is the location of each?


Mr. Eymard Corbin (Parliamentary Secretary to Minister of the Environment):: 1. None has been established to date.
2. No negotiations are underway to establish water quality management areas. Discussions have been held with the provincial officials involved, but these have not yet reached the stage of formal negotiations. Under the authority of the Canada Water Act the federal government in cooperation with provincial governments is undertaking a number of comprehensive river basin studies in major basins across the country.


PORT OF VANCOUVER POLICE FORCE
Mr. Mather: 1.	Has the National Harbours Board replaced the Army veterans security force with a new police force at the Port of Vancouver and, if so (a) how many veterans were formerly on staff (b) how many were retained (c) what was the annual cost of the veterans guard service (d) what is the annual cost of the new police force?
2.	What is the cost for the rental of the headquarters building?
3.	Are the lessees of the sheds being charged for the security service and, if so, at what rate?


Gérard Duquet: The National Harbours Board advises as follows: 1. The National Harbours Board replaced its security guard force at the Port of Vancouver with NHB policemen on June 9, 1969. The NHB never employed an Army Veterans Security force at the port but did employ 13 security guards, and 8 were veterans, (a) eight; (b) all 13 security guards retained in positions at higher salaries; (c) security services cost $184,154 in 1968; (d) police services cost $317,288 for 28 men in 1970.
2.	Rental for police buildings is $522 per month.
3.	Lessees are not specifically charged for security and police costs are factored as recoverable costs in determining revenues.


BELLECHASSE CONSTITUENCY-RAILWAY CROSSING SIGNALS INSTALLED 1968-70 INCLUSIVE
Mr. Lambert (Bellechasse): Did the government instal any blinking signals at railway crossings in the constituency of Bellechasse during the years

June 28, 1971

1968, 1969 and 1970, following a request by the Quebec Department of Highways and, if so (a) at what locations (b) what was the cost of each project?


Gérard Duquet: The Canadian Transport Commission advises as follows: Automatic protection consisting of flashing light signals and bell was authorized at railway crossings in the constituency of Bellechasse following a request of the Quebec Department of Roads at the following locations:
1968-	Nil.
1969-	8th and 9th Range Road, Notre Dame du Ro-saire, mile 154.18 Monk Subd. CNR Authorized by order No. R-4362 dated January 9, 1969. The actual cost of this installation was $13,865.09, with the committee contributing 80 per cent, or $11,092.07. 9th Range Front Road, St. Damien de Buckland, mile 178.91 Monk Subd., CNR Authorized by order No. R-6415 dated August 12, 1969. The actual cost of this installation was $16,745.55, with the committee contributing 80 per cent, or $13,396.44.
1970-	Station Road, Ste. Justine, mile 50.44 Chaudiere Subd., Q.C.R. Authorized by order No. R-10012 dated October 27, 1970. The estimated cost of this installation is $16,900 and the committee's contribution is limited to 80 per cent, or $13,520.
The apportionment of the balance of the cost of the above noted installation was assessed 12J per cent to the Quebec Department of Roads and the balance of the cost to the respective railways.


LOSS OF REVENUE TO PRODUCERS OF WHEAT, OATS AND BARLEY-JUNE 1, 1970-MAY 31, 1971
Mr. Mazankowski: Has the unpegging of the dollar and corresponding reduction in the selling price of export grains caused any loss of revenue to the producers for the following grains (a) wheat (b) oats (c) barley, for the period June 1, 1970 to May 31, 1971 and, if so, what was the amount?


Otto Emil Lang: Canadian grain prices are adjusted in accordance with the exchange rate of the Canadian dollar and a number of other factors affecting their competitive position. It is not possible to determine the extent to which any particular competitive factor producer returns.
1971 CENSUS


Mr. Mazankowski: 1.	How many people are employed as census-takers for the 1971 Census?
2.	How many of those employed are students?
3.	How many census-takers hold another job?
4.	How many married women are employed as census-takers?
5 What is the total estimated cost of the 1971 Census?
6.	How many 1971 Census forms will be picked up by the census-takers?
7.	How many forms will be returned by mail?


Bruce Andrew Thomas Howard: Statistics Canada (Dominion Bureau of Statistics) reports that: 1. Approxi-
Questions
mately 42,000 Census Representatives (Census-takers) have been employed for the 1971 Census.
2.	Figures are not yet available, but it is known that a large number, probably in the order of several thousand, were students during the past year and are employed as census representatives.
3.	To be hired as a Census Representative, it is necessary that the candidate be able to attend the training sessions and be available to work full time for the duration of the assignment. It is not known how may have other jobs to which they may return after their census work is completed.
4.	This information is not available.
5.	For the fiscal year 1971/72 the cost of the Census is estimated at $35,000,000. The total cost of the 1971 Census, including preparatory work, acquisition of supplies, printing of forms, etc. prior to 1971/72, and tabulation, publication and dissemination of data subsequent to 1971/72 is in the order of $50,000,000.
6.	Some 2,200,000 forms were distributed to households in the pick-up areas for subsequent retrieval by Census Representatives.
7.	Some 3,600,000 forms were distributed in the mail-back areas. Any of these which are not mailed back will be picked up by Census Representatives.


PUBLIC WORKS-CONFERENCE, MONTEBELLO. QUEBEC
Mr. Schumacher: 1.	How many officials of the Department of Public Works attended the conference at Montebello, Quebec during the period April 19 to April 21, 1971?
2.	What mode of transportation was involved by each person attending the conference?
3.	Was there any registration fee involved and, if so, what was the amount of such registration fee, in each case?
4.	Did any expenses involve wives or families of those attending and, if so, what was the amount in each case?
5.	What mode of transportation was involved for anyone accompanying those persons attending the conference?


Arthur Laing: 1.
Fifty-five officials.
2.	By air to Ottawa: 3 from Atlantic Region; 2 from Western Region; 3 from Pacific Region. The remainder used privately owned motor cars, as drivers or pessen-gers, as did the eight noted above, for the portion Ottawa to Montebello.
3.	No.
4.	Yes; the wife of one of the senior officials. This official was to retire shortly after the conference on medical grounds and it was thought to be prudent in the circumstances to have his wife accompany him. They remained one night only and the charge was $21.70.
5.	Privately owned motor car.


POSSIBILITY OF ESTABLISHING DEPARTMENT OF SMALL BUSINESS AFFAIRS
Mr. Robinson: Will the government consider the advisability of designating a part of the Department of Industry, Trade and Commerce as a Department of Small Business Affairs?

June 28, 1971
Questions


Bruce Andrew Thomas Howard: All of the services and programs of the Department of Industry, Trade and Commerce in Canada and abroad are at the disposal of the business community, both small and large.


TENDERS FOR PAINTING JOBS-VALCARTIER MILITARY BASE
Mr. Godin: In the past year, did the government call for tenders for painting jobs at the military base of Valcartier and, if so (a) how many contractors tendered (b) what are the names and the addresses of the contractors who were awarded the contracts (c) what was the cost?


James Alexander Jerome: In so far as the Department of Supply and Services is concerned:
Yes-there were two (2) tenders called for painting at the military base of Valcartier.
Tender No. 1	Tender No. 2
(a)	Eight (8)	Ten (10)(b)	Gagnon and	Marcoux Adjutor PouliotENR	2507 Chemin Ste-Foy608 Aqueduc	Quebec 10, Quebec
Quebec 8, Quebec
(c)	$10,000	$5,175
In so far as the Department of National Defence is concerned:
Yes, as follows:
Contract	(a)
Exterior Painting 45 Buildings	4
Exterior Painting 408 PMQ's	2
Exterior Painting 77 PMQ's	4
Exterior Painting Levis Armoury	8
Interior Painting Grande Allee Armoury	7
Interior Painting 23 Buildings	8
Interior Paintings 240 PMQ's	5
Interior Painting	9


OFF-LOADING OF COD-PORT ALBERNI, B.C.
Mr. Barnett: 1.	Approximately how many cubic feet does one ton of flake ice occupy?
2.	Approximately how many cubic feet does one ton of cod occupy?
3.	Were 13,727 pounds of cod, off-loaded from the MFV Jo-Marc on January 27, 1971, at Port Albemi, British Columbia and subsequently transported to Vancouver and, if so, what are the inside dimensions of the truck box used?
(b)	(c)
Raymor Co. Ltd., 635 Guimond Ind. Park Longueuil, P.Q.	$34,710
Benayoun & Larocque Ltee., 2435 Chemin Ste-Foy, Quebec, P.Q.	$99,800
Benayoun & Larocque Ltee., 2435 Chemin Ste-Foy, Quebec, P.Q.	$33,460
Raymor Co. Ltd., 635 Guimond Ind. Park, Longueuil, P.Q.	$7,300
Clarke & Co. Contractors Ltd., 353 St. Nicolas Street, Montreal 125, P.Q.	$16,840
Benayoun & Larocque Ltee., 2435 Chemin Ste-Foy, Quebec, P.Q.	$27,800
Robert Frenette Inc., 2496 rue Guimont Trois Rivieres, P.Q.	$85,945
Windsor Painting Contractors Limited, 31 Third Avenue, Trenton, Ontario	$54,000


Eymard G. Corbin: 1. One ton (2240 lbs.) of flake ice occupies approximately 57 cubic feet of space.
2.	One ton (2240 lbs.) of cod occupies approximately 39 cubic feet of space.
3.	Yes. Thirteen thousand, seven hundred and twenty-seven lbs. of cod were off-loaded from the MFV Jo-Marc on January 27th, 1971, at Port Albemi, B.C., and subsequently transported to Vancouver. The inside dimensions of the truck body used for transporting this fish were 4' x 74' x 134'.

June 28, 1971


AIR AND SHIPPING SERVICES BETWEEN CANADA AND THE COMMONWEALTH CARIBBEAN
Mr. Macquarrie: 1.	What air service between Canada and the Commonwealth Caribbean is now provided by Canadian air lines?
2.	In each case, when was the service inaugurated?
3.	Since the inception of the services, what has been the annual passenger total?
Air Service
Montreal-Toronto-Bermuda
Montreal-Toronto-Nassau, Bahamas
Montreal-Toronto-Kingston, Jamaica
Montreal-Toronto-Barbados
Montreal-Toronto-Montego Bay, Jamaica
Montreal-Toronto-Port of Spain, Trinidad and Tobago
Montreal-Toronto-Antigua
Montreal-Toronto-Freeport, Bahamas
Halifax-Bermuda
Orders for Returns
4.	What regular commercial shipping service between Canada and the Commonwealth Caribbean is now in operation?
5.	What subsidy is being paid by the government for such shipping service?


Gérard Duquet: The Canadian Transport Commission advises as follows: 1 and 2.
Airline	Date of Inauguration
Air	Canada	May, 1948	Air	Canada	December,	1948Air	Canada	December,	1948Air	Canada	December,	1949Air	Canada	December,	1953Air	Canada	December,	1958Air	Canada	December,	1958Air	Canada	December,	1965Air	Canada	December,	19653.	Except in the case of Canada-U.S. transborder statistics which are published by agreement between the two countries, origin and destination statistics on international routes are not made public.4.	Three shipping lines are now in operation between Canada and the Commonwealth Caribbean, providing services as follows: a. Saguenay: Agents: Saguenay Shipping Ltd., 1060 University St., Montreal, Que. i. From: Port Alfred, Montreal, Halifax; To: Bermuda, Kingston, St. Lucia, St. Vincent, Grenada, ii. From: Port Alfred, Montreal, Halifax; To: Dominica, St. Kitts, Antigua, Bridgetown, Port of Spain, Georgetown, iii. From: Port Alfred, Montreal, Chandler, Saint John, N.B. To: Nassau, Kingston, Port Esquivel. (Container service available).b.	Caribbean Container Line: Agents: Lillis Marine Agencies Limited, 300 Sacrement St., Montreal, Que. From: Halifax-(intermodal service from Toronto and Montreal). To: Bermuda, Nassau, Jamaica. (Fully containerized weekly service).c.	Great Lakes Transcaribbean Line: Agents: Protos Shipping Limited, 160 Bay St., Toronto, Ont. i. From: Hamilton, Toronto, Montreal; To: Barbados and Trinidad, ii. From: Hamilton, Toronto, Montreal; To: Jamaica.5.	None.


POSSIBLE INCREASE IN FINANCIAL ASSISTANCE TO XCAN
Mr. Southam: Is it the intention of the government to provide an increase in financial assistance to XCAN so that this organization can step-up sales activities with a view to penetrating world markets to a much greater degree for Canadian grains?


Otto Emil Lang: In October 1970 the government announced that it proposed to intensify its support of grain market development activities and would be prepared to make available financial support for specific projects
to be undertaken jointly with industry whenever possible. The government and officials concerned with grain marketing are working closely with all parts of the industry, including XCAN, with a view to increasing exports of Canadian grains and oilseeds.


CANADA WATER ACT-WATER QUALITY MANAGEMENT AREA, FRASER RIVER BASIN
Mr. Goode: Are plans now underway to have the Fraser River basin in British Columbia designated as a water quality management area under the Canada Water Act and, if so, when is it estimated that such designation will take place?


Eymard G. Corbin: No.


INCOME TAX EXEMPTIONS
Mr. McCIeave: What does the Department of Finance consider to be an acceptable level of income tax exemption for a single person and for a married couple with one wage earner?


Edgar John Benson: The government's proposals in this regard were stated in the budget presented on June 18, 1971.
*



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Paproski: 1. Were tenders called for contract CR-67-2716, June 22, 1967, Equipment and auxiliary facilities, Central Heating Plant Phase IH, Cliff Street and, if so (a) what was the number of bids

June 28, 1971
Inquiries of the Ministry
received (b) what was the highest and what was the lowest (c) what bid was accepted (d) how was the notice of tender publicized?
2.	If no tenders were submitted, what was the reason?
3.	Who was awarded the contract?
4.	If the Department of Public Works executed the contract (a) what was the cost of (i) architectural supervision (ii) engineering supervision (iii) excavation (iv) foundation (v) super structure roofing contractor and concrete supplier (vi) masonry construction (vii) interior divisions plastering and interior finish partition (viii) heating and air conditioning (ix) electrical wiring (x) plumbing and heating (b) by whom was same done?
5.	Who was the bonding company for sub contracts?
6.	With whom was the insurance placed for sub trades?
Return tabled.


ASSISTANCE TO AMATEUR SPORTS 1968 TO 1971
Mr. Rodrigue: 1.	What amounts did the Department of National Health and Welfare give to associations or other agencies as assistance to amateur sports during the years 1968-69, 1969-70 and 1970-71?
2.	What is the name and address of each?
Return tabled.


CANADA COUNCIL-NAMES OF MEMBERS OF JURY
Mr. Serre: 1.	What are the names and birth places of the members of the jury of Canada Council responsible for the consideration of bursary applications at the doctorate level?
2.	Of the doctorate students granted bursaries by Canada Council this year (a) how many were Canadian citizens (b) how many were not Canadian citizens (c) what was the distribution by province (d) how many were francophones?
Return tabled.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, in view of the decision this morning of the Supreme Court of Canada declaring ultra vires the regulations under legislation in Manitoba restricting interprovincial trade, I would like to ask the Minister of Justice whether he intends to meet with the provincial governments, particularly with the governments of Quebec and Ontario, with regard to eliminating the restrictions on interprovincial trade being enforced by those provinces?


John Napier Turner: Mr. Speaker, I would want to read that judgment and discuss it with my colleague, the Minister of Agriculture, and the government and then decide what the appropriate action should be.


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the
Minister of Agriculture whether he intends to examine the decision with a view to its bearing on Bill C-176 and whether it would involve any change in the approach of the government toward the subject covered by that bill?


Horace Andrew (Bud) Olson: Mr. Speaker, I have only had a copy of the judgment in my hands for less than five minutes. Therefore I have not had an opportunity to give consideration to that, but I think there is some relation that ought to be looked at.


James Aloysius McGrath: Mr. Speaker, I wish to direct a supplementary question to the Minister of Justice. Did the government have a contingency plan in the event that the Supreme Court rendered a decision favourable to the federal government and, if so, is the federal government now prepared to implement that plan?


John Napier Turner: We are ready, as we always are, for all contingencies, Mr. Speaker.


James Aloysius McGrath: As a further supplementary question, Mr. Speaker, will the minister undertake to get in touch immediately with the provincial Attorneys General of the provinces that have marketing boards, such as Ontario, Quebec and Newfoundland, to acquaint them officially of the Supreme Court of Canada decision?


John Napier Turner: I think they will learn of it, Mr. Speaker.


Stanley James Korchinski: Mr. Speaker, I should like to ask the Minister of Agriculture whether in the interim while the House is not in session the government will not take any particular action which may affect the over-all position, with the idea that perhaps a debate in the House may be necessary despite any decision that the Supreme Court may have made or any decision that the government may have made on its own initiative?


Horace Andrew (Bud) Olson: I am sorry, Mr. Speaker, but I do not understand the question.


Stanley James Korchinski: I am simply asking whether the minister will not reserve any decision that he may want to make in the interim during the summer holidays and not implement any action at all until such time as Parliament is again in session and a debate in the House may be initiated on the entire question to decide whether or not the action that the government may be taking is necessary and proper?


Horace Andrew (Bud) Olson: Mr. Speaker, I am still not certain that I understand the question, but I think it is important to remember that the main features of Bill C-176 were arrived at after consultation and agreement with all 11 governments.


Stanley James Korchinski: The minister does not understand the situation in Saskatchewan-


Mr. Speaker:: Order, please.

June 28, 1971


Alfred Pullen Gleave: Mr. Speaker, I wish to direct a supplementary question to the Minister of Agriculture. In view of the gravity of the situation that will arise as a result of this decision, will it be possible for the minister to report to the House, either tomorrow or on Wednesday before the House recesses for the summer, and give some indication of how the situation may be met?


Horace Andrew (Bud) Olson: Mr. Speaker, I can give an undertaking that we will immediately make an intensive examination of this decision, particularly with respect to the bill, but where that can be done before tomorrow I am not sure.


Mark Willson Rose: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. In view of the obvious legislative impediments to Bill C-176, has the government any plans to introduce national marketing legislation for poultry and eggs only?


Horace Andrew (Bud) Olson: No, Mr. Speaker, we do not. Of course, as the hon. member will realize, the main impediment is the opposition to Bill C-176.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.



TAXATION


David Lewis: Mr. Speaker, I have a question for the Minister of Finance arising out of a statement he is alleged to have made to a conference of foreign tax experts. Can the minister inform the House whether approximately 20 individuals and companies were able to avoid paying the withholding tax through some loophole in the tax system and, if so, how long ago did the government become aware of this avoidance by the said individuals and companies?


Mr. Speaker:: Order, please. I am not sure that this is a proper question. The hon. member is referring to something which may have happened some time ago, and he inquires as to when the government was made aware of the situation. I always have some reservations about this kind of question. I appreciate that the House will be rising later this week, hopefully, and because such questions can hardly be expected to be placed on the order paper perhaps the minister might like to reply.


Edgar John Benson: Mr. Speaker, this is only one of the many loopholes in the income tax system that we will be plugging through legislation which I hope the opposition will help us to pass.


David Lewis: I should like to ask the minister whether he would undertake to make a statement to the House
Inquiries of the Ministry
tomorrow or Wednesday or file a return which would show the names of the individuals and companies concerned, when he became aware of the avoidance of the withholding tax, and the amount involved in each case?


Edgar John Benson: Mr. Speaker, if I were going to make disclosure of all the avoidances of taxes taking place in Canada I think I could take up the whole of the next session. The aim of the new legislation is to close these loopholes, and I hope, we will get the co-operation of the opposition.



EXTERNAL AFFAIRS


Mr. Real Caouelte (Temiscamingue):: Mr. Speaker, I would like to put a question to the Secretary of State for External Affairs.
Has he received from the Bangla Desh Association of Canada a telegram containing the following allegation:
We suspect Canadian arms are also going to be shipped to Pakistan.
Is he able to assure the House that no Canadian arms will be shipped to Pakistan?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I have received such a telegram
and I have made inquiries. As I have said in the House, no export permits for arms have been issued for some time now because of the situation in that part of the world and so far as I am aware there will be no arms shipments from Canada on that ship.


Mr. Andrew Brewin (Greenwood):: Will the Secretary of State for External Affairs inquire into a report that a ship known as The Padma, bound to Karachi and carrying arms shipments, is docked or is docking in Montreal and make sure that when it leaves it does not carry Canadian arms to that area?


Mitchell William Sharp: That was the ship that was referred to in the previous question by the leader of the Social Credit party, Mr. Speaker.


INFORMATION
Gerald William Baldwin: I should like to direct a question to the Prime Minister, Mr. Speaker. In light of the charges made in the report by the Science Council of Canada to the effect that the Canadian people are being deprived of access to certain information, will the Prime Minister ensure that that information is made

June 28, 1971
Inquiries of the Ministry
public and certainly available to the Science Council of Canada?


Pierre Elliott Trudeau: I am not
aware of the charge, Mr. Speaker. I shall look into it.


Gerald William Baldwin: I have a supplementary question for the Minister of Justice. In light of the fact that there are a number of charges about secrecy on the part of the government, would the minister be prepared to accept the principle of Bill C-250 dealing with the right of the public to be informed and have the subject matter of the bill referred to a committee for study in view of the minister's own expressed desire that such a bill be incorporated in government legislation?


John Napier Turner: I share the objective of the hon. member, as he knows, Mr. Speaker. I should like to thank him again for his help on the Statutory Instruments Act which serves, as much as anything in this Parliament, to increase the rights of the citizen to know what his government is doing.


Gerald William Baldwin: Has the minister now changed his mind in respect of the statement he made at Kingston a year ago?


Mr. Speaker:: Order, please. The hon. member for Lambton-Kent.


OPPORTUNITIES FOR YOUTH PROGRAM-REDIRECTING OF CANCELLED GRANTS TO PREVIOUSLY REJECTED PROJECTS
Maclyn (Mac) Thomas McCutcheon: I wanted to direct a question to the Secretary of State, Mr. Speaker, but since he is not here I shall direct it to his parliamentary secretary.
Will the moneys available because of the cancellation of the Georgia Strait grant and others now be made available for such rejected programs as that of the Toronto school board or other worthwhile programs?


Mr. James Hugh Faulkner (Parliamentary Secretary to Secretary of State):: Mr. Speaker, as I have said before, there are projects which, of course, are worthwhile but which, because of the limited budget, we were not able to finance. If money becomes available as a result of the cancellation of certain projects which have failed to meet the criteria set out in the contract, I will certainly consider the suggestion of the hon. member.


Maclyn (Mac) Thomas McCutcheon: Has the government made certain that all those receiving funds are actually students or intend to be students in the fall?


James Hugh Faulkner: Mr. Speaker, I do not think that is a specific criterion. There may well be people working on projects who are young people within the ages specified. I do not think there is anything that requires them necessarily to be students.




Heath Nelson Macquarrie: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. It is based upon disturbing reports of events in Cyprus. Can he advise if the government has looked into these matters and if there are any developments which would cause an alteration in the role and performance of our forces there under the United Nations?


Mitchell William Sharp: Mr. Speaker, I will bring myself up to date on the situation in Cyprus and try to give an answer to this question before the House recesses.


LABOUR RELATIONS
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a question to the Minister of Manpower and Immigration who answers for the Public Service Staff Relations Board. It arises out of the strike now going on by the bridge site employees of the Crown corporation, Defence Construction Limited, at Nanaimo, British Columbia and at Valcartier, Quebec. Since the Crown corporation has rejected the unanimous recommendations of the conciliation board set up by the Minister of Labour, would the minister ask Defence Construction Limited to reconsider this matter in order to bring this strike to an end?


Otto Emil Lang: Mr. Speaker, I believe the Minister of Labour is involved in this question rather than the minister responsible for the Public Service Staff Relations Board.


Thomas Clement (Tommy) Douglas: Then may I direct my question to the Minister of Labour, Mr. Speaker?


Bryce Stuart Mackasey: Mr. Speaker, I will discuss this matter with my officials the moment the question period is over.


Thomas Clement (Tommy) Douglas: Did Defence Construction Limited have authority to tell the employees, as it told them on June 17, that they would be transferred as of September 30 and brought under the Public Service Commission? Since this is a decision which can only be made by the government, by what authority did Defence Construction Limited make this statement, a copy of which I have in my hand, to the employees?


Bryce Stuart Mackasey: Mr. Speaker, I would be pleased to get a copy of that statement, because at first glance it seems to me to be an unfair labour practice. I would appreciate
getting a copy of the statement.

June 28, 1971


NATIONAL REVENUE
Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, my question should be directed to the Minister of National Revenue but in his absence I will direct it to the Prime Minister. On what authority or on whose authority do the officials of the Department of National Revenue threaten by letter cancellation of legitimate income tax exemptions if replies to their correspondence are not received by a date specified by them?


Pierre Elliott Trudeau: Mr. Speaker, this question is really too vague for me to be able to answer. If the hon. member has specific cases in mind he might send them to me or to the minister and we will look into them.


John (Jack) McIntosh: In reply to the Prime Minister's suggestion, may I say that I have already brought this matter to the attention of the Minister of National Revenue.


An hon. Member:: With no result.


John (Jack) McIntosh: With no result, that is right. May I ask the right hon. gentleman to bring this matter to the attention of the minister?


REQUEST FOR STATEMENT ON EXPEDITING OF PROVISION OF MEDICAL AND PARAMEDICAL PERSONNEL
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare. As the minister is now looking, along with
the provinces, into techniques to increase medical and paramedical personnel in Canada by shortening the educational term or by some other device, when can we expect the minister to make a statement to the House on this matter?
Hon. John C. Munro (Minister of National Health and
Welfare): Mr. Speaker, I expect that there will be a federal-provincial conference of health ministers, probably in the fall, and I will be making a full statement about matters of this kind, I expect, during the time of that conference.


Philip Bernard Rynard: Would the minister consider making special grants to those provinces which open their medical schools during the summer to help to alleviate the shortage of doctors?


John Carr Munro: Mr. Speaker, I will take the matter under consideration.
Inquiries of the Ministry


CANADIAN CONSTITUTION
Mr. Roch La Salle (Joliette):: Mr. Speaker, I should like to put a question to the Prime Minister.
Since the Premier of Quebec stated yesterday that he had to talk today with the Prime Minister of Canada regarding constitutional problems, would the Prime Minister be prepared to make a statement tomorrow concerning the discussions to be held today with the Quebec Premier?


Pierre Elliott Trudeau: Mr. Speaker, I am not aware that such talks are to take place. If the Quebec Premier were to call me, I shall be happy to receive the call. As for the other part of the question, it becomes hypothetical, Mr. Speaker.


David Réal Caouette: I have a supplementary question, Mr. Speaker.
Since Quebec rejected the Victoria charter, has the Prime Minister received any communication with regard to a meeting between Ottawa and Quebec and has a date been set for such a meeting?


Pierre Elliott Trudeau: I have just given a negative answer to the hon. member for Joliette, Mr. Speaker.


VARIATION IN GRANTS PER BED FOR ESTABLISHMENT OF HOSTELS
Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, may I direct a question to the Minister withodt Portfolio in charge of Information Canada in connection with the release he put out on June 15 outlining the grants to be made to youth hostels to look after transient youth this summer. What is the reason for the great discrepancy in the amounts of grant per bed? I note that in Sherbrooke, for example, it is $237.50 per bed whereas northwest of Calgary it is $30.09 per bed and in one place in Toronto $25 per bed.


Hon. Robert Stanbury (Minister without Portfolio):: Mr. Speaker, first may I say that the statement would have been issued by me in my capacity as minister responsible for citizenship. The grants are made this year for hostels on the basis of the requests from local organizations in communities and the kind of other support which they have been able to get. We have established no hostels of our own this year. We are simply trying to assist financially these initiatives taken by communities themselves. The amount in each case depends on the need as seen by organizations in the communities. There is not a strict

June 28, 1971
Inquiries of the Ministry
formula because the resources available in different communities are different.


Douglas Scott Harkness: Can the minister explain why the grant per bed should be nine or ten times greater in one place than in another?


Mr. Sianbury:: Mr. Speaker, the hon. member will realize that the costs are not only for beds, and that if you make your calculations on the basis of the number of beds you will obviously not arrive at a very productive figure.


Some hon. Members:: Oh, oh!


REGINA HOSTEL PROGRAM-APPLICATION FOR ASSISTANCE
John Stratford Burton: Mr. Speaker, may I direct a supplementary question to the Minister without Portfolio. In view of difficulties which developed in Regina some time ago regarding that city's youth hostel program and other developments which have now taken place, has the minister received a renewal of an application for assistance from Regina and can he inform the House what response his department has made and how much is to be made available to that city?


Robert Douglas George Stanbury: Mr. Speaker, I cannot give the exact response requested, but I have discussed this matter with the alderman of the city of Regina who is the chairman of the hostel committee. He has told me that he would be forwarding another application, and I will be pleased to give it sympathetic consideration.


Mr. Speaker:: Order, please. I have suggested to the hon. members in the past that we could spend most of the question period on questions and answers about individual projects. I wonder whether this is what hon. members want. I think these inquiries might be made in some other way than during the question period.


NATURAL RESOURCES
Robert Lorne Stanfield: Mr. Speaker, may I ask the Prime Minister a question about the proposal he made a year or so ago to the provinces regarding the administration and the sharing of revenues from offshore mineral rights. Has the Prime Minister received a rejection of this proposal from any of the Atlantic provinces, particularly Nova Scotia, or from Quebec or British Columbia?


Pierre Elliott Trudeau: No, Mr. Speaker, I know of no rejection. I must say that I have not looked at the correspondence recently. I have not got
a note of it here, but when I last looked about a month ago there were still some provinces which had not answered our proposals and there was no final settlement of the matter.


Robert Lorne Stanfield: I understand there is no final settlement of the matter, but is the Prime Minister saying to the House that the government of Nova Scotia, for example, has not rejected the proposal that the Prime Minister put forward to the provinces with regard to the administration of offshore mineral rights and the sharing of any revenues from these rights?


Pierre Elliott Trudeau: That is right, Mr. Speaker. I cannot remember any outright rejection of the federal scheme by any province, but I will check on the record. If I am incorrect, I will tell the House tomorrow.


John Howard Lundrigan: A supplementary question. May I ask the Prime Minister whether the provinces or any of them, the Atlantic provinces in particular, have advanced any counterproposals in response to the formula offered last year?


Pierre Elliott Trudeau: Mr. Speaker, I know there was a meeting of officials of the federal government with the provincial officials of some of the Maritime provinces some months ago which had to do with counterproposals.


OFFSHORE MINERAL RIGHTS-FEDERAL GOVERNMENT POSITION IN EVENT OF MAJOR OIL FIND OFF ATLANTIC COAST
James Aloysius McGrath: I have a supplementary question, Mr. Speaker. My question is really not hypothetical because there is a suggestion of a major oil strike. What is or what will be the position of the federal government in the event of a major oil strike off the Atlantic coast?


Mr. Speaker:: Order, please. To my way of thinking the hon. member is asking a hypothetical question. Perhaps he should ask it positively and see what reply he will get.


James Aloysius McGrath: 1 will rephrase my question. In light of what appears to be a major oil strike off Sable Island, has there been any change in the position of the federal government or exactly what is the position of the federal government vis-a-vis the right to these minerals?


Pierre Elliott Trudeau: The federal position was stated to the House a year and a half ago or perhaps more when we put it to the provinces that we had a scheme for sharing the administration of offshore oil. The hon. member will recall that basically it had to do with a specific assertion by the federal government that the continental shelf is under the jurisdiction of the federal government. This was based on the Supreme Court judgment in the case in British Columbia and on our view of the law. But there was a proposal to the provinces that certain areas very close to their shores could be administered by them.
(Mr. Stanbury.]
June 28, 1971

Inquiries oj the Ministry EXTERNAL AFFAIRS




Right Hon. J. G. Diefenbaker (Prince Albert):: My
question is directed to the Secretary of State for External Affairs. It has to do with the extraordinary action of Malta in refusing to permit units of the United States fleet to visit that country. Will the minister state whether at the last Prime Ministers' conference this question was dealt with in any way or if there had been any warning that such a step would be taken? Is it not a fact that this extraordinary action cannot but weaken the position of the western world in the Mediterranean and improve the situation for the U.S.S.R. which is making continuing naval moves in the Mediterranean? To meet the immediate problem, will the minister say whether Canada is giving consideration to agreeing to moving the NATO naval headquarters from Malta to Italy?


Mitchell William Sharp: Mr. Speaker, the right hon. member asked several questions and made several statements. The first question was whether the matter of the future of Malta in the NATO alliance had been raised at the Prime Ministers' conference. I am informed that it was not. There was no warning of this situation. With regard to the final question, which I think was the second one directed to me, we are not supporting any change involving the moving of the headquarters from Malta to Italy.


John George Diefenbaker: Has the government been consulted by NATO in this regard and determined that it will not agree to any change despite this flagrant action on the part of Malta which strikes a deadly blow in the Mediterranean to NATO?


Mitchell William Sharp: Mr. Speaker, I do not take such a pessimistic view of the future of Malta in the NATO alliance.


INCOME TAX
Stanley Howard Knowles: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that some of the proposed income tax changes that affect old age pensioners and veterans are to be made effective January 1, 1971, will the minister consider making all the changes that specifically affect these two groups of people retroactive to that same date?


Edgar John Benson: I do not think this would be possible, Mr. Speaker.


ASSISTANCE TO FORMER RESIDENTS OF SPRINGHILL
Mr. Robert C. Coates (Cumberland-Colchester North):: My question is directed to the Secretary of State for External Affairs. About a week ago I asked a question about a group of miners from the town of Springhill who had sought and secured employment in the state of Pennsylvania and who are now being forced to leave that state as a result of action by the United States federal authorities. At that time the Prime Minister took notice of the question on behalf of the Secretary of State for External Affairs. Is the minister in a position to provide me with an answer?


Mitchell William Sharp: Yes, Mr. Speaker. We have been in contact with the United States authorities who have agreed to hold talks very soon.


DECLINE IN NEWSPRINT EXPORTS-MEETING WITH PULP AND PAPER ASSOCIATION
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is for the Prime Minister. In light of the fact that newsprint exports are down 7 per cent from May, 1970, is the government going to arrange to hold an emergency meeting with the Canadian Pulp and Paper Association in order to assess what measures should be undertaken to improve the export position of this very critical industry?


Pierre Elliott Trudeau: I have had some correspondence with Mr. Fowler on that subject, Mr. Speaker. I have recently replied that his representations will be studied by the government and that if a meeting were necessary and advantageous we would have one.
[DOT] * *


NATIONAL SECURITY
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I would like to address a question to the Prime Minister. Is he aware that in Canada and particularly in the province of Quebec there are youth camps involved in subversive propaganda and in teaching young people how to handle weapons and organize rebellion in the country?

June 28, 1971
Inquiries of the Ministry


Mr. Speaker:: The hon. member is asking the Prime Minister if he is aware that such camps, such circumstances exist. I doubt whether the question asked in those terms is acceptable. The hon. member may put his question differently if he so desires.


Léonel Beaudoin: Mr. Speaker, I would ask the Prime Minister whether he has heard, directly or indirectly, about the existence, especially in Quebec, of youth camps where subversive propaganda is made, where young people of 20, 22, 25 are taught how to organize a revolt in Canada?


Pierre Elliott Trudeau: No, Mr. Speaker, I have not received any information to this effect for a long time, but if the hon. member can give us more details the government would be happy to get them and it might contact the Solicitor General on this matter.




Sylvester Perry Ryan: My question is for the Secretary of State for External Affairs. As Canada took a
position at the last Commonwealth conference against the sale of arms to South Africa and as France has now taken a decision to sell Mirage jets to South Africa, what is Canada's position in this matter and, if there is a position, will it soon be conveyed to France?


Mitchell William Sharp: Mr. Speaker, our position on this question is very well known: we are opposed to shipments of arms by any country to South Africa or to the kind of arrangements which reportedly have been entered into between France and South Africa. That is our position and, as I say it is very well known. It stems from our support for the United Nations embargo.


Sylvester Perry Ryan: Is the government formally conveying to France our objections to these sales?


Mitchell William Sharp: I do not think that is necessary, Mr. Speaker. Our position is very well known. We have always voted in favour of the arms embargo and we have protested when any country, including France, has shipped arms to South Africa.


LABOUR RELATIONS
Mr. Frank Howard (Skeena):: Mr. Speaker, may I direct a question to the Minister of Labour. Inasmuch as start-
[Mr. Beaudoin.!
ing last evening a strike was commenced in the salmon industry of British Columbia, has the minister any intention of involving either himself or his department in this cessation of work in an attempt to resolve the dispute?


Bryce Stuart Mackasey: Mr. Speaker, if we had any intention it would be premature in view of the fact that the strike has only just begun.


SOCIAL SECURITY
Jack Marshall: Mr. Speaker, my question is for the Minister of National Health and Welfare. Can the minister indicate whether the government is going to meet the September deadline in regard to increasing benefits under the family income security program?


John Carr Munro: Mr. Speaker, I do not know whether the deadline will be September. I indicated that my hope was to introduce legislation in the fall.


AGRICULTURE
Stanley James Korchinski: Mr. Speaker, I should like to address a question to the Minister of Agriculture who seems to have difficulty understanding my questions. On June 3 I asked him why a plant at Redwater, Alberta, which had received a $10 million grant under the government's incentive program, was selling fertilizer in Plentywood, Montana, at $86 a ton while in Canada the price was $106 a ton. Is the minister now in a position to answer that question?


Horace Andrew (Bud) Olson: Mr. Speaker, I asked the hon. member whether he could provide me with some evidence of a sale having been made by the plant in Edmonton, but so far I have received no such evidence other than a general discussion of the matter in a letter written to one of the farm papers.


Stanley James Korchinski: Has the minister not investigated this letter written to the Carrot River Observer to see whether these are merely allegations or actual statements of fact? These are common, known facts in Canada in relation to the United States.


Mr. Speaker:: Order, please. The hon. member for Regina-Lake Centre.
June 28, 1971



IMMIGRATION


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration. In view of the many people of East Indian descent who have members of their immediate families still residing either in East Pakistan or in refugee camps in West Bengal, is any provision being made to expedite the movement of members of the immediate families of Canadian citizens of East Indian descent? May I also ask whether medical examination structures and other regulations will be eased in order to remove these people from the situation in that part of the world?


Otto Emil Lang: Mr. Speaker, we would always be glad to take a very lenient view in an attempt to expedite the movement of people who may come here. In the interests of all concerned I have some doubts about the wisdom of easing such requirements as medical examinations in the circumstances. I would be glad to look at any specific cases which may come to the attention of the hon. member and do what can be done to expedite them.


Leslie Gordon Benjamin: In view of the fact that probably no one from that particular area of the world who might otherwise qualify would be able to pass the medical examination, is the minister making any provision for those who may apply to come to Canada to be placed in isolation either in Canada or in India until they are in good enough health to come?


Otto Emil Lang: That is an interesting suggestion, Mr. Speaker, that deserves to be looked into.



POLICY RESPECTING PEOPLE FROM EAST PAKISTAN NOW IN CANADA

Francis Andrew Brewin: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration and is supplementary to the question asked by my colleague from Regina-Lake Centre. Will the government soon announce its policy in regard to students and others now in Canada who come from East Pakistan; and will the government allow them to stay under permit until the situation in that country has cleared up?


Otto Emil Lang: Mr. Speaker, our usual policy in cases where there are difficulties or disturbances in the world is to make it easier for people from such areas who are in Canada, temporarily or otherwise, to stay until the situation has clarified itself, and that would apply in this case as well.
Inquiries of the Ministry DRUGS



INQUIRY AS TO TABLING OF FINAL REPORT OF LE DAIN COMMISSION BEFORE SUMMER RECESS

Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Does the minister intend to table the Le Dain report before the summer recess in order to facilitate debate on this important subject?


John Carr Munro: Mr. Speaker, I do not believe that the Le Dain report will be ready before the end of the summer.



INCOME TAX


Alfred Dryden Hales: Mr. Speaker, may I direct my question to the Minister of Finance. Will the
minister be announcing valuation day before the summer recess?


Edgar John Benson: No, Mr. Speaker.


Alfred Dryden Hales: By what method does the minister propose to announce this date? Will the announcement be made inside or outside the House?


Edgar John Benson: If the House is sitting it will be made in
the House, Mr. Speaker.



INDUSTRY


Hon. Theogene Ricard (Sainl-Hyacinihe):: Mr. Speaker, I had a question for the Minister of Industry, Trade and Commerce but in his absence I should like to put it to the Prime Minister.
In order to protect the jobs of Canadian textile workers, does the federal government intend to recommend setting up an over-all quota for a five-year period for cotton and mixed fabrics originating from countries where costs are much lower than here?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member's question would call for quite an elaborate reply which can only be given on motions. I should just like to say that the Minister of Industry, Trade and Commerce has on several occasions set forth the government's new policy on textiles.

June 28, 1971
Inquiries of the Ministry



EXTERNAL AFFAIRS


Mr. Jack Muria (Lisgar):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. As the United States has asked the International Joint Commission to investigate the question of the flooding of the Pembina River, does the Department of External Affairs intend to make its policy on this issue known in the near future?


Mitchell William Sharp: Mr. Speaker, I should like to take notice of that question.


CAPE BRETON DEVELOPMENT CORPORATION
Donald MacInnis: Mr. Speaker, I should like to direct my question to the Prime Minister. In view of the favourable report of the Justice and Legal Affairs Committee with respect to preretired Cape Breton miners and present employees of the Crown corporation, Devco and its acceptance by the responsible minister, will the Prime Minister take steps to see that the problem in question is satisfactorily solved very shortly to the benefit of these miners?


Pierre Elliott Trudeau: I will most certainly look into the question, Mr. Speaker.


POLLUTION
Randolph Harding: Mr. Speaker, I have a question for the Minister of the Environment. Has the minister been in touch with the International Pacific Salmon Fisheries Commission regarding the potential pollution threat to our salmon fishery from the application of Atlantic Richfield Oil Company to discharge 3.7 million gallons of effluent daily into Georgia Strait at a point ten miles below the Canadian border and adjacent to the migration routes of a major salmon run?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, we have not been dealing through the international commission in that area but have been using our own departmental officers for the task.


Randolph Harding: Is this one of the international areas in which pollution problems will be examined jointly with the United States and for which strict regulations will eventually be laid down?


John (Jack) Davis: Mr. Speaker, strict regulation is possible through the medium of the North Pacific Salmon Fisheries Commission as well as through other international bodies.


IMPORTATION OF RUSSIAN TRACTORS-REPORTED INTERFERENCE BY SOVIET GOVERNMENT
Harold Warren Danforth: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. Has the minister had ample opportunity to investigate the rather serious charges of interference by the Russian government or its officials in the importation of Russian tractors into Canada, and can we expect a report on this matter in the House?


Horace Andrew (Bud) Olson: Mr. Speaker, I have not had a report on this, nor have we made any investigation. I will take the question as notice.




Mark Willson Rose: Mr. Speaker, on Friday I directed a question to the Prime Minister and I should now like to direct the same question to the Secretary of State for External Affairs. Has he had any further recent discussions with members of the United States government regarding the forthcoming Amchitka nuclear tests?
Hon. Mitchell Sharp (Secretary of Slate for External
Affairs): No, Mr. Speaker, I have not had any occasion either to direct my officials or to have any communication myself. We have made our position amply clear but we have had no further word from the United States as to their intentions.


Mark Willson Rose: On a point of clarification, Mr. Speaker, is the minister saying he has had no encouragement that this hazardous test may be cancelled?


Mitchell William Sharp: We have had no indication that it is likely to be cancelled.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, June 25, consideration of the motion of Hon. E. J. Benson (Minister of

June 28, 1971
[Stage Direction]
Finance) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West) (Page 7229).
David Réal Caouette: Mr. Speaker, I have listened, like all the other hon. members the budget speech delivered last week by the Minister of Finance (Mr. Benson), some called it a pre-election speech, that will not change much to the present situation.
Mr. Speaker, I believe the second point is nearer the truth. By the way, if we look at what happened in Saskatchewan last week, just a few days after the famous budget, the Liberals were given a warning by losing the elections in that province. Had the voters of that province been interested in the budget, I think that the Liberals would have stayed in power.
The same situation prevails now, not only in Saskatchewan, but almost everywhere in this country. I say that the budget of the Minister of Finance will not create a single job in Canada, will not generate any new industry and will perhaps prove unable to keep the present industries in operation.
Mr. Speaker, this is an obvious budget, a red herring across the trail of the electorate. It mentions, for instance, that the basic non taxable amount for single persons will be $1,500 instead of $1,000 and $2,850 instead of $2,000 for married people. We have been asking for some at least ten years exemptions of $3,000 for single people and $5,000 for married people because we know that if wage earners keep their salaries for their expenses, when they buy products they are subject to an indirect federal tax. And yet the government gets a large share of the money spent by Canadian taxpayers and consumers. This is why we find the exemptions suggested in the budget clearly inadequate. In fact, a saving of $25 or $30 a year does not increase considerably the income, the purchasing power of the consumer.
Now, with exemptions up to $1,500 and $2,850 being granted, the budget makes unemployment benefits and scholarships subject to taxation, which was not the case formerly. Finally, this year's budget is one and a half billion dollars higher than last year's and this billion and a half the government is getting from the pockets of Canadian taxpayers. Even if the government says "We have relieved a million Canadians from taxation", if it must overtax five or six million people in order to balance the budget supplement of a billion and a half dollars, Canadians on the whole will be no better off. There could only be one justification for taxes, and that would be full employment, as a result of which production would be inadequate to meet the requirements of the whole population because of high consumption on the part of some of the population.
But this is not the case today. In fact, the history of taxation as an expedient is based on two propositions: first, that the poor would become richer by making the rich poorer; second, that it is a justifiable procedure to support a system of accumulation of wealth while arbitrarily confiscating part of this wealth. The latter proposition is like saying that the object or purpose of a 24171-47
The Budget-Mr. Caouette
hockey team is to score goals but that if more than a
certain number are scored, any number in excess will not count.
Let us first consider the first assertion to the effect that the poor are poor, that the less poor are less poor and that the poor would become richer. That is the line of reasoning of the right hon. Prime Minister (Mr. Trudeau), of the government and of the present system. This assertion arises from the confusion that exists between money and real wealth.
It is alleged, in the first place, that there is absolute equality. Economists say so. There is complete equality between actual wealth and money, and therefore the standard of living of the community would be enhanced if anyone having much money as compared to his neighbour was taxed, even though the amount of said taxation was not fully passed on to the less fortunate neighbour, which is more often than not the case.
That this argument is absurd is self evident if it is applied, for instance, to those who own a Cadillac. Should every owner of such a car be taxed according to his standard of living, it does not follow in the least that those people who do not own a car or who own a Volkswagen would be able to buy Cadillacs.
This simply means that fewer Cadillacs would be produced. It would certainly be a good thing if the production scheme could transfer the Cadillac employees elsewhere and have them produce real and desirable resources.
We realize that this is excatly what happens in times of war when production of luxury items stops. But in time of war we do not have unemployment or this surplus of unsold production. However, under the present financial system stopping the sale of Cadillacs would mean higher unemployment, and full employment is the best way of keeping people in slavery.
All those arguments arise from the suggestion that production of real resources, that is those money can buy, is completely separate from production of the money allowing people to buy them and that by taxing all but bankers we increase the monopolizing power of the money makers.
Fortunately, it is not necessary today to develop extensively this argument since it has ceased to be discussed in financial and economical circles. In Volume 15 of the Encyclopaedia Britannica we read:
Banks make loans by creating credit. They create means of payment out of nothing.
Or again according to the president of the Midland Bank: "The monetary mass in circulation varies through the action of the banks." Not the action of the government, the action of the banks!
Since our civilisation is based on money and no one among us is able to do anything without money, it is obvious that this has everyone at the mercy of banks. It is so true that a bank can literally make somebody out of you financially speaking one day and have you go bankrupt the day after; banks have that power, not only on governments, but also on individuals, businessmen,

June 28, 1971
The Budget-Mr. Caouette
industrialists, etc. who count on bank credit everywhere in Canada for everything. An increase in taxes while decreasing the amount of money available to the taxpayer tightens the bounds of slavery we are subjected to by the banks.
The first clear insight, then, short of inquiring as to the disposal made of taxes, must be of the heavy burden of taxation laid upon us and that directly profits the banks within the banking system.
In considering what disposition is made of the taxes levied we realize that a big portion goes to pay interest on the national debt and, the rest, the bigger portion, pays for social security for those dispossessed through this system. Social welfare recipients are victims of the system and part of the taxes are now used to help those who are deprived in order to pay taxes and interests. A funny system if ever there was one, endorsed by economists who pride themselves in finding solutions.
Mr. Speaker, after the First World War, the national debt of Canada was approximately $1.5 billion. In 1960, it was 12 billion and, in 1971, $24 billion, thus increasing more and more each year. However, the interest this year, according to the new budget, will be $2,030 million. Such is the first statement. We will have a supplementary budget before the end of the year and it will mention another amount to be added to the $2,030 million already announced. That is one reason why Canadians are being deprived of their wealth. In 1971, the debt stands at $24 billion and it goes on increasing. It is likely that 80 per cent of this debt were created through the above-mentioned process, that is, the writing of figures by the bankers or the creation of money by the banks, this money being loaned to the country for the purchase of bonds, Treasury bills, and other securities.
Here is how the situation is analysed in the budget papers and proposals of the Minister of Finance. The deficit of the federal government, in 1961-62, was $791 million. Indeed, until 1971-72, with the exception of 196970 where there was a surplus of $393 million, we have had nothing but deficits. But, in addition to the deficits of $370, $600 or $750 million, the present gross debt of Canada amounts to $42,965,500,000. The increase in our debt, for 1971, amounts to $417 million, and the interest, as I said a while ago, to $2,030 million. This means that we pay $5,561,643 every day, in interest only, on Canada's debt. Five million dollars a day, but that amount is not discussed in Parliament. The Minister of Finance does not speak of it. It is a sacred matter.
Mr. Speaker, no minister dares speak of the $5,561,643 we pay daily in interest. But when mention is made of $500,000 to help the young, the pensioners, the students, then the government keeps saying: "We have no money". We did not hear the Minister of Finance tell us the other day that we have no money to pay $5,561,643 a day in interest. Indeed not, it is a sacred matter.
Mr. Speaker, it is untrue to maintain that this interest is paid to individuals. Half of it is paid to the banking

system, as reported in the table on page 56 of the budget papers. More than half is paid to the banking system.
Mr. Speaker, the table shows that in 1960, the banking system held $1,381 million in treasury bills and that this amount has reached $3,366 million in 1970. An increase of 1,985 million of what? Printed money? Dollars bearing the likeness of the Queen? No, cheques made up by the banking system! It is holding $1,985 million. The government does not mention it. No. They are asking the Canadian people to tighten their belts to pay for the administration of the banking system. That is sacred. Finance must be paid. But people can be left to starve. Yes, mothers and whole families are exposed to extreme misery. But not the financiers! They have to be kept alive, nourished and fattened. We have to work for them. It is the worship the golden calf. That is our system at present.
Mr. Speaker, the banking system which held only $5,802 million of the public debt now holds $10,935 or almost $11 billion, an increase of $5,133 million.
Which means, Mr. Speaker, that within 10 years the banking system doubled its assets in Canadian bonds and treasury bonds, and now holds more than 40 per cent of the debt, while it had only about 34 per cent. It also means that out of the $2 billion Canadian taxpayers will pay in interest this year, the banking system will get more than $800 million, profits drawn out of nothing of about $2.5 million a day for Canadian bankers.
The minister himself admits it as can be seen on page 56 of the Budget Papers, and I quote:
During the past decade, of the $7.9 billion raised by the issue of Government of Canada securities, the banking system, that is the Bank of Canada and the chartered banks, absorbed all the marketable bonds and Treasury bills issued as well as a reduction of over $1 billion in holdings of all others.
Mr. Speaker, that is what the minister said. In other words, the banking system benefits from the billions of dollars paid every year by Canadian taxpayers for debt service.
To say it more clearly, it means that since banks create money or their means of payment out of nothing, except by means of accounts and cheques they draw upon themselves, it enables them to buy treasury bonds and Canada saving bonds with pieces of paper which do not cost them anything. And all the taxes and surtaxes we are paying are used and will be used more and more to pay ever higher annual amounts in tribute money to the banks and to increase the discretionary and totalitarian power they have on the life of everyone, on the life of institutions and governments whatever they may be.
If the Canada bonds, the treasury bills and other securities bought by the banks had all been credited to the Canadian public since 1960, nearly $10 billion, as the Minister of Finance said, would have been capitalized in the name of the Canadian taxpayers. However if all securities had not been registered in the name of the banks since confederation, the national debt would not exist and the national assets of Canadians would be over $42 billion rather than a $42 billion debt. Moreover,
June 28, 1971

instead of paying taxes to reimburse banks and pay them $2 billion in interest each year, Canadians would be paid instead annual dividends of approximately $2,030, million.
For those who find that funny, dividends that is, it is odd that they do not laugh at dividends paid to the banking system. But they would find it strange to pay dividends to Canadians who are building Canada.
Therefore, there would be no more socializing, punitive and tyrannical taxes such as we have under the present financial system, even though the minister boasts of having eased our fiscal burden, reduced or eliminated tax on margarine, etc. In fact, he resorted to all kinds of small measures in an effort to lull the population.
Mr. Speaker, if we were not subjected to the present arbitrary taxes, we could pay national dividends under the Social Credit system we have been urging-at all times and not only before an election-the elected government to establish in order to administer on the basis of the people's needs and our ability to bring them security in freedom.
It is along the lines of that program that for many years we have been working, explaining and stating the Social Credit financial theory to the House.
Mr. Speaker, the day will come and may be closer at hand than we think, when we will have to choose between two things: either to put the financial system in the service of man, or communism, confusion, revolution, the effects of which are beginning to be felt in various areas of Canada.
There is a limit to the sufferings and hardships which may be imposed on people who want to live, to develop, to build a national heritage which really belongs to them. There is a limit to the sacrifices forever to be imposed in the interest of financiers, the only ones who do not suffer hardships in Canada!
Mr. Speaker, let us try and prevent people's sufferings. Let us give financiers a taste of misery and put money in the service of the people in our country, Canada.


Mr. Alastair Gillespie (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, in rising to take part in this debate I recognize it as a rather historic occasion; it might even be described as a watershed in the process of government. I am referring in particular to the process of participation which is coming, if not at least to a close, close to a close in this debate and to a close in the clause by clause examination in which we will participate this September.
Before entering into my speech I should like to comment on one or two things that the hon. member for Temiscamingue (Mr. Caouette) said in his speech to which I listened with considerable interest a moment ago. I suppose that if I had to put it down in a few words I would say that it was an interesting voyage into the outer space of high finance. For me it was too far out, a little too high. He made such statements as that if we were to adopt his policies, there would be no national 24171-471
The Budget-Mr. Gillespie
debt at all. He even went so far as to suggest that those who lend their money to the banks-most of his speech was devoted to a discussion of the importance of the banking system in financing our affairs today-would do so without requiring any interest payment on their savings. Surely this tests our credibility too far. Also, in the early part of his speech he referred to the new tax legislation and the proposals as they might affect Canadians on lower incomes. He seemed to ignore some of the statistics and figures that have been presented by the Minister of Finance (Mr. Benson) in his budget speech a week ago Friday. I should like to remind the hon. member for Temiscamingue that under these proposals, one million Canadians would be taken off the tax rolls altogether, and there would be a further 4,700,000 Canadians who would have their taxes reduced. Those are significant and important figures, and I think that the hon. member for Temiscamingue should be reminded of them.
I do not propose in my speech today to recite the various provisions of the tax legislation-others have already done so very competently. The Minister of Finance, the able, affable, persistent, flexible and very responsive Minister of Finance, took two hours to set before the House the largest, the most complete set of tax proposals that this House has ever considered. The hon. member for Grenville-Carleton (Mr. Blair) in his speech dealt with the question of reform versus tax change. He recited case by case the reform elements in this package of new tax legislation. He was followed by the incisive and, to my view, the very clearminded hon. member for Don Valley (Mr. Kaplan) who reminded the hon. member for Edmonton West (Mr. Lambert), the financial critic of the Conservative party, that equity is an important part of a tax system. If there are only two pillars in the tax system, this would be the second pillar. The Parliamentary Secretary to the Minister of Finance, the hon. member for Calgary South (Mr. Mahoney), dealt in his lengthy speech with the specific points of the tax legislation. It is unnecessary for me to go over that ground again.


Mr. Alexander:: Who wrote his speech?


Alastair William Gillespie: The other person whom I would like to mention at this juncture is the hon. member for Gatineau (Mr. Clermont) who was chairman of the House of Commons Finance Committee, a man who more than most would understand and have experienced the process of participation-the able, respected member for Gatineau who took the committee through the most exhaustive series of hearings that any parliamentary committee, in my knowledge, has been exposed to.
It is not my intention to go through the provisions of this tax legislation, as I have already indicated, nor is it my intention to deal with the budget provisions as distinct from the tax legislation provisions, other than to observe that our critics seemed to have difficulty in finding something to attack. They have had considerable difficulty in swallowing the relief from the 3 per cent surcharge. They seemed to have accepted the idea of not

June 28, 1971
The Budget-Mr. Gillespie
taxing those with a taxable income of less than $500 at the lower income level. They have accepted it but they do not seem to be able to find what they are looking for, that is, some way to say that this is a suggestion that they had made. Equally, they have had difficulty in dealing with the relief from excise tax of the electronic industry and the relief from sales tax on margarine. I think that perhaps the House has already recognized that these are important measures, well designed to help the economy forward, as the Finance Minister said, over any pause that might develop.
Perhaps the best compliment that has been paid to us was paid by the hon. member for Prince Edward-Has-tings (Mr. Hees). He has a good, straightforward view of many things. The simpler the better for the hon. member for Prince Edward-Hastings. It was his view that this must be an election budget because it was just too good. Translated into what might be described as Prince Edward-Hastings-'ees, "It's a damned good budget, baby." There is one thing about the hon. member for Prince Edward-Hastings. He does not like to one-upped. He produced what he thought would be his own best design for an election budget. He would reduce income taxes by 10 per cent right across the piece.
l
Mr. Speaker, what I want to do, as I have indicated, is talk about the process of participation which the tax legislation is now rapidly concluding. It is pretty obvious, as we cast our minds back over a period of two years, that the Tories have never really understood the process. It is not in their tradition, and I suppose we should not say that this is a surprise. The idea of participation does not come naturally to the Conservative party. It also perhaps explains why the Tories are now having so much difficulty in making up their minds as to whether they should try to take some credit for the tax legislation or whether they should criticize it. In my view they have not done either very well, which I suppose is also in the Conservative tradition.
They have tried to suggest to us that this is not reform at all, that it is tax change. Well of course it is tax change because there is no reform unless there is change, and the important thing, Mr. Speaker, is that these are important changes. One has only got to look over the list to see how important they are and to realize that it is fundamental and comprehensive reform.
They have criticized this tax legislation as too long in coming. Well, let me remind them that they started the process in 1962.


Lincoln MacCauley Alexander: Are you giving any credit for that?


Alastair William Gillespie: I do. I think that was a wise decision. Your government of the day and subsequent Liberal governments have dealt with this issue started in 1962. But at various points in the last two years the Conservatives have had trouble wondering whether we were going too fast or too slow.
As I recall it, on one occasion last year, early in the year, the Leader of the Opposition (Mr. Stanfield) said
that we should withdraw the white paper. For him this was not participation. He wanted to withdraw it and start all over again. Later in the year their financial critic, a member of the House of Commons Finance Committee, stated he felt we were going too fast. He even accused us of closure, of using the guillotine, and he called a press conference to tell the Canadian people that the Liberals were trying to close off debate, that they were trying in some way to guillotine the whole process of participation.
More recently the Leader of the Opposition stated that this new tax legislation lacks credibility. These are his words. Anyone who has read this new tax legislation, anyone who has looked at it, who has listened to the comments, must say that that criticism lacks credibility.
I would like to go back then to the process itself and just remind hon. members opposite that on November 5, 1969, when the Minister of Finance tabled his white paper, in effect he said to the Canadian people, "Give us your views. Play a part in helping us to reform the tax system." What did the Leader of the Opposition say, Mr. Speaker? He said, "Withdraw the document"! He did not understand participation.
More recently he has taken another tack. When this new tax legislation was presented he thought that perhaps he should change his view and he said, "Now the government is backtracking." Those are his words. He never understood the process of participation. Perhaps this is not surprising. After all, his chief financial critic did not either. He, on one occasion, seemed to echo his leader's position that the government should withdraw the white paper. That was earlier last year, although it was not always certain that that was his position. Then, as I have indicated, last June he called a press conference to say that the Liberals were trying to move too fast in bringing the participation process to a useful and constructive conclusion. He accused us of all sorts of things, of the guillotine, of closure, of making the committee hearings a sham.
In Victoria, about a year ago, when the Finance Committee held its final public hearings, that is, public hearings to receive briefs from the private sector, what did the hon. member for Edmonton West do? He rushed to the press again and called another press conference. This time he accused the Liberal members of the committee of all sorts of things, of being about to ram through the tax legislation. He stated that he thought it very likely that they would receive their orders and act in some way as if they were not free men. He even seemed to suggest that the legislation was then already being drafted. I do not think that he understood the process of participation.
And when the Commons committee completed its report during the summer of last year, what did the hon. member for Edmonton West do, and how did he advise his Conservative colleagues on that committee? Again he showed that he did not understand the process of participation. He again showed that he was not able to make up his mind. Neither he nor his colleagues voted to support the House of Commons committee report or to reject it. Mr. Speaker, they could not make up their minds.

June 28, 1971


Lincoln MacCauley Alexander: Would the hon. member allow a question?


Alastair William Gillespie: I would be prepared to accept a question at the end of my remarks.
I would now like to turn to the thrust of the tax legislation proposals. The first point which needs to be made is that the Tory critics appear to have grudgingly approved the higher exemptions for personal taxes, and I say grudgingly because the hon. member for Edmonton West seemed to dispose of equity as if it was not important.
On this point he was reminded by the hon. member for Don Valley that equity has to be a cardinal, a main p'.llar of any taxation system, and indeed it is of this tax legislation. The Leader of the Opposition seemed to acknowledge that lower taxation for wage and salary earners, except for single persons with incomes over $8,000 a year, was a good thing. But there was some difficulty in understanding his arguments about elasticity. He acknowledged the importance of a capital gains tax. These, I think, are all pluses. He seemed to approve that the measures to assist small business were good, but I have looked through the speeches of the hon. members I have mentioned, the Leader of the Opposition and the hon. member for Edmonton West, and I am not clear on their position with respect to small business. I give them the benefit of the doubt, however, Mr. Speaker.
I think it is worth mentioning here that under these new provisions there will be a saving of $2,500 on the first $50,000 taxable income. Under the new proposals there will be a low rate of 25 per cent on the first $50,000 of taxable income, which is $12,500. Under the previous arrangement there was a low level tax of 21 per cent on the first $35,000, which is $7,500, and an additional tax of 50 per cent or slightly over on the next $15,000, which is again in the order of $7,500. So taxes under our present system are $15,000 on the first $50,000 and under the proposed system they will be $12,500.
I have looked in vain for a statement from the members opposite on the reduction of corporate taxes to 46 per cent. Do hon. members approve of this particular incentive to the corporate sector? Nor have hon. members opposite had much to say about the provisions to foster Canadian ownership. I put it to them, Mr. Speaker, where do they stand on these provisions?


Mr. Gilbert:: Where do you stand?


Alastair William Gillespie: Right behind them.


John Gilbert: How far?


Alastair William Gillespie: Let me say in that connection, Mr. Speaker, that there are some important changes which go further than the hon. members opposite have noted here. One is with respect to the position of Canadian based multinational corporations. Let me take a moment to review some of these provisions which are going to assist potential Canadian based multinational corporations and which will assist mature Canadian based multinational
The Budget-Mr. Gillespie
corporations. On the potential side there are two things in particular and one is a low rate for the small corporation. If a foreign corporation purchases a small Canadian corporation which has enjoyed the benefit of the low rate of taxes on the first $50,000 of taxable income it will have to pay back the tax savings earned by that small corporation. A Canadian corporation will not have to. Similarly, interest charges are now deductible to Canadian purchasers. This will place the potential Canadian based multinational corporation on the same basis as foreign corporations.
The provisions with respect to pension funds and with respect to dividend tax credits should materially assist the financing of mature Canadian based multinational corporations by Canadians. Under the new tax legislation proposals, foreign source dividend income will be treated on the same basis as it is now and not on the basis proposed in the white paper. The treatment of foreign source income is a very complicated area as is the question of dividend income, income from operations and passive income. I do not propose to go further than to say that this will require considerable study by the House. I think it is most important that we recognize that Canadian based multinational corporations should be able to compete on an equal basis with multinational corporations in third markets.


John Gilbert: Canadian based or Canadian owned?


Alastair William Gillespie: Canadian controlled, Canadian based, multinational corporations.


John Gilbert: Canadian owned?


Alastair William Gillespie: Canadian controlled.


John Gilbert: There is quite a difference.


Alastair William Gillespie: Canadian controlled with Canadian
shareholders, Mr. Speaker. Let me deal with some of the NDP positions. They have just recently started to show an interest in my remarks, Mr. Speaker.


Leslie Gordon Benjamin: Corporate chicanery.


Alastair William Gillespie: There are two particular things which seem to characterize the remarks of the hon. members opposite and both of them, I think, involve contradictions. In their remarks they seem to be wedded to the Carter commission proposals. For instance, they seem to have forgotten that the royal commission proposals were a package and that with full capital gains there was full integration. We have heard a great deal to the effect that these proposals only provide for the taxing of half capital gains and that it should have been full capital gains.
We have heard nothing about the fact that the integration proposals of Carter would mean the following sort of thing if they were accepted alongside. Under the Carter commission proposals dividend income would not have been taxable in the hands of individuals; dividend income would not have been taxable if first taxed as corporate income. You would have seen individuals with a dividend income of $100,000 a year paying no tax. Is this what the NDP want? If they want Carter that is

June 28, 1971
The Budget-Mr. Hellyer
what they get. It is time they reread Carter to find out what he recommended. They see with one eye and they see only half a package. They have a half vast view.
The NDP also talked about neutrality. If they were to apply the principle of neutrality would they have lifted completely the low rate of tax for small business? Do they understand what direct investment means? Do they understand natural resources are developed by direct investment, that direct investment is the name of the game? Do they think that a natural resource company interested in development is likely to go into the electronic business? Fiscal measures used selectively, on NDP position, are, of course, the very opposite of neutral. Out of the window goes the principle of neutrality.
They are also contradictory in another area, Mr. Speaker, and this is the NDP attitude toward inflation and particularly toward the government voluntary restraint program. "Let's encourage those who are negotiating for higher incomes", seems to be their attitude. Then when costs and prices go up and when they affect people on fixed incomes they berate the government for paying no attention to those people. They cannot have it both ways, Mr. Speaker. It is a bankrupt policy-a policy of contradiction.


Walter Gilbert Dinsdale: Are you talking about the government policy for unemployment?


Alastair William Gillespie: Mr. Speaker, in concluding-


An hon. Member:: Good.


Alastair William Gillespie: -I should like to run over the criteria of a good tax system and the tests that should be applied to a good tax system. Five were set forth by the Minister of Finance and they were growth, equity, to close abuses and loopholes, to provide for administrative efficiency, economy and, justice. The fifth is compatibility of provincial systems. I think the tax legislation which we will be considering in detail meets those tests, Mr. Speaker, but there is a sixth and it is implied. It is that any tax system must meet national objectives. I think this tax legislation does meet a national objective. It is a move in the right direction of stimulating Canadian ownership. I do not pretend that by themselves these provisions are enough. They are not, and like many other members of the House I am anxiously waiting, perhaps even a little impatiently, for the announcement of the policy of the government on foreign ownership.


John Gilbert: Yes, we have waited a long time.


Alastair William Gillespie: I think the process of participation which I have tried to review, Mr. Speaker, has shown that this exercise will work. I think that this patricular legislation is a victory for the people of Canada, for the process of participation, and for common sense.


Hon. Paul Hellyer (Trinity):: First of all, Mr. Speaker-


Walter Gilbert Dinsdale: We will hear truth now, unbiased truth.


Paul Theodore Hellyer: First, Mr. Speaker, I want to congratulate the government on presenting a budget which was so much better than anyone expected that they deserve commendation.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: One could nitpick, of course, but this is not the time for nitpicking. In normal times the budget could only be described as good by a normal observer. But these are not normal times, Mr. Speaker. The Canadian economy is alive, but sick.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: It is very, very sick.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: And what the budget speech failed to tell us was how we got into this mess in the first place. Nor did it tell us how to get out of it. These are omissions of staggering proportions.
The fact is, Mr. Speaker, that the government's economic policies are tearing the country apart. In my whole life I have never seen so much bickering, dissatisfaction and frustration.


An hon. Member:: Are you listening, Alastair?


Paul Theodore Hellyer: That is evident everywhere except among the naive, the well fed and the complacent.


Stanley Howard Knowles: That is the cabinet.


Paul Theodore Hellyer: Surely the decision of the Quebec government to reject the constitutional charter must not be interpreted only as an expression of Quebec nationalism; it must be interpreted, partly at least, as a reaction to the massive intrusion of the federal government into areas of provincial jurisdiction in the 1960's.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: It is interesting to note, Mr. Speaker, that although the people of Quebec seem to want a greater degree of control over their own affairs, particularly those involving social security, the interests of individual Quebeckers seem to be very similar to those of people in other parts of the country. On the basis of sample memberships in Action Canada-


An hon. Member:: What's that?


Paul Theodore Hellyer: -may I say that 45 per cent of the membership in Quebec indicate that unemployment is the matter of primary concern to them.


Mr. Bell:: Is the government listening?


Paul Theodore Hellyer: The second and third matters of concern, in order of priority, are inflation and tax reform. Of the people of Quebec who have joined Action Canada, only 2 per cent have indicated that constitutional reform and only 3 per cent have indicated that federal-provincial relations were their first concerns.
June 28. 1971

The Prairie provinces and British Columbia are unhappy too. Whether or not it is fair to interrupt the Saskatchewan vote as a rejection in part of Ottawa's agricultural policies, the fact remains that there is a great deal of dissatisfaction in Canada's western provinces.


Stanley Howard Knowles: They are dissatisfied with Ottawa.


Paul Theodore Hellyer: Ontario, too, is losing patience with Ottawa. The people of this province are getting fed up with paying exorbitant taxes to finance harebrained, bureaucratic decisions in the field of regional development and some-I underline "some"-Opportunities for Youth projects. They would not mind if the programs were producing the desired benefits in relation to cost. However, in many cases they are not doing that. In many cases they just transfer unemployment from one geographical location to another without improving the overall situation significantly.


Marcel Joseph Aimé Lambert: They transfer unemployment even within the same areas.


Paul Theodore Hellyer: I suspect that the Atlantic provinces are unhappy too. They certainly should be, with the level of unemployment existing there. This is a tragic situation and one that is thoroughly unacceptable in a so-called civilized society. The whole problem relates back to the management of our economy.
It is not the system that is at fault, Mr. Speaker; it is the managers. It is not imported unemployment and misery that we are suffering from; it is the home-grown variety. It is not the ravages of famine or war that we are suffering from; it is the consequences of economic mismanagement which can only be described as inhumane and unintelligent. The number of unemployed persons is still ridiculously high. An improvement of a fraction of a percentage point is little comfort to the hundreds of thousands of human beings who are still without work.
A few days ago when I was visiting Winnipeg I was driven to the airport by a young man. I asked him if he was a student. He replied that, no, he was a graduate. He had graduated in chemical engineering and was unable to find employment of any kind in his own field. Consequently he took a position driving a taxi. I also received a letter a few days ago from a woods product scientist. This man lost his job as a result of the contraction in the pulp industry and was unable to find any kind of useful employment in his own field in this great country. That is a tragic reflection of the opportunities available for people of energy and education who want to create a better society. These people have one thing in common- a feeling of hopelessness and frustration because they are the hapless victims of the way the system is being operated. They have the ability to work. They have the desire to work and they have the qualifications for contributing much to this great country. Yet for reasons beyond their control they are not able to participate in a meaningful way in our economy. Young people prepare themselves to contribute, to produce and to be productive
The Budget-Mr. Hellyer
and then, through no fault of their own, they are unable to do so. That is probably the greatest tragedy that can befall a nation.
In budgeting for a large deficit the government seems to be following the 30-year old edict of Lord Keynes. One wonders when revenues will be adequate to meet the needs of a voracious government. It is difficult to be optimistic in the face of the fact that interest on the public debt alone has increased by more than 200 per cent in 15 years.


Walter Gilbert Dinsdale: That is shocking.


Paul Theodore Hellyer: That is galloping inflation. Nor is the end in sight. What about the extra $100 million required for the proposed family allowance revisions and what about the several hundred million dollars that will be required for the new Unemployment Insurance Act? Where will that money come from?
To speak of the unemployment insurance bill, Mr. Speaker, raises the specter of an enormous credibility gap. Without reflecting on the decision taken by the House, I think it might be worth while to examine that new act for evidence of a monumental snow job.


Some hon. Members:: Oh, oh!


Paul Theodore Hellyer: First of all, it appears that we were deceived by the government which held that the proposal was a bona fide insurance scheme that will give rise to virtually the same cost to the government as the previous act did. This contention was never supported by the facts. No actuarial report was produced. I suspect the reason was that none exists. Reference was made to a consultant's report by Urwick, Currie. That too has not been made public. Why? Are the public not capable of comprehending?


Mr. Speaker:: Order, please. It being one o'clock I do now leave the chair.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Paul Theodore Hellyer: At one o'clock, Mr. Speaker, I was discussing the unemployment insurance bill and the lack of a proper actuarial report in respect of it. I was asking, why the secret? I presume that if a proper actuarial basis existed in support of the government's case that it would have been made public. I can only assume that the lack of public presentation of such a report indicates that there is none in fact. The sickness and pregnancy benefits were guesses. The alleged benefits due to the extension of the waiting period and the elimination of seasonal benefits are largely fictional.
Apart from the sloppiness of the mathematics, Mr. Speaker, a fundamental objection must be the continued emphasis of unemployment insurance or welfare as a

June 28, 1971
The Budget-Mr. Hellyer
substitute for jobs. Everyone agrees that individuals should be adequately compensated when jobs are not available through no fault of their own. That is fundamental. But jobs should be available. It should be a man's inalienable right to work if he wants to work. In our kind of society, we should see that that fundamental right is guaranteed. The present situation is not necessary. It is a result of a deliberate policy on the part of the government to fight inflation by nineteenth century methods.


Some hon. Members:: Hear, hear.


Paul Theodore Hellyer: For support of the suggestion that we could have had full employment in Canada, one need only look at the experience in other western countries. There is full employment in Japan, Germany, Switzerland, the Scandinavian countries, Australia and New Zealand. In fact, in almost every western country, with the exception of the United States, Canada, and to a certain extent Great Britain, full employment policies are being pursued. In Canada, we have mismanaged our economy. The consequences for hundreds of thousands of our citizens in human terms are beyond description.
In recent weeks I have received literally hundreds of letters from unemployed people. In not one single case did they ask for higher unemployment insurance benefits. Almost universally and without exception they suggested that they wanted employment. They wanted work. They want to use their talents, strength and energy to help build a better Canada.
A profound objection to the Unemployment Insurance Act and the minister's budget is the institutionalizing of unemployment. By inference at least. In the Unemployment Insurance Act, and in all of the other acts and statements of the government at the present time, we are being led to believe that 4 per cent unemployment is to be considered normal. The consistent use of this figure by the government must be considered part of the conditioning process to get the public used to the idea of chronic unemployment. It is not good enough. In fact, it is preposterous. The idea must be vigorously rejected. On June 19, the Toronto Star suggested that one of the minister's officials used the figure of 5 per cent unemployment as a target figure. That is even more preposterous. I hope the minister will lose no time in denying the validity of that idea, if he has not already done so.
In underestimating the cost in future tax increases required for unemployment insurance by an order of 8 or 10, the government is not levelling with the people. In following this course, it raises the question of the credibility of all its budgetary proposals. Have budgetary revenues been over-estimated and, if so, by how much? As a matter of fact, if private industry were to make a presentation to the public which was so inaccurate,-


Robert Lorne Stanfield: They would go to jail.


Paul Theodore Hellyer: -the Minister of Consumer and Corporate Affairs (Mr. Basford) would lay charges. It is the old shell game. Watch closely for the figures are quicker than the eye. The public gets a view of the benefits before the
election. It gets the fantastic bill and higher taxes afterward.
If inflation rises to expectant levels next winter, even the minor benefits to the little people will be unceremoniously wiped out. We must end these policies that tear the country apart. They are not good enough. The people want jobs, stable prices and lower taxes than are in existence at the present time, because in many cases the pressure is becoming too great. These are not unreasonable expectations, Mr. Speaker. It would be different if such achievements were beyond our capacity, but that is not the case. We in Canada have fantastic resources, both human and material. All we have to do is to put them to work in an intelligent way. This is why we cannot blame the people for wanting more. We have raised their expectations but the realization is incompatible with those expectations. The people now want changes in government policy. Instead of minor tinkering, they want to know how to solve the present situation in which they find themselves, to the point where every Canadian who wants to work is able to work: where every Canadian who retires with a pension of $2,000 a year will know that his pension will buy just as much five years later as at the time of retirement; where every Canadian who is taxed to death on his real estate and in other ways will know that somehow he will be able to get by and raise his family with some sort of dignity and decency. These are not unreasonable suggestions or expectations for a country as great at this, but we have to change our policies very dramatically and substantially if we are to provide our people with what they want and deserve.
The Minister of Finance concluded his speech by saying that we are on course. On course for where, Mr. Speaker? Niagara Falls? Earlier the minister said that the data that he had produced suggests that, while we cannot insulate ourselves from the pervasive impact of economic influences from the United States, we have it in our hands to achieve a somewhat better performance if we have the wisdom and the will to do so. With that masterpiece of understatement I agree, Mr. Speaker, so let us get at it.


Edmund Boyd Osler: Mr. Speaker, I want to say a few words on the budget and I hope hon. members will give me their indulgence since my usual bull voice has become even more "bully" and it may be difficult to get across what I want to say.
At the outset, and without being in any way personal- because I do not intend to be personal about a man whom I like and admire greatly-I regret that the hon. member for Trinity (Mr. Hellyer) did not specify in his speech that he was a minister, and a very senior minister, of a government that fought an election, at least in part, on the issue of inflation and how to attack it. I might add that to my knowledge he never opened his mouth in caucus against the methods being used to fight inflation. Therefore, having heard his speech, it is a little difficult not to make those observations. Otherwise I

June 28, 1971

thought he made a constructive contribution to the debate.


Lincoln MacCauley Alexander: He has seen the light.


Edmund Boyd Osler: He may have seen the light, but I am afraid he should have had his dark glasses on because it has been a little too dazzling for him to gaze upon.
We have before us a proposed budget and a series of documents containing provisions of legislation that is about to be introduced to reform personal and corporate income taxes. These are, as other speakers have pointed out, quite separate things. Neither the budget nor the proposed provisions for tax reform are perfect, but, then, nothing in this world ever is perfect. In my opinion, the comments we have heard so far from the official opposition and the spokesmen for the NDP, and also for those who are playing "rover" on their own, fall far short of anything to be expected of normally competent men in this imperfect world.
As for Conservative reaction, I looked up some words of Sir Walter Raleigh, who was quite a figure a few hundred years ago, who said something that might sum up the comments of Conservative members. He said: "Fain would I, but I dare not". As for the reaction of the NDP, in view of the problems that they have been experiencing with the "Waffle", I again turn to the words of Sir Walter Raleigh, who said: "I dare, and yet I may not".
This government can dare, Mr. Speaker, and it has dared. In the first instance, it has dared to take up the challenge of tax reform and to engage in dialogue with the people before coming to any decisions. In the second instance, it has dared to heed the will of the people and to modify its own views. Finally, it has drafted legislation for this Parliament to consider and to act upon. Would the NDP have taken this action? Has it ever managed to bring itself to admit that it may not be all wise in the management of the people's affairs? Would it have changed direction in the slightest degree in public?
We who sit to your right, Mr. Speaker, are often accused by the scribes and the pharisees on the other side of the House of being arrogant, heartless and technocratic in our approach to all problems. Indeed, technocratic is a favourite word to be found in the glossary of gall-soaked adjectives that the new leader of the NDP inherited from the old leader. Yet, in spite of this, we are now condemned for modifying our original proposals. We may be arrogant in the eyes of some, Mr. Speaker, but we are not afraid to try to meet problems. Nor are we afraid to admit that when a man tries to do something meaningful he does run the risk of making some mistakes. We may be heartless, Mr. Speaker, but we do have sufficient courage and concern to lay our necks on the line and to adopt new policies in our efforts to find new solutions to age old problems of equity and growth.
The hon. member for Waterloo (Mr. Saltsman) made much of the so-called bribes to businessmen that he said were contained in our proposals for tax reform. To my mind the hon. member for Don Valley (Mr. Kaplan) effectively demolished his reasoning on this subject. I 24171-48
The Budget-Mr. Osier
would merely like to add that the Schreyer government in Manitoba seems more inclined to go along with this government's reasoning than do the NDP members of this House.
In the speech from the throne which the present government of Manitoba delivered this year, there were three interesting items that indicated to me that that government was at least trying to head in the same direction as this government. The first item is as follows:
Programs for economic and industrial development will be focussed primarily on activities which will not only increase average per capita income, but will also improve the distribution of that income among the population.
The second item is this:
My Ministers inform me also that plans have been made to provide for more effective recognition of the potential of small business through a small business loans operation as an integral part of the Manitoba Development Corporation.
Lastly, item No. 3 reads:
You will be asked to approve of expenditures for the purpose of the creation of a mineral exploration company which will be able to embark on programs to discover viable Manitoba resources either on its own initiative, or in partnership with other exploration companies.
It is pretty strong meat for social democrats to admit that they will be dealing with business people who may have ideas and can help them achieve their objectives. It is too bad that the members of that party in this House do not take a leaf from the book of the members of their party in Manitoba and be a little more realistic in their approach to matters, instead of talking of bribing businessmen. The hon. member for Waterloo might well brief himself on what his social democratic confreres are attempting to do about stimulating business in Manitoba before he denounces the government party in this House for trying to do the same thing.
There is nothing much to say about the remarks of the members of the official opposition. They are still impaled on the fence that they spent last year constructing with a melange of old driftwood and a few rusty nails. I think it was the week before last that the leader of the Progressive Conservatives is reputed to have said that the government has "the smell of fatigue and collapse of a loser's locker room". At least, that is what he is alleged to have said. I can only add that he ought to recognize the aroma because he has smelled it often enough; and behind the lockers in his locker room I caution him to watch out for shadowy figures clutching the assassin's knife. I have played on many a team that has lost a game. I was even in an air force once that lost a battle or two. But, I have never smelled the smell of "a loser's locker room" and I am certainly not smelling it now. I think the hon. gentleman must have been standing with his back to the wind when he recorded those immortal words.
The business of the government is to govern, and it requires courage to govern in this day and age of changing values and problems of unprecedented gravity. It requires the courage to try and the courage to admit the

June 28, 1971
The Budget-Mr. Osier
possibility that one may make mistakes. The people of Canada are the ones who must ultimately decide this issue. The people of Canada are fair-minded; they admire courage and, according to much of the mail I receive, it would appear they are fed up with the carping, unproductive criticism we hear so often in this House.
We have two things here, a budget and proposed measures for tax reform. The budget seems to me to be a good one. We have the elimination of the 3 per cent surtax, new personal exemptions and reductions in sales and excise taxes, all of which amount to a little over $200 million being injected into the economy during the next half of this year. We have $650 million more put into the economy as a result of government spending delayed from the winter, and $400 million in new programs intended for 1971-72.
This should further encourage demand for consumer durable goods, which already seems to be on the rise. I understand retail sales have increased by 4.5 per cent from March to April with an underlying trend in relation to prices, being about 3 per cent more per year. So, real growth this year should be determined at the rate of 5 per cent to 5.5 per cent. In any event, we are gaining in productivity.
The elimination of tax uncertainty should provide business with enough encouragement to stimulate its own capital investment program. Manufacturing activity appears to be picking up in spite of the fact that over-all unemployment remains regrettably high. There were
57,000	new jobs in manufacturing in May and 67,000 new jobs in the construction industry in that same month, and the rate of unemployment is going down.
Hopefully the slight trend for imports to climb faster than exports will not persist, but we must continue our efforts to sell to customers other than the United States. Hopefully too, the downward trend in the value of the Canadian dollar will continue, because this will not only stimulate industry, it will free Canadian funds for government cash requirements in Canada and reduce the necessity for having to go to the bond market.
As for tax reform, the proposal brought forward by this government shows concern both for people as individuals and the economic machinery required to fulfil their needs. The NDP sound sometimes as if this economic machinery should be looked upon as a disease unless it is owned by the state. In a country like Canada you Cannot have equity for an increasing population unless you also have economic growth. You cannot have growth at anywhere near the rate required to increase real per capita income and consumption unless the rate of capital accumulation, and of productive improvement, matches the expectations of the people.
The greatest achievements of the government's reform plan are the increased personal exemptions, the deductibility of child care expenses for working mothers, the introduction of income averaging for those who have fluctuating incomes or who receive large lump sum payments such as capital gains, the major increases in deductibility of contributions to pension plans, the deductibility of an employee's cost of earning his living,
the deductibility of an employee's moving expenses, the increased exemptions for those over the age of 65, and the increase of deductible gifts to charitable organizations from 10 per cent to 20 per cent of one's income. The government has achieved these things for individuals without weakening the economic machinery required if this land of ours is not to stagnate. It is to be hoped that the provinces will refrain from jumping in to fill the reductions in the federal tax load with new provincial taxes. To prevent this, people must be as vigilant and as vociferous toward their provincial governments as they have been in the past year toward the federal government and its white paper proposals.
Premier Schreyer of Manitoba is reputed to have already said the federal tax system would reduce Manitoba's tax revenues, and that he will have to consider levying a provincial estate tax and increase the retail sales tax. He said this, in spite of the fact the federal government has guaranteed that provinces will not suffer a revenue drop, or if they do that Ottawa will make it up. He has said this, too, in spite of the fact the provinces will have new revenue from their share of the new capital gains tax and their increased taxing right over mineral companies. This will give them an extra 15 per cent. One can only wonder about a statement or an attitude like this, especially when one suspects that Manitoba's taxes were bound to go up anyway in order to fulfil the recent promises of its politicians. These promises were made even before they knew anything about the federal government proposals.
It is to be hoped that provincial governments will follow the federal lead toward tax relief instead of following this predicted road. For example, federal tax reform proposals will result in the elimination of tax for all couples who are 65 years of age and older on their income up to $3,600. It would be logical for the provinces to now reduce the real property tax for home owners in the same age group, that is if they are as socially minded as they claim.
Lastly, it is to be hoped that efforts will be intensified to reduce or at least check the rate of expansion of the federal budget, and that the federal authority, now that it has created a new tax framework, will persist in its search for a truly effective way of stimulating development in slow-growth areas. Will the way not soon be open to allow tax incentives to eliminate regional disparity?
It seems to me the proposals which will gradually alter the basis for taxation of the mining and petroleum industries might provide some room for tax incentives to manufacturing and service industries in the less dynamic regions of Canada. Must we sit by while Toronto, Montreal and Vancouver become overcrowded monstrosities unfit to live in and the rest of the country becomes an unpopulated desert? There is nothing personal in my reference to Montreal, Toronto and Vancouver. But there are predictions that they are going to grow into monstrosities unless something is done. Must we stand by while they become such monstrosities? I certainly hope we will not have to do this. I feel the federal government should continue vigorously to pursue a goal of regional

June 28, 1971

equality of opportunity. I certainly hope it will do what it must in respect of tax concessions and exemptions to gain such an end.
I am happy to note that the federal government plans to encourage Canadian saving and investment. I am not one of those who has a psychopathic hatred of foreign investment, particularly of the non-shareholding kind. But it seems to me we should not forever depend on foreign sources of savings, because capital inflows from abroad may cease to flow in this capital-poor world in which we live, or at least cease in terms that would be acceptable to us.
Finally, I must repeat that the government's proposal strikes a workable balance between equity and growth. We need growth in order to provide equity. We need equity to ensure a continued orderly function in our society. This must surely be the only foundation on which growth itself can be achieved. Thus equity and growth are complementary, not opposing factors in the equation. Thus both should be maximized to as great an extent as possible by government tax policy. I believe what we see is a maximizing and very acceptable compromise, following a year and a half consideration of the white paper and budget proposals.
Before I sit down, I should like to congratulate the House of Commons and Senate committees for the exhaustive and very intelligent work they performed for over a year and a half. Let me congratulate the government, and especially the Minister of Finance (Mr. Benson), for being open-minded enough to look in a neutral and fair way at the proposals which came from these sources. Let me congratulate the government itself for being big enough to come out with this reform proposal now tabled for the consideration of this House.


Jack Burnett Murta: Mr. Speaker, when I look at this budget and the so-called reforms in the tax structure, I must come to the conclusion that western Canada once again is to suffer from eastern domination. What seems to me to be a total lack of regard for the western economy, the farm situation and western development, will once again breed distrust and suspicion among westerners. I am disgusted at this government for allowing the economy of Western Canada to reach the stage it has. In my opinion, the effect of this budget has been magnified. It will do little for economic expansion in western Canada. I cannot see it reducing unemployment but, along with other government controls, I can see it having a highly inflationary effect. The so-called tax reform fails to take into account the plight of the small farmer. I also feel that the capital gains tax is discriminatory to the owners of small businesses and farmers.
One cannot necessarily make a blanket attack on all the budget proposals but neither can they be hailed as the great tax reforms they have been called. These tax reform proposals must be a betrayal of one of the principles of true tax reform, the principle of equity. An equitable system, I believe, should take into account regional disparities, the nature of certain industries and the unequal burdens created by the present tax system.
24171-48J
The Budget-Mr. Murta
In my opinion, this must be labelled an eastern budget. As are most budgets, it was designed by an easterner for the easterner. I must say my greatest hope is that some day we will have a budget which will take into account all of Canada rather than Ontario and Quebec.
I must comment on the general feeling which is growing in western Canada, and then perhaps the minister will understand why the budget fails to impress anyone from that area. Contrary to popular eastern belief, the prairie farmer is not fabricating his complaints. He might perhaps be compared to those in Quebec who seek to preserve and safeguard their culture. The western farmer desires to preserve a way of life, his way of life, and it seems to him today that this government, for some unknown reason, wishes to drive him from his land.
The events of the past five years would almost cause any farmer to think that his demise is a definite part of government policy. Historically, the prairie farmer has had much to complain about, but his complaints never seem to be heard. In fact, they have been totally ignored since this government has come into power. It sounds very dramatic to accuse the government of a definite anti-farm and anti-west policy, Mr. Speaker, but one must eventually come to this conclusion after years of neglect and abuse. I could go into a monologue on discriminatory freight rates, high tariffs to protect the uncompetitive eastern industrialists, lack lustre attempts by the eastern bureaucrats to sell our agricultural products and now, to top if off, the efforts of the provinces of Ontario and Quebec to restrict our agricultural produce from entering their provinces, the latest restriction being on eggs. I would suggest to the minister that he come to rural Manitoba to see the situation for himself, so that he might better understand what I am talking about.
If one travelled through southern Manitoba, he would soon see the shocking situation that is developing. There is a trend, which if not arrested, could leave the countryside in economic shambles. The farmers are going further and further into debt, municipalities are confronted with increases in tax arrears and the people are becoming frustrated and resentful about their lot. City dwellers today may be concerned about inflation and unemployment, but the farmer is concerned about his whole way of life. He sees his costs rising, due in large measure to the ever-increasing wage demands of labour, and his income dropping. He is confronted with property taxes which in many cases run into thousands of dollars and is increasingly hard pressed to find money to pay them. He sees his education taxes, over which he has no control, assuming mountainous proportions. He wonders how long he can hold out in the face of these built-in expenses. He is increasingly resentful of government regulation and control at both the federal and provincial levels. One farmer expressed it in this way. He said it is getting to the point where he might as well be nothing more than a hired man on his own farm because as a hired man, he would be better paid.
Welfare is a live issue in rural Manitoba today, and in most of rural Canada. The hard pressed farmer is bitter and resentful about contributing to welfare costs for people who he believes are faced with fewer real mone-

June 28, 1971
The Budget-Mr. Murta
tary problems than he is. That is the situation in rural Manitoba. It is a situation which has ramifications in every phase of rural life, social, agriculture, economic and political.
A good measure of eastern affluence results from the fact that the non-industrial provinces are forced to buy their consumer goods from the eastern industrialists. It is not only time for this affluence to be shared, but for the development of a western policy. This budget gives no relief to the ailing agricultural industry. It will not relieve the tax burden on the farmer or the small businessman. I believe it will hinder the development of the oil and mining industries in the west. An example of what I consider prejudice is the removal of the tax on margarine. This will certainly make some dairy products less competitive and, in the end, increase the burden on the dairy farmer. Yet, the government gives the electronics industry a boost by removing the federal excise tax. Why cannot the same consideration be given to agriculture?
I should like, Mr. Speaker, to refer for a few minutes to the implementation at this time of a capital gains tax. This is a tax at income tax rates on 50 per cent of all capital gains on property sold valued at more than $1,000. I believe this will have a very devastating and detrimental effect on the west. I can only conclude that the minister has failed to recognize the nature of the rural farm set-up on the Prairies. Is it oversight or is it a definite government policy to drive the farmer from the land? The reason the capital gains tax is unfair to the farmer is quite simple. It lies in past government farm policies. This government allowed prairie farm income to slip so badly that the only hope a farmer had was the knowledge that he owned valuable land. In the last ten years farm land has not been easy to obtain. Many young people who wished to start out in an agricultural career found that the owning of their own farm required a tremendous outlay of capital. Many such new farmers went into debt for years. They virtually signed away their futures. Profits were poured into paying for the land. The people have done without the normal amenities and luxuries of urban life in order to own their own land.
A farmer will work hard all his life in order to pay for his land. He never shows a profit until his land is paid for, perhaps some 20 or 30 years after he has begun farming. I repeat that the one thing which has kept the farmer going has been his knowledge that, on his retirement, he would own valuable land that would bring him a return for all his years of work. Now, when he sells his land he will be taxed to the hilt. This is grossly unfair. Many of these farmers have been building and paying for 30 years or more. The fruits of thirty years hard work are to be taken away. The minister should realize that farmers are not speculators. All they desire is an honest return for their years of doing without and paying for the land which they hope to own. These are not overnight gains that are being taxed in this case, but the labours of generations of work. All I can say is that I must protest this move. It will remove what little incentive there was left in the agricultural industry.
There is another aspect of the capital gains tax which is unfair, especially to rural western Canada. It is being implemented at a time when farm land values are depressed because this government has allowed the western economy to fall into a state of depression. Depending on the region, land prices have gone down 20 per cent to 30 per cent. When a farmer sells his land upon reaching retirement age, he will pay a higher than normal capital gains tax because valuation day will be at a time when the farm values are depressed. Supposedly he has a choice in determining his tax. He can use the purchase value of his farm or he can use the value as of valuation day, which is a day to be later announced. Now, if in five or six years he wishes to sell, it is quite likely that the land values will have returned to or greatly exceeded the values of five years ago. The result of all this will be a higher differential between the buying and selling price than should be the case, and because of this the farmer will be paying a disproportionate share of the capital gains tax when he disposes of his assets.
If the government insists on a capital gains tax for farmers, I hope that it will defer its implementation to a time when land values have returned to their previous level or to a more realistic level. In the case of a farmer who has owned land for 30 years and wishes to retire in five years, the tax would certainly be higher than he should be paying.
The capital gains tax cannot be called true tax reform. If anything, it is a retrogressive step. In the first place, the government has reduced the personal income tax to
61.1	per cent from 82.4 per cent for the $100,000 level. The capital gains tax, set up as it is now, will do more to establish the rich in this country as the favoured class. The capital gains tax will reduce the incentive of the middle income earners who have aspirations of becoming rich and who invest accordingly. This tax will affect the greatest source of investment capital in the country. This seems to me to be a contradiction in government policy. Two weeks ago, we were closing debate on the establishment of the Canada Development Corporation. The government rammed this bill through, saying that it. would encourage Canadian investment in Canada. Now, we have the capital gains tax which I am sure will take much of the incentive out of such investment. Perhaps the government had in mind the fact that one measure would offset the other. At the time, we expressed our doubts that the establishment of the CDC would encourage a greater degree of Canadian investment. In my opinion, the implementation of a capital gains tax will just make the situation worse, and of course if it were truly a reform it would be a progressive tax which it is not. It will hinder the middle income earner the most, and it will do much to stratify this country even more into three groups, the rich, the middle class and the poor. Upward mobility will become more difficult.
The government has been congratulating itself on this budget. They say that the tax cuts will be beneficial to the economy and that the budget will be hailed as one of tax reform. The initial reaction of the press and of

June 28. 1971


John Napier Turner: Mr. Speaker, although I would enjoy supporting the budgetary provisions of the Minister of Finance (Mr. Benson) on behalf of the government, and indeed the substance of the changes in tax reform which he has presented for the approval of the country and of Parliament, this afternoon I want to confine my remarks to some of the procedural aspects of the income tax bill which is annexed to the resolutions, which affects taxpayers' rights as against the Crown, and which to my mind enhances the rights of the taxpayer in his dealings with the Crown.

June 28, 1971
The Budget-Hon. J. Turner
I have said on other occasions that one of the objectives of the federal Department of Justice is to attempt to redress, so far as we have jurisdiction, the imbalance of the relationship between the individual and the state, and to compensate somewhat for the remoteness, the bigness and the anonymity of government, and so to arrange the rights and remedies available to the individual citizen that he is not further obscured and dwarfed by the bigness and pervasiveness of modern government.
We undertook a review of the administrative powers available to the state contained in the present Income Tax Act. We have reviewed these powers with the purpose of seeing whether they might not be altered so as to afford the citizen greater protection from arbitrary action on the part of his government. It is important that the laws of this country should give to the citizen a clear right to air any grievance he has and, in respect of the matter now before the House, to air any grievance he has with the revenue authorities of Canada in as speedy and expeditious a manner as possible. I believe further it is essential that the rights of the individual, in so far as they relate to his duty to discharge his proper burden of taxes towards his fellow citizens, should not be unduly or unnecessarily curtailed or restricted.
Your Honour, in the annexed bill which is attached to the resolutions now before the House, there are provisions which have been inserted with the purpose of simplifying legal proceedings, of giving the Canadian taxpayer a greater right of access to the courts, of giving him the means of having legal disputes with the Crown determined in as expeditious a manner as possible, and providing him with greater protection from the arbitrary abuse of the various administrative powers now under the Income Tax Act entrusted to various officials concerned with the administration and enforcement of the revenue laws. One of the greatest protections which a citizen can have from arbitrary action is the right to institute legal proceedings for the purpose of asserting his rights. If this right or remedy is to be effective, it is necessary to see that the provisions in relation to the institution of legal proceedings be kept as simple as possible.
Hon. members will recall that when the Tax Review Board bill was before the House, it implemented the first step of the government's program to simplify legal proceedings under the Income Tax Act. That bill, which is now law, gives the average citizen a greater opportunity to challenge any assessment for tax made against him. Hon. members will recall also that under section 9 of the Tax Review Board Act, it is provided that no special type or form of pleading, or petition is required in order to institute an appeal before the board against any assessment for tax. Hon. members will also recall that the Tax Review Board, in adjudicating disputes between taxpayers and revenue authorities, is not to be bound by any legal or technical rules of evidence.
The taxpayer is not required to be represented by his lawyer. He can appear himself before the board, or be supported by his accountant, or any neighbour or friend who has some knowledge of the facts before the board.

There was also in this act, when it appeared before Parliament and as it was endorsed by Parliament, a legislative directive that the board was to deal with all appeals as informally and as expeditiously as the circumstances and considerations of fairness would permit. That act also amended the Income Tax Act to provide that if the revenue authorities were unsuccessful before the board, that is, if the taxpayer were successful in having his appeal against the assessment allowed, and the revenue authorities appealed that decision to the then Exchequer Court, now the Federal Court of Canada, if the amount in controversy were less than $2,500 the revenue authorities would be required to pay all reasonable and proper costs of the taxpayer in his appeal, whether or not the taxpayer won or lost that appeal before the court.
I think hon. members will recall that our colleague from Burnaby-Richmond-Delta was successful in persuading the standing Committee to raise that amount from $1,000 to $2,500 by way of an amended recommendation before the report stage, and we were able to endorse the comm.ttee's report. This provision with respect to the Tax Review Board has been continued in the proposed bill which is annexed to the resolutions.
In the proposed bill which is attached to the resolutions, and which is before the House, hon. members will see that further steps have now been taken to simplify legal proceedings, and to sweep away special statutory provisions found in the present Income Tax Act which in fact often constituted unnecessary and unexpected booby traps for taxpayers and for those who were advising taxpayers. In the proposals now before the House, it is provided that income tax proceedings before the Federal Court, under the Income Tax Act will be instituted in the same manner as ordinary actions. It is the view of the government that all of the various legal proceedings that may be taken under various statutes before the Federal Court of Canada should, to the greatest extent possible, correspond to those of an ordinary action in that court so that any lawyer can feel perfectly competent to institute proceedings in the Federal Court.
Hon. members will observe that the proposed bill provides that the special form on notice of appeal against an income tax assessment before the court shall no longer be necessary. In future, all proceedings will be instituted in substantially the same manner as any other legal proceeding. Furthermore, the rather incomplete and fragmentary code of procedure now found in division J of the Income Tax Act, which regulates the manner in which actions between the Crown and taxpayers are to be conducted, has been swept away. Under new provisions, the rules of the federal court will apply to legal proceedings instituted under the Income Tax Act in the court. Now, rather than having a fragmented, overly-complicated and incomplete code of procedure under which the taxpayer is governed if he wishes to challenge the assessment of the Department of National Revenue, the generalized rules of court will be available to him.
There is an adage that justice delayed is justice denied. For this reason, an attempt has been made in the pro-
June 28. 1971

posed bill to provide for alternative avenues to have disputes between the revenue authorities and the taxpayers resolved. These alternatives will permit a more expeditious resolution of disputes. For example, in many cases, at the time when the tax is assessed, it is clear to both the revenue authorities and the taxpayer that there is a serious dispute which will not be resolved on the facts of the assessment without a determination on a point of law by the courts. Hon. members will see that in the proposed bill, provision has now been made whereby a taxpayer in filing a notice of objection to the assessment can indicate that he wishes to appeal immediately to the court or tax review board. In that case, the revenue authorities, if they consent, are empowered to refer the objection immediately to the forum chosen by the taxpayer for adjudication.
Hon. members will also see that in the proposed bill there is provision that the federal court has jusrisdiction to determine any question of law, fact or mixed law and fact arising out of the bill, which the parties have, by stated case, agreed upon. This will be useful both to the taxpayer and revenue authorities. This provision will permit the question to be stated to the court prior to any assessment having been made, and thus it should be possible to obtain a decision on the question of law while the facts remain to be determined.
If hon. members have had an opportunity to go through the rather complicated provisions of the bill annexed to the resolution presented by the Minister of Finance (Mr. Benson) they will observe that the Minister of National Revenue now will be able to make an application to the federal court or to the tax revenue board to determine common questions of law, fact or mixed law and fact which are common to one or more assessments determined in a single proceeding. In other words, where there is a question of law that may affect a number of taxpayers across the country, rather than putting the burden upon a single taxpayer to go to court to have that determined, the minister may ask that a class action be taken in order that one case may be determined for the benefit of all taxpayers in a similar situation. I believe this provision will avoid multiplicity of litigation and I believe it will result in a fairer adjudication of the issues where a determination of the factual interests of one taxpayer might adversely affect another. I think every lawyer in this House has heard the saying, "hard cases make bad law". Sometimes it is the psychology of particular circumstances-


An hon. Member:: So do bad statutes.


John Napier Turner: -before the court which may influence which way a decision will go. A decision which may be the proper one in terms of equity and justice for the one taxpayer may, because of law involved, prejudicially affect hundreds of thousands of other taxpayers whose rights have not been impartially determined. By allowing the case to go before the court in this way, a fairer judgment will be arrived at for all involved.
The Budget-Hon. J. Turner
Hon. members will observe specific provisions in the annexed bill allowing for appeals from the denial of registration or the revocation of registration of a charitable organization, amateur athletic association, retirement savings plan or profit sharing plan. Any hon. members who have represented sports associations seeking a certificate of deductibility for contributions under the Income Tax Act will know how difficult it is to obtain this. At the moment, there is no appeal from the decision of the administrative officers concerned. I believe an appeal from an administrative decision relating to charitable organizations, retirement savings plans and profit sharing plans is a step forward.
Any revenue law which commands the respect of the majority of citizens must contain penal provisions. There must be the mechanics available to punish that incredibly small minority of citizens not prepared to carry their fair share of the cost of providing for the common weal and the cost of government. It is equally important that those penal provisions of any Income Tax Act should not be oppressive, unfair or harsh. The procedure should be such that their application is fair and not arbitrary. For that reason, we propose to change the existing rule so that now in any case where a penalty has been assessed against a taxpayer, the burden in the event of a dispute will be on the revenue authorities to establish the facts justifying the imposition of the penalty. It is the view of this government that it is not good administration of justice to permit imposition of penalties subsequent to imposition of punishment by the courts. We do not believe it is fair administration for the Department of National Revenue to come along after a court decision adjudging guilt or liability, and add a further penalty to the result.
There is now a clear legislative intent in the present bill that no penalty can be imposed after proceedings for the commission of an offence have been instituted in the courts. It is up to the courts to decide whether the penalty can be invoked, whether interest runs and whether criminal or civil law is involved.
The wide provisions under the present section 126 (3) of the Income Tax Act permit the Minister of National Revenue to grant an authorization to enter and search the premises. This has been curtailed. Under the new provisions set forth in the annexed bill, it will be incumbent upon the revenue authorities to establish by evidence on oath to the satisfaction of a judge that there are reasonable and probable grounds for believing that a violation of the act has been committed or is likely to be committed before they are authorized to enter and search. There is no more blanket authorization to enter and search. The bill further provides that a person from whom documents have been seized will be entitled to inspect them and obtain copies. The proposed bill annexed to the resolution contains a provision which will require the revenue authorities to return any documents seized during the course of an audit to the taxpayer within 120 days from the date of seizure, unless an order is obtained from a judge of a superior or county court permitting them to be kept.



Y396 COMMONS DEBATES

[Stage Direction]
June 28, 1971
The Budget-Hon. J. Turner
Finally, the provision under which inquiries are held under the Income Tax Act has been changed substantially. First, an inquiry is now to be held before a hearing officer, a person appointed by the Tax Review Board, not an administrative officer of the department. This should give all interested parties an assurance that the hearing officer will be a person independent of the revenue authorities. The bill goes on to provide that any person giving evidence on an inquiry will be entitled to be represented by counsel and upon request will be entitled to receive a transcript of the evidence given by him before the inquiry. Provision is made for the person whose affairs are being investigated to be present and represented by counsel unless the hearing officer rules to the contrary. I believe these are all advances which are long overdue and are remedial in their purpose and intent.
I can assure hon. members and Your Honour that in arriving at these proposals put forward by the Minister of Finance on budget night, the government was assisted by representations received from interested citizens and organizations all over the country, from the committee of the Canadian Bar Association and from the institute of chartered accountants.
The administrative process remains an unexplored labyrinth. We are concerned, particularly in the Department of Justice, about the difficulty of challenging laws that may have gone beyond statutory limits or the scrutiny of Parliament. We are concerned with controlling the breadth of the enabling powers that authorize those regulations that are found in our statutes. We are concerned, as well, about the judicial powers exercised by administrative tribunals. We introduced a federal court bill, which now is law, to broaden the scope of the judicial review of the powers of administrative tribunals, commissions and boards, making them more responsive to the average Canadian citizen. This process is continuing.
The provisions I have referred to which relate to the procedural rights and remedies of the taxpayer against the state are a continuation of the civilizing of the administrative process in the service of the individual. We have to inquire into the complete workings of the public administrative law in this country, including the organization, administration and operation of the procedures of federal boards, tribunals and commissions, and into the internal workings of departments of government, to ensure that Canadians, in dealing with their government at Ottawa or across the country at the federal level, have opportunities to challenge, have remedies that are effective in the courts if that action is ineffective. We will continue to define and create new remedies and processes of review for the average Canadian citizen against the state.
I commend to the House the provisions of the proposed bill presented by the Minister of Finance that go a great distance towards redressing some of the imbalances between the citizen and his government so far as discharging his fair share of the burden of taxation is concerned.
David Lewis: Mr. Speaker, I will not speak on the subject which the Minister of Justice (Mr. Turner) raised. Of course, it is important; I do not deny that. I suspect that it is more important to the wealthier citizens and to the corporations than to the ordinary worker or taxpayer whose tax is deducted at source. I do not deny that the subject is important; however, that is not the subject with which I want to deal.
The more one studies the budget, the budget speech and the income tax resolution, the so-called tax reforms, the more it becomes clear that the Canadian people may be the victims of a major hoax and the more it becomes clear to me that ten years of work in seeking tax reform is now down the drain. All the studies the Carter Commission made, and the attempt to establish equity in our tax system which the Carter Commission Report presented have been entirely rejected by the government. Indeed, many of the more progressive suggestions in the white paper have been retreated from in what we now have before us.
I want to make clear on behalf of my colleagues, and the party I have the honour to lead across Canada, that we reject the notion that there has been tax reform as suggested by the Minister of Finance (Mr. Benson). There is no such thing before this House. There are some tax changes, a few of them desirable and many of them undesirable; however, the tax system which the Minister of Finance has presented and which members of the government party are supporting remains inequitable and unjust in most of its aspects. It does not reform the system; it does not shift the burden of taxation to those who can afford to pay; it does not introduce equity to our tax system. The inequities, injustices, loopholes and special privileges which have existed in the tax system until now will continue existing. Therefore, It is not a tax reform at all. I have a feeling, Mr. Speaker, that despite the attempts of the government and government spokesmen to persuade the people of Canada that the tax system of this country has really been reformed, the people of this country, the workers, farmers and the majority of our citizens and residents, will recognize very quickly that they cannot accept that proposal, that they are the victims of a hoax, that it is not true that the tax system has been made more equitable and that it will go on being just as bad as it has been until now.
There have been some desirable tax changes, Mr. Speaker. We have, at last, increases in personal exemptions, which of course everyone in Canada welcomes. I make two points about that. First, I point out, as everyone can see who has made some kind of statistical study of this, that the increases in tax exemptions are still less than would have resulted from a tabulation of the cost of living increase since 1949, when the present tax exemptions were introduced. There would need to be a considerable increase in that item. I say secondly, Mr. Speaker, that we have rejected for some time personal exemptions as an adequate or equitable way of dealing with the matter. We have insisted that there be a tax credit system, as the Carter Commission Report suggests. It is obvious to anyone who has thought about it that increases in tax exemptions benefit higher income people
June 28, 1971

a great deal more than they benefit lower income people. Having said that, I am pleased, of course, that there is to be some increase in the personal exemption. We are very pleased, indeed, that there is to be some relief for old age pensioners and aged people, and we are very pleased with the child care allowance. Those are the only improvements of substance in the new tax system that has been introduced.


An hon. Member:: What about the capital gains tax?


David Lewis: I will come to the capital gains tax later.


An hon. Member:: And what about the margarine tax?


David Lewis: I hope the hon. member will forgive me if I do not think that that is quite as important as some of the other things I have mentioned. He does not think so, either. Although I am very pleased with these things, as I said on another occasion, I did not jump for joy at these things being done. You know, Mr. Speaker, all that the Minister of Finance has done is this: He has stopped robbing the poor. He has stopped taxing those who for years should not have been on the tax rolls. While we are very pleased indeed that those poor people in Canada will no longer be gouged, even to a small extent, I cannot accept that item as being the basis for tax reform. I say that, welcome though the changes may be.
Why do I say that there is not tax reform, Mr. Speaker? I will come to the economic part of the budget later. I say that there is no tax reform for a number of reasons which I want to emphasize. All have been dealt with by the hon. member for Waterloo (Mr. Saltsman) in his excellent speech on the first day of the budget debate and by two more colleagues who followed him. I think it is important to underline these things.
First, Mr. Speaker, let me point out that much, if not most of the tax decrease for the 4 million-odd people who, according to the minister's table, are to pay decreased taxes, is due not to change in the tax system at all but to the elimination of the 3 per cent surtax. This surtax was imposed on a temporary basis and should have ended on December 31, 1970. Presumably, it would have ended on December 31, 1971 in any event, unless specifically extended by the government. As I say, much if not most of the tax relief for those 4 million-odd people results not from changes in the tax system but from the elimination of the 3 per cent surtax, which was a temporary tax in any event. Therefore, the claims being made are simply not justified in these circumstances.
It is interesting to look at the range of benefits as between lower income and higher income people, and anyone studying the figures will see, obviously, that what I am about to say is correct. I am not claiming any originality for it. The 3 per cent was a surtax on the tax payable. Obviously, those who pay higher taxes will get more relief.
It is interesting to look at the actual figures. A person with a gross income of $5,000 will get relief from the elimination of the 3 per cent surtax for the remaining six
The Budget-Mr. Lewis
months of 1971, as this comes into effect on July 1, of the magnificent sum of $1.31. A person earning $6,000 will get the magnificent relief from the elimination of the 3 per cent surtax of $3.91. A person with a gross income of $8,000 will get relief of $10.16. However, a person earning $20,000 will get relief of $73. When you get to a gross income of $50,000, there is relief of $298 in round figures. This repeats itself in every aspect of the tax system. It merely underlines the inequity which pervades and permeates our present tax system.
All the inequities and injustices remain, despite the introduction of the capital gains tax. Everyone has noticed that even though the capital gains tax has been introduced, the tax is to be at the income tax rate, but only on one half of the capital gains. Why? I don't know, except it is a deliberate intention to favour those who are able to earn their income through capital gains. There is no other reason why that is so. Some of my friends in the Progressive Conservative party are uneasy about any capital gains tax. I disagree with them on that point.
The Carter commission report was obviously right and just in emphasizing that the tax on the income of income earners ought to be based on the total income, not as to the source of their earnings. Whether a person makes that income by wage, salary or capital gains, it is still income in his pocket or, in most cases, the corporation's pocket and it ought to be taxed at the regular rate. In terms of equity and justice, there is no reason why a person who makes his income or any part of it by capital gains should pay income tax on only half whereas the ordinary salary earner, whether he makes $5,000, $15,000 or $20,000 a year, has to pay on his total taxable income. Indeed, in all cases, most of it is deducted at source. He has no opportunity to find any loophole with which to avoid any of the taxes.


Alastair William Gillespie: Carter also recommended no tax on dividend income. Do you agree with that?


David Lewis: I will come to the dividend income in a moment. I say that the capital gains tax, which should have been on our tax books for years, finally introduced by this government after years of study and painful thought, still ends in an inequity. It is still an immense advantage to the rich and powerful in this country.
I ask the people of Canada and members of this House to remember this simple proposition. Every time any segment of our people get a tax advantage, the rest of the people have to pay for it in one way or another. Every time some group of citizens, whether individual or corporate, are able to pay less in taxes, the ordinary citizen has to pay more because the revenue of the government has to be raised somewhere. If it is not raised from those who have it, it has to be raised from those who do not have it. This is precisely what our tax system has done all these years and will continue to do.
As several writers have already indicated, the fact that capital gains will be taxed at the income tax rate on only one half of the capital gains will open yet another loophole for the avoidance of taxes. This morning I asked the Minister of Finance (Mr. Benson) a question with regard

June 28. 1971
The Budget-Mr. Lewis
to the tax avoidance which he mentioned in a speech. He said if he was to give all the instances of tax avoidance, it would take him a whole night or a whole week, I forget which.
This preference for capital gains will be an absolute Roman holiday for the tax lawyers and tax accountants when they look at the books of the corporations and individual rich Canadians. There will be a lot of juggling and interpretations made to place certain earnings under capital gains rather than under income. The treasury will not only lose by its failure to tax the whole of capital gams, as it should have done, but it will also lose by the immense loophole that is opened by this distinction between one kind of earning and capital gains.
My second point is that all the inequities in our system remain because the limited ceiling that was suggested in the white paper on expenses, entertainment and related matters of corporations and executives has been removed. There is now no such ceiling. All the games that have been played up until now with expense accounts, expense allowances, the expenses of corporations and their executives will continue to be played. There is nothing in the new so-called reform system that places a ceiling on expenses. There is nothing that closes any of the loopholes through which hundreds of thousands, if not millions each year have crept in defiance of justice and equity. When you compare the concession the minister has made to corporations and executives with what he has done for the ordinary working men and women in this country, you see the kind of double standard that still controls our tax system.


Some hon. Members:: Hear, hear!


David Lewis: When it comes to the working men and women, the minister left what he suggested in his white paper. He made no change for them. They can deduct their expenses connected with earning their living at 3 per cent up to a maximum of $150 a year. There is no limit for the corporations and the corporation-executives. For seven million, eight million or nine million Canadians, or even more if you add management personnel and the like, there is a limit of $150. That double standard remains as it has always been in our tax system.
I now come to my third reason for saying that all the inequities, injustices and, in some respects, stupidities of the tax system still remain. I refer to the whole complex of capital allowances that are still there. The special concessions to the mining and oil companies are still there. I know, of course, that the three year tax holiday for mining corporations is to last only until 1972 and the present basis for depletion allowances is to be changed in 1976. Until 1976 the same sort of system will be in effect in Canada. Even after 1976, although the basis for depreciation allowances is going to be changed-it will be based on earned depletion-the iniquity of that kind of allowance will still remain in our tax system; the same principle is continued.
Almost all of these for the most part large corporations, for the most part foreign owned, are involved in
depleting our non-renewable resources and shipping them out of Canada without adequately refining, smelting or developing them as well as without developing industry around them. In addition, they are going to have the tax advantages they have enjoyed until now. Why are we in such a hurry to benefit such corporations? What is it that makes this government and so many members of this House so anxious to help have our non-renewable resources depleted at so fast a rate, at a time when the world is growing shorter and shorter of resources, especially the United States? If we were to do some planning in Canada we would realize that some years hence these resources will be needed by a hungry world even more than they are today; but Canada's resources will have disappeared.
Some other country may have held on to their reserves which they will be able to make available to the new nations of the world as they develop, but many of our resources will have been depleted at a cost to the Canadian people. Large, foreign-owned corporations make immense profits despite the fact that they drill dry holes and that explorations are frequently without result. That is all part of the game. Despite that, the large, foreign-owned corporations as well as large Canadian ones have consistently made huge profits at the expense of the Canadian people as a result of tax allowances given to them.
I think it is necessary to place on record some of the figures that the hon. member for Duvernay (Mr. Kier-ans), recently resigned from the cabinet, put before a group of Canadian economists some weeks ago in St. John's, Newfoundland. I have spoken to some men and women who were present at the meeting and have not heard or seen anywhere any valid criticism of the facts that the hon. member placed before that august body. At page 15 of his speech he said this:
In 1968, for example, book profits reported to shareholders-
For the whole complex of corporations, I might add.
-amounted to $8,350 million while taxable income reported to the Revenue Department amounted to $5,021 million.
What this means in simple terms is that Canadian and foreign owned corporations in all these areas paid tax on only 60 per cent of their profits, namely of $5 billion, no tax being paid on $3.3 billion. This means that the ordinary working people of this country made up the difference. The hon. member for Duvernay went on to say this:
The main components of the difference in 1968 were:
(a)	non-taxable Canadian and foreign dividends of $1,269 million, a measure of interlocking control;
(b)	$495 million in the excess of capital cost allowances over audited depreciation;
(c)	$310 million in exempt mining income;
Over $300 million in one year exempt income for mining corporations!
- (d) $213 million in depletion and
(e) $284 million in gains on capital asset.
Part of the last category will soon be taxed by the proposed capital gains tax, but only to the extent of 50

June 28, 1971

per cent. The rest of these allowances are gifts to large corporations, made without justice and without equity.
According to the tables that were attached to the speech of the hon. member for Duvernay, some more and very revealing facts emerge about the present Canadian system in general and about the tax system in particular. In table 2, which is based on an official report, the hon. member has calculated, or has had someone calculate for him, a comparison of book profits before tax and taxable income by selected industries for the years 1965-63. According to this table, within this four year period the metal mining industries paid tax on only 13 per cent of their book profits. The mineral fuels industry paid tax on only 5.7 per cent of their book profits. Other mining industries paid tax on only 32 per cent of their book profits, compared with the retail trade which paid tax on 90 per cent and the wholesale trade which paid tax on 87 per cent. Manufacturing industries paid tax on 63 per cent, but mining industries had an immense tax advantage, and in most cases are capital incentive rather than labour incentive.
A comparison of various sized corporations gives another inkling of the kind or system we live under and the kind of tax system presently in force. It is the large and powerful corporations that get the most assistance, whereas the smaller corporations pay most taxes. In table 3 the hon. member for Duvernay breaks down corporations by size. The table shows that corporations with less than $1 million in assets paid taxes on 76 per cent of this profit. Corporations with assets worth between $1 million and $5 million paid tax on 70 per cent; those between $5 million and $25 million paid tax on 64 per cent; and those over $25 million paid tax on only 47 per cent. So that the larger the corporation, the smaller the percentage of taxation on their profits.
Both for individuals and for companies our tax system benefits the strong, the powerful, the wealthy, and will continue to do so even with the few changes the minister has introduced in his budget. I should like to place on Hansard one paragraph from an article that appeared in the Financial Post for June 26 by a professor of economics, John Bossons, dealing with business, not individuals. According to Mr. Bossons:
The tax reductions in the new tax bill are primarily aimed at making tax reform more attractive for those who now have already accumulated wealth. They do very little good for entrepreneurs with little capital who seek to become wealthy. By opting to use the tax revenues gained from a capital gains tax in this way, the government has chosen to protect current wealth-holders at the expense of Canadian entrepreneurs.
Personally, I am not particularly anxious about some of the things the professor says, but his emphasis is right in that it underlines, as I have said, that large corporations, some foreign-owned, will benefit much more than anyone else.
The other items which make the reforms, so-called, inadequate and unrepresentative are the increased tax credits for dividends from 20 per cent to 33J per cent. To give one example, if you make $15,000 in salary or
The Budget-Mr. Whicher
wages you will pay a tax of $4,137, but if you make the same amount in dividends you pay taxes of only $1,442. I am referring to a single taxpayer. If you make a wage or salary of-


Some hon. Members:: Oh, oh.


David Lewis: I am not going to listen to those irrelevant interjections, Mr. Speaker, because they are the result of those hon. members' consciences crying out, and what can I do about that.


The Acting Speaker (Mr. Laniel):: Order, please. The Chair would ask for the co-operation of hon. members. The hon. member for York South (Mr. Lewis) has only two minutes of his allotted time left and I think he should be permitted to complete his remarks.


Some hon. Members:: Hear, hear.


An hon. Member:: That's all, two minutes.


David Lewis: I appreciate the reason for the applause, I do not have to be told.
If you are a single taxpayer making $8,000 in wages or salary you would pay a tax of $1,654, but if you make $8,000 in dividends you would pay no tax at all, according to the calculations we have made. This provision just continues the inequities.
To that I would add the repeal of estate and gift taxes which is, as I have said on several occasions, an aboslute-ly outrageous introduction of inequity in the system under which the rich will be able to hand over large estates without taxes. If the intention is that provinces should enter this field, the result will be a jungle of succession duties and estate taxes with constant competition among provinces as to which will have lower estate taxes, which will attract the rich, and which indeed will result in a will being probated in one rather than another province because of provinces with higher or lower estate taxes.
I do not have time to discuss some of the other points relevant to this, but that has been done by others of my colleagues and will be done again. Any kind of objective analysis of the minister's proposals will underline the fact he is not reforming the tax system but leaving in all the injustices and inequities. He has even made some of them worse. I say to the government, and Liberal members opposite, that if they think they can continue to fool the people of Canada they do not realize how sophisticated the Canadian elector has become.


Mr. Ross Whicher (Bruce):: Mr. Speaker, I am very sorry the Minister of Finance (Mr. Benson) is not here this afternoon because I feel I owe him an apology. When the white paper on taxation first came out, like many other Canadians and members in this House, I criticized him somewhat severely because I felt there was a lot in the white paper which could have been left unsaid. May I say to him now through you, Mr. Speaker, that he certainly picked up the ball and ran for a touchdown. This has been said not just by supporters of the government, but by other people across Canada from Newfoundland

June 28, 1971
The Budget-Mr. Whicher
to British Columbia. I think he deserves a good pat on the back for his efforts.
Before I commence my main remarks this afternoon, let me say a word or two about the remarks of the last speaker. Of course, it is an honour to follow such a man as the leader of the NDP. He is articulate, and he has researched some of his facts, while others he has not. For someone like myself, who sits in the back benches of the Liberal party, it is rather difficult to understand a leader of any political party in Canada who would say that had he been bringing the budget forward instead of the Minister of Finance he would have come out for a system of tax credits.
I just happen to have in my hand the minority report of the hon. members of his party who were members last year of the House of Commons Committee on Finance, the hon. member for Waterloo (Mr. Saltsman) and the hon. member for Regina East (Mr. Burton). Nowhere in that minority report is there even the remotest suggestion of tax credits. As a matter of fact, their recommendation was as follows:
Therefore, we recommend that the present approach to the personal income tax schedule be retained.
There is nothing there about tax credits whatsoever. I suggest that the leader of the New Democratic Party should hold a caucus of his own members to find out what the backbenchers of that party think.
We listened to the hon. member for some time talking about the fact that he would like a full capital gains tax in Canada. He quoted Mr. Carter at some length and suggested what a great man he was. Should we not question the sincerity of a man who quotes Mr. Carter so far as a full capital gains tax is concerned, but when talking about dividend tax credits forgets about him altogether? I am sorry he is not here, but we must think seriously about the sincerity of a man who, in the same speech during the same five minutes, stands by Mr. Carter when it suits him and ignores him completely when referring to something else.
I must say I noted some of the old fire on the part of the NDP leader this afternoon. When I saw him on television on the Sunday after the minister brought down the budget he did not reveal that old spirit. As a matter of fact, and I say this in kindness to him, he looked somewhat older than his age. I asked myself whether this was the new look of the NDP and whether this was an example of the youth we want to lead our political parties here in Canada, such as the man we in the Liberal party have at the present time. I was reminded of a time years ago when I spoke to a page in the Ontario legislature who knew the son of the present leader of the NDP here in the House. I said to him, "There is Mr. Lewis' father". The young lad said to me, "It can't be his father, it must be his grandfather". I suggest that when he appeared on television he did not have the guts to really drive at the issue because the Minister of Finance had done many of the things that we in the Liberal party, and indeed the people of Canada, had asked. He found the old fire going out. If ever there was a father of a family which wanted power, I suggest you look at the
leader of the NDP in this House. If he were an Evangelist his theme song would be "Power in the Blood".
For the past three years, this government has been under severe criticism. Many of these criticisms have been unwarranted and some of them have been completely irresponsible. If I were to criticize the government it would be for sitting back and accepting some of these criticisms which in our opinion are completely irresponsible. You will remember, Mr. Speaker, that when we first came here three years ago, the thing we talked about every day was wheat, lack of sales of wheat. We talked wheat every day for 12 or 15 weeks, and when we finished with wheat we started on fish. We talked about the fishermen in Newfoundland, the fishermen on the east coast, the fishermen on the west coast. What are the results today? The results are that there have been substantial sales of grain throughout the world. The facts are that about three years ago, when the government was being criticized, there was a glut of wheat and grain across the world. However, to a large extent this situation has been remedied and there will be sales in the immediate future. At the present time this government has a trade mission in China, a place where substantial quantities of wheat can be sold in the future and, indeed, have been sold in the past. I suggest, too, that the fishermen on both the east and west coasts are in a much better financial position, and are in a much happier frame of mind, than they were two or three years ago.
This government has not been sitting around doing nothing, I can assure you. What was the next criticism we had? Do you remember the Biafra situation? Every single day members of the official opposition, of the New Democratic Party and of the Creditiste party, got up and tried to embarrass the government, particularly the Prime Minister, because they believed nothing was being done about the starving millions in Biafra. I want to tell you, as a matter of fact, that I received many letters about that. In my heart, I wondered whether the government was doing everything it could. Let us look at some of the criticisms which were made. Let us look at the Leader of the New Democratic Party, for example, who called the Prime Minister of Canada fatuous and callous. He said in one speech that we must have night flights because that would be the only way Biafra would accept the flights. The Leader of the New Democratic Party said these flights should be made in time or else the Biafrans would starve.
I doubt very much if millions of Biafrans starved. However, Mr. Speaker, if we look at page 1330 of Hansard, Volume 2, Second Session, we will see that that is what the Leader of the New Democratic Party said. I suggest we might look at the first words in Rudyard Kipling's poem "If". I refer to the words, "if you keep your head when all about you are losing theirs". We might be thankful that our Prime Minister did not lose his head. He did not suggest that we should go to war, although it was suggested that we should use some sort of force to get food, medical supplies and so on into B'afra. Of course, it was necessary to get more food there. The final

June 28. 1971

result showed that the leader of the revolutionary movement in Biafra, whom the Leader of the New Democratic Party held up as an example to all, was a man compared to whom John Dillinger would appear to be an angel. The Prime Minister was right in his actions, and I am sure we as Canadians and as Members of Parliament are glad that he took the position he did.
You know, Mr. Speaker, when we talk about the Bia-fran situation, and other crises around the world, some people in this House are eager to criticize that great nation to the south of us. Certainly, that country can be criticized. It is not perfect. Certainly, in respect of Viet Nam I have heard the former Leader of the New Democratic Party condemn the United States. Most of us in this House realize the United States is involved in a treacherous and tough situation there. Even many people in the United States; and their leaders, are critical of their government in this regard. However, the fact is that when the United States went in there it did so to defend a way of life which existed in that country at that time. It is all very well to have hindsight and to be critical of the greatest nation in the world, our neighbour, but I ask you, would you rather have the Russians to the south of you or the Chinese. Personally, I would take the United States each and every time.
It annoys me when I hear the continued attacks on the United States by people in this House of Commons. They talk about our neighbour, but do not talk about the plight of the Lithuanians, the Estonians or the Latvians. They forget about what happened in 1956 when the Russian tanks rolled down the streets of Budapest and the people had little more than rotten apples to throw at them. What about Czechoslovakia? At every opportunity, these people vent their wrath upon the nation to the south of us.


Mr. Rowland:: Mr. Speaker, would the hon. member permit a question?


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


Ross Mackenzie Whicher: One would wonder what the favourite color of the Leader of the New Democratic Party is. After reading what some people in Canada have said, I would think that if he happened to be a female he would wear pink dresses all the time. A few minutes ago I heard the Leader of the New Democratic Party say that this budget would not make him jump with joy. I heard him say exactly the same thing on television. Although all people may not jump with joy, I know there are some who are very pleased with the budget. We happen to have about 1,500,000 old age pensioners in Canada. There has been criticism that these people were given only an additional amount of 42 cents per month. Let us look at the facts. One third of the old age pensioners in Canada, those who are single, are today drawing $135 a month. Married couples are drawing $255 a month. These are the highest old age pensions anywhere in the world.


Some hon. Members:: Hear, hear.


Ross Mackenzie Whicher: Not one single cent of tax is involved in so far as this type of old age pension is concerned. Let
The Budget-Mr. Whicher
me point out what the tax situation is in other countries in the world. Let us look at a country which is very dear to many of us in this Chamber, the United Kingdom. For more than 500 years, the United Kingdom has been a mighty fine little island. It has done a great deal for the whole world, and not just for itself. Today it is drowning in a disease called socialism, a disease which the Leader of the New Democratic Party sticks supports. However, he has the unadulterated nerve to criticize the government for not giving enough to the old age pensioners. When I look at the figures for today, June 28, 1971, I see that a single old age pensioner in Canada receives $2,250, tax free. In England, he pays a tax on every nickel over $1,197. Some system of government-socialism! You can drown in it if you so desire, but I do not want to have anything to do with it. We see here that as of January 1, 1971 a married taxpayer under 65 will have $2,950 tax free. In England, the amount is $1,171.80.
I will tell you about another group of people who are not the least bit unhappy about the budget, namely, the one million veterans in Canada. Did you know, Mr. Speaker, that in the western world today there are only two countries that think well enough of their veterans to have ministers of veterans affairs. One is France and the other is Canada. As a Canadian, I am proud we have one.


Some hon. Members:: Hear, hear.


Ross Mackenzie Whicher: You may very well say, what has that to do with the budget? I will tell you. Our veterans who were unfortunately disabled in world war I, world war II or in Korea, receive the highest pension of any country in the whole damn world, and I am happy for the veterans of Canada. Then the Leader of the NDP mentioned the Carter Commission. Let me tell you there is not a veteran in Canada who does not understand the implications, because it was the Carter Commission that said a buck is a buck so the veterans pensions should be taxed. That is the sort of thing the Leader of the NDP supports and that is what I am against.


Some hon. Members:: Hear, hear.


Ross Mackenzie Whicher: He said he was in favour of some things in the budget. I could not make a note of them all, but one of the things he was in favour of was assistance for working mothers. Perhaps he is right when he suggests that there should have been such a provision a long time ago, but the fact is that there is one now and the Minister of Finance (Mr. Benson) deserves credit for that.
Then, there is the matter of small businesses and corporations. The Leader of the NDP hates the word "corporations". He does not like the idea that the corporation tax in the province of Ontario, for example, is now 52 per cent, the highest corporation tax anywhere in the world. The minister thinks it should be reduced to 46 per cent. The Leader of the NDP does not appreciate the fact that our corporations have to do business in competition with U.S. corporations. I wonder if he understands that in that great socialistic country, the democracy of England, instead of there being a 52 per cent corporation tax

June 28, 1971
The Budget-Mr. Whicher
today the corporation tax in England is about 36 per cent. That is what the socialist government is doing over there. The NDP should realize that corporations,, like invididuals, have to face competition and therefore should not be overtaxed.


Derek Nigel Ernest Blackburn: Who is the prime minister of England today?


Ross Mackenzie Whicher: The fact is that the interest paid by corporations is deductible. This should have been done a long time ago, but now it has been done by the Finance Minister. It is a wonderful thing so far as corporations are concerned.
If I wanted to be critical of the budget I would say that it is too bad the Minister of Finance could not have taken off the 11 per cent tax on building supplies. However, we appreciate the fact that it brings in a large sum of money, approximately $300 million, and getting money such as that is not easy. As a matter of fact, I remember the time when a cabinet minister resigned over the government's housing policy, some members of the opposition, and indeed some members on our side of the House, criticized the government for its housing policy. All of us know that there are some people in Canada who have poor housing, housing that is not fit for human habitation. But let us remember something that has not been brought out, namely, that the housing in Canada is the best housing anywhere in the world.


Some hon. Members:: Hear, hear.


Ross Mackenzie Whicher: These are the things that we should be talking about. We should mention the fact that this coming year, in 1972, the government of Canada, through private organizations and through the National Housing Corporation, will build an extra 220,000 units. This is something of which the government should not be ashamed and which will benefit Canadians a great deal.
Every day we hear criticism of this Canada of ours. It almost makes a person sick. I say, go to Europe, go to Asia, go to the United States or to Australia, go where you want to and come back to your rec room and look at the map of Canada. There is not one single Canadian who has any pride in his heart who will not say that he is glad to be back home because this is the best place in the world in which to live. I have forgotten who wrote this poem but it comes to my mind now: breathes there the man with soul so dead, who never to himself has said, this is my own, my native land. I say to you that more Canadians should repeat those lines because we have something here of which we should be proud.
Of course, if you look at the whole of Canada you will find there are many things that are wrong. Look at the standard of living we have; it is the second best in the world. Look at the schools and hospitals that we have, and the many great buildings we have. I say that many of them would make Buckingham Palace look like a shack. Look at the way we look after our sick and our disabled. After many years, we have free hospitalization; we have free medical care across Canada. We have some of the greatest parks in the whole world. We even have
the freedom to criticize, although in many respects much of that criticism is irresponsible. This is a great country and more of us should stand up for it. More of us should appreciate the fact that over the years governments have done a reasonably good job, regardless of their political stripe. It is for all of us the best country in the world in which to live. In my opinion this budget which the Minister of Finance has introduced has made it even more so. As has been repeated many times, it has eliminated taxes for one million citizens in Canada, and I do not care whether that amounts to $2 or $100 per person. If you want to be fair, you should give credit to the government for that.


Some hon. Members:: Hear, hear.


Ross Mackenzie Whicher: If you are going to criticize when things are wrong, at least be man enough to give a loud hurray if you cannot shout for joy for a government that has eliminated taxes for so many people. If you are not able to jump for joy because of some physical disability, give one little hurray for the 4,700,000 people for whom the Minister of Finance has reduced taxes. After all, this was not done by the NDP or by the Progressive Conservatives. It was done by the man whom most of you have been criticizing for the past couple of years. Give him a pat on the back if you want to be fair.
There is one more thing to remember. The NDP Leader throws these figures around. He mentioned the figure five million as the number of people for whom personal income tax had been reduced or eliminated. To set the record straight, let me say that it is not five million at all, it is 5,700,000, and these people appreciate that reduction. Then we have a tax change of only 1 per cent for another two million people, and the tax is increased for 1,300,000. After much study and much deliberation by the Minister of Finance, his staff, the Standing Committee on Finance of the House of Commons and the Finance Committee of the Senate and, most of all, by the people of Canada, the Minister of Finance has done an excellent job. I will be most happy to support him when the vote comes.


Stanley James Korchinski: Mr. Speaker, having listened to the hon. member for Bruce (Mr. Whicher), all I can say is that he was prepared to show his willingness to spout off. I am very much impressed with the budget presented by the Minister of Finance (Mr. Benson), and particularly with the total over-all cash requirements that the government faces. According to my estimate, the government will have to borrow some $417 million, and it also has a total of $1,770,000,000 in commitments made within the last year that have not been covered, making a total of some $2,200,000,000.


Patrick Morgan Mahoney: Tell us about Bill C-176.


Stanley James Korchinski: Bill C-176 represents another area for which the government may have to find some money. This is money that the government will have to borrow on the open market. Where do we go from here?

June 28, 1971

Last winter interest rates varied between 8 per cent and 10 per cent. In most cases, they were around 9J per cent. Can the smart alecs opposite tell me how high interest rates will rise in the foreseeable future? I come from a community, Mr. Speaker, that has been subjected to great governmental pressures as well as to pressures from the banking community. The people of that community are very conscious of the effect of interest rates. Can hon. members opposite tell me that, as a result of this budget, interest rates within a year will not be far higher than they are today? I beg them to tell me how interest rates can be set at a level which we in the west can tolerate?
Do hon. members opposite realize that the Farm Credit Corporation has borrowed $1,200,000,000, and the Farm Improvement Loan fund $300 million, making a total of $lg billion? If this trend continues the government will have to float bonds, loans, and resort to other devices to finance its operations. Regardless of how the government manipulates affairs, we in the west will be affected. I can foresee interest rates returning to the 8 per cent, 9 per cent and 10 per cent levels. I challenge anybody on the government side to tell me that I am wrong. I don't hear one peep from the government side.


Patrick Morgan Mahoney: You are all wrong, Stan.


Stanley James Korchinski: We in the west were paying 9J per cent and 10 per cent, while you were sitting here and swallowing all that government guff. I am a resident of Saskatchewan, Mr. Speaker, and I want to put some facts on the record. The income level, of the people of Saskatchewan has been reduced to the point where they are damn well fed up, particularly with politics. Their only concern is to get enough to raise their standard of living.
I refer hon. members to page 79 of the Budget Papers which sets out certain startling statistics. The result of the recent provincial election in Saskatchewan was not based on the popularity of the NDP, or on the fact that the P.C.'s were largely negative. These figures tell the story more than anything else.
In Saskatchewan in 1965, private and public investment totalled $773 million; in 1966, $928 million; in 1967, $964 million; in 1968, $943 million; in 1969, $755 million; in 1970, $623 million and in 1971, $649 million. Compare those figures with the figures for Alberta or Manitoba. In Manitoba, in 1965, private and public investment totalled $537 million; in 1966, $656 million; in 1967, $719 million; in 1968, $820 million; in 1969, $901 million; in 1970, $893 million, and in 1971, $862 million. In Alberta, comparable figures were $1,320 million in 1965; $1,564 million in 1966; $1,675 million in 1967; $1,723 million in 1968; $1,914 million in 1969; $1,954 million in 1970, and $1,997 in 1971. In other words, progress was being made in those two provinces and, while this is not an indication of provincial maladministration, in Saskatchewan private and public investment had been going down. These figures indicate a lack of income in that particular area. What we have to do is analyse the situation in that province in relation to the rest of the country.
The Budget-Mr. Korchinski
[DOT]	(4:20 p.m.)
I have indicated that in the last year public and private investment was only about two-thirds of what it amounted to three or four years before, it was in the doldrums. But what else can be expected? The people of Saskatchewan did not want one particular political party more than another, but simply wanted a change. However, the NDP need not feel that they are the answer to the dilemma because the dilemma still exists. It is now up to them to find answers to the problems.
There are other indications that we must watch. For example, I understand that the financial requirements of Canada were such that last year we borrowed $4 billion. I suppose that is nothing unusual but it represents about $20 a head. I wonder whether this is what young Canadians look forward to, the young hippies or slippies or whatever they call themselves, and the young students. I wonder if they want to inherit this kind of indebtedness.
There is another thing, Mr. Speaker, and it is not easy to say what I want to say now but I believe that I must comment on the unfairness of the bilingual and bicultural commission. I do not believe it was ever intended that it should be a bilingual and bicultural commission. I believe it was only meant to be bilingual and I will give my support to that, but I do not believe that this is a bicultural country. I have hesitated to bring this matter up as I felt there were others better qualified than I to deal with it. Mr. Speaker, I think you understand what I am trying to say. I did not want to have to make these statements, but I strongly believe that this is a multicultural nation. It may have been a mistake to call this a bilingual and bicultural commission, but we have made mistakes in the past and we should correct this one before it goes too far. In all sincerity, I ask the government to set up an entirely new commission to study the contribution that other cultures have made to our way of life. It is not simply a question of struggling with races- it is very difficult to express-but I think it is a continuation of silly things if you like, of the way we live.
I make these statements in a way that I think many people will be able to understand, Mr. Speaker, because I really want these other cultures to continue in this country. I have no opportunity to speak on this subject except in the budget debate. I ask this government to look at Book IV of the report of the B and B Commission, on which they spent millions of dollars, and they will see whether or not other cultures have made a contribution to Canada. On the government side, there are many concerned members, some of whom have not had an opportunity to assert themselves. If the government had so wished, it could have used the millions of dollars needed to produce the report on bilingualism and bicul-turalism to push the cause of multiculturalism.
[DOT]	(4:30 p.m.)
I am not suggesting that it should not push bilingualism. I am willing to concede the need for bilingualism. I simply think that the government, headed by the Prime Minister (Mr. Trudeau), has been very lax on that particular point. I must tell the Prime Minister that his main

June 28, 1971
The Budget-Mr. Tolmie
concern seems to be with French Canada, something which might not be acceptable to all members. I must tell him that he ought to consider members of other ethnic groups when considering appointments to cabinet. For instance, how many years has the hon. member for Park-dale (Mr. Haidasz) been here? He has been here since 1953. How much more capable a man do you need, Mr. Speaker? What more do you want? He speaks English, French and Polish, and does everything well. However, he does not fit in with the attitude of the Prime Minister. I must say that the Prime Ministers' attitude must be considered as anti-ethnic. That is my assessment of the situation. He has never proved to me that he is willing to appoint members of certain ethnic groups to cabinet or other positions. He has never felt that people coming from certain other groups have the necessary qualifications. I must say these things, Mr. Speaker, because, although my time in this House might be limited, I am going to say those things that I want to say while I am here.


Mr. D. R. Tolmie (Welland):: Mr. Speaker, before briefly alluding to the budget itself, I think it only just and proper that a few minutes be taken to recount some of the solid achievements of this government in the economic sphere. I believe that those achievements have brought great benefits to literally millions of Canadians.


Walter Gilbert Dinsdale: Benefits like unemployment and inflation. The hon. member's speech ought to last only a couple of minutes.


Donald Ross Tolmie: With our preoccupation with unemployment and inflation, with criticism, sometimes unwarranted and intemperate, of government economic policies, the government's real concern for the Canadian people has not received proper publicity. The government has been castigated as a heartless ogre which unfeelingly, in a mechanical, rigid way, needlessly threw thousands of Canadians out of work with all the resultant human misery and suffering in a vain battle against inflation. The image which some are deliberately trying to create and foster is that of an arrogant, ruthless government working with cool precision but no warmth or compassion for the Canadian people. This assessment of government economic policies is blatantly wrong.
What are the true facts. What is this government's record in the economic realm. What evidence is there of this gross lack of compassion and feeling for the little man? Time does not permit a recital of government accomplishments, but here are a few items which should torpedo the unfair portrayal of this government and prove to the contrary that our government in a few short years has shown more concern for the welfare of Canadians generally than perhaps any other government since confederation.
Have we forgotten, for example, what this government has done for our war veterans? Do hon. members not know that Canada and France are the only two countries in the western world that have ministers of veterans affairs? I think that has been alluded to in previous
speeches. We recently increased disability pensions by 10 per cent and allowances by 15 per cent.
Have we forgotten what this government is doing in the field of housing. National housing loans have been increased and made more available to the low income earner. A concerted effort to provide low cost public housing has been made. A special $200 million low cost housing program was commenced and federal support for housing now has passed the $1 billion figure. Certainly, this evinces a concern for the people of Canada. Surely, much more can be done; we realize that. However, the government is aware of the essential need for housing and is continually revising and trying to bolster those policies and trying to implement proper policies for the benefit of all Canadians in the field of housing.
Have we forgotten, for example, what this government has recently done for the unemployed by the passage of the Unemployment Insurance Act. Coverage will become universal. Benefit rates will be substantially increased with the maximum benefit of $100 per week. Benefits will be extended to those who suffer loss of income due to sickness, pregnancy and retirement.
What about our senior citizens? Has this government ignored their plight? Recently, for those in need, the government increased the guaranteed supplement for single pensioners from $105 a month to $135 and for married pensioners up to $255 a month. I feel, however, that the government should take a hard look at the flat rate pension of $80 a month with a view to an increase; and, certainly there should be a fair cost of living increase included in the basic pension.
What about our youth seeking summer work? I realize there has been criticism of the summer youth programs, but the fact remains that the government instituted a program. It acted promptly to meet a pressing problem. Certainly, there were mistakes; but the net result is good and this program is providing work and hope for thousands of young Canadians. The initial student program, a $58 million project which has since been increased, is designed to involve as many as half a million students in meaningful jobs, travel and other activities this summer.
What about the consumer? Has this government shown a callous disregard for their interests? Amendments to the Bills of Exchange Act will, for the first time, provide a legal defence if a financial institution sues for non-payment but the original seller of the goods has defaulted on his part of the bargain. The consumer packaging and labelling bill is designed to facilitate choice among consumer products by providing better information and to help reduce confusion in the market place. It will control packing practices, including proliferation of package sizes, which can confuse or mislead consumers. The weights and measures bill and the Hazardous Products Act will give additional protection to the consumer. All these measures indicate a deep concern for the health and welfare of the consumer-in effect, every Canadian.
Have we forgotten what this government has done in the war against pollution of our environment. The

June 28. 1971

Canada Water Act will provide an effective, co-ordinated and flexible vehicle for the federal government to act within its sphere to manage the water resources of Canada jointly with the provinces. The act is designed to permit the federal government to mount a systematic attack on water pollution problems jointly whenever possible and unilaterally if necessary. Amendments to the Fisheries Act re-define the anti-pollution powers of the Department of Fisheries and the much praised and widely heralded Arctic waters pollution prevention bill establishes a 100 mile wide shipping safety control zone off the Canadian coast. Within that zone, the federal government can take action to prevent the threat of pollution.
* (4:40 p.m.)
Many other measures have been taken against pollution, including amendments to the Canada shipping Act. These are primarily designed to prevent ships from polluting our waters. At the present time, ships plying our Great Lakes and canal systems are in most cases indiscriminately dumping human waste and raw sewage into our waters. This has been a scandalous practice for years and to my own personal knowledge has caused unsightly, offensive and dangerous pollution of Lake Erie and the Welland Canal. The new regulations making treatment of wastes mandatory before dumping into the water is a step in the right direction, but a relatively feeble one. The continued practice of dumping even treated wastes into our lakes will continue to add to lake pollution, fostering plant growth which eventually develops into the destructive blight of algae. These regulations pertaining to lake shipping, to be really effective, should prevent dumping of any waste or sewage, treated or not. Container tanks with dockside discharge should be mandatory. I am aware of the jurisdictional problems with foreign vessels, but with the will and determination these are not insurmountable. Pleasure boats in Ontario are being forced to have container tanks. Why not huge ships which are plying our waters for profit and at the same time desecrating a water resource, the heritage of all Canadians?
What has this heartless government done for those in our society who for many reasons, some beyond their control, find themselves incarcerated within our penal system? Have we forgotten about them? The Criminal Records Act, in which I am personally interested, will assist the rehabilitation of the offender by helping to erase the stigma and civil disability of a record. I believe the mechanics of investigation and procedure can be improved upon. I was delighted to see a Senate committee set up to study the operation of this act. I hope it makes cogent recommendations to achieve more effectiveness and increased efficiency in the administration of this act. The 10-year Canadian penitentiary service plan designed to emphasize the rehabilitative aspect as opposed to the custodial, inaugurated a system of maximum, medium and minimum security prisons and much progress has been made in a more enlightened attitude toward our penal system. We still, however, have gaping anomalies and retrogressive practices. As this is a budget
The Budget-Mr. Tolmie
debate, apart from the humanitarian aspect, there is a tremendous financial one.
In 1970, there were 7,400 inmates in federal penitentiaries. It costs at least $6,000 a year to maintain an inmate. One can see the enormous cost, running into the millions, to the Canadian taxpayer. Great Britain, with over twice the population, has half the prison population we do. If for no other reason than purely financial, we should impose more suspended sentences, grant more probation and even more parole. Prison construction is costly, especially maximum security institutions. The question now arises, how many maximum security prisons should we have and what type of design? In my opinion, we should have fewer and they should be designed to promote the rehabilitation of the inmate as opposed to the preoccupation with security. From a budgetary standpoint alone, we would gain. Millions would be saved in construction and millions saved by having inmates return sooner to society better able to cope, and once again become productive citizens. I am glad to see that a committee will be studying the whole problem of maximum security prisons and will report this November.
My theme in these remarks has been that the present government, although certainly not perfect, contrary to the critics' allegations of a cold, impersonal machine-like approach, devoid of feeling and compassion, has demonstrated its deep concern for the individual as shown by its progressive policies. I have mentioned a few, in the realm of veterans affairs, senior citizens, housing, the consumer, our youth, pollution and penal reform. This liberal, progressive and equitable trend reached its summit in the new budget proposals and tax reform. Certainly, I am not going to recapitulate the budget proposals. Suffice it to say that this budget has been acclaimed by nearly every segment of society; business, the middle class and low-income families. The fact that now one million low-income and elderly taxpayers will pay no personal income tax; five million will pay less and 1.3 million with higher incomes will pay more, along with the introduction of the capital gains tax, all indicates the most radical, comprehensive and progressive reform in our tax system since its establishment in 1917.
What is really important about the budget is, of course, the fairer distribution of the tax load, but more important is the climate it is generating across this country. The economy has to be stimulated if we are going to relieve the miseries of unemployment. The government has helped by its own expansionary policies. The increased money in the hands of the individual and the corporations through lower taxes will help, but the sense of confidence in government, confidence in ourselves and our economy will release hundreds of millions from the private sector now hoarded and conserved against the uncertainties and vagaries of present economic conditions. This new feeling of optimism and stability created by our budget will restore confidence to business, the investor and the consumer, with a resultant decrease in unemployment and tolerable inflation.
I would be remiss not to congratulate the Minister of Finance (Mr. Benson). Largely by his decisions, a mood of buoyancy and hope pervades this land; by this budget

June 28. 1971
The Budget-Mr. Marshall
and these tax reform decisions he has ushered in a new era and started an economic recovery which will redound to the benefit of every Canadian.
Mr. Jack Marshall (Humber-Sl. George's-St. Barbel:
Mr. Speaker, each time this government introduces some new piece of legislation or announces some scheme, there is such a fanfare raised in this House from the benches of the government that it seems a new era of justice, equality and goodness is being delivered to all Canadians in the field that the legislation or scheme concerns. However, when we separate the propaganda from the facts, we inevitably find that all is not as beautiful as it has been said to be.
On June 18, the Minister of Finance (Mr. Benson) introduced a budget and tax reform proposals. For the past several days in this House, we have heard the trumpetings of government members as they tried to make up for the lack of substance in the minister's statement with a compensating dose of noise.
One of the illusions which the government is under is that the budget, together with the tax reform legislation, will do all that any tax-reform budget combination can do toward the alleviation of poverty. More than once in the past 10 days the budget and the proposed tax reform have been heralded by the Liberals as being the maximum effort that could be expended by any finance minister as part of his role in the fight against poverty. On Tuesday, June 22, one hon. member said, as recorded at page 7245 of Hansard:
1 suggest that the government has done everything it can in the way of tax reform with respect to poverty.
This member was deluding himself when he said this. Either he was letting his own idle wishes obscure the facts or he was trying to cover up his naivete in the field of poverty and welfare by merely reciting loyally the official government propaganda line. We should all be aware that poverty means that an individual or a family does not have sufficient income to meet the basic needs of life; the need for adequate food, clothing, shelter and medical care. It means that the children of the poor do not attend school as long as other children. They suffer from poorer health and live in poorer housing.
The poor may be divided into two categories. The minority are unable to earn a living because of such things as age, chronic sickness or disability. The majority are those who are poor because they have difficulty in finding or holding a steady job. Their difficulties may arise from disadvantages, such as lack of education or training, lack of information about job opportunities, inability to move to known job opportunities, and poor physical or mental health stemming from economic deprivation.
The Economic Council of Canada has stated that income is more likely to be below the poverty line when one or more of the following characteristics are present: the head of the family has no formal education beyond elementary school; the family lives in a rural area; the family lives in the Atlantic provinces; the head of the
family is not a member of the labour force; no member of the family worked during the year; the head of the family is 65 years of age or over. Whatever their characteristics, however, the poor share the same problems. For example, the preliminary report in the United States of the President's commission on income maintenance programs documented a strong correlation between poverty and ill health. The report states that poor families have four times more disabling heart disease and six times more nervous disorders and mental illness than the population at large. The poor also have three times as many orthopedic ailments and eight times as many visual defects. Nearly one-half of poor, pregnant women receive no prenatal care, and a child born to poor parents is twice as likely as the average newborn to die before his first birthday. Fifty per cent of poor children are not immunized adequately, and 64 per cent have never seen a dentist. Since poor health among children and teenagers reduces their educability, their future employability and productivity is also reduced, thus contributing to the cycle linking poverty, unemployment and ill health.
I could continue for some time to document the problems faced by the poor and the traps that bind them. However, it should be evident, even from this limited discussion, that any attack on poverty, if it is to be successful, must be a many-pronged one which would include efforts to improve education, housing and health as well as income. Nevertheless, the most important and first ingredient in a solution to the poverty problem is to raise the incomes of the poor to a reasonable level. An inadequate income is a common denominator shared by all poor, and measures to guarantee a sufficient income to the poor must be considered the all-important first step towards relieving poverty.
There are many and wide ranging estimates of the extent of poverty in Canada. Perhaps the best known figures on the number of poverty stricken Canadians are those based on the Economic Council of Canada's poverty line concept. In 1969, the poverty line was set at $1,894 for unattached individuals, $3,157 for families of two, $3,788 for families of three, $4,420 for families of four, and $5,051 for families of five or more. These income limits, originally developed as long ago as 1961, were selected on the basis that urban families with incomes below these limits usually spent 70 per cent or more of their income on the basic necessities of food, shelter and clothing and were thus left with very little discretionary income. These limits have been adjusted by the rise in the consumer price index since 1961, but have not been revised to take into account changing consumption patterns.
Using these figures, the Dominion Bureau of Statistics reports that 17.3 per cent of all families and 35.5 per cent of all unattached individuals in Canada in 1969 were below the poverty line. Poverty affected a total of 842,000 families and 577,000 unattached individuals, altogether involving a total number of persons that in all likelihood does not fall much, if at all, below the 1961 total of over four and one half million as estimated by the Economic Council of Canada. Other sources give different approxi-

June 28, 1971

mations of the extent of poverty in Canada. However much we debate the actual figures, there is no denying that the number of poverty stricken Canadians is substantial-too substantial, in fact, to be ignored.
There are many reasons why we should mobilize all our resources to remove these low income Canadians from this degrading state. First and most obvious is the human reason, the untold misery and suffering of these people saddled with poverty. Secondly, there is the economic cost of poverty, the lost output to society. The 1961 census figures show that poverty may have cost the country as much as $2.3 billion in that year in loss of output that would otherwise have been achieved if the poor had been properly employed. More recently, in May 1971 Dr. Clarence Barber put the loss of output figure at $5 billion.
Thirdly, and perhaps most relevant considering that this is the budget debate, one can speak of a pecuniary reason, namely the cost in the form of higher tax rates to the rest of society in providing the various transfer payments to the poor. The measure most loudly hailed by the Liberal government as being the salvation of the poor is the proposed raising of personal income tax' exemptions from $1,000 to $1,500 for single persons, from $2,000 to $2,850 for married couples, and from $500 for those taxpayers over 70 to $650 for all taxpayers over age 65.
There is little dispute that this is a welcome, though long overdue, improvement. But is it going to be effective against poverty? These exemptions will not even give the poor the same benefits from personal income tax exemptions that they enjoyed in 1949, for inflation has eroded more than the extra dollars they have been granted as tax exemptions in the intervening years. If the personal exemptions, which were last raised in 1949, had been increased solely to match the increase in the consumer price index, personal exemptions would now stand at over $1,700 for a single person and at more than $3,400 for a married couple. Through these changed exemptions the lot of the poor will not even be restored to its 1949 level, let alone improved. How many poverty stricken Canadians will be removed from the tax rolls as a result of this change? Are we to believe one hon. member when he said that what we have done has been to assure that virtually no one who can be described as being in a condition of poverty has to pay income tax? It does not take much knowledge of poverty in Canada to come to the conclusion that the hon. member's statement is completely erroneous.
In the first place, the income tax exemptions that will be effective in 1972 do not even reach the Economic Council of Canada's poverty line for 1969. To see this is so it is only necessary to turn to table 5 of the summary of 1971 tax reform legislation. For example, a family of four with an income of less than $4,420 is under the 1969 poverty line, yet a family with an income of just $4,000 in 1972 will pay $73 in tax. Furthermore, there are between four and five million Canadians living in poverty in Canada now. The tax reforms will remove one million from the tax rolls. This will go only part of the
The Budget-Mr. Marshall
way towards removing from the tax roll all Canadians below the poverty line.
Next, let us consider the tax reform that will make child care expenses deductible up to $500 per child under 14, with a maximum of $2,000 per family. What result will this have on those in poverty? According to a staff consultant with the metro Toronto Social Planning Council, these proposed tax exemptions could raise the price of private day care, thereby penalizing the poor even more rather than aiding them. The reasoning behind such a probable increase is simple. Currently, the bulk of day care service in Canada is provided by private individuals, many of them low income women. To qualify for the proposed child care exemptions, a mother would have to produce day care payment receipts. This will leave the woman who is providing day care but not reporting her income two choices: she could refuse to issue receipts and thus deprive a mother of the exemption; or she could declare her day care income and raise her rates to compensate for income tax, pension plan, and other payments. The proposed child care exemptions are therefore no substitute for what is really needed, a national day care policy. The poor will not benefit-in fact, they will probably suffer-from the changes since the reforms are not tied to any national day care scheme.
In addition to the tax reform proposals that will affect poverty, there are some ingredients of the budget that will have an impact as well. The removal of guaranteed income supplement payments from the taxable income side of the ledger can only be seen as a trivial move, little more than another hypocritical move by a government which proclaims a desire to aid the needy, old age pensioners and then proceeds to give them a 42-cent increase in their old age pension and fix it at that level.
The budget tell us that the 12 per cent sales tax on margarine is to be eliminated immediately. This is a welcome step because it aids the poor as consumers and it is as consumers in the marketplace that the poor face the difficult task of stretching too few dollars over too many items. The elimination of the 3 per cent surtax is another aspect to discuss. However, my colleagues have already pointed out the lateness and inadequacy of this feeble attempt to stimulate the economy and the even feebler effort to put money-actually a paltry amount- into the hands of all Canadians, especially the poor.
Given this assessment of what the budget and tax reform proposals contain for the poverty-stricken, let us now consider what they could contain. First, let us look at one budget alternative. The sales tax on margarine was removed. Why not remove other sales taxes as well? Removing the tax on construction materials could reduce the cost of housing in Canada, costs that are exorbitant to the poor. Removing the sales taxes on food and necessities has long been advocated by the Consumers Association of Canada. Currently, the over-abundance of sales taxes at the federal and provincial levels hits the poor severely. Taxes on children's clothing are unfair, and mothers who try to economize on these costs by sewing

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The Budget-Mr. Marshall
clothes themselves pay the penalty of sales tax on yard goods, patterns and notions.
Next, let us discuss an alternative to the present tax reform proposals. This alternative is perhaps the most obvious one I could mention-the negative income tax. The negative income tax was proposed in the United States by the economist Milton Friedman. His proposal started with the premise that families who earn too little to file a tax return are also deprived of the automatic exemptions for each member of the family and the deductions for medical bills, and so on, which amount to tax savings. To compensate, Friedman suggested a family reporting no income should be paid an allowance which would be equal to half the sum of the standard tax exemptions and deductions. Thus, the scheme would be a reverse income tax. If a family reported a nominal income, the allowance would not be cut off; it would simply be reduced by 50 per cent of each income dollar earned.
The essential idea of a negative income tax, then, is to extend the operation of the personal income tax structure by having the federal treasury make payments, based on negative rates, to people With incomes below some specified poverty line while collecting positive taxes from people whose incomes are above that line. Negative income tax proposals are only one form of that family of proposals loosely grouped together and called guaranteed annual income schemes. These schemes have in common the aim of supplementing incomes in an attempt to raise and keep all incomes above the poverty line.
Currently, the most seriously discussed guaranteed minimum income schemes would operate like Friedman's original proposal, through negative rates being applied through the income tax structure-but individual plans vary immensely. The advantage to be gained through implementing a form of negative income tax would be felt not only by the poor but also by the Minister of Finance in his job of controlling stabilization policy.
This brings me to government welfare programs. I have examined the poverty problem in Canada. I think it can be seen that this budget and tax reform measures are not the anti-poverty measures they are claimed to be. I have pointed out the alternatives open to the government if it is serious in its attempts to alleviate poverty in Canada through budgetary and tax reform measures. Now we should look at the present and some proposed anti-poverty, or so they are called, programs of other government ministers in an effort to see whether present and proposed federal anti-poverty schemes are so superlative in combating poverty that any efforts by a finance minister to attack poverty are redundant.
In 1965, the stated goal of the Liberal government was to eliminate poverty. It would be expected, therefore, that programs from that date would have had a chance to make sufficient headway that poverty would have been progressively diminishing by 1971. The 1965 expression of the Liberal goal to eliminate poverty came in the Speech from the Throne. It stated:
All the great potentialities of our economy are not, however, being realized. The talents of some of our people are wasted because of poverty, illness, inadequate education and training,
inequalities in opportunities for work. To combat these, to improve the opportunities of people who are not at a disadvantage, is to put power in our economic expansion and to enhance the unity of our country. My government is therefore developing a program for the full utilization of our human resources and the elimination of poverty among our people.
Yes, the goal was clearly stated. The aim was nothing less than the elimination of poverty. Some of the means of achieving it were spelled out in broad general outline, including regional development, manpower training and education. In November, 1970, in the white paper on income security the government reiterated its belief that the operations of such services were important and effective in combating poverty. They said:
Manpower, education and economic expansion policies are intended to promote the development of higher paying employment by equipping people with better skills and more physical capital, by creating new jobs and by providing more information.
Between the 1965 Speech from the Throne and the November, 1970, publication of the white paper, therefore, it would appear that Liberal government programs established to eliminate poverty have been making considerable progress. But this is not borne out by the facts. In fact, these services are ridden with faults and are far from being the anti-poverty devices that they are billed. As for example, the Manpower program is not an antipoverty program although in the white paper the government is trying to present it to the public as one. The Manpower program is more oriented to help employees rather than potential employees. It also has been accused of having a bias against those with the most need for rehabilitation and education.
Education is another area where not enough is being done to help poor people, especially poor children. Where are the programs designed to ensure that these children can cope with the demands of the school system? The success of regional economic expansion policies in alleviating the plight of the poor is highly questionable. To date, these schemes have chalked up a spectacular record, not of success but only of failure and wastage of the taxpayers' money.
But these programs are not the only ones designed to reduce poverty in Canada. The white paper also states that "basic to the elimination of poverty is the buoyancy of the private sector of the economy and the effectiveness of government growth and stability policies". All of us here know how empty is the economic growth jargon of the Minister of Finance and his confreres. We know that in 1970, the year in which the white paper on income security appeared, the economy grew at the poor rate of only 3.3 per cent. It is hard to convince the working poor, who are often forgotten, to swallow the economic growth theories of politicians and others when they seem to be receiving so little visible benefit from it. The most direct anti-poverty devices of the federal government must certainly be the income support programs operated through the Department of National Health and Welfare.
Income support programs comprise those income security measures intended to assist people considered to be in a state of poverty, as opposed to income insurance

June 28, 1971

programs which are intended to keep people from falling into a state of poverty. Under income support measures, the federal government supports the incomes of those who have children, through family and youth allowances, of those who are past a certain age, through old age security measures, and of those whose income is insufficient to maintain themselves and their dependants through the guaranteed income supplement, social assistance and the Canada Assistance Plan. Beyond the income support programs presently in operation are guaranteed annual income plans under which everyone would be entitled to a minimum income, the level of which would be determined by the size of the family's income and the number in the family. Such a plan is usually thought of as a replacement for existing income support programs, with special needs being met by supplementary social measures.
An assessment of these several income support programs, whether those now in operation or those raised as alternatives for the future, reveal that the Liberal government's income support measures and its vision of the future in this field are both severely limited and inadequate to meet the often desperate needs of those living in a condition of poverty. The old age security and guaranteed income supplement benefits, even with the increases provided this year, still fall short of the minimum required for a satisfactory standard of living for the aged. Indications are that few older people will be removed from poverty as a result of this increase.
There is a question of why the universal program

old age security-is not substantially beefed-up so that the need for the selective program

guaranteed income supplement-would be a necessity for a relatively small group, for example, 10 per cent. Currently, about 50 per cent of the people on old age security are receiving the guaranteed income supplement and more than half this group get the full supplement. The flat rate of $80 for old age security with an escalation of 2 per cent maximum for the guaranteed income supplement is unfair when the cost of living is rising at 4 per cent to 5 per cent annually.
If the past performance of the economy were repeated in the future, this would mean that in 25 years the $80 would buy something less than $40 worth of goods and services, and at the end of 50 years it would not buy anything. Yet pensioners are at the mercy of the system and cannot bargain for wage increases like everyone else. This action by the government is even more unfair when we realize that old age pensions were directly paid for, in part, by the pensioners themselves and calculated as part of their necessary retirement funds.
Furthermore, old age pensioners are encouraged by provisions in the pension plans not to engage in any part-time job to supplement their meagre incomes. Such a penalty on work incentive is not consistent with the allegations in the white paper on income security that the major reason for not adopting the guaranteed annual income centres on the need to develop a suitable work incentive for such a plan.
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There are many other inadequacies of the federal income support programs for the aged: I have highlighted only a few. The Canada Assistance Plan, enacted in 1966, is a comprehensive public assistance measure which provides, under agreements with the provinces, federal contributions of 50 per cent of the costs of assistance to persons in need generally and selected costs of extending and improving welfare services. As an antipoverty measure, two objectives of the Canada Assistance Plan are to assist the provinces in providing adequate levels of assistance to persons in need, and to encourage the development and extension of welfare services designed to help prevent and remove the causes of poverty and dependency on public assistance.
Perhaps the most serious problem in the current operations of provincial plans supported by the Canada Assistance Plan is the difference in support levels for recipients across the country. Statistics from the Department of National Health and Welfare show that assistance payments funded through the Canada Assistance Plan range widely between the provinces from a low of $2,256 annually to a family of four in New Brunswick, to a high of $4,020 per year to a family of four in Alberta. Such inequality prompted Senator Croll in his interim report of the Special Senate Committee on Poverty to say:
There is unfair financial burden upon the poor provinces ... In the final analysis the beneficiaries of the Canada Assistance Act are the treasuries of rich provinces. The poor provinces can give their people very little. There is unfairness about it.
The scarcity of financial resources, as a result of the fact that 50 per cent of costs must be found within each province, means that the poorer provinces find they cannot afford to provide a desirable standard of assistance and services to eligible persons. Furthermore, evidence shows that provincial differences are quite substantial, not only in terms of dollar amounts given to families in like circumstances but also in terms of the particular characteristics of each scheme-for example, who qualifies, how earned income is treated for persons receiving social assistance, what appeal procedures are available, and so on. The problem surrounding appeal procedures is a serious one which I do not have time to dwell on.
The Canada Assistance Plan has had virtually no impact upon the working poor, those unable to earn a minimum adequate living although fully employed. Those who have only partial earning capacity suffer because of the low level of earned income exemptions provided by provincial assistance programs. Another problem of the recent operations of the Canada Assistance Plan is the need for closer integration with other programs both federal and provincial.
The Liberal government has taken no concrete steps toward the improvement of the operations of the Canada Assistance Plan, yet it has recently taken steps toward changes that will undoubtedly irritate present difficulties with this program. I am referring now, of course, to the federal government's proposal to the provincial welfare ministers that the Canada Assistance Plan be amended so that the federal government would provide compensation for programs that employ an income test,

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The Budget-Mr. Marshall
thus allowing provinces to enter into a guaranteed income plan. This federal proposal to amend the CAP in order to permit provincial guaranteed schemes would increase regional disparities and penalize the poorer provinces which cannot afford to raise 50 per cent of the total cost of such a program. Already we have seen that range in provincial assistance under the CAP is from $2,256 to $4,020. The federal proposal will do nothing to close this gap. More likely, the gap will increase as the more well-to-do provinces forge ahead with guaranteed income schemes while the poorer ones fall even further behind.
Provincial differences in terms of dollar grants are matched by differences in the form of assistance available. This raises the question of portability. The federal government has stated in its working paper "Income Security and Social Services," at pages 71 and 72, that because Canadians are now so mobile and move so frequently from one province to another "it is important to the people involved that their income security benefits be portable", and "it is important for this reason, too, that income security measures be reasonably uniform across the country." Individual provincial guaranteed income schemes negate this statement of federal philosophy. Portability is a definite problem arising from the government's new proposal.
As a result of these provincial differences in income support payments and programs there is a very serious problem that would arise if the federal government proceeded to implement this proposed amendment. The problem is how national standards could be maintained in the future if each of the provinces were to embark upon a different guaranteed income scheme or, more importantly, refuse to take up the federal offer to inaugurate its own guaranteed annual income.
Obviously, the implementation of such an amendment to the Canada Assistance Plan would only irritate the present situation in which there are wide variations in the provincial standards of social welfare already instituted under the Canada Assistance Plan. In its white paper on income security the Liberal government rejected a guaranteed annual income on the basis that it is too expensive and that Canadians cannot afford it at present. The government now has contradicted itself by offering to share with the provinces in instituting such a scheme.
It would seem that this federal proposal must have evolved quickly, and only recently, for it is inconsistent with the Prime Minister's statements in a television program last month, as reported in the Montreal Star of June 8. At that time the Prime Minister (Mr. Trudeau) said of Quebec social affairs minister Castonguay's scheme:
If he thinks that he is going to pay a guaranteed annual income in Quebec with money from the taxpayer of Ontario or of Alberta, he is not going to do it with this government.
Altogether, then, the Liberal government's recent actions involving the Canada Assistance Plan are inconsistent and unlikely to do anything more than irritate present problems in the operations of this income
support measure. These problems should be resolved satisfactorily before any new major program, such as a guaranteed annual income, is incorporated into the structure of the Canada Assistance Plan.
There is no excuse for the Liberal government to produce such half-baked and ill-planned schemes to eliminate poverty. Other countries are forging ahead with their welfare programs while Canada is standing still. Only last week the House of Representatives in the United States approved a sweeping revision of the welfare system by bringing most of it under federal control and by establishing for the first time a national income for poor families. There is no excuse for the Canadian government to continue bungling in this field.
It is obvious, therefore, from all the facts I have presented that the efforts of the present Liberal government in the battle against poverty are atrociously inadequate and could never be considered as an antidote to poverty. Thus, when the Finance Minister faced the task of preparing a budget and tax reform he should have taken the opportunity of embarking upon a real and effective anti-poverty program, for none of his cabinet colleagues have. In conclusion, Mr. Speaker, I would like to challenge the Liberal government-


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


Mr. J. G. Lind (Middlesex):: Mr. Speaker, it is a pleasure to speak a few words on behalf of the constituents of Middlesex. The majority of people in our area are relieved because this budget has provided tax relief for married breadwinners straight through the middle-income range. The Minister of Finance (Mr. Benson) extended tax benefits to working mothers, senior citizens and the infirmed. In giving these concessions he also introduced a capital gains tax the rates of which would roughly parallel the capital gains tax in the United States. In order to offset this new tax the budget abolished gift and estate taxes. There is a general feeling of good will flowing throughout Canada. I should like to quote as follows from Canadian Business Service:
Basically the budget measures are expansionary and the proposed tax reforms pragmatic. The capital gains tax will be an unwelcome intrusion into our daily existence but it is now a fact of life for all other highly industrialized nations. To console ourselves it is always useful to remember that the U.S. has been able to live with, and even prosper under, such a tax-
The measures are clearly designed to inspire confidence in both the private sector of the economy and the reluctant consumer. It removes the uncertainty which has pervaded business and investment planning during the past year and a half.
This confidence in the Canadian people will grow since business at least knows the rules of the game. From July 1, 1971, the 3 per cent surtax on personal and corporate income will be eliminated. This, along with other changes in the tax structure, should help stimulate the economy.
A large percentage of the people in the constituency of Middlesex are farmers, and our agricultural economy

June 28. 1971

is one area that needs a stimulus. Allow me to quote from the Globe and Mail of June 26, 1971. The article reads as follows:
Net farm income after operating expenses last year dropped 7.6 per cent to $1,191,000,000 from $1,289,000,000 in 1969. According to Dominion Bureau of Statistics' reports it was down nearly one-third from its peak of $1,774,000,000 in 1966 and at its lowest level in more than ten years. The figure represents what all farm operations have left for family living or investment after meeting their farm operating expenses and providing for depreciation on their buildings and equipment.
The farmers in Canada are suffering from overproduction, the result of which is depressed prices. Many of them are receiving less for their products than they did in 1946. At the same time they have to pay more for their machinery, gasoline and essential necessities to operate the family farm. In fact, almost everything the farmer needs to operate his farm has increased in price. In Ontario, our farmers have operated under the guidance of some 18 different marketing boards which have provided guidance in production and marketing of farm products. However, now that a decision has come forward in Manitoba that it is no longer legal to close provincial boundaries, I suspect that we will have a continuance of the chicken and egg war. There is no doubt that this may spread to other commodities. If the opposition had cooperated with the government we may have had legislation today to save many family farm enterprises. I must say that the agricultural economy of this country needs a great deal of stimulus.
Perhaps the elimination of the estate tax, through the budget, will mean the survival of some farmers-but my concern is that many of these farmers will go bankrupt and lose not only their investment but their farms if the present downward trend in farm income is not reversed and the agricultural economy of this country is not given a permanent boost. Farmers must, in my humble estimation, be allowed to operate within a supply management framework so that they do not overproduce. I do not know any other segment of our economy which has suffered a loss of one-third of its net income in the last ten years. Even if our farmers have an excellent crop year in 1971, surely it will be hard to compete with such facts as were headlined in some newspapers that construction labour in Toronto has settled for $5 an hour. I cannot blame these labourers. If other construction trades are receiving more, why should they not receive it?
Our government, through CMHC, has been endeavouring to supply suitable housing to those on lower incomes, at reasonable prices. But it is almost impossible for a married couple with a combined income of $8,000 or less to purchase a home when they have to pay high interest rates, heavy municipal taxes and endeavour to repay the mortgage over a 25 to 30-year period. Even with our easier money policy at the present time it is impossible in the small communities throughout my riding to obtain a mortgage for less than 10 per cent interest on a new home, and on an older home it would be higher than 10 per cent.
The other day there was an article in the Globe and Mail about retail lumber dealers in Ontario asking for an
The Budget-Mr. Rynard
investigation in the rapid rise in lumber and plywood prices. Lumber prices have increased since January 1, 1971, as much as 40 per cent in some types and sizes, while at the same time there has been a very substantial increase in plywood prices. I should like to quote an article which appeared in the Globe and Mail on June 22, 1971. It reads in part as follows:
-The Ontario Retail Lumber Dealers Association in a telegram to Consumer and Corporate Affairs Minister Ronald Basford. It says: "Members are deeply concerned with spiralling prices of lumber which we consider to be beyond the point of fair financial return to mills and definitely not in the best interests of consumers.
Wholesale prices for two-by-fours have risen from about $100 a thousand board feet at the end of 1970 to about $135 a thousand currently, according to Alan Bumes, who does the lumber buying-
He says there is "no end in sight" in the present surge of prices and cites market comment from various sources in support of this view.
Naturally, all these increased construction costs are passed on to the consuming public, and in the end those on low incomes will be deprived of owning a little bit of Canada and a home of their own.
I would like to urge that a department of urban affairs be set up which would seek a means whereby local municipal bylaws and provincial and federal regulations could be standardized and co-ordinated throughout the country to provide the opportunity for those who earn less than the average income to become the proud owners of a small lot in this great Canada of ours. I am certain they will also become more conscientious and law-abiding Canadians. In local municipalities in my riding a person or couple is not permitted to build on less than 25 acres of land if the parcel of land is not part of a municipal plan-which virtually prohibits any person from obtaining a lot other than in the regular subdivisions.
I urge the government to investigate excessive increases in both wages and materials, and by co-operation at all levels of government to reduce the restrictions so as to permit Canadian couples, if they so desire, to own their own homes.


Philip Bernard Rynard: Mr. Speaker, I rise to make a few comments on this new tax bill. I have listened with interest to many hon. members who have spoken on it. One realizes, as one sits in the House, that there are always two sides to the coin. But it was interesting to note the great relief after the suspense that hung like a pall over Canada for the last six years when the budget was announced. It was like a stay of execution ever since Mr. Benson's white paper on taxation was introduced. It left gloom and discouragement among the working segments of our society. I do not have time to go into how much that cost us. People were afraid to invest: they did not know what the rules of the game were. Money left the country and people did not know who was going to drive and strive if, in the end, the government was going to leave them only just enough to get by

June 28, 1971
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on. But the joy at the stay of execution was very brief indeed. As John Bassons said in the Financial Post.-
The new tax bill is like an exotic fruit; extremely appetizing to look at and initially good to taste, but devastating in its after effects.
Mr. Bassons opined:
The early enthusiasm of the Canadian business community will be short-lived.
Yes, Mr. Speaker, when Monday morning came the minister's budget enthusiasm lasted just 27 minutes on the stock market!
Over the years since it was first acknowledged that something had to be done to straighten out the tax jungle there have been patches applied here and there, additions here and there as the government struggled to meet changing conditions. At the start taxes were simple and clear cut; there was no misunderstanding. But as time went by the fact that they needed reforming goes without saying. They needed simplifying so that the ordinary man and woman who had to file a tax return could do it honestly. Now it is a many-sided coin with, in many cases, different interpretations.
The Minister of Finance (Mr. Benson) did little to resolve those problems. I was told by a reputable, large, well-established accounting firm that it would take six months or even more to unravel some of the interpretations of this budget. However, the minister did remove some of the onus of responsibility from the taxpayer. He has made it necessary for the revenue department to prove a claim within a given time of 120 days. This was long overdue and for it, as a taxpayer, I commend him. The minister raised the rate of exemption from $1,000 to $1,500 for single taxpayers, and for married taxpayers from $2,000 to $2,850. But let us not forget that these exemptions were of 1948 vintage. Justice has been denied these people. There should have been adjustments every few years.
The minister took 750,000 taxpayers off the rolls, people who should have been taken off long ago. Member after member has asked for that in this House over the years that I have been here. But even with taking those people off the rolls the government is going to get $30 million more than it pays out, in deductions for unemployment insurance as against what it collects by classifying the benefits received as income. Also, medicare premiums, when paid by employers, are to be taxed as income and, if my figures are correct, will bring in over $80 million. How much is the government going to tax adult training allowances? There may be another $20 million there. In other words, it figures out that the government recovers nearly all, if not all, from the working people.
Let us take another look at the raising of the basic exemption which, as I have stated previously, first came into effect in 1948 at a time when the cost of living index stood at 100. Today it has run up to 170. This still leaves the single fellow $200 short and the married couple $550 short. Let us not run away with any idea that we have done justice to the working poor.

The opposition has been pleading for the exemption of the guaranteed income supplement from taxation. I am glad that at least the government has listened. This is something that should have been done long ago, because many of our senior citizens have been finding themselves in very difficult circumstances. Nothing was done to ensure prescription drug care for these people, through negative income tax or otherwise. Really, what have we done about the two million poor who through inflation and otherwise we have made poorer every year? Nothing has been said about the negative income tax for these people. What became of all the good intentions of the Minister of National Health and Welfare (Mr. Munro)?
There was no mention in the budget about the cities and the problems they are encountering in welfare as a result of huge increases in unemployment. Tax deducta-bility of child care expenses is a breakthrough in principle only, in recognizing the job expenses of the working wife and mother. But when you go through the figures for child care expenses it means little more than recognition. The allowable $15 per week, which drops to $10 per week on a 50-week basis, is not much. Take the typical case of a working wife and mother who is employed as a stenographer earning around $400 a month. She can now deduct the maximum of $1,000 for the care of two children. In this instance she gains $260. But assuming that her husband makes at least as much as she does, this family will lose $120 in family allowances and so ends up only $140 to the good. At this rate, the working wife should not have too much trouble choking back her sobs of gratitude to the minister. The husband does not stand to gain much directly unless he is a single parent.
Most day care in Canada is unorganized and no figures exist for it. The government's insistence that day care receipts bear the social security number of the babysitter is clearly aimed at bringing the neighbourhood nannies into the income tax net. This can only have the effect of boosting charges for freelance, child care services and in the long-run increase the costs to the working mother.
Take the case of small businesses. Their tax was 21 per cent up to $35,000, and now it is to be 25 per cent up to $50,000. That is a 4 per cent increase in taxes. Twenty-five per cent on $50,000 only applies till it reaches $400,000, and in eight years you eliminate all companies that have been earning up to $50,000 or more. At that stage are they to sell, get out, pay taxes or what? This will not increase the growth rate of Canadian companies: it is penalizing them.
Then we have the question of provincial finances. There is nothing to indicate what will happen here. What about the deficits? All provinces but two will have deficits this year. Ontario is going to have a deficit of over $425 million, and the federal government of $750 million. What does the federal government propose to do about this? This will mean an additional $100 million in interest payments on borrowed money. Where do we get the money to provide the jobs that we are going to need? This is the crux of the problem. Where are we going to get jobs for the almost 600,000 who are unemployed? To maintain current levels of unemployment by 1972-73 will
June 28, 1971

require an annual growth rate in our economy of approximately 9 per cent, and after 1972-73 we must have a real sustained growth of 6 per cent over the rest of the decade. This is double the U.S. and European performances.
At present our rate of achievement, Mr. Speaker, is 3J per cent and normally we do not exceed 6 per cent. Capital will be our greatest need, but there is no indication where it is coming from. We must provide more jobs. We must sell more goods. Today, to provide one job costs $50,000 in capital and it is estimated that by 1975 it will cost $70,000. There are 375,000 young people entering the labour market, and according to my mathematics it will require between $25 billion and $30 billion to provide them with jobs alone. This is a staggering figure-and it does not take into account the maintenance of the equipment in industry today. I am afraid this bill will not do it, Mr. Speaker. I hope there will be changes and modifications to meet the pressing needs in this country and the pressing need of returning the unemployed to work.


Mr. Oza  Teiraull@Villeneuve: Mr. Speaker, when the Minister of Finance (Mr. Benson) presented his budget on June 18, he was all smiles and was wearing a red flower in his buttonhole.
Mr. Speaker, all government supporters appeared to be very happy to see the Minister of Finance doling out miniscule tax reductions to the workers of Canada. Here is an example: the head of a family with two dependents earning $10,000 a year will pay $95 less annually, or 26 cents per day, which is not enough to buy a loaf of bread or a quart of milk. A person with two dependents earning $2,800 annually now pays $15 in taxes each year. After 1971, he will not pay any, the reduction therefore is equal to 4 cents per day.
Mr. Speaker, I had prepared a lot of figures which I was going to quote. I believe, however, that my colleagues from Champlain and Abitibi (Messrs. Matte and Laprise) as well as our national leader, the hon. member for Temiscamingue (Mr. Caouette), have given sufficient information to the people on the matter.
Mr. Speaker, in my view, the Minister of Finance is laughing at the people. In fact, when he speaks of Canadians, he merely says "the taxpayers", when, in fact, he should say Canada's shareholders.
Mr. Speaker, Canada does not belong to a small group of people or to high finance; as everyone knows, Canada, belongs to all Canadians. It is not right that in our big, beautiful, overwhelmingly rich country so many people should be living in poverty: two out of five. And yet Canadian production is sufficient to meet the needs of a population twice as large as ours.
Mr. Speaker, Creditistes believe that what is materially possible and desirable can and must become financially possible. Man is made by his Creator and material needs are made for man. Man has temporal needs. He needs food, clothing, heat, shelter, etc. The good Lord has
The Budget-Mr. Tetreault
placed on earth everything required to satisfy the needs of all mankind. Our planet is more densely populated today than one thousand years ago and yet, far from being depleted, it offers man a greater variety of goods and in greater quantities than 1000 years ago.
Mr. Speaker, everyone knows that the Prime Minister (Mr. Trudeau) and his cabinet members are constantly travelling all over the country in an effort to sell our products. At the same time we are taxing Canadians to the extent of $100 million to reward western farmers for not producing wheat.
Due to the new tax reductions for the year 1971-72, the government will create a budgetary deficit of $750 million, considering that this amount will be borrowed at the rate of 7 or 8 per cent.
The Canadian people will have to pay in interest alone more than $52 million a year. What a beautiful gift to give to the controllers of our economic blood and to the bankers!
Social Credit is a movement whose aim is to allow the consumer to benefit from the full capacity of production of useful goods. Unemployment which we are experiencing now is not the result of the saturation of consumers' needs or the depletion of productive resources, but only of the non distribution of products and services. The producers do not operate according to the orders they receive: orders are conditioned by the purchasing power of the consumer. As far as purchasing power is concerned, it depends on the money available to consumers with needs to be satisfied.
Mr. Speaker, Social Credit offers a carefully designed, polished and improved scheme which may at any time fill the gap between the prices of the products ofEered to consumers and the money they have at their disposal to buy these products. This is therefore a system which admits neither inflation nor deflation, but which maintains automatically and mathematically the balance between production and purchasing power. It controls money and puts it at the service of man. It compels it to fill its function, that is the sale of production, the satisfaction of consumers, in as much as this is made possible by natural and industrial resources.
Mr. Speaker, this balance, which has been advocated by Social Credit for 35 years, may appear somewhat curious to some politicians. However, nobody will deny that Canada can easily produce enough goods to ensure substantial aid to one and all. The physical opportunities exist, the financial ones alone are lacking.
So finance is not helping Canadians. A solution must be found as Henry Ford used to say. Products are there but there is no money to buy them. Producers are doing their job but not the dollar manufacturers. There is wonderful know-how in production but none in the present monetary system.


Mr. Oza  Teiraull@Villeneuve: Mr. Speaker, the people of Canada are producing almost everything in abundance and are will-

June 28, 1971
The Budget-Mr. Tetreault
ing to produce more if the possibilities are put forward to produce more.
Prior to the 1939 war my home was near a small railroad town and I could see thousands of young men travelling coast to coast from Halifax to Vancouver looking for jobs, wanting to do something for Canada. During those years these young men were called hobos simply because they could not And work.
During the 1929-39 crisis all the governments of Canada were dead broke; all the citizens were also broke. Mr. Speaker, in the fall of 1939 the World War broke out and in 24 hours the Canadian government found all the necessary funds to give work to all Canadians, dress them, feed them, provide them with free medical examinations and, if they were found fit, the army would train them free of charge, plus a salary and free transportation to the battlefield.
If the war had lasted for ten years the government would have found all the funds necessary for the duration of the war. Once the war was over, the government did not find the necessary funds to balance its budget. Apparently the government is anticipating a $750 million deficit for 1971-72. We cannot continue very long in incurring such heavy deficits because we are already paying $2 billion annually in interest on our national debt. For many years we asked the government to use the Bank of Canada, which is the bank of the people. Why pay exorbitant interest rates when we know that we have our proper bank?
Our national debt represents a drain of over $5 million every day of the 365 days of the year. I think we should stop and think and see what the Social Credit Party of Canada has to say. I think the country should study our ways of thinking about the financial system we have in Canada. I do not think many members of this House have been attacking this system. Social Crediters are the only people who will attack our financial system. I think our government should study once again our policies and realize that we want to go forward with Canada.


Cyril Lloyd Francis: Mr. Speaker, the problem that the Minister of Finance (Mr. Benson) faces in preparing a budget for the nation becomes more complex in our society each year. I can remember that as a student at university-I am now 51 years old and that tells what is my generation-the problems we discussed in our economics classes related to such factors as high levels of employment and price stability. Those questions are still with us and are fundamental. To those problems have been added the problem of maintaining a stable exchange rate. This does not just mean that we must maintain stable internal prices; it means that we must maintain a stable price of our currency in relation to the currencies of our trading partners.
Then, as the complexities of government intervention in our society became more obvious, additional objectives were put forward. The Economic Council of Canada spoke of them in terms of an equitable distribution of rising personal incomes. The information that is required

to achieve these purposes has been extended through the use of computers and the development of statistical techniques. The more the government is called on to do, the more it must know; and the more it must know, the more difficult the task becomes. At the very best, the budget is a skilful exercise of judgment because there are areas in which the judgment of the Minister of Finance can have very serious consequences for the economy.
Looking back on recent performances, it is clear that the government's record in price stability has been better than that of any of our major trading partners. Indeed, it is fair to say that in the past year it has been the best among western European societies. This achievement has not been without its difficulties. Our record in price stability led to a very healthy stimulation of our exports. This led to a large accumulation of reserves in New York and to upward pressure on the Canadian dollar which, in turn, led to the more painful decision that was absolutely inevitably made by the Minister of Finance to let our dollar float and to bring it up in value in relation to other currencies. This, in turn, caused pressure to be exerted on export industries and created unemployment in those industries. To the extent to which the government achieved certain purposes its successes created difficulties, because we were successful in stabilizing prices and in keeping our rate of inflation below that of our trading partners. To that extent our difficulties were multiplied.
It is clear, Mr. Speaker, that we cannot as a nation set goals substantially below those of our major trading partners in terms of price stability. However, the wisdom of hindsight seems to be greater than the wisdom of foresight. By looking back we know what might have been done a little better. In looking forward we can only use our best judgment.
To the immense difficulties which the Minister of Finance must face in the areas I have outlined, there is another difficulty to be added. The difficulty relates to maintaining reasonable economic relationships within a federal state and a reasonable degree of integration as between the federal budget and the budgets of the provinces. It was of no small concern to me, and I am sure it was a matter of no small concern to members of the House, to learn on April 26, when the provincial treasurer of the province of Ontario brought down his budget, that that budget was a declaration of economic warfare against the central authority of Canada, the possible consequences of which could be severe.
It is abundantly clear that when that ultimatum was delivered to the federal government, stating that there could be no consitutional revision and no progress on the constitutional front unless there was a handing over of the fiscal authority of the federal government to the province, the province of Ontario was charging that that province had been singled out for penalty and had been held back in its natural rate of economic development by the policies which the central authority had pursued.
Looking back on the federal budget that the Minister of Finance (Mr. Benson) brought down some ten days ago, one wonders why the treasurer of Ontario thundered the way he did. Many of the items he felt were good, will
June 28, 1971

be incorporated shortly into legislation as a result of the budget before us. They are items like the suspension of the surtax, the tax relief which has been given in a number of areas, increased exemptions for senior citizens and benefits for lower income groups generally, and measures to stimulate small business. In what is obviously an expansionary budget there has been to a considerable degree an integration of the objectives of the province of Ontario and of the federal authorities. This has been done much more by luck than good management, perhaps, in some respects. None the less, Canada cannot be governed, nor can confidence in the future of this nation be maintained, if one authority declares economic warfare on another.


The Acting Speaker (Mr. Laniel):: Order, please. It being six o'clock, it is my duty to interrupt this debate. Further proceedings thereon will be deferred until 9.45 o'clock p.m., at which time the question will be put on the amendment now before the House. When the House resumes at eight o'clock it will be for the purpose of considering the government notice of motion to establish a ministry of state for urban affairs.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


Robert Knight Andras: That the following address be presented to His Excellency the Governor General of Canada:
To His Excellency the Right Honourable Roland Michener, C.C., C.D., Governor General and Commander-in-Chief of Canada.
May it please Your Excellency.
The House of Commons, having considered the proposed text of the Order in Council laid upon the table of the House on June 25, 1971, in relation to the establishment of a ministry of state for urban affairs, prays that the making of the said Order in Council be approved.
He said: I must admit to all hon. members, through you, Mr. Speaker, some sense of satisfaction and accomplishment, at long last, as a member of the government that tonight we are considering a draft Order in Council to establish Canada's first ministry of state for urban affairs. At the same time, I admit that the decision to create the new mechanism of a ministry of state is perhaps more fundamental than our significant decision to create a federal institution in the urban sector.
I recall my own enthusiasm almost three years ago, in 1968, when the Prime Minister (Mr. Trudeau) defined what I thought were the central and priority tasks of
Urban Affairs
complex, modern governments-the need to question the basic assumptions on which government is acting; from time to time to objectively examine how government defines and articulates national objectives and priorities; how existing policies and programs can distort widely-held objectives if not, in actual fact, prevent their achievement and, most important, how in the face of the overlapping maze of public bureaucracies at all levels of government, government can in all its many activities be made more relevant to and less remote from the real hopes and needs of people.
These things, the ways in which a nation seeks to govern itself, to determine its objectives and priorities, to organize its administrative apparatus, rarely capture widespread public attention. Yet whether one is a backbencher, a member of cabinet wrestling with Indian policies and entrenched ways of thinking, or seeking to make housing policy more relevant to those who are ostensibly being served, these remain to me central and fundamental questions.
The manifestations of responses since 1968 are many. They range from our implementation of program, planning and budgeting, a continuing attempt to achieve order and reason in the longer term budgetary process, to our recognition of the need to improve the effectiveness and efficiency of management throughout the public service, to the reorganization of the cabinet process, the rationalization of functions among departments and the creation of new ones, and to the many fundamental policy reviews, particularly the urban policy review, that are well known publicly.
I would like to stress that one of the latest and significant manifestations of this priority in the thinking of the Prime Minister and the government is the creation of ministries of state. It is more than a coincidence that we decided that of all broad policy areas, this kind of new institution was most appropriate in the field of urban affairs.
In 1969 we launched an objective review of urban problems in Canada. As a result of this review the government concluded that, first, the problems of Canadian cities were real; but there was a lack of consensus as to what those problems really were in precise terms and, hence, what the most appropriate solutions should be. The fact is that the hard, scientific evidence was lacking on this most complicated and highly interdependent public question. The need for intensive research on Canadian urban issues was clearly defined. Second, the government concluded, and found, that the federal government was already deeply involved in shaping urban Canada through its numerous policies and programs. We identified some 27 agencies and departments of this government and some 117 federal programs directly affecting our cities.
Third, there was clearly a lack of policy co-ordination of federal programs having an urban impact, and an absence of effective co-ordination among levels of government. Fourth, there was a clear need to seek new
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Urban Affairs
ways of creating a national process involving all key actors in order to define our urban objectives and the policies required to achieve them. Fifth, it was also clear that the very complexity and all-inclusive nature of urban problems and the very number of major actors involved argued against any traditional concept of creating a new federal department of urban affairs in order to achieve the required research, policy development and co-ordinative objectives. Hence, Mr. Speaker, the ministry of state for urban affairs. It is not a department. It will not take directly unto itself any program delivery capability. I think the very nature and complexity of the issues we are facing argue against the concept that policy emerges only from those entrusted with its administration. It embraces the concept that objective policy development across a broad range of activities and authorities can emerge when unfettered by the vested interests that grow from administering programs.
I hasten to say that while policy formulation will be separated from program administration in this ministry of state, it will not be to enjoy the artificial world of the ivory tower but to assist in the shaping of all policies and to influence the implementation of programs that affect the urban environment, to the benefit of all Canadians and without having to duplicate or to take over delivery systems that in many cases already exist in other departments and agencies of the government.
The ministry is purposely named the ministry of urban affairs, not urban affairs and housing, urban affairs and transport or urban affairs and land management; and it is so named because its policy mandate is unrestricted and as wide as possible while its direct operational role is non-existant. The ministry's role will be co-ordinative as between federal policies and their departments. It will be supportive of all relevant federal programs and projects on behalf of comprehensive urban policy. It will be consultative with the provinces and their municipalities in achieving, hopefully, with the co-operation of the provinces and the municipalities an integrated approach to solving urban problems that none of the three areas of jurisdiction can solve on its own.
I think in all the policy areas that I could explore with hon. members it has been too easy for too long simply to blame the problems of urban blight, congestion, soaring land prices, slums, inadequate housing and pollution on another level of government. Equally, it has been too easy for the federal government unilaterally to develop, in what I am afraid has been an ad hoc fashion, one policy or one program to come to this House and the people of the country and suggest that now this one new program of urban renewal, urban transit or whatever it is will solve the complex urban problems that have accumulated over the decades.
Such simplistic and patchwork responses may solve short-term political problems but they do not, I submit, solve urban problems; and in fact that approach is often a perverse one. Thus, we are not asking the House tonight for this kind of program authority. We want to
break that deceptive and misleading chain. We do not intend to present politically appealing yet simplistic, apparent cure-all solutions. We want the support of the members of this House for the creation of a new organizational form, launching a new process that will allow us within our own government and together with the provinces, cities and people of Canada, really to start tackling the root causes of enduring and growing urban problems that no modern nation to date has succeeded in coping with effectively. In attacking these issues we hope to raise urban life in this country to the high level of satisfaction and accomplishment that it ought to have.
I am grateful for the fact that many on both sides of the House have given us encouragement and support in this endeavour over the past two years. I also want to recognize the agreement of the provinces in our search. A new atmosphere prevails in urban affairs discussions- tenuous, fragile, but nevertheless there-with the provinces. There seems to be an order of political leadership that is seeking reasons for and new forms of collaboration.
In trying over the last two years to develop a consensus on the need for a national urban policy and new institutions, the municipalities of this nation have also sought the higher, and perhaps more difficult, plane of longer term solutions. I congratulate them, as well as the leadership of the various provincial and municipal associations and the Canadian Federation of Mayors and Municipalities, particularly their two past presidents, Mayors O'Brien and Dent, and now their new president, Mayor D'Amour of Hull.
More specifically, in our discussions with the provinces and representatives of Canadian municipalities over the past year I think it is fair to say that significant progress has been achieved. General acceptance has been given to the principle that the three levels of government, whose urban activities are so interdependent, must find new ways of meeting together so that our policies and programs will become better understood, more interdependent and complementary, and not contradictory in the pursuit of common objectives and priorities.
What I describe as an historic meeting took place in Winnipeg in April of this year. I, representing the federal government, the ministers of municipal affairs of the provinces and representatives of Canadian municipalities from coast to coast held a meeting which led to the formation of a committee of all three levels of government charged with creating a national forum for continuing consultation. While only one step along the long road to new forms of intergovernmental collaboration, in my opinion at least our collective recognition that we can no longer talk of problems of Canadian cities unless the cities themselves are party to such discussion has been a significant departure. We meet again in Victoria on August 25, in what I hope and expect will be a further and conclusive step in this direction.
I think it is now widely held and accepted in this country that Canada is an urban society that is based upon a highly industrialized economy. This reality clearly demands co-ordinated urban policies by the federal government in the many areas of jurisdiction that affect

June 28. 1971

urbanization. In addition, as Canada grows and matures, the national role of our cities, as carriers of cultural and social progress as well as centres of economic and political strength, ought to be reflected in appropriate institutional structures.
Historically, the city has been mankind's focus of lasting accomplishments. It was in cities that man had sufficient leisure and incentive to devise democratic institutions. The very word "democracy" recalls its Greek origin and Athens as the place where Plato, Aristotle and Socrates invented the concepts of personal freedom and social public responsibility. In recent years, perhaps, we have equated cities too much with problems and human conflict and we have not spoken positively enough about their opportunities and potential. Over the centuries, people of every nation and of every origin have congregated in communities. This has been their choice and it is the choice being exercised today by increasing numbers of Canadians.
The conclusion must be that it is in an urban environment and in urban centres that most Canadians find or expect to find greater opportunity across their wide spectrum of desires and ambitions. Perhaps the ground rules that influenced that choice are wrong, distorted or should be changed. As we examine this whole process of urbanization this kind of question must be looked at as well.
The fact is that cities are excellent social systems with still more benefits than costs, at least in Canada. We know that costs are rising rapidly-and I am not talking about straight economic costs but, even more important, social costs. We think there is still time in this country to maintain the opportunity gain over those costs provided we join with other levels of government and the Canadian people in a concentrated effort to do so.
The draft Order in Council before members of the House this evening is a charter for a new kind of institution, hopefully for exactly that purpose. It defines the authority of the new ministry in the broadest possible terms. But I think, as most experts of constitutions, or charters, would agree, it is less the language of the basic or founding document but, rather, the commitment of those who lead this which will determine the effectiveness of an organization.
In that light, Mr. Speaker, the Prime Minister and this government are committed to seek that the language of this draft Order in Council is translated into the development of new directions toward a rational policy framework for examining and acting upon urban problems so that the many things that we as a federal government do which affect the lives of Canada's urban residents will be more meaningful and will reflect their wishes.
I close simply by asking for the support of the House to the terms of reference before us in order that we can get on with the task.


Sylvester Perry Ryan: Mr. Speaker, I am happy to welcome, in the name of the official opposition, the establishment of the long-awaited department of urban affairs. Along with the creation a few days ago of the
Urban Affairs
department of science and technology, the new department of urban affairs marks for the Canadian urban society a new phase in its pattern of development. We sincerely hope this department will show the determination of the government to put an end to its irresponsible attitude toward urban problems and that we will see the beginning of a new, innovative era toward the building of a livable and better urban society.
The problems to be tackled are numerous and large. The urgency of the situation requires that all the scientific and technological expertise of this country be put to work in order to hasten the solution of the new and complex problems which are facing all our metropolitan centres. Great are the social and political implications of our urban growth. The source of our problems is the rapid and uncontrolled rate of urbanization which our country has known since after the Second World War.
The excessive concentration of populations in the cities has had serious social and political repercussions on the structure of our society. The demands for living space to accommodate the ever-increasing number of families has led to the hyperinflation of land and shelter costs. Very few citizens can now really afford a single family home. The majority of the people who choose to live in cities have to resign themselves to living in huge apartment complexes where too often little or no space has been spared for recreational facilities or for the freedom of movement we all need and love. The poor, isolated and alienated, have no other choice than to live in the grey areas of the city and in the sad, poor homes their limited means can afford.
In order to alleviate the scarcity of land and homes in the downtown areas, cities have had to extend their boundaries. As a result, municipalities, singly or together, have had to provide for more efficient transportation facilities. For the thousands of commuters who wish to drive to work every day, the city has to build new access roads and bigger expressways. For the rest, who choose to use public transit, the city has to develop an extensive network of commuter rail services, extended subway lines and multiply its bus services. Linked with the problem of transportation are the problems of pollution of our air, our water and our tranquility. Sophisticated and expensive equipment and technology are required by municipalities and private industries to deal with pollution.
There is a definite need for this department of urban affairs to co-ordinate the use of all the resources of the nation, especially at times like these when it is increasingly difficult for the cities to manage their own affairs. To better serve the needs of the city and the country as a whole, we believe there is an urgent necessity to readjust some of the responsibilities and financial arrangements of our local administrations.
Representatives of the three levels of government should meet as soon as possible to decide on the specific terms of reference of this new department so they will not overlap and be working at cross-purposes. The year 2,000 is only 30 years away. Experts have forecast a total Canadian population of 34 million in that year. Out of this total it is also estimated that about 44 per cent of all

June 28. 1971
Urban Affairs
Canadians will live in the three large centres-about 6.5 million in Toronto, 6.25 million in Montreal and 2.3 million in Vancouver. The new bureaucratic structure the government is proposing today should start at once to alleviate some of the negative effects of this polarization in our country.
Can Canada still be viable politically if our people are centred around only three dominant cities? Would it be possible to maintain a clearly defined Canadian identity in these circumstances? The responsibilities of this department will be to see that the growing dominance of large metropolitan areas does not mean the death of the rest of the country. Working with the Department of Regional Economic Expansion, the department of urban affairs should try to find ways to direct this growth in order to strengthen the forces which bind this country together. I think we all agree with that.
Can we allow growth and prosperity for one part of the country, and economic stagnation for other parts? Can the population of our cities range from super rich to super poor, with the poor locked into intercity ghettos and the rich locking themselves into private enclaves to defend themselves against the disorder around them? All these questions, Mr. Speaker, will have to be answered by the people who today have the responsibility to define the priorities of this new department.
Despite our vast land area in this country, unfortunately our rock, muskeg and climate conspire to compress our people into all too few areas. These areas that are favoured by both mother nature and economic factors are the areas in which we see our large cities. We deplore the piano-box housing of some more southerly countries, but they live close to nature in compensation. Sanitation is their main problem as, indeed, it is a major one of ours. But we have more problems even as we strive to build better shoe-box housing in the sky in these areas of Canada.
To commune with nature in the cities of this country is beconTng rap dly more difficult for the city dweller. One can understand such development on the relatively small and hilly island of Hong Kong, but for cities such as Toronto surely we can expect proper, modem procurement, planning, servicing and construction. Surely we can save them from becoming mazes of jammed, arid canyons like Manhattan, where a few wind up with millions, where many wind up as rubby-dubs, sleeping on the sidewalks, and where the quality of life for all deteriorates. It is no wonder that Mayor John Lindsay of New York city has been talking about taking his city out of New York state. That might come to pass. The major reason is that New York is in financial trouble and is not allowed to run its own affairs as great cities in other parts of the world customarily do. Our big cities are in exactly the same position save that for some reason Montreal seems to be able to assert more autonomy, more successfully, than Toronto. Legislators from all over Ontario tell Torontonians what they should do, yet rural and small town Ontario is quite a different world from metropolitan Toronto.
The cry is that the cities spend too much money and that is why they are in trouble. The truth is quite the opposite, since both our federal and provincial governments milk the cities for the benefit of others. I would like to know how many dollars are taken from metropolitan Toronto by the province of Ontario for the benefit of outlying towns and the countryside, and how many are spent for the benefit of the city. I would like to know even more the "take" from metro Toronto by the federal government and the amount returned, because I am certain that its "take" is far higher than that of the province and that its return is far lower.
In the last couple of decades the great mechanization of farms and the encouragement of abandonment of marginal farms and occupations has destroyed the jobs of thousands of farm and other workers. They were driven to our cities for survival. Their need for housing, joined with that of migrants from other lands, called for the rapid growth of suburbs. This has been encouraged by federal housing loans and has resulted in great servicing and transportation burdens for the cities. Now, with the added long period of unusually high unemployment under this government it has become necessary to lower the welfare standards in our cities in an effort to hold the line. They have good reason to cry out for a fair share of the wealth which they still manage to provide.
Mr. Speaker, it may not be too long before the demand for provincial status by our largest cities will become a major issue in our confederation, for while their need and their production of wealth is the greatest of all levels, they have the poorest access of any level of government to tax revenues. This demand for provincial status will not be lessened, but will become all the more vociferous if the present Minister without Portfolio responsible for housing and urban affairs (Mr. Andras), who is minister designate for urban affairs, makes many more statements like the one he made in his speech at Halifax on May 17 when he said:
Economic and demographic patterns are happening in Canada that, I believe, must be constrained and re-channelled to some degree. Otherwise they will further the dominance and powers or the urbanized, industrialized centres and the regions surrounding them.
Mr. Speaker, the minister has misconceived the reason for any needed constraint or re-channelling. The fact is that dominance and power are with the mandarins at Ottawa and in the provincial capitals. Look at the battle over the white paper on tax reforms! It was fought out mainly between the mandarins at Ottawa and the federal cabinet on one side, and the big businessmen, Parliament and the provinces on the other. There was unreasonably long delay, confusion and disruption destroying much and accomplishing very little-and of participatory democracy there was none. I note with interest these words in the Speech from the Throne for the current session:
To foster co-ordination of the activities of all levels of government and to contribute to sound urban growth and development, the government proposes the reorganization of its urban activities under the direction of a minister of state for urban affairs and housing.

June 28. 1971

Mr. Speaker, the government motion that we are presently debating seeks approval of an Order in Council in relation to the establishment of a ministry of state for urban affairs, period. The housing designation has apparently been dropped by cabinet some time between October 8 last and last Friday. This illustrates that occasionally even this bureaucratic government can, and will, see the light. It also points up the half-baked nature of the Speech from the Throne. I do not now, and never did, think the "housing" appellation was a proper one. I think the designation "urban affairs" is sufficiently inclusive of housing and that the spelling out of a special responsibility for housing might not sit well with some of the provinces. Regard should be had for their sensibilities. After all, they have substantial jurisdiction and primacy in the field of housing. All they want from Ottawa in urban affairs is financial help, co-operation in the coordination of standards and the proper provision of services for which the federal government has responsibility.
Speaking of responsibility, I feel that the minister of state for urban affairs probably will have one of the most responsible portfolios in the cabinet. Much will depend upon how much he dedicates himself to the task and how diplomatically he conducts himself, not only with the representatives of the provinces and municipalities but also with those of his colleagues in such portfolios as Public Works, Transportation, the Post Office, Manpower and Immigration, Consumer and Corporate Affairs, Citizenship and, above all, the Department of the Secretary of State which is contributing so much to moral pollution in this country at taxpayer expense. He may, however, in the last instance, find that he has to forget about diplomacy and get tough with the hon. member for Hochelaga (Mr. Pelletier).
Although the minister designate for urban affairs stepped over the provincial jurisdiction line and recently was rather badly bruised in an encounter with Hon. Allan Grossman in Ontario when he injudiciously and unwarrantedly called for fixed rents for two years on low-income public housing, he is still the only man with any experience in this new field and I am sure he will learn where to step in, where not to, when to speak and when to say nothing.
The proclamation for this new ministry for which approval of the House is now sought is a very carefully worked out instrument; in fact, it is overworked. It gives the new ministry of state power to formulate and develop policies in relation to the activities of the government of Canada that affect the urban environment through measures within fields of federal jurisdiction. But clause 5 of the government reorganization Bill C-207 says that the duties, powers and functions of the Minister of the Environment extend to and include all matters over which the Parliament of Canada has jurisdiction. Some questions therefore arise: for example, how close can the Minister of the Environment come to Moosonee when legislating for James Bay, and how far can Montreal's sewage go into the St. Lawrence River?
Urban Affairs
The quality of life in our cities must be improved; we are all agreed on that. But it will not be if there is to be such ambiguity between the responsibilities of ministers. The public will not care which minister clears up the problem of the E. B. Eddy Company across the river in Hull, or whether the National Capital Commission will do it. This is a physical environment problem for which all three apparently have responsibility; and so, of course, does the province of Quebec.
Here we have an excellent example of how to get people all mixed up so that much is spent and nothing is accomplished. This is typical of the government's performance-all image and no substance! But the image blurs as its leader get fuzzier and fuzzier.
The minister himself admits that the ambit of his new ministry is wide. His sway is mighty across the land. The Minister of the Environment is in much the same position. The country and this House will want to have clearly defined just where the influence and the power of each minister begins and ceases, otherwise how can our municipalities and private industries with pollution problems know where to go or whom to believe?
I was glad to hear the minister say that the meeting scheduled for August 25 in Victoria will be a tri-level meeting. I believe that originally he contemplated having only a two-level meeting with just himself and the provincial ministers. I take it from what he said this evening that now municipalities will be invited to that meeting, which should speed up things. But with the formation of the ministry of state for urban affairs a standing committee of the House of Commons for urban affairs should be instituted also.


Some hon. Members:: Hear, hear!


Sylvester Perry Ryan: Otherwise we will have the same jungle in which the ministry will find itself. How can anyone interested in urban affairs be expected to go from the Committee on National Health and Welfare, dealing with CMHC, to the Committee on Transport and then to the committee dealing with the estimates of the Secreary of State, and so on to other committees? It just cannot be done, especially if we are also to put in any time in the House. I suggest that it will be absolutely necessary for a new standing committee on urban affairs to be established, even if it means winding up two or three other committees.


Gerald William Baldwin: An opposition member in the chair would help.


Sylvester Perry Ryan: I have already mentioned moral pollution. I think in this area we will have a man as the new minister who is prepared to do something. I think his influence on other departments which are making grants and loans should be, and will be, great.


An hon. Member:: What about the minister and Rochdale?


Sylvester Perry Ryan: He himself cannot escape from some responsibility, although he was not around when the

June 28, 1971
Urban Affairs
Rochdale College mortgage loan was made. However, he was there when the loan to Pestalozzi College in Ottawa was made, and I understand that there is already trouble there.
I suggest to the minister that if he has not done so already, he should immediately get together with his deputy minister and take a close look at the management of Pestalozzi College, otherwise he will face the same problems of mismanagement, the decay of buildings and financial problems which have been experienced at Rochdale in Toronto. Then I hope that he will use his coordinating influence with other departments, such as the Department of the Secretary of State, the Department of National Health and Welfare and the citizenship department when it comes to making grants to projects and organizations across the country. I suggest that more care and discrimination is needed in selection and inspection before money is handed out. I would recommend to the minister that his rule be that the taxpayers' money should not be used to teach young people to hurt themselves or even to aid and abet in this.


Lincoln MacCauley Alexander: How about Rochdale?


Sylvester Perry Ryan: The experiment has taken a long time. It has become a great financial problem. I had hoped that in some form or another it might recover and prove eventually to be a successful experiment. I must now admit that I have very dim hope and expectation of that, although I do not think it is the fault of the present president of Rochdale College but, rather, it is the fault of those who went before him. I think the minister should be very charitable with regard to the fraternity which occupies one floor of that college. So far as I know, that fraternity has an excellent record. They put a lot of money into the venture. If the minister can see some way of saving that fraternity, I do not think the public would be disappointed. But so far as putting in $28,000 a month more of taxpayers' money to support Rochdale College is concerned, I think the college has just about "had it".
Another project which I hope the minister will look into and assess is the one at 19 Huron Street, Toronto, known as The Hall which was started by a group known as Grass Roots. Apparently, they work in close association with CARM, which is short for Committee for Aid to Refugees from Militarism. The Secretary of State recently allowed a grant of almost $7,500 to The Hall, for switchboards. It is supposed to help Toronto residents in finding a place to sleep, eat, and so on. However, as the World Council of Churches appears to be losing interest in supporting CARM, Carm seems to be working its way out through the Grass Roots and The Hall. So far as I can gather, the main beneficiaries of the $7,500 grant are the draft-dodgers and deserters from the U.S.A. Much as I sympathize with fellows who cannot find a place to sleep or eat there, I am not at all convinced that the people of Canada want the taxpayers' money to go into supporting this particular venture.
The Hall passes itself off as being a community centre for the Chinese around Huron Street, which is the Chinese dormitory. I talked to the Chinese and they say they want no part of it, that it is not serving them in any way, shape or form. Therefore, I ask the minister to please look over that situation and if he has any influence on the Secretary of State will he please endeavour to persuade him not to continue so blithely and unconcernedly giving grants to projects which are not altogether in the interests of the country and certainly are not projects that have the complete confidence of the people.
Finally, Mr. Speaker, I want to congratulate the new minister designate and wish him-


Lincoln MacCauley Alexander: God speed!


Sylvester Perry Ryan: Not particularly God speed-I would give him a little time; but I wish him success in what I am sure will prove to be a very difficult job.


John Gilbert: Mr. Speaker, I hope I will not be condemned for having political schizophrenia if I both congratulate and criticize the intended secretary of state for urban affairs. I recall the time when the Minister without Portfolio in charge of housing started off his cabinet career being associated with Indian Affairs. He did an excellent job; in fact, he did such a constructive job that they transferred him to another portfolio. In fairness I must say he has done a good job as Minister without Portfolio in charge of housing. But, Mr. Speaker, that is where the congratulations end because I thought his speech tonight was composed of too many words and not enough ideas, too many platitudes and not enough principles.
When I read the Order in Council to set up a ministry of state for urban affairs I could not help agreeing with the recital which indicated that increasing urbanization profoundly affects the well-being of Canadians and the future of Canadian society as a whole, more particularly in the fields of housing, transportation, environment, employment, life style and other fields. Because of this it is necessary to have national policies comprehensive in nature and requiring the full co-operation of the provinces and municipalities.
On one page of the Order in Council the powers of the ministry of state for urban affairs are set forth. It is indicated that the duties of the minister are "to initiate proposals for new policies, projects and activities; evaluate proposals for new policies ... participate in projects... that may have an influence on urbanization," and to make recommendations and have consultations with other authorities, to delve deeply into research and to co-operate with the different departments and agencies of the government of Canada and with other governments to develop a real urbanization policy.
I would have preferred it to have been more specific with regard to the phrase "urban affairs." I would have liked it to include the word "housing," because I think housing is one of the foremost problems in our country. I am pleased that the minister has openly declared that urban affairs includes housing, transportation, pollution and many of the other problems that are connected with urban life. If he later says that he has not jurisdiction in
[Mr. Ryan.)
June 28. 1971

the field of housing and other related fields, I can assure him that we will be the first to speak about it.
It has been said that the minister attended a tri-level conference with representatives of the provinces, the municipalities and the federal government. I note that he hopes to develop an agenda in the near future and to have a further tri-level conference. This is a step in the right direction: it gives meaning to the phrase "urban affairs." Even though we have tri-level conferences, I hope they will not merely be consultative and that the federal government will assume a leadership role in regard to urban affairs.
If I may speak generally with regard to the problem of housing, I would repeat that it is one of the main facets of urban affairs, probably the most important one. During the past ten years in housing we have had more ups and downs than a stock market chart. The government has considered the housing ministry as of secondary importance. In the past it has been attached to such portfolios as labour and revenue. The federal government has neglected to give leadership in housing; therefore, we have gone from one housing crisis to another without any forthright, long-term solutions being brought forth. In the past the federal government has treated housing as an economic regulator, turning the tap on and off depending upon the economic conditions prevalent at any particular time.
In the last ten years we have had many studies on housing. We have received briefs from social agencies, trade unions, churches and co-operatives. Then we had the ultimate in the task force on housing in 1968, headed by the hon. member for Trinity (Mr. Hellyer), which reported in 1969. If anything emerged from all these studies and task forces, it was a housing philosophy. The task force on housing set forth this philosophy in very clear terms when it said that every Canadian is entitled to clean, warm shelter as a matter of basic human right. The Canadian Council for Social Development, which was formerly the Canadian Welfare Council, said all Canadians have a right to be adequately housed whether they can afford it or not. Therefore, the conclusion to be drawn is that housing must be considered neither as a business nor an industry but as a social program. In other words, housing must be put on the same basis as education, medicare and other social services.
The question arises: How will this be implemented? The federal government must accept the over-all responsibility for housing throughout the country. The federal government must allocate responsibilities to private industry and make known its own responsibilities. It cannot pick up the pieces after private contractors have had the first crack at it. This has been the history of housing in Canada for the past ten years.
I must be constructive and ask myself what the NDP would do in these circumstances. We would implement the philosophy set forth in the task force report, and also set forth by the Canadian Council for Social Development whereby all Canadians are entitled to clean, warm shelter as a basic human right and are entitled to adequate housing whether they can afford it or not. How
Urban Affairs
would we do this, Mr. Speaker? First of all, we would consult the provincial and municipal governments to assess the housing needs of all Canadians. The Economic Council of Canada has said that one million homes are required within the next five years, a figure also mentioned by the task force on housing. It is rather noteworthy that Central Mortgage and Housing Corporation indicated that 225,000 homes would be required each year for the next five years.
We in the New Democratic Party feel that there should be at least 250,000 homes over the next five years to take care of the short-fall in housing that we have experienced in the last ten years. We should keep in mind that seven out of every ten Canadians are living in urban areas at present, and more than eight out of ten will do so by 1980, most of them in 29 municipalities and major cities across the country. This indicates present and future needs with regard to housing. I would remind hon. members that according to the task force on housing, half a million homes are substandard, requiring a great deal of repair and rehabilitation. May I also say, Mr. Speaker, that many Canadians live in double up accommodation, thereby creating social and economic stresses. We have the resources, we have the materials, we have the technology, we have the intellect and the labour to meet these needs and demands. What it takes is the courage and the strength to implement them.
Also, 35 per cent of all Canadians earn less than $4,000 a year and therefore housing is out of their reach. Our record in public housing is little short of disgraceful. The present Canadian stock in housing is between 1 per cent and 2 per cent of public housing, whereas in England and the European countries the range of public housing is between 30 and 40 per cent, and our neighbours to the south have a range of 5 per cent. It is high time we took a bold initiative with regard to public housing.
The question of how we finance housing in Canada then arises. In their report the task force said that $20 billion is required in the next five years to meet the requirement of one million homes. They set forth information to show that under the present situation financing is 50 per cent by financial institutions and pension funds, individual equity amounts to 25 per cent and CMHC falls below 20 per cent. We would see to it that there is adequate financing to meet the needs of housing. At present the minister calls together the financial institutions and pension fund and attempts to persuade them to put moneys into housing.
If the federal government had not contributed very heavily to housing in the last half of 1970, we would have had a very poor housing record. I think it takes more than persuasion when dealing with financial institutions and pension funds. If persuasion failed with regard to instituting financial arrangements for housing, our party would certainly implement laws requiring that a percentage of their investment portfolio be allocated to housing. I think it is high time financial institutions and pension funds realized that they have a social responsi-
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Urban Affairs
bility to Canadians with regard to the savings they have acquired for Canadians. Therefore, Mr. Speaker, we would have a "no nonsense" attitude with regard to financial institutions and pension funds concerning housing.
One of the large components in the high cost of housing today is interest rates. These fall into the category of usury. When people are paying anywhere from 9 per cent to 10 per cent on a first mortgage, and anywhere from 12 per cent to 20 per cent on a second mortgage, it should make Canadians ashamed. I repeat, interest rates should be no higher than 6 per cent for all mortgages in Canada. May I again remind the financial institutions of their social responsibility with regard to providing decent and clean housing for all Canadians. For persons earning up to $7,000 a year, interest rates should be fixed according to their income. Therefore it requires government participation with regard to interest subsidies for people on low income.
The next component of the high cost of housing is the price of land. I was amazed to read of the successful Ottawa developer and builder, William Teron, who said that there is no use dreaming about planning a city unless you own the land. It is high time steps were taken to acquire, to service, to sell and to lease land both by federal and municipal levels of government.
One of the striking things for which I must give credit to the hon. member for Trinity is in seeing the need to have federal moneys provided for direct loans to municipalities to assist them in assembling and servicing land for urban growth. This has been one of the major failures of this government, namely, their failure to recognize the need for direct loans to cities to acquire and service land to take care of growth. I can imagine the minister saying to himself that this is covered in the National Housing Act. May I remind the minister that participation under this section of the act has been pathetic. What it requires is the leadership and initiative of the minister to have a tri-level conference with the provinces and municipalities to provide the moneys with which to acquire and service land for urban growth.
We should also give close attention to the task force recommendation to stop speculation in land. In the last ten years we have seen speculators acquire land and hold it until the price goes up. The recommendation of the task force report was to implement site value taxation whereby a person is taxed on what he could do with the property rather than on what he is doing with it, if he is doing nothing. Again I would remind members of the House of the necessity of stopping land speculation by having a full capital gains tax rather than the halfway measure that we have in the budget.
To have a successful state of urban affairs we must have the proper mix of types of housing. We must have single dwellings, apartments, co-operatives, condominiums, shell housing-more especially for people in the Maritimes-and mobile homes to meet the needs of those who wish to live in that type of accommodation. We must meet the particular needs of all classes of Canadians. At the moment, Mr. Speaker, I feel that a proper mix of
homes is not being provided and that builders and financial institutions are directing their minds and moneys to apartment dwellings which return higher profit and an easier way of obtaining mortgage repayments.
The young person who gets married requires an apartment, then as the children come along he needs a house and later, when he and his wife reach their twilight years, they need either a senior citizens' apartment or a much smaller house.


Eldon Mattison Woolliams: The government has reached its twilight.


John Gilbert: This is the scheme that must be developed by the minister if he is to arrive at the proper mix of housing. May I say a few words about public housing. Many people have said that public housing in Canada become ghettos for the poor instead of providing decent, good housing for low-income groups using the integration principle where public housing is dispersed with other types of housing to avoid stigmatization.
I think a good deal of the blame must be laid at the doorstep of the federal government for not developing public housing with the integration principle under which public housing emits would be properly dispersed throughout the community. Public housing has been considered a dirty word in Canada. I think it is high time the government did a promotional job to make public housing in this country as attractive as it is in European countries, where no stigma is attached to it. As one travels England and other parts of Europe one begins to realize the pride of ownership of many people who live in public housing projects.
The task force on housing said that at least half a million homes across Canada are substandard and require a great deal of repair and improvement. Our experience with home improvement loans has not been satisfying. The record of Central Mortgage and Housing Corporation indicates that there has been a decline in the number of home improvement loans granted in the last few years, the reason being that loans are obtained from banks at the prevailing rate of interest and most Canadians requiring this type of housing cannot afford the high interest.
Therefore, Mr. Speaker, we must stimulate and maintain pride of ownership with regard to housing. We must do this by making moneys available to municipalities for the purpose of home improvement loans. Homeowners can then borrow the money from the municipality at low interest rates and repay the money in the form of taxes. Extra taxes are collected when a home is improved. There is nothing new in that idea. We should not object to extra taxes being collected for the repayment of loans for repairs.
It has been said many times that we need a national building code to provide for high housing quality and safety standards. Many Canadians are sad of heart because they read practically every week of families being totally burned out and of lives being lost as a

June 28, 1971

result of the poor quality of some homes. We need a national building code to provide for a high quality of workmanship and safety standards for all Canadian homes.
Much has been said about abolishing the 11 per cent sales tax on building materials. Many have said that eliminating the sales tax would lower the price of housing. Mr. Speaker, it would only lower the price if there were a guarantee by the government that any reduction in the 11 per cent sales tax would be reflected in a reduced purchase price. I am afraid that if we abolish the sales tax on building materials the builders across the country will pocket the reduction and not pass it on. Therefore, we must make doubly sure that any savings to be gained from abolishing the sales tax on building materials are incorporated in a lump sum which is put to the credit of the purchaser.


Lincoln MacCauley Alexander: The hon. member has no faith in builders or the private enterprise system.


John Gilbert: The hon. member for Hamilton West (Mr. Alexander) tells me I have no faith in builders. He suggests that I am afraid they will not pass on any savings occasioned by abolishing the sales tax and that I have no faith in the free enterprise system.


Lincoln MacCauley Alexander: That is right.


John Gilbert: With the greatest respect, I reply to my hon. friend by asking him to examine the poor record of the private house builders in this country.


Some hon. Members:: Hear, hear!


John Gilbert: The next point I wish to make to the hon. member is that high interest rates press very heavily on people of low incomes and if CMHC had not participated in public housing programs and made housing loans available to meet the housing needs of Canadians, their needs would not have been met to the extent that they have been. Perhaps the hon. member for Hamilton West (Mr. Alexander) has faith in the private enterprise system, but when he looks at the record I am sure he must shake his head and say, "They have not done a good job over the years."


Lincoln MacCauley Alexander: Blame the federal government and its lack of leadership.


John Gilbert: One of the main planks of the New Democratic Party has been the idea of a Crown corporation active in the housing field. We have heard many suggestions for making the Department of Public Works into a Crown corporation. A deputy minister of the Department of Public Works had great ideas for setting up a Crown corporation to build government buildings.


An hon. Member:: That idea would never work.


John Gilbert: Those who made such suggestions are now silent. One wonders why. The New Democratic Party would establish a Crown corporation to undertake building, and we would use all the ideas of the National Research Council to bring forward new techniques in
Urban Affairs
house building. We have had some experience with the $200 million innovative fund the minister has mentioned. The minister was proud to announce that he had found ways and means of providing housing for people in the low-income groups, particularly for those between the $4,000 and $7,000 per annum level. That was in 1970. He experimented, and was criticized on the grounds that under the innovative housing program many of the units were made smaller and the density was greater.
We hope those criticisms have not discouraged the minister and that we will not quit at an early stage. I think there ought to be innovative housing techniques. Surely the National Research Council should develop and implement them through a Crown corporation. I should also like the minister to introduce an innovative scheme to subsidize interest rates paid by low-income people across the country. He tried this idea by introducing his $200 million innovative fund. Although the program enjoyed some small success, I think it would have enjoyed greater success had he implemented our suggestions and enforced them.
One cannot talk about urban life without mentioning the problem of pollution. A high quality of urban life requires minimum pollution standards across the country to make our air clean and the environment pure. I recall the present minister appearing before the committee that was considering his estimates and giving his ideas with regard to the E. B. Eddy Company. All he really said was that he would consult the company and hoped that a plan would be available in the future. If the minister adopts a similar attitude to the pollution problems of urban areas across the country we will be in serious danger. The minister is hobnobbing with industries across the country and is failing to take the initiative with regard to this serious problem. Pollution controls demand the enforcement of standards. We must have a minister who believes that ours should be a clean air society. I look forward to reminding the minister of his duty with regard to pollution.
One cannot talk about urban affairs without also mentioning transportation. When the government of Ontario cancelled construction of the Spadina expressway, I for one was very happy and proud.


Eldon Mattison Woolliams: Good for you.


John Gilbert: If we are to curb pollution we must develop a transportation policy in this country which puts people first and not the motor vehicle. I therefore hope that when the minister attends the tri-level conferences with the provinces and municipalities he will indicate the importance of municipalities and provinces developing transportation policies which meet the needs of urban growth.
I wish to deal briefly with the point raised by the hon. member for Spadina (Mr. Ryan)-the question of Rochdale. I admire the patience and understanding of the minister with regard to this very tricky problem. I condemn the Toronto Daily Star for its purile editorial last Saturday with regard to Rochdale. If there was ever a
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Urban Affairs
time that the government must have patience and understanding with young people, it is now. If we evict these people onto the streets of Toronto, we are asking for serious trouble. I admire the minister for his patience, and the president of Central Mortgage and Housing Corporation for sitting down with them and attempting to work out a plan whereby they can remain and fulfil their rightful place in society in this college.
It does no good to criticize young people when they are attempting to live in their own life style. I noticed that the hon. member for Edmonton Centre (Mr. Paproski) is shaking his head and shrugging his shoulders, wondering what is next. I am sure that when his young people grow up he will appreciate the problems of youth and the problems they have when they leave high school or university and cannot find employment.


Mr. Paproski:: They won't live in a communal flophouse.


John Gilbert: It will require all his patience and understanding to cope with the youth. I can see that I got a rise out of the hon. member for Edmonton Centre.
In the past, we have had financiers, developers, real estate firms and others participate in urban affairs, especially housing. Surely it is time that other citizens in the community participated in housing. I was very proud when I read a speech made by the minister on April 21, 1970, in which he said:
I am convinced that giving some tenants some voice in the administration of their project is a matter of social justice and would help to encourage a new and healthier outlook all around and remove a major cause of many of the difficulties we have experienced to this time.
I agree with the minister. I hope that in urban affairs programs he encourages citizen participation in not only public housing but in all forms of housing throughout the community. We should have landlord courts across the country in much the same way that we have family courts. These could take care of abuses that prevail between landlords and tenants. We should have men in these courts that are able to mediate and adjudicate these types of problems. I think this would lessen many of the landlord and tenant problems. I would also like to see the minister bring forth new ideas with regard to citizen participation on a wider scale than just public housing.
It has been brought to my attention that in the past there have been three main components missing with regard to public housing. These are recreational facilities, social services and day care centres. If we are going to have adequate public housing, we need these three components. Last Friday the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) directed a question to the minister with regard to day care centres operating separate and apart from public housing. His answer was slightly encouraging; he indicated it may require a legislative change.
Last week there was a conference in Ottawa with regard to day care centres taking care of the needs of young people, especially work'ng parents throughout the city. One of the things to which they look forward are day care centres. I hope the minister will make it a first
principle in public housing to include the components of recreational facilities, social services and day care centres, and I hope he will not dilly-dally in this regard.
I have given a broad blueprint for all Canadians to live the good life. I hope the minister will have the courage, initiative and strength to implement these proposals so that housing will be a matter of right for all Canadians no matter whether they can afford it.


Léonel Beaudoin: Mr. Speaker, in the few minutes I have left, I would like to congratulate the hon. Minister without Portfolio upon his nomination as Minister of State for Urban Affairs. I do not think his task will be easy as we were told earlier that his department will have to co-ordinate federal, provincial and municipal policies.
Mr. Speaker, I do not believe the creation of a ministry of state for urban affairs will do much to solve problems of control over rebuilding to eliminate the slums that have for too long plagued our cities, nor to fight pollution efficiently.
The new body will rather complicate things even more by adding to the number of public servants. Whether it is called ministry for urban affairs or anything else, it is another federal intervention in areas under the jurisdiction of provinces in view of the authority they now have over municipalities. We are all aware of the problem of municipalities: they lack money and must go around in circles. They must even defer projects already started because they have to pay excessive interests on loans. They must often wait two, three or four years before the provincial government does anything and, with a federal intervention, they will no doubt have to wait five or six years.
Mr. Speaker, we know how slowly projects are developed. With one government, the start of a project is not too bad. If two governments are involved, it is much slower, but if three are in it, one waits indefinitely for results. Every day, we see departments of the same government show a lack of coordination in their efforts to achieve a project that they have been developing for the past two, three, four or five years.
Before those projects materialize, disputes crop up between the departments because of conflicts between two ministers or between civil servants. In the meantime, the Canadian ratepayer waits for the results.
In closing, I should like to echo the words of the member for Trinity (Mr. Hellyer), as published in the Toronto Telegram for October 17, 1970. I quote:
We all know, needless to say, the universal law of bureaucracy: the civil servants multiply arithmetically, while the rules multiply geometrically, but the results do not multiply at all.
The more officialdom settles in, the more things lag and the harder the task becomes. But the Canadian taxpayer keeps on paying, and waiting.
In closing, I wish good luck to the new minister.

June 28, 1971

[English}


Mr. Speaker:: Is the House ready for the question? Is the hon. member for Peace River (Mr. Baldwin) rising on a point of order.


Gerald William Baldwin: Mr. Speaker, while it is true that we only agreed to have one speaker from each party, and although I do not want to trespass on the agreement, would the minister be prepared to answer a very brief question?


Mr. Speaker:: My understanding is that an order of the House was made. This would require unanimous consent of hon. members. Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: The hon. member for Peace River.


Gerald William Baldwin: Mr. Speaker, my question is based on a statement made by the hon. member for Richmond (Mr. Beaudoin). Is the minister able to tell us very briefly and succinctly about his experience with the provincial governments in this very sensitive area and what are the prospects of being able to work out reasonable agreements with the provincial governments in connection with problems particularly relating to housing and certain aspects of urban affairs? We are all interested in this and we are wishing the minister well, but we would like to know what his experience has been in this regard.


Mr. Speaker:: Again it is only with the unanimous consent of the House that the minister is allowed to speak for a second time during the course of this debate.


Some hon. Members:: Agreed.


Robert Knight Andras: Mr. Speaker, I would be glad to answer as succinctly as possible. I have no signed, sealed or delivered agreements in writing that this or that will happen with regard to provincial reactions. Every province is fully aware of the proposed creation of a ministry of state for urban affairs, and in fact has been since the throne speech last October. Each province was represented-and I think this is a more formal indication of their reactions-at the tri-level meetings at Winnipeg in April by their provincial minister of municipal affairs with whom I have had bilateral and collective discussions over the whole range of matters and principles involved.
In addition, there were indications of their commitment to these principles and an acceptance of the federal government's actions in this regard. That is the only way I can read the situation, having talked to them. I have had discussions with some of the first ministers of the provinces and have had no adverse comments or reactions thus far. As I have said, we established a committee at Winnipeg consisting of a representative of each minister of municipal affairs. My officials have had a meeting with Mr. Dan Campbell, Minister of Municipal Affairs of British Columbia, at which was discussed the relationship between the federal and provincial governments in regard to municipal and urban affairs in light of the creation of this new ministry. Progress is being made and
Urban Affairs
I have seen no discouraging comments. Time alone will tell.


Mr. Speaker:: Is the hon. member for Hamilton West (Mr. Alexander) rising for the purpose of asking a question? Would the hon. member resume his seat. I have to remind hon. members that there is an order of the House to the effect that there is to be one speaker from each party and then the question is to be put. If hon. members wish to pursue the debate until 9.45, this can be done with unanimous agreement. I think the hon. member for Hamilton West, who is now seeking the floor, can speak with the unanimous consent of the House, but before the Chair recognizes him I believe the hon. member for Winnipeg North Centre (Mr. Knowles) wishes to raise a point of order.


Stanley Howard Knowles: Yes, Mr. Speaker. My point of order is the same one that I raised when a few days ago we debated the proposal for the establishment of a ministry of state for science and technology. On that occasion we agreed to append to that day's Hansard a copy of the draft proclamation that had been laid on the table. I make the same suggestion again tonight. I am not commenting on the contents of the draft proclamation but I think it should be part of the record. I suggest the House give consent to the proposed draft, which was laid on the table on Friday, being made an appendix to today's Hansard.


Mr. Speaker:: Hon. members have heard the suggestion made by the hon. member for Winnipeg North Centre. Is it agreed that the document to which he referred be made an appendix to today's official report of the House of Commons proceedings?


Some hon. Members:: Agreed.
[Editor's Note; For document referred to above, see appendix.}


Lincoln MacCauley Alexander: On a point of order, Mr. Speaker, when I entered the House at the time you were disposing of the question that came from our House leader, I was under the impression that questions were in order with the general agreement of this House. I was also aware that each party had the opportunity of putting forth their main speaker to delve into the positions taken by the respective parties. Therefore, it was not with the expectation that I would be recognized to speak that I rose, but rather to ask a question. If I am in order, I ask whether your Honour would ascertain if their is general agreement-


Some hon. Members:: Agreed.


Mr. Speaker:: The hon. member appears to have the agreement of hon. members to ask his question.


Lincoln MacCauley Alexander: Thank you, Mr. Speaker. I was very impressed with the minister's statement with respect to the new ministry. I want to congratulate him for accepting the advice of the opposition, though in part he did not go far enough. We had asked for a department of

June 28, 1971
Urban Affairs
housing and urban affairs but we will settle for the time being for a ministry of state for urban affairs. Secondly, he accepted our advice regarding the tri-level conference, and I known from this will come a lot of meat that will solve the problems of growing urbanization that call for solutions.
My question is: Having accepted those good suggestions, would the minister be in a position to advise the House whether in fact the third matter that is to be dealt with, in order to show some credibility, is being given very active consideration? Because without this further structure I respectfully state that there is no credibility. I am now speaking of a standing committee on urban affairs. Has the minister given some thought to this? This type of forum I call a pipeline. Interested parties can come before the House of Commons, indicate what their several interests and problems are, and indicate probable solutions. Is the minister looking at such a structure with a favourable attitude?


Robert Knight Andras: Mr. Speaker, I always look on any suggestion that the hon. member makes with great favour indeed. It is not 'now possible to accede to this suggestion, but I suggest that in this case the Standing Committee on Health, Welfare and Social Affairs, to which the hon. member for Broadview (Mr. Gilbert) referred in his remarks, makes an excellent pipeline or platform for the hon. member for Hamilton West (Mr. Alexander) to have his views recorded and given publicity, if that is the intent of his question.


Lincoln MacCauley Alexander: On a question of privilege, Mr. Speaker, in view of the seriousness with which I asked the question I am sorry that the minister thought I had some personal motives behind it. If the minister recalls my statement, I said that since I entered the House and became involved as party spokesman for urban affairs I had called for-


Mr. Speaker:: Order, please. This is hardly a question of privilege, and obviously we are moving away from unanimous consent. Hon. members are rising at the moment on questions of privilege and points of order. If there cannot be unanimous consent I think the time has come to put the question to the House. Is it the pleasure of the House to adopt the motion?


[Stage Direction]
Motion agreed to.
Horace Andrew (Bud) Olson: Mr. Speaker, perhaps I might rise at this stage on a point of order. With the concurrence of the House, in view of the fact it is only a little more than one minute until 9.45 I would suggest that we call it 9.45.


Gerald William Baldwin: Agreed. We have been waiting for you to do that all evening.


Mr. Speaker:: I think this is a good suggestion. Pursuant to special order made on Friday, June 21, the House will revert to proceedings on the budget debate and the Chair will put forthwith the question on the amendment standing in the name of the hon. member for Edmonton West (Mr. Lambert).



THE BUDGET


[Stage Direction]
The House resumed consideration of the motion of Hon. E. J. Benson (Minister of Finance) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West) (page 7229).
Mr. Speaker:: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the amendment lost.



BUSINESS OF THE HOUSE

Gerald William Baldwin: Mr. Speaker, I would ask the government House leader what the government intends to do with the remaining two hours at its disposal for government business tomorrow evening?


Mr. MacEachen:: Mr. Speaker, I would like to auction off the last two hours, but Bill C-176 will be the business tomorrow.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!
At 10.10 p.m. the House adjourned, without question put, pursuant to special order.

June 28. 1971



APPENDIX

[Stage Direction]
Whereas the implications of increasing urbanization profoundly affect the well-being of Canadians and the future of Canadian society as a whole;
And whereas the close co-operation of governments is required to ensure that the urban environment evolves in a manner beneficial to all Canadians;
And whereas many of the activities of the Government of Canada substantially affect, directly or indirectly, the urban environment and it is desirable that the Government of Canada give careful attention to those aspects of its activities that affect the urban environment by formulating and developing comprehensive policies in respect of those federal activities;
And whereas it appears to the Governor in Council that the requirements for formulating and developing such policies warrant the establishment of a special portion of the public service presided over by a minister charged with that responsibility.
Now therefore His Excellency, the Governor General in Council, on the recommendation of the Prime Minister, pursuant to sections 14 and 15 of the Ministries and Ministers of State Act, is pleased to direct that a proclamation do issue establishing a Ministry of State for the purpose of formulating and developing policies in relation to the activities of the Government of Canada that affect the urban environment, to be known as the Ministry of State for Urban Affairs and to be presided over by a Minister of State to be known as the Minister of State for Urban Affairs.
His Excellency in Council is further pleased to specify that the Minister of State for Urban Affairs shall formulate and develop policies for implementation through measures within fields of federal jurisdiction in respect of
(a)	the most appropriate means by which the Government of Canada may have a beneficial influence on the evolution of the process of urbanization in Canada;
(b)	the integration of urban policy with other policies and programs of the Government of Canada; and
(c)	the fostering of co-operative relationships in respect of urban affairs with the provinces and, through them, their municipalities, and with the public and with private organizations.
His Excellency in Council is further pleased to specify that the Minister of State for Urban Affairs shall, in relation to the formulation and development of the aforementioned policies, which are policies for implementation through measures within fields of federal jurisdiction, have assigned to him the following powers, duties and functions:
(a)	in respect of policy development he may
(i)	initiate proposals for new policies, projects and activities,
(ii)	evaluate proposals for new policies, projects and activities and seek to ensure their consistency with federal urban policies,
(iii)	evaluate existing policies, projects and activities of the Government of Canada that have an influence on urban affairs and recommend changes therein where required,
(iv)	where appropriate, participate in projects and activities of the Government of Canada that may have an influence on urbanization in Canada, and
(v)	seek, in consultation with other authorities concerned, the co-operative development of urban policy in Canada;
(b)	in respect of research, he may
(i)	initiate research and policy studies relating to urbanization,
(ii)	co-ordinate, in co-operation with other departments and agencies of the Government of Canada, research relating to urbanization that has been undertaken or financed by those departments or agencies, and
(iii)	recommend priorities for research in urbanization; and
(c)	he may perform the following co-ordination functions:
(i)	he may co-ordinate, promote and recommend national policies in respect of urban affairs among departments and agencies of the Government of Canada,
(ii)	he may co-ordinate the activities of the Government of Canada in establishing co-operative relationships with the provinces and their municipalities for the enhancement of the urban environment, and
(iii)	he may co-ordinate the involvement of the Government of Canada with other governments and non-government organizations in urban policy matters.
[Stage Direction]
Tuesday, June 29, 1971