1971-05-18

ROUTINE PROCEEDINGS


[Stage Direction]
Seventh report of Standing Committee on Justice and Legal Affairs-Mr. Tolmie.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I am pleased to table the final report of the Royal Commission on Farm Machinery in both official languages. This report represents the culmination of five years' study by Dr. Barber and his research staff. The final report presents a very extensive series of recommendations aimed at both federal and provincial governments and the machinery companies themselves. Within the federal government, recommendations fall in the field of responsibility of several departments. For this reason the government has named an interdepartmental committee to consider the recommendations.
As far as those recommendations that lie within the responsibility of the Canada Department of Agriculture are concerned, certain actions have already been taken. These include an increase in the resources allocated to agricultural engineering; emphasis on the evaluation of the machinery in the production system; the development of a proposal designed to assist farm adjustment, and increased operating grants to universities for agricultural engineering purposes. Arrangements are also being concluded for a meeting with representatives of the industry in order to give further consideration to matters of joint interest, including the financing of farm machinery.
In tabling this document the government would welcome the views of all interested groups and individuals and I look forward to receiving these in order that the most useful and most workable policies can be developed.


Mr. R. E. McKinley (Huron):: Mr. Speaker, I am sure we are all grateful that Dr. Barber and the members of his commission have at least produced this final version of their report on farm machinery. We certainly hope that some of the recommendations in the report will provide some help to all farmers across Canada who find themselves in a very difficult position because of diminishing returns and ever-increasing costs of production. I have learned recently that even in Huron County, a normally prosperous agricultural area, some farmers have been unable to pay their electricity bills and consequently their hydro service has been cut off. They are in this plight partly because of the recommendation this government made to the farmers of Canada, when they could not sell their feed grain, to diversify and get into other production. The government ruined the situation for farmers all across Canada. I hope the recommendations stemming from this report will not lead the government to introduce legislation which will create a similar problem for all farmers.
It seems to me to be very plain that there must be something wrong in the farm machinery industry because associations such as the Federation of Agriculture have been importing tractors for two or three years and selling them to farmers at a greatly reduced cost compared with the prices being charged by the regular machinery dealers and large companies. It is high time- and I am very pleased that this report so recommends- that the government and the farm machinery companies of this nation and of the nation across the border got together to find out what is wrong and why our farmers are being gouged in purchasing farm machinery.
I might make a suggestion concerning the financing of farm machinery. Some provinces now subsidize interest rates to a certain extent so that it is easier for farmers to buy the farm machinery they require. I suggest to the government that such a policy might be extended all across Canada so that all farmers in Canada would have an equal opportunity to share in this type of government assistance.
We will look forward to reading the report. I sincerely hope something will come out of it which will help cut the cost of production for farmers and be of benefit to them. We can talk about stabilization of farm income as much as we wish, but if we stabilize the farmer's income at the present level without doing something about increasing his profit the result will be that more farmers will leave their farms and wind up on the welfare rolls of the towns. We know we already have too much of that. It is time the government got busy on a program designed to keep farmers on the farms and prosperous so that they can buy the products produced by the workers in the manufacturing plants and thus bring an end to unemployment. This must be done and the sooner the government gets at it the better.


Mr. Rod Thomson (Ballleford-Kindersley):: Mr. Speaker, we are quite happy to have the final report of the Barber Commission before us. It has been so long since the commission was appointed that some farmers will almost be old men before they even hear what is contained in the report, let alone react to it. We look for-

May 18, 1971
Report on Farm Machinery
ward to examining the report in detail. Hopefully, some of the recommendations will be good enough that we can do something constructive about the problems of the farm machinery industry. I hope the government is not as slow in accepting the recommendations or in taking action in connection with the problems exposed by the report as the commission has been in preparing the report.
I suggest to the Minister of Agriculture and the House that farm machinery costs are a very important part of farmers' problems at the moment and unless we take some real action in this connection these problems will continue. I am hopeful that the government will do something constructive about the cost of farm machinery. The government might extend financing to some of the small machinery companies operating in Canada. Perhaps it might consider a method of financing farm machinery on the farm or even extending further financing to countries behind the iron curtain which are selling machinery at greatly reduced prices. We look forward to reading the report and being able to make constructive suggestions.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, the minister has just tabled the report of the Barber Commission on farm machinery.
The Commission created by the government took five years to study the high cost of farm machinery sold in Canada. Five years is quite a long time and I think that had there been farmers sitting on the Commission the latter would have found out much sooner why farm machinery is so expensive.
The government announces that following the report it has named an interdepartmental committee to consider the report completed after five years of work. From past experience, I think the committee will take at least five more years to study the report.
When decisions are taken-decisions that we hope will be effective-the conclusions of the report will be out of date and we will have to go through the whole process again.
In his statement, the minister has said, and I quote:
Arrangements are also being concluded for a meeting with representatives of the industry in order to give further consideration to matters of joint interest-
Will it be matters of joint interest to the industry or to the farmers that will be given further consideration? I think protection should be provided for the farmers' interests before those of the industry and that some means of financing farm machinery purchases should be developed, because there are so very few farmers who can afford to pay cash for their implements. They have to be given the opportunity of buying this machinery at a rather low rate of interest that they may be able to pay. Groups and individuals interested in agriculture are asked in this statement to submit briefs and recommendations to the government. I hope that the latter will seriously consider them.



PROPOSED TRANS-ALASKA PIPELINE SYSTEM-TABLING OF SPEECH BY DEPUTY MINISTER OF ENERGY, MINES AND RESOURCES

Hon. J. J. Greene (Minister of Energy, Mines and Resources):: Mr. Speaker, I wish to table, under Standing Order 41(2), a speech delivered by my deputy minister, Mr. J. Austin, in Anchorage, Alaska, in accordance with my undertaking to the hon. member for Comox-Alberni on May 11. I may say, having now read the speech of the hon. member at his invitation, that I find that taken as read from cover to cover and in context the speech is in accordance with government policy as iterated from time to time.



IMMIGRATION


Hon. Otto E. Lang (Minister of Manpower and Immigration):: PHYSICAL FITNESS, SPORTS SAFETY EQUIPMENT______



REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Jack Marshall (Humber-St. George's-Sl. Barbe):: Mr. Speaker, I rise to move a motion under Standing Order 43 on a matter requiring urgent attention. The latest unfortunate sports incident resulting in the death of a young boy emphasizes the need for a complete investigation into the use of adequate sports safety equipment by our youth. Further, statistics indicate that Canadians lag behind other countries in physical fitness and support the priority need to examine the area of youth development in Canada. I therefore move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That this serious situation and the designation of responsibility in the area of youth development and adequate protection for those participating in sports and recreation, be referred to the Standing Committee on Health and Welfare.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Humber-St. George's-St. Barbe. The motion, being submitted under the terms of Standing Order 43, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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

May 18, 1971



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to address a question to the Acting Prime Minister with regard to attendance as observers at the forthcoming federal-provincial conference in Victoria. Is the government considering inviting myself and the leaders of the other opposition parties to attend the sessions, both closed and open, as observers-


Mr. Guay (St. Boniface):: What will you contribute?


An hon. Member:: A hell of a lot more than you.


Robert Lorne Stanfield: -departing from the policy the government has followed in the past in this regard?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, I understand it is the intention of the government to arrange for some observers to be with the federal delegation. I would question, however, whether the meetings would be closed, in the sense in which the provinces would wish, far less the federal government, if observers were to be present during the closed sessions, and so I think the answer I must give must be in the negative on that part of the question.


Robert Lorne Stanfield: As a supplementary question-


Joseph-Phillippe Guay: Any suggestions?


Robert Lorne Stanfield: Mr. Speaker, we seem to be getting a certain amount of static from the other side. I am sure the Acting Prime Minister will agree with me that constitutional reform is not the private preserve of the government of Canada. I would therefore ask the Acting Prime Minister, in view of the importance of this meeting and in view of the fact that the government may very well need at least the understanding of as broad a cross-section of Canadians as possible with regard to its constitutional proposals, whether the government will not reconsider its decision to exclude the leaders of the opposition parties as observers from closed consultations? Will the government not reconsider this decision in view of the crucial stage these discussions have reached, and in view of the obvious importance of having as widespread understanding as possible in the various parties with regard to the government's proposals?


Mitchell William Sharp: Mr. Speaker, it is quite clear from the way in which the government has made its proposals known to the public as well as to Members of Parliament, and in light of the activities of the parliamentary committee which is now touring the country, that the government wants as much understanding as possible of the nature of these constitutional issues. So I do not think the government lies open to that particular charge. When it comes to the negotiations, before proposals are placed before our respective parliaments and the people I do believe it may be useful-and I think the Leader of the Opposition
Inquiries of the Ministry
having been the head of a government himself understand this-and that on occasions it is well to have private conversations.


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the Acting Prime Minister why the government of Canada finds it necessary to take a narrower attitude toward the make-up of its delegation than have several provinces in the past, including the province of Nova Scotia, and whether he can justify in any way the exclusion of representatives of the opposition parties?


Mr. Speaker:: Order, please. That question is argumentative. The hon. member for Greenwood on a supplementary question.



REPRESENTATION OF MUNICIPALITIES AT JUNE MEETINGS

Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I should like to ask the Acting Prime Minister if consideration is being given to the representation of municipalities as observers or otherwise inasmuch as the constitutional committee has had many representations of this kind and the Federation of Mayors and Municipalities has also urged that the municipalities are concerned about the future constitution of Canada and should be represented at important discussions?


Mitchell William Sharp: Mr. Speaker, that would certainly be a decision for the provincial governments. Perhaps, as the hon, Leader of the Opposition has said, provincial governments may be willing to add municipal representatives as members of their delegations rather than just as observers. We would have no objection to this, but some provinces may feel that they can make greater progress in these negotiations if the delegations are not too large.



INVITATION TO JOINT COMMITTEE ON CONSTITUTION TO ATTEND MEETINGS

Gérard Laprise: Mr. Speaker, I would like to direct a supplementary question to the Acting Prime Minister.
Will the Joint Committee on the Constitution, which has travelled throughout Canada to hear the views of the people about the constitution, be invited to attend the forthcoming federal-provincial conference in Victoria, this June?


Mitchell William Sharp: Mr. Speaker, I think this illustrates the problem facing the government. I can understand that some members of the House might have a greater reason to be present during these negotiations than others, but one then opens the question of why all Members of Parliament and all members of provincial legislatures should not be invited. As to the particular question, the committee of Parliament which has been touring the country is free to make a report either in advance of or after the June meetings.
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EXTENSION OF JUNE MEETINGS TO DISCUSS UNEMPLOYMENT AND INFLATION-POSITION OF PROVINCES

Hon. George Hees (Prince Edward-Haslings):: I have a supplementary question for the Acting Prime Minister, Mr. Speaker. Has the government been in touch with the provincial premiers, as the Prime Minister said it would, to find out if they would be willing to spend one, two or more extra days at the conference to discuss questions of the economy, in particular unemployment and inflation? If so what has been the response so far?


Mitchell William Sharp: Mr. Speaker, I have not had an opportunity to discuss this question yet. I know that our officials have been discussing the agenda with provincial officials and particularly the item of constitutional reform. I should like to reiterate what the Prime Minister said, that whether or not time is set aside for discussion of these other important matters, first priority should be given to constitutional reform.


George Harris Hees: Will the Acting Prime Minister assure the House that he will inquire from the provincial premiers whether they are willing to extend the time to include this most important matter, and when he has done so will he immediately report back to the House the results of such inquiries?



OBJECTIONS BY PROVINCES TO VETO POWER AND RIGHT TO AMEND CONSTITUTION-PRIOR CONSULTATIONS

Mr. Eldon M. Woolliams (Calgary North):: As a supplementary question I should like to ask the Acting Prime Minister if he has had to date, prior to the conference commencing, any objections from the province of Alberta or any other Prairie province to the veto power and the right regarding amendments to the constitution?


Mitchell William Sharp: Mr. Speaker, I would suggest that if we are going to make progress at these constitutional discussions it would be better if these matters could be discussed at the conference and not be the subject of offhand remarks by anyone.


Eldon Mattison Woolliams: Can the Acting Prime Minister advise the House whether he or any other member of the government has had prior consultations with the premiers so that their opinions and objections are known prior to the commencement of the conference?


Mitchell William Sharp: Yes, Mr. Speaker. Preparations are now going on for the conference and federal authorities have visited the provinces to discuss in advance questions that will be raised at the conference.



PROVINCIAL GOVERNMENT OBJECTIONS TO ATTENDANCE OF LEADERS OF OPPOSITION PARTIES AS OBSERVERS

Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Acting Prime Minister whether any provincial government has objected to a leader of an opposition party attending these sessions as an observer?


Mitchell William Sharp: Mr. Speaker, I do not know the answer to that question.



ALTERNATIVE DATE IN EVENT OF POSSIBLE PROVINCIAL ELECTIONS

Mr. John Burton (Regina East):: Mr. Speaker, I should like to ask the Acting Prime Minister if the government has had any discussions with the provinces concerning an alternative date for the conference in the event that one or more of the provinces calls a provincial election between now and June 4?


Mitchell William Sharp: No, Mr. Speaker. The federal government is proceeding to prepare for the date that has been agreed upon.



PENITENTIARIES


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Solicitor General arising out of the inquiry into the Kingston penitentiary riot and the alleged beating of prisoners who were moved to Millhaven. Since the inquiry began yesterday and is to be held behind closed doors and since Members of Parliament and the public are interested in knowing the outcome of this inquiry, is the minister now prepared to agree to make public the report of that inquiry when it is placed in his hands?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, after receiving the report and considering it, I will surely make a statement. The recommendations made by the committee should be drawn to the attention of the people. As for the contents of the report, I have read today the statement of the chairman of the inquiry committee to the effect that some evidence would perhaps not be given except under the seal of secrecy. In my opinion, the judgment is valid and if it applies to the chairman of the committee it should also apply to me.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I direct a supplementary question to the Acting Prime Minister. In view of the statement of Professor Desmond Morton, who was a member of the five-man citizens' committee that acted as a go-between during the Kingston riot, to the effect that "I put the blame on Goyer", and in view of his contention that the refusal of the Solicitor General to guarantee the prisoners that they would not be mistreated was the prime cause of the sad ending to this riot, would the government be prepared to refer this entire matter to the Standing Committee on Justice and Legal Affairs, since the inquiry headed by John Swackhammer does not have terms of reference that would call in question the competency of the minister himself?

May 18, 1971


Mitchell William Sharp: No, Mr. Speaker. I do not accept that statement as a correct statement of the part played by the Solicitor General.


Thomas Clement (Tommy) Douglas: Since the inquiry will deal only with the incidents in the two penitentiaries and not with the handling of the situation by the Solicitor General, does the government intend to make any inquiry into the conduct of the minister which, according to Professor Desmond Morton, brought such sad and dangerous results?


Mitchell William Sharp: Mr. Speaker, quite naturally the Solicitor General will be reporting to his colleagues.


Mr. Baldwin:: Will there by any observers when that happens?
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POST OFFICE


Mr. Rene Matte (Champlain):: Mr. Speaker, I want to direct a question to the Minister without Portfolio responsible for the Post Office.
Has he received, or does he still receive, complaints about delays in the delivery of first class mail which takes sometimes seven to ten days to reach its destination?


Hon. Jean-Pierre Cote (Minister without Portfolio):: Not
of this nature, Mr. Speaker.


René Matte: Mr. Speaker, does the minister intend to take soon the necessary action in order to restore the postal service to its former efficiency?


Joseph Julien Jean-Pierre Côté: Yes, Mr. Speaker.



INCOME TAX


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. At this time of year convocations are being held across the country at various universities and one subject of strong argument is the fact that under arrangements with the United States American professors who come to Canada for two years are exempt from income tax. The result is that Canadian PhDs find themselves unable to secure positions. Although the agreement is reciprocal, it only works one way-Americans come to Canada. In order to ensure that Canadians with PhDs stay in Canada and help to build Canada, would the government do away with this provision at once?


Mitchell William Sharp: Mr. Speaker, perhaps on the technical point the Minister of National Revenue might answer.
Inquiries of the Ministry


Hon. Herb Gray (Minister of National Revenue):: Mr. Speaker, as the House knows, we have tax treaties with a number of countries calling for reciprocal tax arrangements for professors who come for a limited period and return to their own countries. If I am not mistaken, the government proposed in its white paper on tax reform the renegotiating of these treaties to eliminate this particular concession.


John George Diefenbaker: The white paper, I thought, had died a natural death until the minister disinterred it. I ask him why it is that under this particular arrangement, which I do not believe is in the form of a treaty, we are not assured that at the end of two years Americans who come to Canada must return to their own country instead of staying in Canada and thereby creating an impossible employment position for Canadians?


Herbert Eser (Herb) Gray: Mr. Speaker, if I am not mistaken, the arrangements do not call for the return of the professors to their own country. Rather, if they remain, they become subject to the ordinary income tax laws. If I am not correct in this I will so inform the House. In any event, this matter is to be dealt with when next there is a budget presentation before the House.


John George Diefenbaker: Then it will be dealt with in the budget?



AGRICULTURE


Mr. Cliff Downey (Battle River):: Mr. Speaker, may 1 direct a question to the Acting Prime Minister. In light of the admission by the Prime Minister last Monday that Bill C-176 may not constitutionally be able to resolve the chicken and egg war, and in order to clarify the motives behind C-176, is the government going to present, along with other constitutional proposals, a constitutional amendment to enforce the spirit as well as the letter of section 121 of the British North America Act?


Mitchell William Sharp: Mr. Speaker, it is not impossible that some such proposals might be put before the constitutional conference. At the present time it is not contemplated that the division of powers will be a main subject for consideration. The question of bringing our constitution to Canada so that it can be amended in ways that might overcome these problems is our first concern.


Mr. Speaker:: The hon. member for Battle River on a supplementary.


Eldon Mattison Woolliams: Mr. Speaker, are we to-


Mr. Speaker:: Order, please. The Chair has recognized the hon. member for Battle River.


Cliff Downey: Has the government canvassed the provinces on this matter or is the government or any province

May 18, 1971
Inquiries of the Ministry
opposed to a constitutional solution to the balkanization caused by the chicken and egg war?


Gerald William Baldwin: They do not even recognize it.


Mitchell William Sharp: Mr. Speaker, this is an extremely difficult constitutional issue and I hope that the House, in order to advance consideration of this particular problem, if not the constitutional issue, will proceed with the bill now before the House.


Some hon. Members:: Hear, hear!



INTERPROVINCIAL MARKETING-GOVERNMENT POLICY RESPECTING FREE TRADE

Eldon Mattison Woolliams: Mr. Speaker, I am sorry I interrupted the hon. member for Battle River. I had not heard you recognizing him. I direct my supplementary question to the Acting Prime Minister. Is he suggesting that it is the policy of this government to recommend a constitutional change so as to do away with free trade between the provinces of Canada and undermine confederation?


Mitchell William Sharp: Mr. Speaker, as the hon. gentleman knows, there are provisions in the constitution today dealing with trade between the provinces.


John George Diefenbaker: Unenforced by the government.


Mitchell William Sharp: As he knows, some problems have arisen as a result of various provincial enactments. It is our purpose in the bill that is before the House to try to deal with the real problems rather than to engage in the much more difficult problem of constitutional reform. I hope the hon. member understands the priorities.


Gerald William Baldwin: The problem sits next to the minister.



ROYAL CANADIAN MOUNTED POLICE


Mr. David Orlikow (Winnipeg North):: My question is for the Solicitor General. Has the minister investigated the allegations that electronic eavesdropping devices were employed last Saturday at a meeting held in Montreal by the Movement for the Defence of Political Prisoners?


Jean-Pierre Goyer: No, Mr. Speaker, I am not aware of that.


David Orlikow: Will the minister investigate the allegations that the RCMP were involved in such an operation, report to the House if this is so and, if so, whether it was authorized by the department?


Jean-Pierre Goyer: Mr. Speaker, I am not aware of that and I have not received any such information from people who might be interested.



USE OF RADIO BANDS FOR TRANSMISSION OF LISTENING DEVICE SIGNALS

Mr. Mark Rose (Fraser Valley West):: I wish to direct a supplementary question to the Minister of Transport. Has any police department, in particular the RCMP, ever requested permission from the Department of Transport to employ specific radio bands for the transmission of signals from listening devices?


Mr. Speaker:: This seems to be a rather general question which might be placed on the order paper. If there is an aspect of urgency about it, it can be considered at the time of adjournment.


Mark Willson Rose: Perhaps I could rephrase the question. Has the Department of Transport set aside any specific radio bands for such purposes?


Hon. Donald C. Jamieson (Minister of Transport):: will take the question as notice and get an answer as soon as I can.



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: I wish to direct my question to the Acting Prime Minister. I preface it by saying that I am sure the Prime Minister did not intend to say what he did on television on Sunday night. As his remarks left a very clear implication, does the Prime Minister's office intend to make some form of apology to the Canadian Armed Forces for having compared them with the state militia at Ken State University?


Mr. Speaker:: Order, please.



ACTION TO RESTORE COMPETITIVE POSITION OF EXPORT INDUSTRIES

George Harris Hees: My question is for the Minister of Industry, Trade and Commerce. In view of the statement made by the Prime Minister on the television program "Weekend" on Sunday night that said "the Canadian dollar is so strong indeed that it is hurting our export trade because more people are finding it cheaper to import goods and more difficult to sell them abroad", is the minister going to take specific action or introduce specific measures to restore the former competitive position of, particularly, labour-intensive export industries?

May 18. 1971_______________COMMONS DEBATES____________________ 5899


Mr. Speaker:: Order, please. I have the impression the hon. member asked this question yesterday. He may say he asked it of a different minister. I wonder whether it would be in order for the hon. member to ask the same question on different days of different ministers. The hon. member having asked the question perhaps the minister might reply briefly.


George Harris Hees: On a point of order, Mr. Speaker, yesterday the Minister of Finance said it was impossible for him to answer the question. I have therefore directed it to the appropriate minister. Might I have a reply?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, we regularly introduce programs to increase exports. More recently, for example, we now have a new program to share in precontraetual bidding efforts by Canadian exporters. The Export Development Corporation is more active now than it has ever been in history-$200 million worth of financing up to this time. Exports are increasing by about 2 per cent on top of last year's 13 per cent.


Mr. Speaker:: Order, please.


George Harris Hees: As the minister obviously intends to take no action whatsoever, I wish to ask him a supplementary question. Is the minister aware of the letter sent to the Minister of Finance on March 24 by the chairman of the Canadian Exporters Association outlining in detail the steps necessary to restore the former competitive position of Canadian exporters and put them on the same footing as their foreign competitors? I feel sure that the minister does not know anything about it because this cabinet does not communicate. I will send it across and let him have it.


Mr. Speaker:: Order, please.



TRANSPORT


Mr. Ambrose Hubert Peddle (Grand Falls-Whiie Bay-Labrador):: My question is for the Minister of Transport. No doubt the minister has heard the news of the burning yesterday of the replacement for the Strait of Belle Isle ferry. What plans does the minister have to find a further replacement?


Donald Campbell Jamieson: Mr. Speaker, it is unfortunate that the replacement vessel that had been planned for that particular service did in fact go aground and burn. We have had to start from square one to try and find a replacement. Along with the operator, we are in the process of doing that right now.


Ambrose Hubert Peddle: In view of the fact that the Fredrick Blair which burned yesterday would have been no more suitable than the Avalon Voyageur which was condemned last week, will the efforts to obtain a further replacement be directed toward a larger, more suitable craft for this dangerous crossing?
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Donald Campbell Jamieson: In view of the fact that the hon. member appears to be such an expert on the matter of hulls and their safety, I would be delighted to hear any recommendations he has with regard to a replacement vessel. If the hon. member knows of a vessel or can help us in the search for one that is better, I can assure him we will make use of this information.



PROPOSED DAM ON SKAGIT RIVER-DISCUSSIONS WITH UNITED STATES IN ADDITION TO INTERNATIONAL JOINT COMMISSION REFERENCE

Mr. Thomas S. Barnett (Comox-Alberni):: I direct my question to either the Minister of Fisheries and Forestry or the Secretary of State for External Affairs. I will let the Acting Prime Minister decide who should answer. In view of the fact that the reference to the International Joint Commission with regard to the question of the Ross dam in the Skagit Valley, with hearings starting on June 4 in Vancouver, appears to limit the question as to what may be the result of building the dam rather than including the more basic question of whether the dam should be built, can either minister inform the House whether the government has under way with the United States any other initiatives or discussions with reference to this more basic question as to the advisability of building the dam at all?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, there are no other initiatives at the moment. This entire subject is before the International Joint Commission. We expect recommendations from that body this fall.


Thomas Speakman Barnett: After the completion of the hearings, does the government intend to follow up the question of negotiating for release from any obligation it may be considered Canada has with regard to allowing the construction of the Ross dam?


John (Jack) Davis: The staffs of several departments, including the staff of the Department of Fisheries and Forestry, are available to the International Joint Commission. I am sure it will be directing various studies to be made on different aspects of this development, including the legal aspect.



BAY OF FUNDY TIDES-DISCUSSIONS WITH NOVA SCOTIA PREMIER-ASSISTANCE IN DEVELOPMENT IN EVENT OF SALE

Mr. Lloyd R. Crouse (South Shore):: My question is for the Acting Prime Minister in his capacity as Secretary of State for External Affairs. Were any discussions held between the federal government and the premier of Nova Scotia prior to his visit to New York today for talks with interested Americans on the possibility of financing the development of electrical energy from the Fundy tides? If so, will the minister indicate whether federal assistance will be made available for the development of

May 18, 1971
Inquiries of the Ministry
Fundy power in the event the sale of this power can be agreed upon between our two countries?


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

fTranslation]



INCOME TAX


Mr. Henry Latulippe (Compton):: Mr. Speaker, I should like to put a question to the Minister of Energy, Mines and Resources.
The minister stated lately that several large companies have no financial difficulty and hardly pay any income tax and that 70 per cent of taxes are paid by individuals who earn less than $7,000 a year. Would the minister inform the House whether he will use his influence with the responsible bodies to request the implementation of the Carter report recommendations or whether he would have other proposals to make to the government?


John James Greene: Mr. Speaker, I feel certain that the government's tax measures will be forthcoming at the time of the budget as announced by the Minister of Finance and at the time the ultimate tax bill is presented to the House.



FISHERIES


Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct this question to the Minister of Fisheries and Forestry. In reply to a question I asked about lamprey control on the Great Lakes it was outlined to me what action would be taken on the Canadian side of the lakes. Can the minister indicate whether the same efforts are being made in regard to the lamprey infested streams and rivers of the United States?


John (Jack) Davis: Mr. Speaker, I understand that this is the case. An equivalent amount of money is voted by both governments each year. However, I will have to look into this matter and reply later in some detail.



ATTEMPT BY UNITED STATES COASTGUARD TO ARREST CANADIAN FISHING VESSEL IN HECATE STRAIT

Mr. Paul St. Pierre (Coast Chilcotin):: Mr. Speaker, my question is either for the Minister of Fisheries and Forestry or the Secretary of State for External Affairs. What attitude and action is the Canadian government taking as the result of an attempt by a United States coastguard vessel to arrest a Canadian fishing boat in Canadian waters in Hecate Strait? Anthony J is the name of the boat.


John (Jack) Davis: Mr. Speaker, Department of Fisheries officials on the west coast have stated in no uncertain terms that the Canadian vessel was in Canadian waters, and representations are being made through the Department of External Affairs to this effect.


Paul St. Pierre: Will Canadian boats continue to operate in these waters, and have instructions been given to them to continue operating within our area?


John (Jack) Davis: Yes, Mr. Speaker.



PROPOSAL OF FURTHER QUOTA LIMITATION ON HADDOCK, HERRING AND YELLOWTAIL AT ICNAF MEETING

Lloyd Roseville Crouse: Mr. Speaker, I have a related question for the Minister of Fisheries and Forestry. Since foreign over fishing has caused a serious decline in stocks of herring and yellowtail, as well as haddock which has failed to have a good spawning year for the sixth consecutive year despite an international quota and the closure of Georges Bank, is it the intention of the minister to propose a further quota limitation on haddock, herring and yellowtail at ICNAF's annual meeting to be held in Halifax this June?


John (Jack) Davis: Mr. Speaker, the principal purpose of the meeting of the 14 North Atlantic nations at Halifax next week is to consider conservation measures of that kind.



CONSERVATION OF MARINE RESOURCES-DISCUSSION BY PRIME MINISTER WITH GOVERNMENT OF SOVIET UNION

Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I have a supplementary question. May I ask the Acting Prime Minister whether the question of the conservation of marine resources will be discussed during the Prime Minister's current visit to the Soviet Union?


Mitchell William Sharp: Yes, Mr. Speaker, it is my understanding, and it has been confirmed by the Minister of Fisheries, that this is one of the items on the agenda.



CORPORATE AFFAIRS


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. Last week I asked the minister whether he would conduct an investigation into the reorganization of the Rideau-Carleton Raceway to see if any skulduggery was taking place, and the minister said he would undertake such an investigation and report back to the House. I wonder whether the minister has done so and will he now reply to my question?

May 18, 1971

Inquiries of the Ministry PUBLIC SERVICE


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, without accepting the
hypothesis of the question, I believe the hon. member has been informed-if not, he is now informed-that as a result of his question an investigation is being conducted to ensure that the Bankruptcy Act and all its provisions have been observed.


John Edward Broadbent: No, I had not been informed, but to clarify what the minister has just said can he inform the House whether or not the Royal Canadian Mounted Police are involved in this investigation?


Stanley Ronald Basford: That would be quite improper, Mr. Speaker.
* *
*



OPPORTUNITIES FOR YOUTH PROGRAM-EXTENSION OF FINAL DATE FOR APPROVAL OF PROJECTS

Mr. R. N. Thompson (Red Deer):: Mr. Speaker, in the absence of the Secretary of State I will direct my question to the Acting Prime Minister. I believe that May 15 was the cut-off date for approved projects under the Opportunities for Youth program. In view of the list that was circulated today which was seemingly inconclusive, are there more projects to be announced or is the date being extended still further?


Mitchell William Sharp: Mr. Speaker, I will refer the question to the Secretary of State and have an answer tomorrow.



NATIONAL DEFENCE


J. Michael Forrestall: Mr
Speaker, may I put a question supplementary to the one I attempted to ask previously or perhaps rephrase it. Again I address my question to the Acting Prime Minister or the Minister of National Defence. A very clear implication was left by the Prime Minister on the television program, "Weekend", prior to his departure-it was a sort of state of the union address-that the Canadian Armed Forces could not be trusted in the streets of Montreal without the over-all blanket of the War Measures Act. I wonder whether the Minister of National Defence would make some comment so as not to leave the Canadian Armed Forces at the level of assumed professionalism on a par with United States national guard units?


Mitchell William Sharp: Mr. Speaker, I do not think that any reasonable non-partisan person would draw any such inference from what the Prime Minister said, and if the hon. gentleman is one of the exceptions to the rule I can put his mind at rest.



ROLE OF TREASURY BOARD IN INVESTIGATING USE OF DELEGATED HIRING AUTHORITY

Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the President of the Treasury Board. On May 7 I asked him in the House whether he would inquire into the basis of the concern expressed by the Public Service Commission over the manner in which delegated hiring authority is being used and the minister assured me that Treasury Board was investigating the matter. As the delegation of staffing authority is the sole prerogative of the independent Public Service Commission, as specified in the Public Service Employment Act, why is Treasury Board investigating this matter since it is not responsible for the administration of the Public Service Employment Act?


Mr. Speaker:: I must indicate to the hon. member that in my opinion this is perhaps an argument more than a question. However, the minister might want to reply briefly and might be allowed to do so.


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, the hon. member has indeed made a very good point. Responsibility for staffing and appointments to the Public Service lies with the Public Service Commission. However, Treasury Board is responsible for over-all personnel policy within the government service, and it is in this respect that Treasury Board is looking into the matter, merely to ensure that in fact the over-all policy is sound. But as the hon. member pointed out, the specific question is the responsibility of the Public Service Commission.



VETERANS AFFAIRS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. In view of the fact that in a number of provinces the ceilings on income that may be obtained under social assistance legislation are higher than the ceilings on permissible income under the War Veterans Allowance Act, will the government review the matter of these ceilings so that as far as possible veterans might be provided for under their own legislation?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: This is the case, Mr. Speaker, especially in British Columbia. At the present time we are reviewing the situation. As the hon. member knows, we increased war veterans allowances by 15 per cent in April. British Columbia, as the hon. member stated, has also increased its social assistance, so we are reviewing the situation.


Stanley Howard Knowles: I have a supplementary question, Mr. Speaker. Will the department also review the regulations under the War Veterans Allow-

May 18, 1971
Inquiries of the Ministry
ance Act, especially those that deal with ancillary benefits made available to veterans who are forced to relinquish their rights under the War Veterans Allowance Act for other reasons?


Jean-Eudes Dubé: Mr. Speaker, these regulations are always under review and we try to adapt them to changing circumstances.



MANPOWER

[Stage Direction]
QUEBEC CLAIM RESPECTING CONTROI_______CONSIDERATION

Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister. Is the Acting Prime Minister going to make a statement on the demand made by a minister of Quebec for total provincial control in the area of labour and manpower, and is it the intention of the government to place this very important matter on the agenda of the upcoming conference?


Mitchell William Sharp: Mr. Speaker, this question of manpower and manpower offices is a problem that concerns not only relations between Quebec and Ottawa but relations between the provincial governments and the federal government generally. What we are trying to do is to work out arrangements between the provincial and federal authorities to the advantage of the people of Canada in the various provinces. This matter is being discussed in connection with the constitutional review.


Lincoln MacCauley Alexander: In light of the Quebec minister's statement about inflation being a federal responsibility, is the government considering evolving labour and manpower powers to give complete federal jurisdiction in areas of compulsory wage and price controls?


Mitchell William Sharp: Mr. Speaker, I am not aware of any areas of compulsory wage and price controls.



COMMUNICATIONS


Mr. Roch La Salle (Jolieile):: Mr. Speaker, I would like to ask the Minister of Agriculture a question.
Since I heard at noon that the English-speaking media were able to get the report of the Royal Commission on Farm Machinery this morning at ten o'clock, could the minister tell the House why the French-speaking press had to wait till two o'clock this afternoon to get it?


Horace Andrew (Bud) Olson: Mr. Speaker, copies of the Barber commission report in both languages were available at ten o'clock this morning. Of

course, if they were to receive it prior to the report being released in the House they had to submit to the usual condition of keeping it confidential until 2.30 today.



AIRPORTS


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I have a question for the Minister of Transport. In view of the report that a United States firm has displaced a Canadian-owned company at the international airport at Toronto, involving the majority of airport skycaps, would he indicate the method by which such contracts are let?


Mr. Speaker:: Order, please. I doubt whether the question as asked is in order. Perhaps it might be considered at the time of adjournment.



PRICES AND INCOMES COMMISSION


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. In view of the obvious failure of government policies regarding both unemployment and inflation, is
the government now considering-


Mr. Speaker:: Order, please. Would the hon. member ask a question? He knows he cannot preface a question with a statement of the kind he has just made. I must remind hon. members that we are running short of time.


Lorne Edmund Nystrom: Mr. Speaker, in view of some government difficulties in economic matters is the government now considering discontinuing the Prices and Incomes Commission?


Stanley Ronald Basford: No, Mr. Speaker.


Mr. Speaker:: Orders of the day.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. I think you will find, as a result of discussions which have taken place, that there is general agreement regarding the length of speeches during today's debate. The agreement is that the principal speaker for each party will have 30 minutes, but that all others limit themselves to 15 minutes, and that no one will ask for overtime.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It will be so ordered.
May 18. 1971



GOVERNMENT ORDERS


Mr. Max  Bailsman@Waterloo: That this House calls upon the government to adopt immediate emergency economic measures to move the economy to high employment through special programs and more expansionary monetary and fiscal policies, and also to achieve full potential growth through a planned investment and foreign ownership policy and to stimulate the development of secondary manufacturing as the only way of providing the necessary employment opportunities for the hundreds of thousands of Canadians who enter the work force every year.
He said: Mr. Speaker, the importance of taking this day to focus attention on the matter of unemployment is emphasized by the fact that, in spite of all the assurances [DOT]we have received from the Minister of Finance (Mr. Benson) that the situation was improving, the latest figures show there has been a serious regression. Even on the basis of the figures issued prior to that it was quite obvious the economy was not making the kind of progress necessary.
We are strongly of the opinion that the Minister of Finance does not know what he is doing, that his government has no real policy for curing unemployment and that the minister has been walking over this economy with all the wisdom and grace of a demented, trampling hippopotamus. The Economic Council of Canada has pointed out in numerous statements that even with a steady increase in stimulus from the government, it would take almost four years to restore the economy to where it was. If we are going to get full employment, a far greater stimulus than that now being provided by the government will have to be provided.
Stimulating the economy will cause certain problems and I will deal with them later. If we are to overcome what I think is a serious problem we can do nothing less than bring in emergency economic measures. I am sure everyone in this country, including government members who either do not know what to do or refuse to do anything, will acknowledge that it is a serious problem.
Why are we so concerned about unemployment? Obviously, we are concerned for the people who are involved and about the dislocation, the cost to human life and the loss of wealth which has taken place in our economy. It is estimated we have lost between $3 billion and $5 billion in gross national product as a result of the high level of unemployment each year. Furthermore, we are not going to solve the basic problems facing this country if we continue to have present levels of unemployment. There are other enemies to national unity in this country besides the FLQ. At the moment, the greatest enemy is a government which brings in unemployment policies.
The problems of Quebec cannot be solved by implementation of the War Measures Act. These problems must ultimately be solved by a government which is
Measures to Improve Economy able to persuade the people of Quebec that they have a worth while stake in this country, and there exists a federal government which is cognizant of their problems. It may be that even with the best economic policies we will not solve these problems. On thing is certain. Unless we make an effort to get rid of unemployment in Canada, and the situation that exists in the province of Quebec, we do not have a hope in the world of doing anything about other problems facing Canadians today. It is imperative that we do something about unemployment. If the price of correcting unemployment is an increase in inflationary tendencies in this country, then I suggest to the Minister of Finance and this House this is the kind of price we must pay. There is really not much of a choice, the breaking up of the country or a somewhat higher rate of inflation than we have experienced.
There are other problems we have to solve. It is obvious the government is developing a policy of moving people off the farms. The government is spending a few hundred dollars to compensate each farmer. I am not convinced this is a desirable policy, but if the government feels some of this dislocation is necessary for the sake of long-term interest in agriculture, then the government has the enormous obligation of providing adequate compensation to the farmers affected. It cannot do that unless we keep the economy rolling.
This is an area in which the interests of the farmers and the interests of industrial workers are similar. If we are going to make payments available to farmers and develop programs to help them, this can only be done on the basis of national prosperity. We will not have national prosperity in a climate of high unemployment and in which billions of dollars in production are being lost. We cannot tackle the problem of poverty in this type of atmosphere. We cannot tackle the problems of economic independence while we are totally preoccupied in slowing down the economy, which has been the government's policy.
The government has slipped very badly in the last two years. It was slipping even before then, but its decline has been more rapid in that period of time. Canada now occupies fourth place in the world in terms of per capita income. Our position has been surpassed by Sweden and Switzerland, and we are well on our way to becoming fifth or sixth. This is not a record in which any government could take pride.
The Prime Minister (Mr. Trudeau) has been playing a strange little game. The keeper of that zoo over there has been aware of the clumsiness of the government. He does not mind everyone being stepped on. He says, we are stepping on you so we will not be stepping on you. In other words, we are creating unemployment so there will not be unemployment. Those of us on this side of the House could perhaps be forgiven for not being able to see the logic of the kind of argument in which the government says, "We are throwing you out of work so that you will not be out of work". It is as though the creation of unemployment today will stop unemployment in the future. This is not something any reasonable person can accept. Not even the Prime Minister of this country, with his swinging charm and new Sir Wilfred Laurier haircut,

May 18, 1971
Measures to Improve Economy can obscure the intellectual dishonesty and ill conceived arrogance of this government and of his personal policies in this matter. It is not right for a Prime Minister to make this kind of odious comparison when he talks about unemployment and inflation. He says we are facing the kind of dangers that we faced between the world wars and, then tries to say that the situation in Canada is similar to the situation in countries like Germany where inflation was so rampant that it virtually destroyed that country. If he knows any history at all, he ignores the fact that it was government policy that brought about that situation. The analogy is totally false.
We had a similar analogy in respect of Biafra when the Prime Minister compared that situation with Stalingrad. He goes on making comparisons in his charming way in the hope that people might believe him. However, no one with an ounce of sense will accept the kind of comparisons the Prime Minister has been making. He is not satisfied with that. He has gone on to falsify the position of the opposition. He has gone on to say, "Well, what is the level of unemployment?". He asks what we mean by full employment and whether it is 3 per cent, 3 J per cent or 4 per cent. He says that one member of the NDP gave a figure of 4 per cent and another gave a figure of 3| per cent. This is simply not true. Nowhere does the suggestion appear that that is the kind of unemployment the opposition would like to see in this country. He takes things and distorts them to suit his own purpose. This does not further the basic debate we must have.
This is not the first time, Mr. Speaker, Canada has experienced high levels of unemployment. This government did not invent unemployment. During the depression in the 1930's we had an even higher level of unemployment than at present. To some extent we might excuse those years by saying there was a certain amount of ignorance or that that was the pre-Keynesian era in which the people did not really understand how to stimulate the economy and did not know what to do with it. Every country in the world lacked that kind of knowledge. Then, we had another period ten years ago when there were higher levels of unemployment. I believe it is quite obvious that at that time we had government policies which were bungling and incompetent. Never to my knowledge, however, have we had a government that managed to be all these things, ignorant, incompetent, dishonest and arrogant at the same time. There is no excuse for this. There is no excuse for the kind of position this government is taking.
The members of this government never listened. It is not that information has not been available to them, and it is not that they had the support of the experts in the field for their position. They have been told repeatedly that the kind of policies they have brought in would not work. Perhaps they have been listening, but if they have they have obviously been listening to the wrong people, such as government advisers who are out of touch with
events and who have acquired their own arrogance from being around too long. Perhaps in their insensitivity they have listened to the exporters of Canada, who are concerned not about prosperity in this country but about markets outside of Canada. Some men within the government have shown some courage. A little while ago we had the resignation of the hon. member for Trinity (Mr. Hellyer) who could no longer stomach the government's policies. This was a resignation based on economic policies. More recently the hon. member for Duvernay (Mr. Kierans) had to walk out of the cabinet in the hope that he could perhaps more effectively do something for his country outside the cabinet rather than inside that particular government.
It is a sad commentary in respect of the people holding power when two of their foremost cabinet ministers have to leave because they feel helpless within the framework of a government which has the power to do things but which frustrates the efforts of its own people. It is not without significance that both these men are business people with considerable business experience. They are not radicals; they are not academics; they are not people without some knowledge of what goes on in the economy. They have to carry their views to the people outside government. Unfortunately, I do not believe their efforts will meet with much success because there is a special characteristic in being a Liberal. Even if one parts company with the government over a very serious measure, there is a tendency to always maintain politeness because one must never forget that the Liberals are the establishment and one must never get them too angry even if one finds that he cannot agree with them any more. We have seen cabinet ministers walk out of other governments with blood on their hands because their anger had no limit, but not in the case of Liberals. They always walk out after having given the matter very careful consideration. They know that doors will be closed if they say too many incautious things. Even given that situation, it is obvious that some of them had to leave.
I would hope there will be others on the benches opposite who will rise and support our position. This morning in the Committee on Finance, Trade and Economic Affairs I happened to look at a very interesting brief presented by one of the district Liberal associations. I was delighted to see they have been reading our convention papers. This brief was directed at the Canada Development Corporation, and was extremely critical of the government's program, particularly of the level of unemployment it has created. I know there are Liberal associations and Liberal associations, some of which are intelligent and some of which are not intelligent. I wonder why the government always listens to the ones that are not intelligent. The government has a few people who have a certain amount of brains and enough intelligence to look around, find some ideas and listen with an open mind on these matters. It is not too late to take some action. We can still act. There are many options open. Fortunately, we live in a country which is so resillient that even the determined efforts of the Minister of Finance (Mr. Benson) are not sufficient to kill it.

May 18, 1971

At this time, however, we cannot beat unemployment, improve and humanize our society by the traditional tools of monetary policy. The minister says he has eased off on the monetary policy, that interest rates are declining and that he has expanded the money supply. He should go further and make funds available to municipalities and businesses in addition to stepping up federal programs. There are so many things we could do. We could make money available for pollution control and the improvement of municipal services. We could make funds available for conservation and dams, for the creation of parkland and recreation facilities as well as senior citizens homes and low-income housing. Then, we might make funds available for the establishment of public ownership of land in order to control speculation.
If a municipality wants to control speculation or if a province wants to do this, the federal government's role should be to make the money available. We can establish and improve facilities for the handicapped and for day care centres so that women can move more freely in this world and more freely choose the kind of role they want to play in our society. We do not have enough clinics and hospitals. We should be doing experiments in education, particularly for the handicapped people, and also in the area of public transportation. The encouragement of its use is wide open. There are so many things that need to be done, and by doing them now we can also stimulate the economy. The minister will probably put the tag "spend our way to prosperity" on this suggestion. What is so terrible about spending our way to prosperity? We have done it before. Some countries have spent their way to prosperity by giving money away in foreign aid. It is not a new concept, and at this time it is important that we think in those terms.
The federal government could increase consumer purchasing power by increasing old age pensions and in this way it would redeem itself from its niggardly approach to the elderly. We should be increasing the income tax exemptions of people in the lower income brackets, $2,000 for single people and $4,000 for married people. We should be giving more grants to medical research The list is long. There is no limit to what we can do if we choose to do it. The question arises: are we not going to go off into an inflationary spiral if we do that? Yes, we could, if we did not take some imaginative action. I think we have to be very concerned about understanding what happens under an expansionary policy. But there are measures we can take, and in my view the public is prepared to accept new measures.
At the moment we have unemployment and inflation at the same time. Despite the rather limited success that the government had for a few months in holding down the cost of living, it is now climbing rapidly again. We have kicked away enormous advantages. We have thrown people out of work, we have virtually wrecked the economy for the small advantage of being able to show a marginal success with the rate of inflation. But that is over now, and it is increasing. In my view we need a prices review board to examine price increases as they 24107-24
Measures to Improve Economy take place, and then to take measures against them. There are many things we can do short of price control. In some cases we should not be afraid to use some collective price controls. I am not at all convinced that they will not work and that they should not be tried in some areas. We should be dealing specifically with some economic bottlenecks which occur from time to time instead of doing a hatchet job on the whole economy. In some areas there is excessive bargaining power, and we should be dealing with it.
The very fact that we have floated our dollar is a kind of safety valve, as the Minister of Finance (Mr. Benson) well knows, because should inflation in Canada be somewhat greater than it is in other countries, it will be reflected in the level of our dollar. At the moment there is an equalization effect taking place. Because we are holding down our inflation rate somewhat below that of other countries, our dollar has crept up and this has created unemployment in our secondary manufacturing industries. This has made it more difficult for them to recover. So there is a kind of balance in the floating dollar that is very valuable. We should be using the opportunity of full employment to do the many things that are necessary in this country.
One of the things that has to be done-and I think the hon. member for Duvernay (Mr. Kierans) did this country a service in pointing this out-is to stop providing special concessions to the mining and resource industries because that will surely destroy our economy if we continue. When the Minister of Finance brought in the original white paper he was prepared to move against the mining companies, although not as strongly as the Carter Commission had recommended. He was prepared to remove some of their special privileges. However, he lost courage very quickly and has virtually given back all the concessions they had. The evidence is quite clear. They do not pull their weight and they do not pay their fair share of taxes. They may very well be inhibiting the development of Canadian secondary industries because of the vast quantities of capital that are required in their operations. It is very interesting to note the DBS figures which show that it costs at least $100,000 in capital to create one job in a resource industry as against a figure of perhaps one quarter that amount to create a job in a secondary manufacturing industry.
In a country that has almost 300,000 new entrants into its labour force every year, it is not possible to provide sufficient employment for all the people in this country if we continue to emphasize and to encourage the resource industry in Canada. There are special cases where resource industries do provide benefits, and I think where necessary we should assist them. But the kind of blanket over-all assumption that we have made that the resource industry is good for this country and that the more we tear out of our earth and ship away to some other country the better off we will be is not a valid assumption and can no longer be sustained. This is one of the things that the government will have to examine and one of the things about which we will be very concerned when we examine the white paper.

May 18, 1971
Measures to Improve Economy
There will be others who will have something to say in this debate, and the deep concern that is felt on this side of the House about the level of unemployment will surely be made obvious to the government, to the front benches as well as to the back benches. We have an opportunity to correct the situation. I know that the Minister of Finance will wish to intervene in this debate. I hope that when he does he will not give us his platitudes and his excuses, but rather will make an announcement that the government intends to correct the terrible tragedy they have foisted on the Canadian people.


Hon. E. J. Benson (Minister of Finance):: I have listened with great interest to the hon. member for Waterloo (Mr. Saltsman) and I heard him assert that the economy is wrecked. I think that many other countries in the world would like to have an economy that is wrecked the way the Canadian economy is wrecked. He brought forward a great many suggestions. I thought that in view of his motion he would bring forward new or unique suggestions on ways in which the problem of unemployment in Canada, which I admit is a very serious one, could be solved in the short run. He has not done this. He gave us the same old line that we should spend a lot more money and at the same time cut taxes, as well as aid old age pensioners. I do not particularly like his derogatory remarks with regard to old age pensions. If you take a look at the increase in the GIS that is taking place this month you will see that it is well worth while limiting the general old age pension in order to aid those who need it the most.
The hon. member spoke about a prices review board and said we should do something about controlling people's bargaining power where it is excessive. I would like to ask him how he proposes that we do this. He has indicated that we should not worry about our resource industries in Canada. With that I cannot agree. We have to worry about our manufacturing industries. We also need to worry about development of our resource industries, the basic industries in this country.
In the budget which I introduced in the House last December, I expressed my belief that the Canadian economy would continue to expand at an accelerating pace in the months ahead, as a result of the fiscal and monetary stimulus progressively injected into the system over the course of the last year. But at the very outset, I pointed out that there might be month to month fluctuations from the improving employment trend.
At the same time I warned that the road to recovery would not be an easy one, and promised the House that the government was prepared to adopt further measures without delay if they were required to ensure the healthy growth of the economy. As I pointed out in the budget speech:
In saying this I have in mind not only progress toward full employment but also continued satisfactory price performance. If we do not achieve the restraint of prices and costs that we must have we shall not shirk from action that may be required on that front.
Since the budget was brought down six months ago, we have continued to maintain the closest possible watch on the course of economic developments. On the whole, these developments have been highly favourable, but as usual the picture is not without its trouble spots.
Over the past four months there has been a significant rise in the cost of consumer goods and services. Some acceleration in the rate of increase of the consumer price index during the early months of 1971 was to be expected. There is, for example, generally a seasonal increase in the price of food during this period. This increase has been compounded to some extent by the easing of the supermarket price war. While the index rose by .7 per cent in April alone this is, as DBS pointed out, about in line with the average increase for this month over the past five years. On a year to year basis, the increase in the consumer price index in April amounted to 1.9 per cent, the same as in March. During the first four months of this year the rate of increase in consumer goods and services, other than food, has continued to slow down, and after averaging around 3J per cent during 1970 has been running recently at a rate of less than 3 per cent.
Nevertheless, the dangers of renewed inflationary pressures developing in an expanding economy continue to remain very real. These dangers are seriously enhanced by the fact that despite some marginal decline recently, wage and salary increases are still running at a level that is not justifiable either in terms of increased productivity or increases in the cost of living. As I have indicated before, Mr. Speaker, the government is also concerned about the adverse impact on the economy stemming from the continuing high exchange rate of the Canadian dollar. I was rather interested to hear the hon. member say that we can have inflation in this country and that it will all be taken care of by increases in the value of the Canadian dollar. Admitting this could well have an effect on secondary manufacturing industry, he implied that we should not worry. Well, Mr. Speaker, I do worry about this.


Mr. Benjamin:: Look at the mess we are in from your worrying.


Edgar John Benson: This increase in the value of the Canadian dollar serves to weaken the competitive position of a number of sectors, both at home and abroad. The current level of the exchange rate is a reflection of our continuing strong merchandizing trade position and the climate of uncertainty internationally about the position of the U.S. dollar. As hon. members will be aware, recently I again urged provincial governments and underwriters to restrict to the greatest extent possible the amount of borrowing they undertake abroad in order to minimize upward pressure on the exchange rate of the Canadian dollar from this quarter.
But the matter of the most immediate and pressing concern is the substantial rise in unemployment on a seasonally adjusted basis between March and April from 6 to 6.7 per cent. Let me acknowledge at once that this increase is both perplexing and worrisome. It is perplexing because it represents a major break in the downward

May 18, 1971

trend of unemployment that began last October, and because it is sharp contrast to indicators pointing to the continuing expansion of the economy over the past seven months or so. This increase in seasonally adjusted unemployment in April is worrisome because it understandably raises questions about the strength and durability of the resurgence now under way in Canada.
While the increase in unemployment between March and April is undoubtedly a matter of concern, it would be the height of folly to leap to the conclusion that the economy has moved badly off course and requires a major correction on the basis of one month's change in only one of a series of important economic indicators. The unusually small increase in employment that took place between March and April may well have been caused by a number of temporary factors. Obviously, one of the foremost is that the severest winter in the memory of most of us only slowly gave way to spring in many parts of the country, delaying both the opening of the St. Lawrence Seaway and the quickening of the pace of economic activity that normally occurs in many other sectors around this time of year.
The tempo of the economy already may have picked up sufficiently during the weeks since the last labour force survey to take up all or most of the slack that developed last month, although there are new uncertainties associated with the current U.S. rail strike. Certainly, that was the experience in 1967 when employment in April of that year rose by only 36,000 compared with the average gain of 97,000 for that month in the three previous years. In May, 1967, however, employment rose by more than the average gain for that month, almost completely taking up the slack that developed in April.
Since the budget was introduced last December, Mr. Speaker, it has become clear that the economy began to move forward strongly during the last quarter of 1970 following the slower pace earlier in the year. The Gross National Product in real terms rose between October and December at a seasonally adjusted annual rate of 6.4 per cent, in contrast to a decline of 3.4 per cent in the real GNP of the United States during the fourth quarter.


Robert Lorne Stanfield: Real figures?


Edgar John Benson: These are real figures.
There is no comprehensive picture yet available of the economy during the early months of this year. On balance, however, and after taking account of short but sharp changes that may occur from month to month in individual indicators, there appears to be every reason to believe that the economy continued to move forward at a healthy rate, while the U.S. economy also began to gain momentum after the reversal of the fourth quarter of 1970.
During the first quarter, the index of industrial production rose by 1.2 per cent above the level in the fourth quarter of last year, when there was in turn an increase of .7 per cent over the third quarter. Retail sales, which have tended to be sluggish, were up by 3.1 per cent in the first quarter over the level a year ago, and I am informed that on a seasonally adjusted basis this is the 24107-241
Measures to Improve Economy strongest quarterly increase since the first quarter of 1969.
The general loans of the chartered banks, that is, business loans, have been increasing sharply, rising at a seasonally adjusted annual rate of 10 per cent in January, 16 per cent in February, and 28 per cent in March. The number of housing starts in April jumped to 254,000 on a seasonally adjusted annual basis, while in the first quarter housing starts were running at a rate of nearly 204,000.
Although there was some decline in March, during the first three months of this year manufacturers' shipments rose by 3.5 per cent over the last quarter of 1970 and new orders rose by 6.4 per cent.


Robert Lorne Stanfield: Is that real?


Edgar John Benson: Real.


Robert Lorne Stanfield: Yes, but is it in constant dollars?


Edgar John Benson: Yes, in real dollars.
During the first four months of 1971 exports increased by 1.7 per cent above the very high level of a year ago, while imports rose by 1.5 per cent. The result was a merchandize trade surplus from January to April of $813 million, compared with a surplus of $789 million in the same period a year ago. In the period from September to March, Canada experienced a growth in employment of 3.1 per cent at an annual rate seasonally adjusted. The seasonally adjusted level of unemployment maintained a reasonably steady downward trend from 6.8 per cent to 6 per cent. As I acknowledged before, the increase in the rate in April represents a sharp break in this trend. It is by no means evident, however, that the general downward trend has been reversed. I might point out, Mr. Speaker, that in the United States, the seasonally adjusted rate rose from 5.8 per cent in February to 6.1 per cent in April, despite the substantial pick up under way in their economy.


Mr. Valade:: Is it adjusted?


Edgar John Benson: Seasonally adjusted.
Over the course of the past 14 months or so, both fiscal and monetary policies progressively became more strongly expansionary as the existing inflationary price pressures began to recede. The supply of credit has increased substantially and there has been a marked decline in the interest rates. The federal government has adopted a wide-ranging series of measures to encourage expansion of production and employment in those regions and industries most adversely affected by slow economic growth. There was a swing in the cash requirements of the government during 1970-71 from the previous year of around $1.7 billion, which represents a substantial degree of fiscal stimulus to the economy. A further large boost will be provided to the economy from the fiscal policies of the federal government during the current year. I am informed that the fiscal outlook which I gave last December is much more expansionary than the so-called full

May 18. 1971
Measures to Improve Economy employment budget in the United States. In addition, a number of provinces, which together now wield substantial fiscal power, have also adopted more expansionary policies in recent months, thus reinforcing the impetus of federal action.
As members are aware, there are inclined to be long lags between the time that changes are made in the monetary and fiscal policy and the time these changes begin to exert their maximum impact on the economy. I am confident that the measures that have already been adopted will make themselves felt with growing force in the months ahead. Despite the very large degree of stimulus already injected into the economy, members of the opposition have been stridently demanding that we adopt ever more expansionary policies through massive increases in government spending and equally massive cuts in taxation.


Georges-J. Valade: We want you to reduce unemployment.


Edgar John Benson: If we were to adopt the kind of mammoth crash programs being urged by opposition parties in total disregard of the most elementary requirements for sound economic management, we would have every reason to expect that the net result for our economy several months from now would be just that-a crash. Undoubtedly, members of the opposition would happily ignore the results of following their advice and just as happily berate the government for the consequences. I do not blame them-after all, that is the reason for the opposition being there.


Georges-J. Valade: You mean you are happy about
unemployment?


Edgar John Benson: In its study of the performance and potential of the economy, the Economic Council of Canada, which has consistently put strong emphasis on growth, warned that:
-great care must be taken to move in a more gradual way back to potential in order to avoid the excessive surges of inflation-creating demand such as occurred in the mid-1960s and pushed the economy hard against potential.
Trying to push the economy back to its potential growth path too hard and too quickly would, the council said:
-undoubtedly give rise to serious pressures and instabilities.
The very same warning was sounded by the OECD in its publication, "Economic Outlook", last summer when it said:
While the likely impact of restrictive action has nearly always been overestimated, there has been a very frequent tendency to underestimate the impact of expansionary action-
It is not only a question of making proper allowance for the lag between action and the effects of action: account has also to be taken of the resilience of private demand evident in modern full employment economies, especially when inflationary expectations have become entrenched.
There is, I believe, a widespread consensus developing in the country that the outlook for sound growth of the economy in the months ahead is very bright. Both the chairman and vice-chairman of the Economic Council of Canada have in recent weeks expressed confidence that
the economy will continue to move forward at an accelerating pace. On the basis of surveys showing a significant upturn in consumer and capital spending intentions, a Financial Post editorial late last month asserted:
Prospects for 1971 have taken a clear and decisive turn for the better.
The chief economist of the Toronto-Dominion Bank, Mr. Douglas Peters, predicted a substantial business upturn this year. As I have emphasized before, however, the resurgence of the economy now underway does not by itself provide a resolution to the basic dilemma that continues to confront Canada and all other western nations, that of maintaining high and increasingly productive employment and relative price stability.
Mr. Speaker, a background paper prepared for a committee of the other place that is engaged in a study of this particular dilemma warns that it is unlikely the inquiry will discover any single, magic elixir that will resolve this very difficult problem. Over the course of the past several months, we have had a number of elixirs proposed by various parties for providing magic solutions. Given the nature of the problem, however, it is not surprising that the nature of the solution they propose undergoes constant change.
Over a period of several months, for example, members of the New Democratic Party repeatedly called for imposition of mandatory price and income controls to halt inflation, which they recognized then to pose a serious economic problem for a country that is so exposed to the outside world as Canada. In the Commons last March, the then deputy leader and now leader of the NDP, again proposed imposition of price controls but contended wage controls should be considered only in the case of a very small minority of workers gaining excessive pay increases, and then only as a last resort.
During the national convention of the NDP last month, however, delegates were reported to have approved a resolution that said nothing about measures of any kind to contain inflation at any given level and in particular was totally silent on the various forms of mandatory controls advocated by NDP members in this House. It urged only that measures be adopted simply to compensate those who could not run fast enough on the treadmill to keep up with the inflationary spiral of prices.
Early last year, the Conservative party was criticizing increased spending programs adopted by the government to stimulate expansion in slow growing sectors of the economy and contended we should be increasing taxes to fight inflation. By fall, the party had reversed its position, calling for both major decreases in taxes and major increases in spending. The leader of the Conservative party consistently maintained that the dilemma of full employment and relative price stability could be resolved merely by urging Canadians to comply with voluntary guidelines. The Conservative leader has also spoken out vigorously on a number of occasions in opposition to the adoption of any form of mandatory price and income controls.
But a policy paper on economic growth prepared for discussion at the party's meeting this fall makes virtually

May 18, 1971

no reference to voluntary guidelines, the approach that is central to the economic policies advocated by the present Conservative leader. It asserts that the Progressive Conservative party opposes the introduction of a system of universal compulsory wage and price controls "at this time" and I emphasize the words "at this time". The paper says, and I quote:
To date, there has been no strong evidence that such a policy, and the unprecedented intrusion of government into the private sector which it would involve, would be beneficial to the Canadian people.. .however, if circumstances warranted such action, a Progressive Conservative government would be prepared to consider the application of some wage and price controls on a selective basis.
In the past, spokesmen for the Conservative party have been vocal in their opposition to the selective measures adopted by the government to provide a general stimulus to the economy through the provision of special assistance for regions and industries that have been most adversely affected by slow growth. Their position is in sharp contrast to the approach proposed in the same Conservative policy paper to which I referred earlier. The paper insists that "regionally sensitive policies must be a key ingredient in a national strategy for economic growth." Later the paper adds:
The Progressive Conservative party believes that Canada consists of several different economic regions, with in some cases fundamentally different economic conditions and requirements and that government fiscal and monetary policies should take account of these differences.
It is these kinds of contradictions which make it very difficult to determine just what the Conservative party believes about almost any given issue.
I have already informed the House, Mr. Speaker, that it is my intention to introduce a new budget some time in the next month. As I indicated in my remarks earlier today, most of the evidence available to date indicates that over the past six months the economy has been moving forward at an accelerating rate. We are, however, closely monitoring the course of economic developments and, as in the past, remain fully prepared to adopt further new measures if they appear necessary to ensure that the pace of economic growth is maintained on a sound and healthy basis in the months ahead.


Mr. Speaker:: Order, please. The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) wishes to ask the minister a question. I should bring to the attention of hon. members that we should try to stay within the time allotted. If the Minister of Finance will permit the question, he still has a few minutes left.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the minister referred in his speech to the Toronto-Dominion Bank and to the Chairman of the Economic Council of Canada. The minister was suggesting that the economy was improving. I am sure the minister would not want to mislead the House. Is it not true that in the statement to which he referred, Mr. Douglas Peters said that unemployment in 1971 would continue to be high? Is it not true also that Dr.
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Arthur Smith, Chairman of the Economic Council of Canada, said that high unemployment levels would not be substantially reduced within the next three or four years?


Edgar John Benson: Mr. Speaker, I wish to indicate that unemployment is high in Canada at present. It will take some time to overcome the relatively high unemployment in this country. The policies of the government are indeed aimed at bringing it down over a period of time without causing, on the other side, as a result of undue expansion in the economy and as a result of fiscal and monetary measures, another round of inflation which will take money out of everybody's pay cheques.


Robert Lorne Stanfield: Mr. Speaker, I regret very much the conditions which make it necessary for me to take part in this debate. I welcome the opportunity to take part in it because it gives me a chance to appeal once again to the government and, in particular, to the Minister of Finance (Mr. Benson). I ask him to abandon his sterile attitude and empty words and to do something more effective to get the economy moving ahead again at a satisfactory pace. I realize that that is not an easy task, especially when you consider the downhill path on which this government has taken the Canadian economy for the past couple of years.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: That is all the more reason for this government to now rid itself of this complacency. In all fairness to the minister, and I say this without being unfair to him, complacency is what he exuded this afternoon. Let the government finally start to do something to encourage the economy instead of continuing its policy of simply coasting along.
Some alarming figures have come to light, Mr. Speaker. One month ago, in the middle of April, there were about
348.000	Canadians who had been out of work for over four months. Over 50 per cent of Canadians who were out of work at that time had been out of work for more than four months. What is being done about this? How many of these people are receiving unemployment insurance? We may know something tomorrow as a result of the statement promised by the Minister of Labour (Mr. Mackasey). In any event, this is a soul destroying process that has been going on for those 348,000 Canadians who have been out of work for over four months. The Prime Minister (Mr. Trudeau) now recognizes, if I understood him correctly on television, that it is a lot easier to slow an economy down than to start it up. That was known to quite a number of people a long time ago. Certainly, it takes time for government policies to take effect, and particularly to have a stimulating effect. I should like to know what the government proposes to do about those
348.000	Canadians who have been out of work for more than four months. Will it let them rot?
Federal manpower officials in the province of Ontario, the province in which there was the sharpest rise in unemployment between March and April, said that they had an explanation for this rise. They described the rise

May 18. 1971
as a sort of freak caused by the severity of the winter and the lateness of the spring. They talked about the St. Lawrence Seaway and so on. Dominion Bureau of Statistics figures which have come out indicate that in April, 1971, as compared with April, 1970, the number of those who were out of work this year because of bad weather is not higher than last year. Of course, the figure is considerably below the one for March, as one might expect. Let us not have these phony explanations which are often given by officials as a result of the advice of their superiors. Let us come to grips with the real problem.
Just who are those people who have been out of work for more than four months? In the course of the past year there has been a dramatic increase in unemployment among youth. That is dramatic and alarming. In April, according to DBS figures, the number of young Canadians under the age of 25 who were out of work represented 13.6 per cent of the work force. More than one Canadian in eight who was out of work was under the age of 25.


An hon. Member:: Shame.


Robert Lorne Stanfield: The figure, seasonally adjusted, was 12.3 per cent. That still represents almost one in eight. Of course, students at that time had not come out of school.


Jean-Luc Pepin: Could the hon. member give me the comparable figures for this group since 1960?


Robert Lorne Stanfield: I can go as far back as the minister likes. I always thought he liked to look ahead. Of course, when it suits his convenience, he likes to look back. He might be happier talking about the 1930's, I don't know. We like to talk about the present and the future.


Mr. Nowlan:: The present is what we are worried about.


Robert Lorne Stanfield: We want to know what is to happen to these people who have been out of work for more than four months. I am referring to our young Canadians. Are they to go on welfare in increasing numbers, thereby adding to the problems of the provinces and, of course, to the problems of provincial and municipal taxpayers?
The minister quite properly talked about inflation and the problems of inflation. Inflation is a problem. I ask the minister, in view of what he said this afternoon, whether he still believes that it is appropriate to fight inflation in Canada by creating or even by maintaining massive unemployment? He suggested I have been saying that one can fight inflation simply through using voluntary guidelines. Nothing could be further from the truth. I have emphasized ever since coming to the House that, certainly, one must implement appropriate fiscal and monetary policies. I suggested, long before the government did, that it ought to resort to voluntary guidelines as a method of supplementing monetary and fiscal policies. If they had had the courage and foresight to try the course at the time I was suggesting it instead of waiting for the peak of inflation before trying it, that action might have been more helpful than it was. Let us not have these gross

Measures to Improve Economy
misrepresentations on the part of the minister. It is bad enough when he oversimplifies his own attitude with respect to the economy; let him not oversimplify the attitude of his critics.
The government made a big mistake, as it now seems to have recognized, in slowing down the economy so much. Clearly, when it had gone too far, and it must have been clear even to the minister and to the government that it had gone too far, it made a further bad mistake in not applying quickly stronger stimulants to get the economy going. The Prime Minister now recognizes that it is far easier to slow the economy down than to get it started up again. The stimulus that could have been used, Mr. Speaker, need not have been a continuing stimulus. One need not do something in 1971 and continue it through 1972 if it is no longer appropriate.
The minister talks about forecasting growth and employment. I have not seen any forecast of economic growth for this coming year, other than by this government, which indicates a substantial reduction in unemployment. On some days the minister says that a tax reduction of the sort I suggest would be inflationary. On other days he says it would not necessarily be inflationary under present conditions. The minister moves around like a wheel. One day it is inflationary, the next day it is not. If the minister wants to talk about something being inflationary, I am sure that from time to time he must have in mind the increase in the supply of money in this country by the Bank of Canada, something which may be much more difficult to adjust if the inflationary pressures grow than the kind of remedy I have been suggesting.
The minister described the economy today as burgeoning. I think that is the word he used. I think that I have described it fairly as being hesitant. After the April figures, I do not see how anybody can honestly describe it more favourably than as being hesitant. I urge the minister to bear in mind that the economy is not a machine. It is not something that automatically responds by simply having more money fed into it. People respond to certain stimuli and incentives. Despite his speech here this afternoon, I hope that the minister will consider these when he prepares his budget. I hope that he will bear in mind the importance of some method to remove the hesitancy from the economy, the need to get it started moving forward in terms of employment and, preferably, a flexible method of the sort I have been suggesting which lends itself to adjustment as the factors of the economy change.
The minister kept saying that he hoped he would learn something new and sensational this afternoon. I do not pretend to propose anything other than what I have said here before. I again beg the minister to open his mind and realize the importance of moving employment forward. Instead of looking for something new or sensational, I ask the minister to listen to the sensible suggestions that are being made to him.
I must disagree with the hon. member for Waterloo (Mr. Saltsman) to some extent. At the present time, I do not think that the emphasis should be on increased
May 18, 1971

expenditures, although there may very well be particular cases that have to be met such as, for example, members of Parliament. Seriously, there may well be others. The important stimulus needed by the economy now, in terms of psychology and from every aspect, is a considered reduction in taxes.
I spoke of the minister's complacency and arrogance in the sense that complacency soon moves into arrogance. As far as this government is concerned, I do not think there is any more apparent area where complacency and arrogance prevails than in the field of regional development. I intend now to talk about this. In saying that, I certainly do not want to take anything away from the general economic policies of the Minister of Finance (Mr. Benson) in terms of complacency or take him off the hook in that regard in any way. The complacent policies of the Minister of Finance have certainly been shown to be ineffective. We on this side have already had a good deal to say about that. I assure the minister that unless he is prepared to make a substantial move in the direction of common sense and a substantial move in the direction of inspiring the economy with some degree of confidence, he will certainly be hearing a great deal more. Unfortunately, the Minister of Finance is not the only member of the cabinet who can be accused of arrogance and drifting. He is, at most, first among equals with regard to complacency and arrogance. I must say that the Minister of Regional Economic Expansion (Mr. Marchand), as he is called, seconds him very well in the area of complacency.
We have heard a lot about the elimination of regional disparity. The President of the Treasury Board (Mr. Drury), based on the figures on which he works in connection with the adjustment of dock yard wages, must be very well aware that economic disparity between the east and west coasts has increased since 1968. I want to be fair to the Minister of Regional Economic Expansion. To a very considerable extent, his efforts have been thwarted by the offsetting policies and the obstacles erected by the Minister of Finance. I am sure that the people of the eastern provinces were as stunned as I was the other day to hear the minister preen himself, not because the situation in the Atlantic provinces and Quebec had improved, but rather because the situation in Ontario and other wealthier provinces had deteriorated. Look at the figures for the Atlantic provinces. The adjusted unemployment rate for April 1971 was 8.1 per cent. The unadjusted rate for 1971 shows 11.6 per cent of the people out of work compared to 10.4 per cent the previous year. It is difficult to regard that as an improvement, except through some tortured reasoning resorted to by the Minister of Regional Economic Expansion.
It is true that in Ontario the position deteriorated from an unemployment rate of 4.7 per cent in 1970 to 6.5 per cent in the month of April. By putting these two things together, the Minister of Regional Economic Expansion argues that actual conditions in the Atlantic provinces have improved. I do not know what point we have reached in this country. What the minister was in effect saying was that because one of the relatively wealthy provinces in Canada was now going downhill even more
Measures to Improve Economy
quickly than the poorer ones, the relative differences between the two have become somewhat smaller. On this basis, the minister claimed to have done a good job in fighting regional disparity. That is a new low, even for this government. I have often suspected, and half in joke suggested, that the real goal of this government is the equalization of poverty across this country. We now have the evidence that this is the case from the Minister of Regional Economic Expansion. I can tell him and the other ministers present that it is cold comfort indeed to the less well-to-do provinces to be told that they are rapidly being joined in their misery by the rest of the country.
I do not think there has been any single statement that has so clearly shown the fundamental bankruptcy of the policies of this government as that made the other day by the Minister of Regional Economic Expansion. It points out the irony of the use of the word "expansion" in the name of that department. The only thing the minister has really expanded has been the size of the designated area in this country. He now has about half of the country designated and this is not because it does not need to be designated. In that sense, it really is a department of expansion. In the interests of accuracy perhaps the minister should change the name to the department of universal economic collapse, which would be more appropriate at the present time.
It would be appropriate, too, if he and his departmental advisers condescended to take into consideration the suggestions coming to him not only from the opposition in this House but also from people whose business it is to study the economic problems with which that minister is supposed to be dealing. For example, as far as the Atlantic provinces are concerned, he and his department should be listening to Professor William Smith and the Atlantic provinces advisory council. The minister and his department should be listening to other voices that are being raised in warning and appeal-appeal to this government to adopt a strategy for development of areas of slow growth.
This is not simply a question of spending money, Mr. Speaker. The government has been criticized by this advisory body in the Atlantic provinces, which the government itself established, for its failure to devise a feasible strategy for the development of those provinces. It has been criticized for lack of co-ordination. In fact, in short, it has been criticized for wasting money and for its failure to make a concerted effort. We now seem to have reached the point where the minister does not even seem to be able to find a chairman for the Cape Breton Development Corporation. Critics have been pointing out again to this blind and deaf government two facts that are clear enough. First, that the have-not provinces in this country always take the lead in suffering the consequences of federal policies that encourage unemployment, that slow down the economy. They are also the last to recover.
The Minister of Finance tried to make something this afternoon of some suggestions contained in a policy paper

May 18, 1971
Measures to Improve Economy of this party to the effect that the government of Canada had to adopt a flexible fiscal and monetary policy if economic disparity were to be overcome. I have been saying this for years. Anyone who has ever spoken on behalf of the Atlantic provinces has been saying this for years. Yet the Minister of Finance comes before the House this afternoon and suggests that this is something new. Certainly we are saying that there must be flexibility; but I must also say in passing that to talk of economic benefits in the present circumstances is rather abstract at best, because under this government there are not many benefits to count, only costs. In any case, the economists of the Atlantic provinces, and in particular the advisory council that the government established, have been and still are pressing the government to draw the necessary conclusions from this regrettable but real state of affairs. I repeat that it is not so much a question of money as of making a co-ordinating effort.
We are in the position where the chairman of that council is seeking an answer from the government, and is really suggesting that the government should be prodded into providing such an answer. Surely, there must be long-range policies to help boost the economies of the less favoured regions of Canada; but these advisers are also suggesting that the government should take an urgent look at the possibility of applying sensitive policies in a co-ordinated way to give a boost to these economies. I think that that suggestion must be considered closely and urgently, and I think that an answer from the Minister of Regional Economic Expansion to Professor Smith and his colleagues on the advisory council of the Atlantic provinces is long overdue and must be forthcoming.
I may say that it is not enough for the Prime Minister casually to say, as he did the other day, that really 3 per cent unemployment is impossible to achieve in this country because this would mean a rate of one per cent unemployment in Ontario to compensate for a 5 per cent rate in some other provinces. That is not a policy; that is an absence of policy. That constitutes simply a retreat in confusion all along the line. Those words tell us that this government has no confidence in its own policies that are supposedly designed to help eliminate regional disparities and to reduce high rates of unemployment in areas of the country where economic growth is slow.


Thomas Clement (Tommy) Douglas: Five per cent is lower than the present rate.
Mr. Stanfields Yes, it is lower; it would almost be Utopia by comparison. In short, for the Prime Minister to talk in this way is an admission of failure that is as serious as the incredible position taken the other day by the Minister of Regional Economic Expansion. Each in his own way, one casually and the other with great protestations of success in the implementation of his policies, is telling us that this government has little or nothing to offer in the development of effective regional economic policies.
I want to emphasize a point that I have been emphasizing for the past year, and that is that you cannot successfully attack economic disparity in the Atlantic provinces, in Quebec or in other areas of slow growth as long as
there is massive unemployment across the country. You can pour all the money you like into areas of slow growth, but it will just not develop any momentum unless the economy of the country is moving forward generally at a satisfactory rate. Let me repeat what I said many times in and outside this House, namely that one of the most effective measures that the government could take to help areas of slow growth is to get the economy of the whole country on a healthy basis and moving forward satisfactorily. There is no conflict in this respect, at this time at least.
I see the President of the Treasury Board (Mr. Drury) smiling. I would have thought it would have been obvious to him because this point has been raised by many others as well as by me. As long ago as 1960, Professor Alec Cairncross, who came over to Canada to do a study for the Atlantic Provinces, said that the Atlantic provinces could only move forward economically on the basis of a satisfactorily expanding economy in Canada.


Charles Mills (Bud) Drury: Would the hon. gentleman permit a question? I have listened with great interest to his remarks in connection with the general proposition that the sine qua non of helping the disadvantaged areas is to get the general economy moving forward. However, I suggest this is not the only thing required by a long way.


Robert Lorne Stanfield: Is the hon. gentleman asking a question or making a speech?


Charles Mills (Bud) Drury: Earlier the hon. gentleman made reference to the fact-as I had experienced with wage negotiations^-that wage disparity between British Columbia and Nova Scotia was increasing, and perhaps this is one of the consequences of moving the economy forward, even at a slow pace. I would ask him how he reconciles these two propositions.


Robert Lorne Stanfield: Mr. Speaker, I lost the minister a long time ago I must admit. Surely, the hon. gentleman is not going to accuse me of thinking that special measures to help areas of slow growth are of no importance. He was hardly in his seat following the change of government in 1963 when I and a lot of other people were at his door urging the government to adopt special measures to stimulate the economy of the Atlantic provinces.


Mr. Laing:: The mistake you made was in thinking he was smiling. He looks like that all the time.


Mr. Deputy Speaker:: Order. The Leader of the Opposition may complete his reply, but I suggest it does not help to have interjections once he has answered the question.


Robert Lorne Stanfield: Mr. Speaker, I will conclude fairly shortly now. I want to remind the House of what I was trying to explain to the President of the Treasury Board something which I think he really understands, namely that in addition to incentives, encouragement and development of the infrastructure of areas of slow growth, these areas are only going to move forward when we have a healthy economy in the whole of Canada. That is why I suggest it is urgent for the country, and especially those parts that

May 18, 1971

ordinarily suffer from slow growth, that the Minister of Finance take effective measures to stimulate the economy and to remove its hesitance. For the sake of the 348,000 people who have been out of work for over four months as of last month, and the vast number of young Canadians who are starting out in life under these very depressive conditions and outlook, I hope something can be done. For the sake of the government and those people who are out of work as well as those who are paying extra taxes because there is so much unemployment, and for the sake of those who suffer from the ever-spreading poverty which is a result of this unemployment, I hope the government will do something effective in its upcoming budget. If it does not, the people of Canada are facing a difficult time ahead, indeed, and so is the government.


René Matte: Mr. Speaker, we can but
subscribe to the motion proposed by the hon. member for Waterloo (Mr. Saltsman). The present economic situation requires that immediate emergency measures be taken to bring about a high level of employment.
The means envisaged by the hon. member could only be those advocated by the Social Credit, if he could finally do away with the usual tax policies which are the recurring theme of our good friends in the NDP.
There is no doubt that special expansionary programs and policies in the monetary and fiscal fields should be adopted forthwith. For our part, we are quite ready to assist the government in setting up financial programs whose beneficial effects are certain.
The first measure to retain our attention should deal with credit availability which should be based on our actual resources and manpower potential. This would give us an opportunity to assess the actual production capacity of the population which is anxious to put its talents, its competence and its courage at the service of the community.
Once this potential has been determined, there remains but to get this whole business on the road by issuing the required credit. There is no need to sit down quietly, waiting for the good please of Big Business, American, European or other. Neither must we wait for the last results of the flights and mathematical acrobatics of the American dollar, the Deutschmark or the Japanese yen. No! Let's be consequent. Let us show some horse sense. Let us consider all that is materially possible around us and let us make it financially feasible.
Mr. Speaker, roads, bridges, schools, hospitals, to give but a few examples, these are not built with money but with materials, workers and engineers. Are we short of these in Canada? Sand, iron, wood, minerals, our country is full of these raw materials! Who can deny it?
Are we short of manpower, then? Putting the question brings to mind the record number of unemployed in the country, the recent increase in unemployment in April, at the time when there is usually an upsurge of economic activity. No, 700,000 times no. There is no shortage of manpower. Who could claim that our universities do not
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provide all the engineers who are or would be needed to establish plans and carry out scientific calculations?
What then is lacking, Mr. Speaker? Money? That is right! Then, let us just issue all the money materially required for this purpose, let us have the Bank of Canada grant all the credit required. Why seek the permission of New York, London or Paris? What rights have foreigners to directly influence our lives.
Once more, Mr. Speaker, I say we should return to a sound and rational economy. Let us attend to our business. Let us examine our opportunities and take action. Let us stop tailoring our policies to the views of Nixon, Heath, Brezhnev or Mao. The ridiculous and stupid principle that we are applying to our external trade inevitably and irremediably leads our industry and our trade to utter failure and decadence. For how can we increase our production, hence our manpower, if we let into the country any product whose cost is lower than the corresponding production cost in Canada?
Butter is cheaper in New Zealand, so let us buy butter from New Zealand, as the Prime Minister (Mr. Trudeau) said last year.
Cars are cheaper in Japan and in the United States, so let us close all our automotive plants and let us buy cars from these countries.
Textile products are cheaper in China, so let us buy them from China and let us close all our mills. This is why one of the main industries of Quebec is dying. European shoes are less expensive, Mr. Speaker. Canadians who a few years ago walked almost exclusively in our shoes now see the Canadian industry in pitiful jeopardy. We walk on Italian, Polish or Spanish soles before going barefoot.
It is obvious that these policies cannot be maintained much longer. Let us produce in Canada all that is materially possible. The price question is relative and secondary. There would be absolutely no problem in this connection if we merely balanced the cost of production with the purchasing power. If there was as much money available as there are products, everybody would be happy.
Those are concrete proposals. We feel sure, Mr. Speaker, that the Canadian people would be satisfied if they were carried out.
According to the motion we are debating, to achieve full potential growth through a planned investment and foreign ownership policy, credit must be liberalized. All programs, though they be interesting and good, cannot solve anything by themselves. The proposal that taxes be further increased in order to help the state to invest is basically faulty.
It will become absolutely necessary to consider applying the economic principle that all new production must be financed by new credits. It is not up to the government nor to the producers to determine the extent of such new credits, but rather to the consumers themselves. From wants come necessity which in turn creates production, thanks to the private initative of manufacturers and tradesmen.

May 18, 1971
Measures to Improve Economy
Furthermore, Mr. Speaker, those new credits must be financed without interest. High interest rates in fact keep our industries from progressing.
A planned investment policy is impossible without the application of the healthy and reasonable economic principle that any new production must be financed by new interest-free credits. Thus, we could easily promote the development of secondary industry that could be, as indicated at the end of the motion, and I quote:
-providing the necessary employment opportunities for the hundreds of thousands of Canadians who enter the work force every year.


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry. Trade and Commerce):: Mr. Speaker, I have listened to this debate with interest. I listened to the hon. member for Waterloo (Mr. Saltsman) present his case earlier this afternoon. I listened with both ears. If I had had a couple of more ears I would have listened with them also because I had hoped to hear something. But I heard no new ideas. I did not hear anything that would help solve any problems. I have read his resolution which indicates that the only way to provide the necessary employment opportunities for Canada is through secondary manufacturing. Then, he went on to tell us how we should be spending money on a great many other programs in order to improve the employment picture in Canada. Well, I suppose we could have full employment in Canada if we were willing to accept the standard of living which goes with full employment. Our attention is constantly drawn to those countries in Europe and elsewhere which do seek full employment and have full employment. I refer to countries like the United Kingdom, which is coming very close to it, Germany and Japan.
I have looked at these countries and at their employment situation. I know a young lady who went from Canada to Germany a few months ago. She is employed there. Her salary for doing approximately the same kind of work she did in Canada is just about half what her Canadian salary was. Her living conditions I suppose, if one could measure them, would be about a third of what they would be in Canada. So, if we want full employment on that scale, I suppose we could have that kind of full employment. A year ago while I was in Japan I spoke to an interpreter who was with our party. My wife and I asked her about her living conditions. She told us she lived in one room. She described it as a three-mat room. I asked what that was and she referred to those little mats they have on the floor, the tatami mats, which are three feet by six feet. A three-mat room is nine feet by six feet in size and for that she paid $40 a month in rent. There is a toilet down the hall and when she wanted to have a bath she had to go three blocks down the street to a community bath. This young lady was a university graduate and was employed by the Japanese government. That is full employment in Japan. I suppose if we wanted to accept that standard of living in Canada, and if Canadians were willing to cut their salaries by 50
per cent or so, we could have that kind of full employment.
We are having some economic storms in Canada at the moment, but that is not to say that the ship is in danger. Not too long ago I listened to a German economist talk about world economics. He mentioned our monetary situation and recited what, in his opinion, were the stable currencies of the world. The currencies which in his opmion in the next five or ten years, or in a generation, would be the currencies which would stand up he listed as being the Swiss franc, the German mark, the Japanese yen and the Canadian dollar. I hear the old litany from the other side of the House concerning the economic condition of Canada. I hear this over and over again. However, I do not hear any suggestions in respect of improvement which are worth listening to. We have a strange situation in Canada. One member of the opposition talked about the hon. member for Duvernay (Mr. Kierans) criticizing the government. Well, I welcome the criticism of the hon. member for Duvernay. I look forward to hearing his ideas, and his contribution in respect of improvements we can bring about in our economic system. I suspect we will hear a great deal more from him than from the opposition about what would be beneficial to the country. I think it is a sad situation when people on this side of the House have to provide the government and the opposition, too. That is the situation in which we seem to find ourselves today.
We might look at the situation in Canada today and see what the economic indicators are. My department tells me that tourism will be up this year to the highest level we have ever reached. It will exceed the level it reached during centennial year, 1967. I believe this is a pretty good economic indicator. I see that our trade surplus has reached $3 billion, the highest figure it has ever been. I think that is a pretty good economic indicator. I see that investment intentions this year are up again by 10 per cent. That is a pretty good indicator. It is expected that there will be 250,000 new housing units this year, a record level. That is a pretty good economic indicator. There are many other such indicators in the Canadian economy today.
The Department of Industry, Trade and Commerce fortunately does have some excellent programs for improving the economic situation in Canada and for improving the employment situation. Canada happens to be experiencing a rapid increase in population, particularly in that segment of the population which is in its first working years. About five years ago we recognized that this would happen, so the Department of Industry, Trade and Commerce began introducing a number of programs designed to do exactly what the members of the opposition want to see done. I refer to such programs as the industrial research and development program, which was introduced in 1966 and which now is beginning to bear full fruit. Since it was introduced about five years ago a total of 2,113 applications have been received and grants have been made in an amount of more than $75 million. The program is designed to provide for the payment of grants based on expenditures for scientific research and

May 18, 1971

development carried out in Canada. This is an area in which Canada must be very concerned.
We have been watching the research programs carried out by the major nations of the world. We see that we have a deficiency here because it is difficult for small companies to compete with large companies in conducting this kind of research. So, Canada and Canada's government has responded with a program that is bearing a great deal of fruit. During the five years this program has been under way 1,200 companies in Canada have participated in this progressive program. Also, I want to say something about the PAIT program which was introduced in 1965, a program for the advancement of industrial technology. It is a program of forgivable loans to encourage industrial growth and production by providing assistance for the development of new or improved products and processes which incorporate new technology and offer good opportunities for commercial exploitation in domestic and international markets. Since 1965, there have been 339 projects approved under this program at an estimated total cost of $162 million, with the government's share of that being $82 million. This is another successful program designed to improve productivity and employment in secondary industries in Canada and designed to do the kind of thing that has been outlined, rather vaguely I would say, in the motion of the hon. member for Waterloo.
I want to refer also to another new program, the industrial design assistance program which was begun in 1970. The primary objective of the IDAP program is to improve the competitive position of Canadian secondary industry and to expand sales in foreign markets by upgrading the design quality of Canadian products. I should like to refer to the results of that program because it is important to have a look at the positive results achieved in Canada by programs of this kind. To date-and this was just begun toward the end of last year-over 20 applications for IDAP assistance have successfully obtained agreement for funding, totalling approximately $400,000. These companies anticipate first year sales totalling $13 million, including substantial exports.
Then, we have another program called PEP. I should like to recommend this to opposition members because they could certainly use it. The objective of this program is to induce improved productivity in all manufacturing and processing sectors of the Canadian industry. As a result of the PEP program, it is expected that many of those companies which have shown a low level of productivity will start to thoroughly investigate the ways and means to become internationally competitive. The program was introduced late in 1970 and already there have been three applications for PEP assistance which have successfully obtained agreement for funding totalling approximately $50,000, and an additional six applications will be decided upon imminently.
Another program which should be mentioned is the general adjustment assistance program which was
Measures to Improve Economy
brought in after the Kennedy round. The GAAP program is primarily designed to help manufacturers take advantage of export opportunities arising from the Kennedy round. In 1970, this program was extended to assist manufacturers of textile or clothing goods or footwear.
Hon. members have heard of these programs before but they seem to forget that the Department of Industry, Trade and Commerce has a long list of such programs to combat difficulties in the Canadian economy, to encourage secondary manufacturing, and to improve economic conditions in Canada. I have not listed them all. There are many more I could mention, such as the automotive adjustment assistance program which was begun in 1965 and has had such tremendous success, and the PIDA program for the pharmaceutical industry which was begun in 1968. It, too, has been a great success. I could also mention the machinery program designed to encourage the expansion and efficiency of Canadian manufacturing by providing a reasonable measure of tariff protection to machinery manufacturer and enabling users of machinery to obtain remission of duty on imported capital equipment which is not available from Canadian production. I could go on and on with program after program, such as the shipbuilding program and the lumber and plywood export promotion program for the British Columbia industry. There are many such programs that are being used as tools by the Department of Industry, Trade and Commerce.
I must say that I cannot understand the lack of faith in the people of Canada which I hear day after day from the opposition.


Mr. Rowland:: It is not lack of faith in the people but in the government.


Bruce Andrew Thomas Howard: The most essential ingredient in the progress of a nation is confidence in the people. If we have confidence in the business and other sectors of our industry, Canada will be a progressive nation, but if the confidence of the people of Canada is destroyed, then indeed we will have difficulty in making Canada a prosperous nation. I want to recommend to members of the opposition that they lift up their shoulders and look forward at the possibilities that Canada has. They should look at the future ahead of us and at the progress that Canada is making, then Canada will indeed live up to the opportunities that we have.


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, this government will be known to history as the government that gambled and lost. Cold bloodedly and deliberately it has gambled on taking measures the textbooks prescribed to cut down inflation. It knew perfectly well that such a massive slowdown of the economy would cause massive unemployment. The Prime Minister (Mr. Trudeau) said he could live with 6 per cent unemployment. The chairman of the Prices and Incomes Commission subsequently told a university audience that he and others knew that the unemployed would bear the brunt of the fight against inflation. But this gambling govern-

May 18, 1971
Measures to Improve Economy ment went ahead trying to cure inflation by massive doses of unemployment. They gambled with the economy and lost.
In March their own member for Trinity (Mr. Hellyer) told the House that the government's policies to deal with unemployment and inflation had been a near economic disaster and a total moral disaster. While there had been a more modest rate of price increases as a result- and I may say a temporary result-the main beneficiaries of the exercise, he said, had been the people with money, and those who had suffered were the unemployed. Young Canadians, too, have suffered, he said, pointing out that last year's economic slowdown resulted in lost economic activity of $3.5 billion, an amount which, if it had been properly spent, could have provided the base for 100,000 new jobs.
But the government did not limit its reckless activities to the economy. It has gambled and is still gambling with the lives of 22 million Canadians. This government, in spite of its show of bravado, is losing ground steadily. But its loss is as nothing compared with the losses being sustained by the Canadian people. The plight of the elderly, the sick, the handicapped, the veterans, those on low fixed incomes, families on social assistance, and the unemployed is tragic and deepening with every move this gambling government makes.
Today, I want to speak particularly of the cost to young people from coast to coast. They are suffering now and because of their situation our whole Canadian future is in danger. Last fall there were plenty of warnings given after the summer we went through. Dr. Baetz of the Canadian Social Development Council gave figures to indicate that most likely there would be larger numbers of unemployed again this summer. His figures were underestimations. The figures for April of this year showed an 11,000 reduction in the number of unemployed aged 55 years or more, but a sharp increase in the number of younger workers looking for jobs. For those under 25 years, the seasonally adjusted rate of unemployment went up from 11.1 per cent in March to 12.3 per cent in April, and there were 57,000 more of them unemployed in April than there were a year ago.
As already mentioned in this debate, Arthur Smith, Chairman of the Economic Council of Canada, has warned that unemployment will be excessive for at least three years. Last year's figures showed a large number of unemployed young people. A release issued at the end of summer by the Department of Manpower showed that of
179,000	students registered across Canada for employment at the peak of summer, 68 per cent of them found jobs, 32 per cent were still seeking work, and of these 27 per cent were post-secondary students and 73 per cent were high school students. It was the high school students who had to bear the brunt of the unemployment catastrophe.
That was the situation last summer. The picture now has become even more sombre, because this year unemployment has reached up into the ranks of college graduates. It got there last year but is making a heavier impact this year. In April, a report was issued by the Science Council of Canada, not a rabble rousing body but a group of people who consider themselves to be very cautious and careful in the figures they use. This is what the report said in essence:
Half of the 14,000 or so students graduating from Canadian universities in science and engineering this year will not be "effectively utilized," according to a study prepared for the Science Council of Canada.
This figure includes graduates at the bachelor's, master's and Ph.D. level.
About 400 of the 1,200 to 1,500 post-graduate students who will receive PhD's this year could be in surplus.
Prospects for PhD's next year are bleaker. The most optimistic prediction is that 500 of the 1,800 science and engineering PhD's will be in surplus.
The outlook for the next few years is just as gloomy.
In the face of this, I do not see how there can be such whistling in the dark in such a cheerful way by members on the government benches. It is another case where there are none so blind as those who will not see, and none so deaf as those who will not hear. It is no longer just the problem of summer employment for young people that is in front of us. The cold truth of the matter is that society no longer has a place for growing numbers of young people. Under the government's policies young people are being discarded, like old cars on the junk heaps of industry. That is what has been happening to them.
I can tell hon. members on the government benches what is happening. I will take my own province of British Columbia as an example. In a memorandum dated April 8 of this year to the Vancouver City Council dealing with the subject of single transients, aged 18 to 25 years, in British Columbia, the Board of Administration reported some chilling facts.
In 1965 the 25 and under age group represented 2.5 per cent of the total population in receipt of social assistance. By 1970, this 18 to 25 year old population represented 11.4 per cent of the total receiving social assistance, an increase of almost 500 per cent in the five year period.
Population figures for British Columbia show that in the next five years there wil be a peak population of 203,000 aged 15 to 19 as compared with the present population in this age group of 182,400.
What is going to happen to the social assistance figures for British Columbia? What is going to happen to the social assistance figures for every municipality across Canada? What is going to happen to the taxpayers' ability to foot the bill? More important, what is going to happen to our young people? What is going to happen to our society? In this connection studies have been going on in British Columbia for some time, and they show what is happening right now. I can tell hon. members opposite the sort of thing that is going on now, and what their policies are doing to the young people of this country.
These studies in my own city of Vancouver show that a new style of life has been evolving for some time, a welfare life style among young people. It already is affecting about 15 per cent of a large sample of the
[Mrs. Maclnnis.j
May 18, 1971

population, young men and young women alike. These are young people who have been without work over the last months and years, and these are some of the things that the survey is finding out about them. This rot will spread because nothing is being done to check it.
This 15 per cent of our young people no longer want full-time work. Many no longer want work of any kind. They have learned to live on welfare, on a marginal income because they have no opportunity for work, and now they are used to living on welfare. Most of them are using drugs on a daily basis. They include young people from all levels of education, including university graduates. Half of them are living communally, or I suppose you could call it wholesale common-law. Most of them come from homes above the poverty level. This last fact is something which should strike home to hon. members opposite who are inclined to think that as long as the comfortable sector of society is doing well, we are living in the best of all worlds and God's in his heaven. These are young people for whom there is no place in our society. They no longer have a role in the community. They have no chance to earn their own way. They have no chance for responsibility. Without responsibility what is going to happen even to their rights as human beings?
We know that Mayor Campbell of Vancouver dismisses them as free-loaders and hopes for a bigger budget for law and order to handle what may result. We know that our provincial Minister of Rehabilitation-what a word that is to apply to P. A. Gaglardi!-believes in posting notices telling young people to stay away from British Columbia. If this continues, I suppose we shall soon find each province putting up a Chinese wall around itself, not only for chicken and egg wars but to keep out young Canadians for whom there is no work. Yet the federal government sings its soul to glory, and says we have turned the comer, that we are taking more ore out of the ground, that we are having more export trade, that everything is wonderful. But, Mr. Speaker, at the heart of this country the most important thing is that we have no place for our young people. I am talking about people. Hon. members opposite can talk about the rest of things if they like, but let me warn them that once young people have lost confidence it does not matter what hon. gentlemen opposite do with the ore, the minerals and the export trade. Their government is finished.
An hon. member opposite has said that the Canadian people should have confidence in the government. Do you expect them to have confidence in a government that carries on in this way, a government that just does not care? I see the minister nodding his head affirmatively. I am sorry, Mr. Speaker, but I must conclude that not only has he no ears and no eyes but that his heart has been replaced with something a great deal more chilly than a human heart ought to be.
In a statement on income security issued in April by the National Council of Welfare we find this sentence:
Updated estimates based on those prepared for the Carter Commission indicate that the cost to the taxpayer of indirect
Measures to Improve Economy
subsidies to the rich extended through the tax system alone is at least $800 million-one-third more than the entire family allowance program.
The Opportunities for Youth program and the other programs provided by this government, if my arithmetic is correct, will provide $82 million for unemployed youth this summer-$800 million as subsidies to the wealthy through our tax system and $82 million to the unemployed youth! It is not hard to see what should be done, Mr. Speaker. The government should cut out its widespread and unjust subsidization of those people who do not need it and should use their money to give young people the start they need.
It has been pointed out this afternoon that in order to achieve anything substantial we would have to cut our standard of living down to something akin to what exists in the nether regions of Africa. But some of us have memories of what happened when World War II came along, Mr. Speaker. Until then there had been no money for anything, but because we had a government that decided the war had to be proceeded with, suddenly we had growth and industry and all the things necessary to pursue that war. If we had the kind of government that did not have twisted and crooked values, if we had the kind that cared about people and not just the affluent elite, there would be no difficulty about putting people to work. We would clean up pollution, clean up the beaches; we would build schools, establish forests and do the other things that this country needs. We would fill the cultural gap that is so obvious in Canada and we would replan and rebuild our cities into places decent enough for people to live in.
When we say these things out loud, members of the government shake their heads and say, "We have heard nothing new". They are not new but then they are as new as Christianity in that it has never been tried. I think the government should try some of these suggestions before they say there is nothing new. Until they do we will have the young people of this country undermining the values of our society because they must.


Mr. Deputy Speaker:: Order, please. I interrupt the hon. member because her time, as limited under the special order made earlier this day, has expired.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Surrey-White Rock (Mr. Mather)-Finance-Use of portion of revenue from alcohol to combat alcoholism; the hon. member for Moose Jaw (Mr. Skoberg)-Labour Conditions-Failure to hire Saskatchewan welders for pipeline construction project in province.

May 18. 1971
Measures to Improve Economy GOVERNMENT ORDERS BUSINESS OF SUPPLY


[Stage Direction]
The House resumed consideration of the motion of Mr. Saltsman:
That this House calls upon the government to adopt immediate emergency economic measures to move the economy to high employment through special programs and more expansionary monetary and fiscal policies, and also to achieve full potential growth through a planned investment and foreign ownership policy and to stimulate the development of secondary manufacturing as the only way of providing the necessary employment opportunities for the hundreds of thousands of Canadians who enter the work force every year.
Mr. J. H. Horner (Crowfool):: Mr. Speaker, I should like to say a few words in support of the motion before us on the subject of economic conditions. I believe that we need to adopt a more expansionary philosophy in connection with our monetary and fiscal policies, particularly now that so many people are unemployed. I congratulate the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) upon expressing her concern for people. The sad part is that much of what she said is true. I am not going to deal with the question of unemployment rates as the Leader of the Official Opposition dealt with them at length.
I should like to take a brief look at what has gone on in Canada in the last five of six years. We have seen Mr. Trudeau and Mr. Benson parrying on an experiment to find out whether a country the size of Canada could control inflation and to learn what the net result of it would be. In looking at Canada's economic picture from 1965 to 1968, we find that this country had the highest rate of inflation in what might be called the western world. I believe only The Netherlands exceeded Canada's rate of inflation during that period. That was because they had just recently removed the wage and price controls in that country.
From July 1968 until December 1970, Canada had the lowest rate of inflation in the western world, so we went from a period of sharply accelerated inflation to a period of very low inflation-in fact, no inflation at all. I think the rate for the last full year was 1.9 per cent and perhaps this is good. Perhaps the government should be patted on the back. They attempted to do this themselves on January 1, 1971, when the Prime Minister said that he had inflation licked. But what did he say a year earlier on January 1, 1970? He said that we would have to live with unemployment and that even if it got above 6 per cent we would still have to live with it. He was determined to control or curtail inflation. What effect did this sharp reduction of inflation have in Canada from June 1968 to the end of 1970? Well, we had an influx of foreign moneys. The dollar seeks a place where it can find the highest rate of return, so dollars came to Canada. We still kept a tight monetary policy and we had to float our dollar or it would have cost us an
enormous amount of money to pay the difference in exchange.
Floating the Canadian dollar cost us, as primary producers and producers of manufactured goods, millions of dollars. And was it necessary? What was the net result of this curtailed rate of growth, this curtailed monetary policy? The Prime Minister indicated the result last week on the television program "Weekend" when he said:
... the Canadian dollar is so strong indeed that it is hurting our export trade because people are finding it cheaper to import goods and more difficult to sell them abroad.
What does this mean to the Canadian seeking work? It creates a situation where it is cheaper to buy goods that come into Canada and it is more difficult to sell the goods produced in Canada, therefore our export total goes down and our import total goes up. Of course, this creates unemployment. Perhaps Mr. Smith of the Economic Council of Canada was correct when, in the fifth or sixth report of that council, he said that Canada really cannot control its rate of inflation and if we do perhaps it will cause undue hardship on various segments of our society. Unpalatable as that statement may be, I think it must be reckoned with and we have to accept portions of it. What portion of the Canadian economy can Canadians control? What portion of the monetary policy of Canada can Canadians control?
First of all, I think Canada should control the rate of differential between the Canadian dollar and the American dollar, the mark, the yen or whatever it might be. We can control that, and we should make a determined effort to see that our dollar should be 8 per cent, 10 per cent or 5 per cent less in value than the American dollar. In this country we are faced with a different cost of production. We produce for a small home market. We produce mainly in a winter climate and therefore we should have a differential of about 8 per cent between our dollar and the American dollar. In doing this, we must recognize that we have to allow our dollar to inflate at a rate similar to the currencies in the rest of the western world, particularly the United States dollar.
It is well known that a crisis developed because the value fixed for our currency was out of line with the value that the free forces of the market would have established. That is why Germany recently, after having gone through a similar period, has had to float its currency. I think that we need a basic expansionary policy which will allow our money supply to expand. It is interesting to note that even although we have gone through a two-year period of tight money in this country, the government is still wondering which is worse, unemployment or inflation. Last month, I think, the Prime Minister issued a grave warning that we were not to permit another inflationary spiral to take place.
Actually, Canada is a country that can be hurt in two ways. If we permit our economy to inflate too fast, we shall price ourselves out of world markets. On the other hand, if our fiscal policies are too restrictive, our money will increase in value and we shall, as well, price our-

May 18, 1971

selves out of world markets. In that sense, as I say, we can price ourselves out of world markets. We must not allow our economy to inflate too quickly and neither must we embark on too stringent a monetary policy. I think it has been accepted that we must try to balance the scales in that regard.
Whether you judge the Minister of Finance (Mr. Benson) in a political or non-political sense, you will see that he has failed to balance the economy and to keep in step with the rest of the world. Here, he has failed miserably. He brought about a period of high inflation prior to 1968; that priced us out of world markets. Then he tried to curtail inflation too rapidly between 1968 and 1970 and, since it became cheaper to import goods than to produce our own, we were also priced out of the market. Our money became more valuable and that increased the price of our products in world markets. Both actions have brought the same result.
It is no wonder that the hon. member for Duvemay (Mr. Kierans), who was formerly minister in charge of the Post Office, resigned. He became thoroughly disgusted with the inept job the Minister of Finance is doing. In other words, he passed judgment on the government. He had given advice to the Minister of Finance. One could read the speech that the hon. member gave on June 2, 1970. He recognized, on June 2, that the Canadian dollar was strong and far stronger than the American dollar. If I had time I would read what he said in that speech about the floating of the Canadian dollar. He recognized that if we were not careful, we could price ourselves out of world markets, especially if we adopted too stringent a monetary policy.
It is interesting to note what Mr. Rasminsky, head of the Bank of Canada, had to say about this matter. The Toronto Telegram of Friday, April 30, contained this report:
Mr. Rasminsky's position on the direction of economic policy is this: Economic growth should be geared to ensure a steady reduction in unemployment while simultaneously 'avoiding an expansion so rapid that it would over-shoot the mark.'
In other words, he recognizes clearly this question of balance. We must maintain this balance which involves on the one hand our own economic and monetary policy and, on the other, the actions of those with whom we trade. Canada really is a major trading nation. In British Columbia, the Prime Minister said that almost 50 per cent of our goods are exported. I think the figure is higher than that. I think probably about 70 per cent of Canadian production, either directly or indirectly, is export oriented. Our monetary policy, in other words, must keep in step with that of our trading partners, basically the countries of the western world. The Minister of Finance has failed miserably to accomplish this. If we had kept in step we would not have needed to float our dollar, unless he wanted our dollar to come up to par with the United States dollar. I have not heard him say that. On the other hand, I have heard him say that he wants our dollar to be worth 95 cents or less in terms of the United States dollar. He ought to be taking steps to do that and he is not doing so.
Measures to Improve Economy
The Prime Minister is still caught up in his fears about inflation. He wonders which is best, high employment and high inflation or high unemployment and no inflation. You cannot state the problem that simply. We have to consider the rest of the world. If there is inflation in the rest of the world, surely we need some inflation in Canada, although I should like to think of it as being lower than that in the rest of the world. Otherwise, our dollar would become too strong and we would price ourselves out of world markets in that way, as well. We can clearly see that we have been out of step with our trading partners in the western world. We must get in step with them, because a great deal of Canada's employment depends on export projects.
Why does this country which is capable of producing a great deal depend so much on exports? We do not have to depend on exports. The fact of the matter is that we can buy imports more cheaply than the goods we can produce here. So, we must get in step with the rest of the world so that Canadians can be induced to buy Canadian produced goods and so that Canadian produced goods have a chance in the markets of the world. The Minister of Finance has failed in that Canada's monetary policy has not kept in step with policies prevailing in the rest of the world. He has failed miserably in creating an economic climate in Canada in which the current work force will be absorbed in the economy and in which the increase in the labour force, an increase resulting from the natural rate of growth in this country, will be absorbed in the economy. To my way of thinking that is the most serious charge to be made against the minister. I commend the hon. member for Duvernay for resigning from the cabinet. In doing so he pointed out vividly to the Canadian people that all was not well with our economic policies and that action ought to be taken.
I urge the Canadian people who are to go to the polls on May 31 in the four by-elections to register their disgust with the way the Canadian government has managed their economic affairs. One could talk about monetary policy all day; that really does not touch the imaginations of many of the little people throughout Canada. On the other hand, the subject does touch the pocketbooks of many of our little people and, as the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) so aptly put it, government policies have detracted from the opportunities of young people to become part of the growing and viable economy that we ought to have in Canada. I severely condemn the Minister of Finance because of his inept handling of the Canadian economy and economic policy in the past two years.


John Howard Lundrigan: Mr. Speaker, on May 18, 1971, with June around the corner and July and August in our immediate future, with September looming, that being the month in which we begin to see lay-offs in small industries and decreasing employment opportunities, with the temperatures in the seventies and the prospect of temperatures rising to the eight-ties. we should not be talking about unemployment. It was no consolation to Canadians who listened to the Minister of Finance (Mr. Benson) today to hear that he

May 18, 1971
Measures to Improve Economy blamed unemployment on God and on a late spring. First, it is not correct that we have had a late spring. Actually, in those areas where we have the worst unemployment at the moment, spring has been at least one month early. I was astounded to learn this week that the regional director for the Atlantic region said there was excessive unemployment in that area because of the late spring. He knows that is not correct, and he knows that spring this year has been relatively early.
It was little consolation to listen to the Prime Minister (Mr. Trudeau) on national television on Sunday night talking about the reasons behind government policies of about one year ago. He suggested that they created the situation we have today. The Prime Minister suggested that Canada had to opt for an anti-inflationary policy because inflation and the runaway effects of inflation would have such a detrimental effect on unemployment. Of all the countries, the minister used Latin America as an example. He said that we can see what is happening in Latin America. He tried to create the impression that today inflation in Canada had reached such devastating proportions that it had to be brought under control at all costs. Second, he indicated that because we are an exporting nation largely dependent on exports to the United States and other countries, inflation had to be checked. Third, he indicated that the reason it had to be checked was its effect on the little man, people on fixed incomes, seasonally employed, on pensions and people who receive $250 or $300 a month on which to raise a family. These are the people who will be hurt if inflation is not brought under control.
The fallacies are simple. The Prime Minister and his government have created the demon of inflation. Inflation had never reached the proportions it reached in Canada in 1970. We never had to create massive unemployment to bring it under control. The Prime Minister created the feeling of "Trudeauphobia" and the fear of inflation in order to justify the sad state of affairs, as well as the selection of very serious and chronic economic policies.
The minister referred to the export situation. We all know that if we have inflation at the rate of 10 per cent a year and our neighbours have inflation at the rate of 5 per cent a year, we are hurting our export markets. The fact is that our greatest export market, the United States, had an inflationary rate of 6 per cent last year. We had a rate of 1.5 per cent. I am no economist, but it is simple logic that the aim of Canada should be to keep inflation in harmony with that in the nations to which we export our produce in order to remain competitive. The fact is that it is a comparative problem.
Another fallacy is that the very people the Prime Minister wants to help with his anti-inflation policies, those on fixed incomes, seasonally and marginally employed and the unemployed, are the people who have been most adversely affected. They have been rendered unemployed. Members opposite know that this is a fact.
The results of the present policies have been massive unemployment, an increase in regional disparity, much
more difficulty in trying to export the unfinished resource products of the agricultural industry, the forest industry including the paper industry, the fishing industry and the mining industry. All those areas which differ from the more industrialized regions of Canada, such as the Atlantic region, Quebec, and the northern prairie region and parts of British Columbia are the areas that have been most adversely affected.
We have had a tremendous loss in potential. If members had time to ponder this fact, they would see the effect which this loss of potential had on Canada. If an industry is forced to cut back, lay off and produce at a slower rate, it has to charge more in order to increase its margin of profit. Everyone knows the effect that has on inflation. It is impossible for any member to develop the extent of the problem in 15 minutes. In the few minutes which I have, I want to dwell on some suggestions. I have been advised by the Minister of Finance (Mr. Benson) that he will at least read these recommendations.
First, the minister should seriously consider abdicating his role as Minister of Finance. I do not believe that the minister has confidence in his policies. In fact, I do not believe they are his policies. I believe that the Prime Minister is cramming these policies down the throats of the cabinet members. Like the Canadian people, whether they like it or lump it, they have to swallow them. The Minister of Finance ought to be honourable and consider abdicating his present role.
Second, it is time that the Prime Minister assumed his responsibility and stated what the Canadian government, now in power with 152 members, has as its expectations for inflation and unemployment In Canada in 1971 and for successive years. Someone has to assume the responsibility of setting the goals and expectations for the Canadian nation. Will we tolerate 3 per cent inflation? Are we prepared to tolerate 6 per cent inflation? Are we prepared to tolerate 3 per cent unemployment? What are the goals the Canadian people can expect for 1971 and the successive years?
It is not good enough for the Prime Minister to appear on national television and ask the Canadian people to define what is meant by the term "full unemployment". This government which was elected by the Canadian people has the responsibility of setting the goals and expectations. If they are not prepared to do this, the least they can do is reduce expenditures $2 million by laying off Mr. Young and his bunch of boys who are running political interference for the government.
Third, the government should reassess its monetary and fiscal policies on a regional basis. I visited the province of Prince Edward Island last week. This month that province has 10.1 per cent unemployment on an actual unemployment basis. I believe that is the figure. The reason for this situation is that they cannot sell their agricultural produce to the New England market because of the tariff structure. The time has come when the government must realize that policies which are uniformly applied across Canada disadvantage some regions, especially the slow growth areas. We are the first to feel the pinch and slow down. We feel it to the greatest extent. We are the last to feel the effects of recovery.
[Mr. Lundrigan.l
May 18, 1971

Somebody has to face these facts, even though our small population does not justify it on a political basis.
Fourth, we must reassess our policy of incentives and loans to industry, especially in the slow growth areas. The three recent reports by the Minister of Finance and his parliamentary secretary bear me out on this. They indicate that in the slow growth areas, such as in the Atlantic regions, particular industries cannot avail themselves of the loans guaranteed by the government. The lending institutions refuse to co-operate. I am not saying the legislation is bad, but some way has to be found to enable industries to take fuller advantage of loan programs. If we expect these industries to recover, expand, grow and develop, we must make money available to them. The industries that And it most difficult to avail themselves of loans at the present time are the industries in the slow growth areas.
The major point I want to make is that the tax uncertainty in this nation has a crippling effect on our economy. People do not know where they are going. They do not know whether to expand. They do not know whether to take their few dollars out of the bank and invest them because they do not know when this valuation of assets will take place. They do not know about capital gains, the protective tariffs for small business and concessions to mining companies. All in all, the tax uncertainty is having a detrimental effect on the economy. The minister has been on the horns of a dilemma for a year in connection with these tax proposals. I am not prepared to wait for a month. Some indication has to be given of the present tax position of this government.
Another point is that the government must reassess its priorities. Many members religiously avoid mentioning the emphasis that is put today on linguistic equality in this nation. I continuously receive representations from concerned Canadian taxpayers on this matter. There is a tremendous effort being made in this country to bring about linguistic equality. On the west coast of the province of Newfoundland there is a place called Port au Port. The hon. member who represents that area can speak with authority on this. There is a very small group of people who live in that district who have been assimilated over the years. Now, this area has been classified as a bilingual district. Everything must be done on a bilingual basis, including the distribution of information. I believe it was in 1964 that Professor Stoker, a linguistic expert at the university, said that three years previously the process of assimilation had reached the stage where the people no longer had any desire to have a separate culture or anything of this nature. Yet that part of our country has been designated as a bilingual district.
Every day dozens of circulars and pieces of literature cross my desk. Whether we like it or not, they are printed in both languages. I can go further and state that there are civil servants taking language immersion courses who will retire before their courses are completed. There is no sense to this. I contend that a lot of problems in Canada, including Quebec, are economic, not language problems. I would like to see the present gov-
Measures to Improve Economy ernment reassess the problems and adopt some policy positions.
Ever since 1968 the Prime Minister of this country has acted like a great, charismatic leader on television, in this House and elsewhere. I have never heard him state in the House or publicly what he considers to be the priorities for this nation. I have never heard him state any clear, definitive policy positions. I have never heard him state any manpower policy positions. I have never heard him state any foreign-ownership policy positions. I have never heard him state any resource development policy position. This country cannot continue without being given some indication of over-all government policy.
You cannot kiss away the problems facing the Canadian nation at this moment. You cannot kiss away the unemployment problem facing Canada, the depression being experienced by the agricultural industry or the forest industry. Someone has to stand up and sanely, soberly and rationally lay down priorities and policy positions that are based on hard-nosed facts.
This is not a popularity contest that we are running, Mr. Speaker. Here we are in the month of May, and I suggest it is not enough for the Minister of Finance to tell the country that we are going to recover, that unemployment is going downhill. Are Canadians going to be satisfied come September when they have had only six weeks' work? I remind hon. gentlemen across the way that there are 659,000 Canadians out of work. Are they going to be satisfied, when the lay-offs start in September and the cold winter months are ahead of them, that this country is commencing a recovery? In my own province 16.4 per cent of the people are unemployed. This represents 25,000 people. This is the most diluted kind of statistic because the true figure may be more than 20 per cent. When people tell me that things are going to be better next week, I tell them that they are not better today. The Trudeaumania that swept this country in 1968 is fast becoming Trudeauphobia, and it is time we brought it to a stop.


John Stratford Burton: Mr. Speaker, I think the evidence that has been presented to members of this House in the past few days, and over the past several months in particular, demonstrates a total failure on the part of the government to deal with the problems facing the Canadian economy. I feel that the actions taken by the Liberal government can be summed up by placing them in three general categories. We have seen examples of gross mismanagement, of poor or bad judgment, and a lack of courage in dealing with Canada's economic problems.
If I may turn to each of these three categories in turn, one example of mismanagement that comes readily to mind has to do with the student summer employment program announced by the government not long ago. I find it very interesting to note the comments of some of the officials who say they feel we are doing reasonably

May 18, 1971
Measures to Improve Economy well in dealing with this situation, considering that the program had been introduced so late in the season. I suggest this is nothing but poor management. The government has been unable to bring forward its announcements and plans until this late date, and this will have a detrimental effect on solving the over-all problems facing the Canadian economy at this time.
Secondly, with respect to poor judgment we have very ready examples of this in the inadequacy of government programs which have been introduced over the past year or two to cope with the series of economic problems that have arisen. I have read in a number of publications, such as The Executive, a magazine certainly not unsympathetic to the federal government, and elsewhere that government officials were astounded that the economy had been so slow in responding to some of the policy initiatives introduced by the government, first of all to deal with the problem of inflation which the government was really rolling up its sleeves to tackle. It took a long time to get any sort of response at all. I read that government officials simply could not understand this and were very surprised that the economy was so slow in responding to the measures taken by the government.
Similarly in dealing with the unemployment problem which has grown rapidly during the past winter, again government officials could not understand, according to some of the publications I have read, why it took so long for the economy to respond to some of the initiatives that the Minister of Finance (Mr. Benson) and others were bragging about in this House. I feel this is a case of poor judgment. Somehow the government has lost its grip on and control of the situation. It is not able to handle it any longer, so it flounders about from crisis to crisis. In addition we have seen a demonstrated lack of courage in tackling some of the problems that exist.
To analyse the situation I think we must look at what is happening to the Canadian economy today. Why have government officials been so surprised? Why has the government found it difficult to understand why the economy has been so slow to respond to policy initiatives? I think the answer is very simple: the Canadian economy has changed. It is a different sort of economy today from what it was a number of years ago. Today we have a managed economy, not an economy managed by the government or an economy that is operating in a free market but one that for the most part is controlled by large corporations which call the tune, which take the initiatives that determine the course of affairs in the Canadian economy. I have seen it demonstrated by this government that it is not willing to tackle the sources of economic power in Canada, or the seat of economy power in Canada, in order to deal with the economic problems that are plaguing the Canadian nation.
This afternoon I listened to the Minister of Finance taking part in this debate and could not help but feel sorry for him. I thought back to last Thursday and his statements about the unemployment figures that were announced. He simply could not understand what was the trouble, what was causing the increase or why it was that government policies had not been more effective. He
was floundering about in helpless fashion. We had a further example this afternoon when the minister was pretty hard put to try to come up with any sort of plausible defence of government policy.
It seems to me that there is a noticeable lack of enthusiasm and support for the minister and his policies from the government benches. This is demonstrated by the absence of participation in this debate by government members. Since the Minister of Finance spoke, I understand that one other government member has made a speech in the debate, which is one more indicator to me that there is a very noticeable lack of enthusiasm for the policies of the minister and for the situation in which he finds himself. In response to the speech made by my colleague from Waterloo (Mr. Saltsman) the minister tried to say that many countries would like to have an economy with the record that Canada's has. I question that statement very much. Many countries are doing as well as or better than Canada, and with a good deal less in the way of resources at their disposal.
I note that the minister also disagreed with my colleague in his references to the need to put the resource industries of Canada-the primary resource industries, the minerals industry, and so on-on the same footing as the rest of the Canadian economy and to take away the special advantages that they enjoy today. The minister has the right to disagree. In fact, in doing so he is being consistent because this is in line with the statements he has made over the past several months in which he made it very clear that the tax concessions which these industries have enjoyed for so many years will be continued for a further period.
I also noted that the Minister of Finance did acknowledge that there were some problems. I believe he referred to them as trouble spots in Canada. It seems to me a rather euphemistic expression, to refer to the 659,000 people in Canada who were out of work during the month of April as simply being trouble spots. That is a great many trouble spots! I suggest it is time the Minister of Finance woke up and realized the situation.
He also attempted to analyse the unemployment situation. If I interpreted him correctly, he gave the impression there are problems but things are going all right; there are some good indicators in the Canadian economy which show that things are on the upward trend. This does not do away with the fact that there are still 659,000 people out of work.
I was also amazed to note that the Minister of Finance was so hard up to find a defence for his policies and, in some cases, the lack of them, that he had to start worrying about the recent NDP federal convention. I suggest he will have to worry a great deal more about the NDP and its federal convention than he has up to the present time. I assure him, just to set his mind at rest, that there is absolutely no problem of reconciliation between NDP policy as set down at that convention and past conventions and the position being taken by NDP members of the House of Commons.

May 18, 1971

The Minister of Finance did acknowledge that there were some problems concerning unemployment, and that unemployment was at a level which made all of us unhappy. I should not expect any less from the minister in that regard. It seems to me he must take a closer look at what is happening to the Canadian economy at the present time. The fact is that in April, 1971, there were
342.000	people in Canada who had been out of work for four months or longer. That compares with 308,000 people in the same category in March, 1971, and only
229.000 in the same category in April of 1970.
Attention has also been drawn to the large number of
young people who are out of work at the present time. This is a source of serious concern in Canada. I also find that there has been an increase in unemployment at every age level set out by the Dominion Bureau of Statistics. I noticed that the minister was so hard pressed to deal with the problem that he had to blame it on the winter. I acknowledge there have been problems in some parts of Canada in that regard which would have a temporary effect and which may be overcome in another month. I also know that in every region across Canada, except in the parts furthest west, there was a notable increase in unemployment in the month of April as compared with March.
In the Atlantic region, unemployment for April was 11.6 per cent, compared with 10.9 per cent in the month of March. I have not been in the Atlantic provinces recently, but the information I have does not suggest that their winter or spring conditions were so bad they could account for the increase in unemployment that took place between March and April. It seems to me a much closer analysis is required of the situation than the Minister of Finance has come forward with up to the present time.
I should like to briefly refer to three areas which I think deserve special attention in attempting to deal with Canada's serious economic situation. The first area concerns the problems of rural Canada. This is having a very serious effect on the Canadian economy. Farm income in Canada in 1970 was $1,198 million, which is 23.9 per cent less than the 1969 level of $1,595 million. This is bound to have a serious effect on the Canadian economy and on employment in centres such as Brantford where a large part of the farm machinery manufacturing industry is located.
In my own province of Saskatchewan, the farm net income in 1970 was $202 million. This is $200 million less than the $402 million for 1969. In 1970 the net income level for farmers in Saskatchewan was cut in half. We see the results of what is happening in the drift away from farms into the cities of people who do not have skills with which they can demand a decent and adequate level of income. We also see what is happening to our rural communities and small urban centres, those complexes involved with the rural community structure. We have made proposals for emergency assistance on a long-term basis which would help to deal with these problems by increasing the net income available to farmers and our rural people. These would be much more beneficial than the proposals which have been brought forward by the government.
Measures to Improve Economy
Secondly, I suggest the government's policy dealing with regional development has been an unmitigated disaster. The minister sloughs off criticism, but he is not able to come up with any concrete answers. He simply says we are doing all right, we are giving away millions of dollars in grants, much of it to large corporations which have no need of it. There are no plans available to deal with the economic problems of the underdeveloped regions of Canada or regions which do not come up to the average of Canadian income.
I suggest, thirdly, there is a need for reorientation of our trade policy. I noticed the Minister of Industry, Trade and Commerce (Mr. Pepin) was bragging this afternoon about our export surplus when answering a question during the question period. On the other hand, the Minister of Finance was expressing concern and worry about the export surplus. This shows that the government is having a good deal of difficulty co-ordinating its position. We must find out what our trade policy is. The Minister of Industry, Trade and Commerce always answers by saying we must keep a balance.
What is the government doing to take into account the growth of new trade complexes, particularly the European Common Market? How are we going to adjust to this, and what is the government's response? The minister says we are going to undertake multilateral negotiations to reduce tariffs and other non-tariff trade barriers in Canada. We have to come up with alternatives. Canada must consider what it will do if such multilateral negotiations are not successful or are not possible. We have yet to hear from the government what its answers are. I commend the motion moved by my colleague the hon. member for Waterloo (Mr. Saltsman).


William Gordon Ritchie: Mr. Speaker, while I cannot support this motion put forward by the hon. member of the NDP, I think it is a good idea in one sense to have a debate at this time on the economic status of the country. I say this for three reasons. This country is experiencing, and in all likelihood will continue to experience, levels of unemployment without economic or humane justification. It has become manifestly apparent that the government's attempts to curb inflation have not been successful in that they have not had any effect in reducing unemployment.
Finally, the government has allowed the Canadian dollar to reach a level in international monetary markets which, by the Prime Minister's own admission recently in Vancouver, is harming our international trade upon which our economy is vitally dependent. This can be related particularly to the economy of the western grains industry which last year lost $90 million to $100 million as a result of the increased value of the dollar.
The government has suffered the embarrassment of having two of its most articulate ministers resign from the cabinet over its economic policies. In more normal times one would be content to view such resignations as a somewhat unavoidable result of the interplay of strong personalities. However, when one examines the figures of the labour force contained in the press release for the week ending April 17, he finds that the unadjusted rate

May 18, 1971
Measures to Improve Economy of unemployment is 7.8 per cent. When one also remembers that the increase in unemployment is the largest in 13 years, one begins to understand some of the true and bitter realities of the current state of our economy.
It cannot but be cause for the most serious concern by each of us in the House when we remember that the unemployment figures to which I have referred do not include the effect on the Canadian labour force of the several hundred thousand young people who will be leaving our secondary schools, technical colleges and universities to seek either permanent or temporary employment. Let us also remember that at about this time of year a very large percentage of the people undergoing training courses sponsored by the Department of Manpower and Immigration will be coming onto the labour market.
Notwithstanding the infinitely broader and perhaps even more fundamental question of the effects of automation on the concept of full employment in a highly industrialized and specialized society such as we have, we must remember that not only is the work ethic still dominant in Canada but more important is the fact that work is a basic necessity for the individual's well-being as well as that of the nation collectively. In our society one is defined largely in terms of what he does to earn his living. I do not suggest that this is a correct concept, but it is an inescapable fact. Thus, when one is deprived of the opportunity to earn his living he becomes deprived of much of his personal sense of worth.
The sociological and psychological effects of mass unemployment, particularly amongst our young, well educated people, our skilled tradesmen and technicians, is an evil which must be rooted out of our society before it leads to the most destructive consequences. No longer are our people prepared to accept such conditions as inevitable features of a free enterprise economy. If the government cannot find the solution to the malignancy of massive unemployment, I have not the slightest doubt that the radical forces in this country will be joined by a great many of our younger citizens who Eire, understandably, disillusioned with the inability of the government, with all its massive resources, to lead this country in a manner which enables those who are capable and desirous of working to find appropriate employment.
Mr. Speaker, it is all very well for the Prime Minister (Mr. Trudeau) to say that he accepts the responsibility for unemployment, but I ask: What are the practical effects of such a declaration? Does it in any significant way ease the soul-destroying anguish of the unemployed father whose insurance benefits have expired and who, still being unable to find employment because of the government's economic policies, must now resort to the indignity of seeking welfare to sustain his family? I can assure you that the Prime Minister's words are of no comfort whatever.
There is an old cliche which states that poverty is not a disgrace. I say that in this country, in this day and age, poverty brought about in large measure by the government's deliberate policies is not only a disgrace but a moral condemnation of our whole society. We are not without control over our economic destiny and when the government embarks on certain courses of action it is because it has chosen them over others. The policies which the present government has pursued in attempting to manage the economy reflect the most insensitive aspects of nineteenth century economic thinking.
One can only hope that on some glorious day in the next few weeks, possibly on the occasion of the presentation of the budget to this House next month, the Minister of Finance (Mr. Benson) and his chief advisers will be dragged into the twentieth century, notwithstanding the resistance which they will obviously offer to the pursuit of policies which reflect and serve the needs of the average Canadian as opposed to satisfying the view of the government's economic advisers whose advice, presuming it has been accepted, has so disastrously affected our country.
Mr. Speaker, figures recently released by the government indicate that its battle against inflation could well result in its being routed out of office by a justifiably angered population. The trend in the first quarter of this year indicates that if inflation continues to grow at its present rate we shall have nearly 6 per cent inflation for the whole year. Once again, people on fixed incomes or modest pensions, who are supposed to be the beneficiaries of the government's anti-inflationary policies, will be the most cruelly affected. We must also consider the effect of this renewed round of inflationary pressures on interest rates generally in our economy.
In the Globe and Mail of today I noted in the financial section an article entitled "Interest rate rise looms". The article dealt in general terms with the effect on interest rates in the United States of the current international monetary difficulties in Europe, as well as the general reappearance of inflationary factors in the economy. I should like to quote one paragraph from that article because of its relevance to Canada. It reads:
An indication of the kind of problems posed to potential borrowers by today's capital market conditions is Quebec's continuing hesitation over its planned 100 million dollars (United States) issue in New York. Postponed once because of market uncertainties, this is currently scheduled for early next week. But the province's financial managers remain very concerned about disturbed market conditions, and it would not be at all surprising if the issue were postponed again.
Mr. Speaker, when borrowers become apprehensive about borrowing because of existing interest rates, or provisions in their borrowing contracts to provide for adjustments according to market fluctuations, or when lenders refuse to do so unless borrowers agree to escalator clauses in the borrowing market, then the market reaches a situation which prohibits growth because the capital investment on which our economy is so dependent becomes simply too speculative and risky for either the borrower or the lender.
When mortgage rates-I Eim speaking of prime mortgages-command interest rates of 10 per cent and 11 per cent as they have in recent months, and when businessmen must pay similar rates or even higher in order to

May 18, 1971

borrow money needed for their day to day operations, one sees just how blatantly ineffective the government's so-called anti-inflationary policies have been. What disturbs me is that our chartered banks, trust and insurance companies and other major lenders having tasted the sweet blood of double-figured interest rates will not be content to have interest rates return to sensible levels. Again, I think it is quite clear that the government's record in attempting to use its influence and authority to drive down interest rates has been singularly ineffective.
On March 18 there appeared a very timely and forthright editorial in the Globe and Mail on Canada's chartered banks, entitled "Their account is overdrawn". I should like to quote the first paragraph of this editorial.


Mr. Speaker:: Order, please. I should bring to the attention of hon. members that it is six o'clock. The hon. member has about five minutes remaining to him by virtue of the order passed earlier this day. Is it the wish of hon. members that the hon. member for Dauphin (Mr. Ritchie) be allowed to conclude his remarks now?


Some hon. Members:: Agreed.


William Gordon Ritchie: Thank you, Mr. Speaker. I should also like to thank the House for its courtesy. I was about to quote an editorial which reads in part as follows:
Things are tough all over, as the spokesmen for Canada's chartered banks were saying just the other day. So they have sought unanimous solace in an adjustment of the charges they make for most services. There will be a 33 per cent increase in charges on current accounts, a 27 per cent increase in the cost of writing personal cheques, and a 33 per cent increase in the charge for paying utility bills through bank branches.
Mr. Speaker, I shall leave that point and pass on to my last point of disagreement with the government's management of our economy, which involves the unpegging of the Canadian dollar. At a time when Canadian industry has been experiencing inflation at home increasingly strong competition from other countries for its world markets and excessive demands by some parts of the economy, the government has for some mysterious reason seen fit to aggravate their difficulties by unpegging our dollar and allowing it to rise to parity with the United States dollar. In fairness I must say that the Minister of Finance and the government have been consistent in refusing to alter the decision once it had been made. No matter how harmful or manifestly wrong it is shown to be for Canada, they will nevertheless continue to cling to it.
Mr. Speaker, in the Montreal Gazette of May 6, 1971, there appeared an article by that paper's financial columnist, Mr. John Meyer, entitled "And what if our dollar had been repegged?". It reads:
Finance Minister Benson has refused to be rushed into repegging the Canadian dollar. The wisdom of that course should now be readily apparent in the difficulties being experienced by West Germany and, to a lesser degree, Holland, Belgium, Austria and Switzerland. The deutschemark has been formally set afloat and the currencies of the other countries are floating in fact, if not yet formally proclaimed to be doing so.
Measures to Improve Economy
Had the Canadian dollar been repegged, it too would be under the sort of pressure being felt in Europe and which, in the long run, courts national bankruptcy to attempt to resist indefinitely.
Finally, he says:
It's extremely doubtful that the United States feels any serious compulsion to go beyond the current adjustments in its policies. Why should it? It's the principal beneficiary of any upward revaluation, relative to the U.S. dollar, or the deutschemark or any other currency, including the Canadian dollar. The higher the foreign currency, the less competitive are imports, the more competitive American exports ...
What is being demonstrated here is the extent to which, in a context of fixed currency relationships, the policies adopted in the United States can influence those of its trading partners. When those policies are taken to extremes, as they have been the past two years, they can cause similarly extreme reactions abroad until relief is obtained by breaking away from a fixed relationship.
I think it is time for the Canadian government to look at the repegging of the Canadian dollar, even if it is done in the so-called narrow range, with a crawling peg or by some other mechanism. I think our exports will be hurt badly if we do not look very closely at the value of the Canadian dollar.


Mr. Speaker:: It being after six o'clock, I do now leave the chair. The House will resume at 8 p.m.
At 6.05 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Jean-Luc Pepin: Mr. Speaker, my personal approach to the economic question is dictated by a strong sense of relativity. In every crisis I have witnessed, in Canada or abroad, I have seen very competent men, men of demonstrated good will, taking completely opposite positions, offering contradictory solutions. The good remedies of some may have failed and the bad remedies of others may have succeeded. This may be the reason why some newspapers print in separate but opposite columns the differing opinions of experts, namely to pinpoint their variety of opinions.
I drew the conclusion, Mr. Speaker, that economics is an inaccurate science and a difficult art where humility is appropriate, and even essential. That is why I consider as somewhat out of place certain opinions expressed this afternoon, in particular by the hon. member for Waterloo (Mr. Saltsman)-who is usually such a likable fellow- who terms the government as "ignorant, incompetent, dishonest and arrogant".
The Leader of the Opposition (Mr. Stanfield) spoke somewhat in the same vein, using the words "complacency, drifting, creating massive unemployment", etc., and charging the government with systematically creating unemployment, as if the control of inflation was not

Secondary industry is not having an easy time in this country at the moment, I will admit. This is known and recognized by the government, and the reasons are also well known. Canada has a small domestic market, there is a restriction to trade in the world and, consequently, a lack of economies of scale and specialization in many cases.


Eldon Mattison Woolliams: A free dollar was out of competition with the rest of the world.


Jean-Luc Pepin: I will come to that.


Eldon Mattison Woolliams: I don't know who wrote that, but I am just telling you.


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


Jean-Luc Pepin: I am well aware of a few things, and some others that my friend is not aware of. The government is working hard to improve the basic viability of this important sector of our economy. This is done by providing assistance covering all stages of the product cycle and helping in the rationalization of sectors in difficulty. It is also being done by gaining access to wider markets and by active participation in international negotiations.
If I had more time, Mr. Speaker, I would indicate the extent of negotiations going on right now in all parts of the world in which this government is having some sue-
TMr. Pepin.]
May 18, 1971

cess recently as, for instance, the EEC enlargement negotiations.
The government is also providing assistance to marketing by exporters all around the world. These efforts are bearing fruit, as witness the improvement in the manufacturing sector of the Canadian economy, in output, productivity, employment, investment and export of manufactured products.
On a number of occasions I have told the hon. member for Prince Edward-Hastings (Mr. Hees) that manufactured products constitute a greater and greater part of our export performance. They have increased from about 10 per cent at the beginning of the sixties to something like 40 per cent at the present time. Those who say that there has been no major improvement in the situation pertaining to secondary industries should look at the facts.
I recognize, however, that the forward trend was interrupted last year. I am aware of the monetary situation not only in Canada but in the world in that period. There was slow demand in Canada and in the United States, labour and other cost increases, high interest rates, low returns to producers. In such circumstances, everything that is relatively marginal in the secondary industry sector is, of course, subject to tremendous pressure.


Robert Norman Thompson: Bad government policy.


Jean-Luc Pepin: Is that the extent of the contribution of the hon. member to this debate?


Robert Norman Thompson: Give us time.


Jean-Luc Pepin: A number of these factors, Mr. Speaker, are in the process of being corrected. My department is doing all it can to counter these forces, with some success. First of all, our services as a department are becoming more competent, more aggressive and are being better received by industry. Research and development funds are increasing; they increased 27 per cent in 1970 over 1969, and 24 per cent in 1971 over 1970. This constitutes a sum of $85 million which is being provided to industry for research and development.
Our whole programs have been improved. For example, the PAIT program has been improved in the sense that what used to be loans are now grants, and consequently the program is much more popular. Restructuring of industry in certain centres which are in difficulty is a major preoccupation of the department. For example, the GAAP program has been extended to cover the textile and footwear industries. Some special programs have been created. There is, for example, the export subsidy to ships which is already a major success. My friends are aware of the fact that already $100 million worth of ships have been ordered from Canadian shipyards for export and there is more to come.

The Export Development Corporation is also doing more and more with more and more success. In 1969, the amount of export insurance reached $242 million; in 1970,
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this figure was increased to $500 million and will at least remain at the same level in 1971.
As regards financing, the Corporation has financed $65 million worth of exports in 1969, $100 million in 1970 and $200 million during the first three months of 1971.
Mr. Speaker, I am trying to show how the government is trying to compensate some difficulties inherent to the manufacturing sector through other kinds of assistance.
The same applies to the marketing sector. Our exhibitions and missions are contributing to increase our exports in the industrial sector.
There are two examples, Mr. Speaker, that I want to mention in conclusion to illustrate the fact that we are having success in developing exports for manufactured products and, consequently, that we are helping to strengthen the secondary manufacturing sector. The value of the average annual export sales of Canadian railway rolling-stock over the last five years was $13.6 million. During the past 12 months-listen to this-the Canadian industry has broken into several new market areas with sales of 35 locomotives to East Africa, 54 to Nigeria, 6 to Jamaica, 57 to Yugoslavia, 46 commuter cars to the New York subway, 26 tank cars to Mexico and 604 gondola-type ore cars to Australia, for a total value of about $80 million. This again compares with an average of $13.6 million in the last five years. It indicates the amount of marketing support being offered by the government.
May I cite one further example and give one more figure. Yesterday, in Montreal, I announced that the Marconi Company was getting a $23 million order from Iran. This is the result of the opening of a line of credit by the Export Development Corporation to the government of Iran in order to allow that government to buy in Canada communication equipment. That is another indication of what is being done to strengthen secondary industry-


The Acting Speaker (Mr. Richard):: Order, please. The hon. member for Abitibi (Mr. Laprise).


Eldon Mattison Woolliams: On a point of order Mr. Speaker, I do not think the minister had finished. I wanted to hear everything he had to say so that I might be able to answer him. This is very important.


The Acting Speaker (Mr. Richard):: Order, please. I hope the hon. member recognizes that according to the agreement made in the House while I was present this afternoon there was to be no extension of time.


Eldon Mattison Woolliams: Not even if there is consent, Mr. Speaker?


The Acting Speaker (Mr. Richard):: If the hon. member wishes to seek agreement, that is different. The original agreement was made by unanimous consent. Does the House consent to break the agreement?

May 18, 1971
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Stanley Howard Knowles: No, Mr. Speaker. It was a pretty good agreement. It was entered into in good faith. Let us keep it.


Eldon Mattison Woolliams: Where is the hon. member's
consideration?


Gérard Laprise: Mr. Speaker, I would have been willing to listen to the rest of the minister's statement which would have taken only a few moments. From this statement we can however guess how he feels about his government's administration.
Of course I would have been quite surprised if the minister had condemned his government's policy. I do not think the Minister of Industry, Trade and Commerce (Mr. Pepin) would have had the nerve of the hon. member for Trinity (Mr. Hellyer), for instance, or of the former Minister of Communications (Mr. Kierans) who have both severely condemned this government's economic policy.
The contribution of the Minister of Industry, Trade and Commerce to this debate is rather insignificant, because we already knew that he was going to commend the approach of this party and of the cabinet, of which he is a member.
However, the people who might read his remarks as well as those of the Minister of Finance (Mr. Benson) will completely disagree with both of them.
Mr. Speaker, I wish to congratulate and thank the hon. member for Waterloo (Mr. Saltsman) for having introduced this motion this afternoon. It puts forward a number of quite acceptable principles. However, its success will depend on the performance of those called upon to apply them and to establish, as requested, special programs designed to move the economy to high employment.
In fact, the Liberal party tried to achieve such objectives, but, it seems to me, in a somewhat abnormal fashion. It proceeded from bottom to top, whereas it should have done the opposite.
The Minister of Regional Economic Expansion (Mr. Marchand), with his subsidies program, also tried to bring about a high level of employment, but with a view to solving the production problems. He attempted to settle non-existent problems, for there are no production problems in Canada at the present time. The Minister of Industry, Trade and Commerce has just said that he does his best to increase our export trade because we have too many products.
A war is now being waged among the provinces, because of a glut rather than a scarcity of products. The provincial authorities are now erecting walls between the provinces to prevent interprovincial trade.
Not so long ago, I heard the premier of Saskatchewan, Mr. Ross Thatcher, say that the main problem now is overproduction.
At a time when we find overproduction everywhere, the Minister of Regional Economic Expansion generously subsidizes the industries in order to help them produce more. All those amounts that are given out do not reach
[The Acting Speaker (Mr. Richard).]
the consumers because the problem does not exist at the production level but at the consumer level. That is where the real problem is.
Instead of subsidizing production, the minister and the government should have subsidized the consumers. Thus, consumers, particularly those who are in need-whether they are unemployed, handicapped people or older people-could have benefited from the production at their disposal and through consumer subsidies they could have ordered from producers and industrialists the kind of production they want.
But the opposite is the case at the present time; producers are subsidized and there are some who would like consumers to buy the goods that are made for them. But as the system in which we live is increasingly automated, those subsidies given out to the industry are not always profitable to workers but they are profitable to the machines that replace them.
I just read a report stating that some steelworks had been constructed in Japan recently where not a single worker is needed for the production of parts. One is needed at the door to direct the iron towards the works and, when the process is completed, another is required to ship the product.
The same situation can be found fairly often in a large number of industries, and we are told that in the near future a similar process will be used everywhere.
When industry is subsidized, it is fairly often the purchase of machinery to replace the workers that is subsidized. Consumers do not benefit from such subsidies and yet those are paid with their taxes.
The motion submitted by the hon. member for Waterloo states, in part:
.-emergency economic measures to move the economy to high employment-
That is a change in the New Democratic Party's use of terms. Not so long ago, full employment was what we spoke of; now, we speak of a high level of employment because, when you give the matter some thought, it is increasingly difficult to achieve, full employment what with machinery, automation, cybernetics even.
The motion also calls for:
-expansionary monetary and fiscal policies
But no ways and means are indicated. There are means of extending the monetary field, but care must be exercised. It must indeed be noted that over the past 10, 20, 30 years, there has been a monetary expansion, but this has been achieved through debts. We are still paying interest on debts contracted 30 or 40 years ago. Such a monetary expansion is not favourable to the development of Canada, or to an improvement in the Canadian standard of living.
Expansion in the fiscal area is also advocated. That worries me because I have learned from experience in public affairs that every move toward fiscal expansion has always been to increase taxes. The only fiscal
May 18, 1971

changes that have been made have been tax increases. Therefore, this request worries me a lot.
The government is also called upon
-to achieve full potential growth through a planned investment and foreign ownership policy-
Mr. Speaker, I think this is acceptable with regard to local investments, but we must be careful about foreign capital. Indeed, we have seen the premiers of nearly all Canadian provinces go around the world in order to get foreign capital. But each time we succeeded in getting foreign countries interested in investing capital here, we paid for it. Each year, we must let profits go out of the country back to those investors. The fact that those sums or benefits go back to their foreign sources means that we are deprived of that much in capital assets.
So, Mr. Speaker, I think that local investment should be promoted to a much greater extent than foreign investment. But how is that going to be achieved?
It happens, Mr. Speaker, that in private industry or in business we lack funds. Savings accumulate here and there, but they are attracted by high interest rates offered by the federal, provincial and particularly municipal governments. The three levels of government are at war to attract the savings of individuals, because in the first place a rather high interest is paid, and also because garantees are offered on bond issues sold to the public. Thus all those savings are drained off by the public enterprise and none are left for private enterprises.
The Social Credit advocates the following solution. The government, through the Bank of Canada, should make funds available to non-profit public corporations which render some services to the Canadian people. Thus, individual savings would be available to private enterprise. We could then refer to local investments, because there would be some capital to invest.
Those are the few considerations which I wanted to state during my contribution to this debate on the motion under consideration.
The motion concludes with a request that a stimulus be provided for the development of secondary manufacturing. Well, Mr. Speaker, this request should have been complied with a long time ago.
There is a serious lack of secondary industries in Canada. We are still only extracting natural resources that we are mostly shipping as raw materials.
A few moments ago, I was referring to the case of a new highly automated Japanese steel mill. I did not say that this was the first one. In fact, there are many others and we sire aware that Japan is a big importer of iron, coal and copper from Canada, but they import these as raw materials, to be refined and processed.
I think that in such a field, Canada would find it profitable to facilitate the establishment of industries to promote the creation of secondary industries, in order to process our raw materials here.
Our country, particularly the northern area, abounds in ores of various kinds and we are satisfied with burying our miners underground to extract the ore, ship it to foreign countries where it is refined and then shipped
Measures to Improve Economy back to us for our own use. There is no rhyme or reason to this, and immediate steps should be taken to change this situation.
Thanks to our labour, equipment and technology we could be much more self-sufficient than we are today, and it would be to our advantage.
Those are the few considerations which I wanted to express tonight in connection with the motion before the House.


Eldon Mattison Woolliams: Mr. Speaker, it was rather refreshing to hear the Minister of Industry, Trade and Commerce (Mr. Pepin). He talked about the problems of the secondary industry, and unemployment. I thought back to 1962. At that time we pegged the dollar in order to permit our secondary industries and primary producers to compete in the world and regain full employment. At that time some hon. members, including some who are still here and the former Secretary of State for External Affairs who has gone to the other place, wandered up and down the land and brought our government to a minority position. Today the problem is that the government has freed the dollar and we have priced ourselves out of world-markets, no matter how you dish it out. That is the ironic part about politics.
The government does not now, and never has had, a comprehensive, realistic policy on foreign investment. We have heard a lot about it. At best, the government has instituted a series of ad hoc arrangements which mean that it is responding to one crisis after another. It is known as a crisis government. The government has substituted brinkmanship for sound, rational investment policy. The results for Canada have been catastrophic. As a result, we have high unemployment together with inflation, although the Prime Minister (Mr. Trudeau) said he had inflation licked. Inflation has licked the Prime Minister, and unemployment is going to lick this government.
The Canadian government's decision to save Home Oil for Canadian investors stands in glaring counter-distinction to this and the Quebec governments' intention to finance the James Bay project with foreign, mainly United States, capital to the tune of $2 billion, regardless of its effect on the ecology. So once again western Canada is discriminated against. Although Home Oil is one of the biggest independent companies in Canada, the government has said no, it cannot be sold to foreign investors. But it is fine if Quebec, through this government, brings in $2 billion of foreign investment to take over the resources of that province, when the province of Quebec-I hope Quebeckers will hear my voice through the media-has one of the highest unemployment rates in Canada. We are going to give away electrical energy. We are using United States capital to finance Quebec's resources and to give Americans jobs that the workers in the province of Quebec should have.


Mr. Boulanger:: What would you do about it?
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Eldon Mattison Woolliams: If you will just listen I will tell you what can be done about it. This government has shown a glaring inability to do anything about it. There are certain facts that would constrain a rational approach by the government in the field of foreign investment. With respect to our foreign investment policy as it is applied to natural resource development, it is obvious that the federal government cannot have such a policy unless that policy intimately and meaningfully implicates the provincial governments. The reason for this is simple. It is the constitutional prerogative of the provinces to develop their own natural resources.
We all know what happened at the time of the Bennett government when the natural resources of western Canada were returned to the provinces. The federal government has only a limited role to play in this area. I agree that is the case, but it has to be worked out with the provinces. However, this limited role can be an important one if the federal government and the provinces can agree to certain guidelines relating to foreign investment and natural resource development. Such guidelines will always be impossible to achieve if the federal government persists in operating an economy wherein provincial governments find it difficult, if not impossible, to attain their own economic objectives. The reason Bourassa and the Quebec Liberal government has decided not to wait for Ottawa is that they, like Ontario and Alberta, are convinced that the federal government's economic policies are not in the best interests of Canada as a whole or any individual province.
The important thing to underline in any discussion concerning intergovernmental co-operation is the need for the federal government to pledge that it will do everything in its power to ensure that Canada fully utilizes all of its economic potential. A full employment, growth-oriented, dynamic economy ensures that Canada will gain economic degrees of freedom to pursue an independent, rational investment policy regarding our natural resources. The reason the Quebec government is not waiting for the federal government is that Quebec is convinced that the federal government's economic policies are not in Quebec's own interests; and neither are they in the interests of western Canada.
If Ottawa is not providing the economic climate which is conducive to Quebec's growth, then Quebec will go outside Canada to get the moneys available to develop Quebec, as it has had to do, at the same time handing over its jobs to United States workers. In the same sort of way, Ontario is not prepared to stand still while Ottawa screws up the Canadian economy. Intergovernmental co-operation on economic matters is impossible so long as the provinces are convinced that Ottawa's economics are not in their own best interests. This government will not even discuss a problem so important to the welfare of all Canadians at a constitutional conference.
We were asked what we would do when we formed the government. After establishing a full employment, economic policy.-and we on this side of the House have made it clear to the government, through my leader, on many occasions how we would get the economy moving again at full strength-we would have to tackle in a
meaningful way the problem of foreign investment. I do not have much time to go into detail, but these are some of the actions that we would consider taking. First of all, we need proper information. There is a lot of false information concerning foreign investment, for political reasons. What we need is proper information about the actions of foreign subsidiaries in Canada. Without information there can be no clear understanding of what these subsidiaries are doing and what Canada might want them to do differently. Increased financial disclosure by private companies is necessary in order to come to a decision; I think everybody would agree with that.
Secondly, having obtained proper information we would need to decide in which sectors of the Canadian economy foreign investment should be restricted or regulated. If we pulled out foreign investment in Canada tomorrow, it would be like pulling the plug out of a big bathtub; we would just hear the water gurgling, and further unemployment would be the result. We must consider, first, the importance of the sector to economic planning. By economic planning I mean devising appropriate rules and regulations and establishing the proper economic climate. Then we must consider the policy-leverage aspects of the sector, that is, the importance of the sector in allowing the government's economic policies to become more effective.
Then we must consider, if we are going to be nationalistic at all, the cultural sensitivity of the sector, that is, its importance as a factor in the establishment and maintenance of a Canadian identity. We have to ask ourselves the question: Do we want to remain Canadian?
Thirdly, the key sector concept raises two questions. Is there adequate Canadian capital and entrepreneurship to man these sectors? It is no good our saying that there is enough capital in Canada to build a pipe line from the Arctic down through the Mackenzie Valley to the midwest. As a matter of fact, it would be a shorter distance to transport natural gas or crude petroleum from King Christian Island to eastern Canada were the pipe line is. It is 1,500 miles closer than the Mackenzie Valley route. Yet I question whether the Minister of Energy, Mines and Resources (Mr. Greene) even knows this. He has no policy-only the kind of breeze that he blows from time to time-and speaks without knowledge, as he showed us the other day when he made his statement.
The second question we should ask ourselves is, how one can be sure that Canadian-controlled enterprises will behave in a way that coincides more closely with Canadian national interests? It is frequently claimed that sufficient Canadian savings exist to provide for Canadian-owned investments in the full amount needed for the development of our country. The argument is that foreign subsidiaries have been expanding 85 per cent through the use of retained earnings generated in Canada and only 15 per cent through the use of the inflow of new capital. In these terms the adequacy of savings begs the question whether these savings would have been generated without the original foreign initiative, and the question regarding the right and advisability of Canadians to expropriate these savings for their own use.

May 18, 1971

When we save money in the bank, our savings are invested in various ways. But there is a need for foreign capital. My point is: How do you determine just where it should be used, and in what sector, so as to create a climate in which the economy can be kept moving, at the same time retaining some form of Canadian stamp or control?
A more relevant proposal is the provision of further incentives to holders of Canadian institutionalized savings-that is, mutual funds, pension funds and insurance funds-to invest in Canadian enterprises. At the extreme, these incentives might be made a requirement. The stimulation of Canadian entrepreneurship is a far more difficult question since it is by no means easy to locate it and to quantify its potential.
A proposal in this area must provide for two phases, one short-run and another long-run. In the short run it is necessary to provide financial incentives and assistance to the operation of new firms in key sectors, including assistance with the importation of technology and the arrangement of management contracts. In the long run it is necessary to produce greater numbers of entrepreneurs and people with the kind of managerial skills that we need. Representatives of business and of schools of administration should be encouraged to research this question and, where possible, to adjust their programs to provide more extensive and appropriate learning experiences.
The claim for Canadian equity participation in Canadian firms, either minority, majority or controlling, is not a claim that the view of Canadian corporate owners will necessarily coincide with that of Canadian governments; there will be some confrontations. Rather, it is based on the view that Canadian owners and managers will be more receptive to and have a better appreciation of the reasons underlying Canadian government policies than will foreign owners and managers. We have to be shown that. It has to be proven.
A number of proposals are made which will help sensitize foreign-owned firms in Canada to Canadian government policy. First, federally-incorporated companies should be required to have at least three Canadian citizens as members of the Canadian board of directors, at least two of whom should be outsiders who are not connected with the company. This would ensure exposure of the board to Canadian opinion and view. At the same time they should show a fair profit and return.
In order to sensitize foreign subsidiaries to Canadian conditions, the Canadian directors should be provided with lists of their duties as directors, for which they should be held legally responsible. This should be the case in respect of the companies acts of the provincial governments or the federal government. The board of directors should be held responsible for its decisions. This proposal is an attempt to prevent the appointment of Canadian directors becoming a rubber-stamp operation and it is a recognition of the need for the Canadian government to state more precisely what is expected
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from foreign subsidiaries. The United States does this, and Canada can do it. I do not think anyone would think for one moment that the United States would not continue to invest in this country provided there was the kind of confidence in Canada that there should be. One of the reasons the United States is investing today in Germany and Japan is that it has lost confidence in Canada, and I put the onus for this on the government.
A policy toward foreign takeovers should be developed in line with the establishment of key sectors. Foreign takeovers of Canadian firms in key sectors should be monitored and restricted, although not necessarily disallowed. A takeover in a key sector might be permitted where there was a commitment to make equity available to Canadians over a number of years. When the stock was issued for the Alberta gas line, which was controlled, engineered and initiated by the provincial government, every citizen of Alberta had the opportunity to invest up to $20 in the stock of that company.


An hon. Member:: Non-voting shares.


Eldon Mattison Woolliams: They were not non-voting shares. You make your speech and I will make mine. Those $20 shares are today worth $57. It was a guarantee by the provincial government. The same thing could be done federally to develop the proper sectors and resources of our country. This is not difficult, but we have to start now.


The Acting Speaker (Mr. Richard):: Order, please. The hon. member's time has expired.


Mr. Steven Otto (York East):: Mr. Speaker, when I first read this motion I wondered how it was that the Liberal members had proposed an opposition motion. There is nothing at all in the motion with which the government disagrees, as far as I can see. Indeed, if I read this motion correctly it has to do with new expansionary monetary and fiscal policies, which I think is the objective of a great many members on all sides of the House.
With regard to promoting secondary industry, about which we have spoken on this side, the minister mentioned the methods being used to accomplish this end. The Minister of National Revenue (Mr. Gray) said in the House tonight that we are dealing with the question of foreign ownership. Therefore, it is not difficult to agree with this motion. Indeed, I am glad to know that the proposers of the motion have also come to the conclusion that the people who will solve our unemployment problem are the entrepreneurs, those involved in secondary industry.
In the few minutes at my disposal I should like to deal with an issue which will come before this House and the country in the very near future. There are two schools of thought as to whether we should adopt restrictive or expansionary fiscal policies. I feel that the restrictive school of thought should be brought to a conclusion. There is not a more kind measure this government could adopt than to give Mr. Young his walking papers and thank him very much.


Some hon. Members:: Hear, hear!
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Steven Otto: We should tell him he has done a good job 30 years too late and that his ideas-


Stanley Howard Knowles: Is that the Liberal position?


Steven Otto: I would say it is. I think members opposite will And that a great many Liberals throughout the country, not only in this House, are inclined to accept the record, and it is quite evident. It has been expounded in the last year or so that restrictive measures do not work. Indeed, expansionist measures and the adoption of the ideas of some of our new economists such as Miss Diane Cohen, Mr. Weldon and Mr. Friedman, will have a great bearing on the policies of this government. Therefore, I think the motion is quite good.
Let me say to members opposite who proposed this motion that one of the essentials to a successful conclusion is this: If we are indeed going to adopt expansionist measures, we will have to bring our economy and our industry into greater efficiency. We will be faced with this problem in the forthcoming budget. If we are to keep inflation under control we must be very selective in making tax concessions. There is an argument at the present time that if we allow tax concessions across the board there will be an inflationary push. The hon. gentleman opposite shakes his head, but I suggest there will be an inflationary push.
If there is already a push and a squeeze between manufacturers' costs and the sales position, and you throw $500 mihion or $600 million into the consumers' hands, there will be immediately an upward price movement. If this will mean an inflationary push, we must think of another method. We must give tax concessions to corporations and businesses: it is their reserves which are decimated. They cannot get loans to buy new equipment and machinery because the banks know they have a poor profit picture and that their reserves are down to nil.
If we gave tax concessions to the corporations they would have to make a profit by selling their goods at a low price. If we did this, just think what hon. members across the way might say. Everyone over there would rise with indignation and ask what we had done. They would suggest we had given tax concessions to business and nothing to the poor consumers.


Stanley Howard Knowles: What have you done?


Steven Otto: Just what we intended to do. I ask the hon. gentleman opposite how new policies can be adopted when they are ingrained with the old policies. What gentlemen opposite are saying is that we should adopt new concepts and new expansionist policies, but do not show any favouritism toward business-give the concessions to the consumer. This is the position they take in the motion. The last part of the motion refers specifically to the fact that the people who will succeed in getting other people to work are the entrepreneurs. We have to come to this conclusion in some way.
With regard to secondary industry, I should like to direct the attention of the House to the most recent United States labour figures. It is surprising to find that 63 per cent of American people are employed in the service industries. That covers everything from superintendent of a plant to a salesman, the sales manager, the executive, junior executives, lawyers, architects and engineers. Only 37 per cent are employed in the factories operating machines and producing goods. There is already an impetus for a large number of Canadians to work in factories producing goods. In a short time we will not be saying we are the hewers of wood and the drawers of water; we will be complaining we are the ones making the goods by working in the factories and the Americans are the ones who occupy the high positions in industry. There is already a movement in that direction and I think it will continue for the next 10 or 15 years. We are already considering the next phase, which is foreign ownership. I will deal with that matter in a minute.
Mr. Speaker, this government should recognize that if we are to have any influence over secondary industry we must re-think two positions we have adopted over the last five years. I believe hon. gentlemen on this side of the House have already brought this matter to the attention of the government. If we continue our regional incentive programs it is completely incongruous to say we will promote industry in those regions where industry really is not suited, and at the same time try to bring more efficiency into our economy. This is impossible, because what we are really saying in all our regional incentive programs is that the government will pay from $2,500 to possibly $10,000 per job for an industry to establish itself in an area, which economically does not make sense. This only deprives other, more efficient areas of this type of industry.
So we are at cross-purposes. We may decide to put an industry in northern Ontario or northern Quebec a long way from the market and in an area where there are transportation and technological problems. We say we will pay an industry to go there, and at the same time complain that the industry is not efficient. Of course it is not efficient because it is competing with the Germans and Japanese who are very sophisticated.
While speaking of the German market, we must consider their position in respect of free enterprise and anti-combines legislation. In the last two years, hon. members will be interested to know, the German coal industry found itself in a serious predicament. The industry was competitive; it had about 57 plants and 103 enterprises, none of which was making money. As a result, two years ago the German government sponsored and promoted a combine, the Ruhr Coal A.G. This is a company which now controls all the German coal producers. It is working toward an efficient combine and monopoly in order to make the German coal industry prosper, while we on the other hand have not acknowledged that there is a time when we must re-think our

May 18, 1971

ideas in respect of industries in which an element of competition no longer applies.
In some industries there is no competition. There are large corporations which probably tolerate a smaller competitor merely as a figurehead. The fact is, however, that a certain segment of our industrial enterprise has no competition. We should accept that fact and promote some sort of combine or monopoly to make it more efficient, rather than have each enterprise lose money.
This brings me to the question of foreign control. I believe the policy the government will introduce on this issue will be found to be acceptable and welcome to the whole country. But I have never worried too much about control in respect of Canadian industry. The real issue is efficiency. There is a second and possibly just as important consideration. We as Canadians must decide which industries are to be exploited and promoted, although not on a worldwide basis because we are not concerned about a multinational corporation as an investment in Tanganyika or Brazil even though it would be more profitable to establish it there than in New Brunswick or Ontario. We must consider it from the Canadian point of view.
After more than 22 years in business I have learned that there is no school, university or educational process within which to train executive cadre, other than apprenticeship. It is an unfortunate fact in multinational corporations that when it comes to the man who makes the decisions, someone is always sent here to manage. So we have nowhere in which to exercise apprenticeship. Therefore, the United States executive is much more efficient. We should have a policy which would allow our young people to enter the executive cadre and assume control of corporations. We should regulate this matter.
There is another element which possibly has never been emphasized. The United States industrial enterprise is very great and has a vast accumulation of capital. Our presumption always has been that capital comes from savings. I deny this. Venture capital, or risk capital, does not come from the money we accumulate by scrimping and saving. This money is used to buy insurance policies, something nice and safe. The money which is invested and reinvested is the money which comes from dividends. If we look at the record of dividend payments and reinvestment of dividends we will find that a fantastic proportion of the dividends received by a shareholder are put back into the market. We do not have this.
The United States has the world's largest reserves of capital investment. So, as an hon. member said, it is important to ensure that eventually Canadians will be able to buy this equity and obtain shares in order to reinvest the money. For that reason, Mr. Speaker, I strongly supported the white paper on tax reform because it emphasized the need to provide a wider distribution of shares in the country.
I do not think any of us would find anything to argue about in this motion. It is a question of timing and a question of emphasis. So far as this motion is concerned, the government has done more than it asks for. Indeed, there is nothing in the motion that we have not done or
Measures to Improve Economy
are not in the process of doing. Therefore I do not find any difficulty in supporting it.


Douglas Charles Rowland: Mr. Speaker, I listened with great interest to the remarks of the hon. member for York East (Mr. Otto). Having heard them, I only wish that this influence on the policies of the government was a bit more profound. The Minister of Industry, Trade and Commerce (Mr. Pepin) during his remarks charged the opposition with being somewhat intemperate in its attack, and with failing to realize that the circumstances in which this country's economy now finds itself are at worst the honest mistakes of honest men attempting to do an honest job in the very imprecise area of economics. We are all aware of this. What makes us intemperate, if such we are, is the distorted value system upon which this government has based its policies.
Perhaps I might illustrate what I mean. This afternoon I listened with absolute horror and total disbelief to the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Howard, Okanagan Boundary) defend his government's economic policies. In commenting on those remarks I will be employing language which does not come easily to my tongue. However, I make no apology for this because the kind of social philosophy presented to us by the parliamentary secretary can only be described as disgusting by any civilized group of men.
He told us that we could have full employment if we were willing to sacrifice our standard of living. He implied that we would not be willing to make such a sacrifice. For the moment I will leave aside the validity or lack of validity of the direct relationship he implied between high rates of employment and low standards of living. I want to emphasize that a member of the government stood in his place and told us, in effect, that if forced to choose between 600,000 or 700,000 men and women being stripped of their dignity through being denied gainful employment and having to give up the opportunity for some of the niceties of life available to the fortunate third of the people in North America, he would choose the second television set. I thought that today one could only find people with that total absence of social conscience in the works of Charles Dickens.
What an utterly barren, hopelessly antique, totally depraved approach for man to say, "I will fight unemployment only if it does not hurt me. I'm all right, Jack"! Moreover, the direct relationship between the standard of living and the rate of unemployment which the parliamentary secretary postulated simply does not exist. He told us of a secretary who went to work in the full employment economy of Germany and had her wages cut in half. He told us of "three mat" apartments in Tokyo and implied that if we in Canada were to achieve full employment, not only would the parliamentary secretary's friends be forced to sell their second Skidoo but all of us would be forced to live like rats in a hole. What a piece of sophistry! What a fatuous bit of histrionics hoping to pass as argument!
No one can deny that the standard of living in the full employment economies of Germany and Japan are below

May 18, 1971
Measures to Improve Economy our own. What the parliamentary secretary neglected to tell us was that the standard of living in those two countries is rapidly overtaking our own. What he neglected to tell us was that the standard of living in the full employment economy of Sweden has already surpassed our own.
Then the Parliamentary Secretary to the Minister of Industry, Trade and Commerce went on to assert that he had heard no new ideas from the opposition, implying that because they were not new they were valueless. If it does not glitter with new paint, it is no good, whether or not it has been tried. There speaks the petty bourgeois Philistine of nineteenth century literature. He said that even with four ears he would not have heard anything of value from this side of the House today. I would suggest to the hon. member that there must be something between the ears before one can attempt to weigh values.
Enough said about the remarks of the hon. member for Okanagan Boundary. The fact remains that this winter the government had to acknowledge the existence of almost three-quarters of a million unemployed people in Canada. In April, the figure was 659,000, up 9,000 from March. Probably there was and still is further hidden unemployment not measured in the statistics. This situation illustrates vividly the Liberal party's callousness toward people and the total bankruptcy of its economic policies.
Never before in the history of this country did a Prime Minister state before a national audience that it was his government's intention to allow unemployment to rise, if necessary, to 6 per cent to combat inflation. Never before did any federal government knowingly, consciously and with a cool, detached deliberation sentence hundreds of thousands of Canadian workers and their families to the hardships of unemployment. The brutality, the callousness, the studied indifference to the human consequences of this anti-inflationary approach was matched only by its ineptitude. Its ineptitude is measured not only in terms of its social consequences but in terms of its complete failure to deal with the inflationary situation it was supposed to meet. The cost of living figures for the first quarter this year show conclusively that inflation is not licked and that at the same time unemployment is continuing unchecked.
What do the figures in connection with the frightening level of unemployment really mean? We are not talking about statistics; we are talking about hundreds of thousands of human beings. We are not talking only about the unemployed themselves but also about the people who depend upon them and their jobs. These unemployment figures represent human tragedy on a massive scale. They represent fear, want, hopes dashed and confidence undermined. We are not talking about mere figures of 660,000 or 700,000; we are speaking about the immense and continuing suffering, deprivation and spiritual degradation of hundreds of thousands of people as a result of deliberate government policy.
That is why I cannot discuss this subject with any degree of equanimity. Any government that is calculate ingly responsible for such a situation and which speaks
to me about the just society is guilty of total, complete and unparallelled hypocrisy. No government which has looked at the full cost of unemployment would deliberately choose increased unemployment as the answer to inflation. But that is what the Trudeau government has done. New Democrats, in contrast, state that full employment should be the primary economic goal of government. If some price rises occur with full employment or because of shortages or external circumstances, it is far better and cheaper to compensate the victims of inflation, those on fixed incomes, than to squeeze the life out of the economy and pay the staggering bill for unemployment.
In the short run, the present serious shortage of jobs can only be overcome by priming the economy. The New Democratic Party has been urging the government to undertake the following policies immediately. We have urged the institution of a massive public housing program which would be focused on areas of acute shortage and which would involve the provision of additional mortgage money at reasonable interest rates for low-cost housing. We have advocated the stimulation, acceleration and expansion of anti-pollution programs, including capital aid for sewage and waste treatment facilities.
We have advocated the acceleration of other public works projects, but only after re-evaluating their social usefulness. It may be that new post offices might not be nearly as important as new convalescent or nursing-home beds. Making funds available to the provinces and municipalities for such works would be an important feature of the program we are advocating.
Another short-run policy we have advocated in order to supply jobs for the immense number of people out of work is the increasing of purchasing power by tax relief for low-income groups and by increasing allowances to those on pensions and other fixed incomes, together with the inclusion of a cost of living escalator in all such allowances.
We have advocated the tying of new unemployment insurance benefits to the cost of living index, and the extension of seasonal benefits to meet the present emergency. We have also advocated the provision of funds to increase employment opportunities for young people in the area of services to people, such as child care, convalescent services, assistance to elderly persons, recreation, conservation and public health.
To maintain full employment in the long run, this party also advocated a number of policies-among other things, changes in the tax system to end the discrimination in favour of capital-intensive industries. We have advocated an end to the special tax concessions to resource extraction industries which encourage investment in overcapacity there with the result that secondary industries, where the jobs are, lack development capital.
We have advocated an investment reserve system which would involve the placing of a few points of tax on business into a reserve that can be drawn upon within designated periods of time for designated purposes in designated areas. Such a program would make use of the planning capacity of the whole of private industry. We

May 18, 1971

have advocated the creation of a real Canada Development Corporation which would be unequivocally an instrument of government policy and which would be employed to develop secondary industry, to expand resource processing in Canada, to rationalize established industry and to invest in the development of the leading edge of technology.
I could go on into the night listing specific policy suggestions which this party has made. What they all add up to, however, is planning the development of the economy and in so doing ending the haphazard approach to economic development adopted by the present government, policies which the hon. member for Duvernay (Mr. Kierans) has aptly described as being "stop-go, boom, bust, rags to riches" and which are at the base of most of our economic ills.
What about controlling inflation? In my opinion, we must begin to face up to the fact that inflation in Canada is largely imported from the United States, largely because of our overdependence upon them as a market and as a supplier to our market and because of the corporate pricing policies of American-owned firms operating in Canada. With these factors operating, even the most draconian measures, such as those the government introduced, can only have a marginal effect, and we have seen that. To end the importing of inflation we must diversify our markets and our suppliers. We must drastically decrease the percentage of our economy which is controlled by foreign-owned corporations. And, finally, we must pray for an end to the war in Viet Nam.
Should we succeed in doing all these things, perhaps fiscal and monetary policies of a normal kind will serve to keep internally-generated inflation at an acceptable level. But the real point is that we must not continue to sacrifice the lives of Canadian men and women on the alter of controlling inflation, a god which in present circumstances cannot be appeased. Instead, we must make full employment our primary economic goal.


Mr. F. J. Bigg (Pembina):: Mr. Speaker, my colleague from Calgary North (Mr. Woolliams) was making a very valid point on federal tax policy when his time ran out at about ten minutes to nine o'clock. One conspicuous example is the fact that current Canadian tax policy, as opposed to U.S. tax policy, makes it far easier for an American company to acquire control of a Canadian company than for one Canadian company to acquire control of a second Canadian company. To be specific, American companies and other foreign-owned companies are allowed by their governments to deduct as a business expense the interest paid on money which they borrow to acquire Canadian companies. This is obviously so unfair and so advantageous in particular to the American companies that at the present time the figures show 75 per cent foreign ownership in some fields of Canadian industry.
That is not the whole story by any means. But if we are serious in our desire to regain control of industries which we have already developed, and if we hope to
Measures to Improve Economy
have Canadian control of other industries which we hope to encourage, then a serious tax change has to be made and made now. This motion suggests immediate, emergency measures. Unfortunately, it is too late to do anything very dramatic or sudden this year. But for goodness sake let us start now. It is never too late to mend. It is never too late to start taking control of your own house.
I think that a government which has talked so much about participatory democracy should do something about participation by our own people in the wealth of our own country. I am shocked and amazed that any government which calls itself Liberal, in the old Glad-stone-Laurier sense, should argue that any level of unemployment is acceptable to the Canadian people. I do not often praise Soviet Russia, but I understand that at the present time Russia is seeking to recruit unemployed people from the European labour markets. If these people have skills, Russians are offering them jobs and good opportunities, with good wages which they can take back home in gold. But here in the upper half of North America, the richest half of North America, the undeveloped half of North America we sit around and mostly worry about sharing government jobs and government hand-outs of one form or another.
We have a Department of Industry which, by a stroke of the pen, is able to hand out as much as $12 million to any entrepreneur who seeks help. That sounds fine if it were not coming from a schizophrenic government. What is the good of it offering $12 million to start an entrepreneurial business and then putting out a white paper on taxation which says that in five years it will take a quarter back, in ten years it will take half back and within a generation it will want the whole darn works? Nobody is going to invest money, time, energy or education in the future of a country which offers nothing better than state control.
State control has never worked for the little people. It has not worked in Soviet Russia nor in Czechoslovakia. It is not working in Red China today. They tried it in agriculture, but it did not work. At a time when the Russians and Chinese are giving land back to the peasants, we are rushing through Bill C-176 which is trying to do exactly the reverse, forcing the people of Canada to give up their land to a supposedly all-knowing and capable government, but a government which is floundering with unemployment figures approaching 7 per cent and in local communities with unemployment running a great deal higher than that-up to 10 per cent, 12 per cent and 14 per cent.
The big excuse used by the government is inflation. Mr. Speaker, we have been living with inflation for 20 years and by and large it has done us proud. By inflation we are able to have a two-car garage, get a bigger mortgage and live in a better house. At least that is the case for those who have jobs. But tonight I wish to concentrate on unemployment because it is our big problem.
In some cases I think we have academically overeducated our young people. They are coming out of school in the hundreds of thousands and they want to

May 18, 1971
Measures to Improve Economy participate in the economy. But what are we offering them-soup kitchens, bread-lines, hostels, walking tours of Europe! And when they go to Europe they will find that Europeans are fully employed. When they return they will want to know why they cannot have the same. I think we must have full employment. I think we can achieve it. I agree with the motion when it stresses urgency. It is something we should tackle today.
When the Prime Minister (Mr. Trudeau) returns from Soviet Russia, I hope he will have a satchel full of ideas, not communistic ideas but North American ideas, entrepreneurial ideas to put every Canadian back to work on his own land or in his own business, using a tax policy which means that 20 years from now a man's life will be richer and happier, without him bequeathing unemployment to his children and having them sit around on Parliament Hill or on the Mall growing hair and whining.
Let us be realistic about this, Mr. Speaker. My taxes are high enough but I am willing to be taxed a little more if a 10 per cent increase in my taxes will give jobs to young people. These young people have gone to work in our education system, although in many cases I do not think it is worth a damn. Now they are emerging as PhDs, or as master mechanics from our technical schools and we are telling them that we have nothing for them to do. And all this is at a time when we have only one decent road running east and west across the country, with no decent road running north and south.
We have no transportation into the Arctic worth talking about. We have no idea of the wealth of our natural resources, but our greatest natural resource is our young people. All we are saying to them is that some day things will get better in the American economy and then we will catch up. In effect we are waiting for the American economy to recover, hoping to ride on its wave of prosperity and, incidentally, in the meantime letting the Americans defend us from all the assaults of our enemies. Yet according to my friends to the left we should not accept American money or American investment.
Now I hear a chorus coming from the government benches that we ourselves should own Canada. But they do not have a policy to bring this about. My colleague from Calgary North suggested a tax policy to them. Make it pay to save money. Make it specific. Invest in Canada. Trade is the answer. It is trade that gives us jobs. Only by trade can you set up a business and have something to sell. It is no good setting up a business if you do not have markets.
We need a proper fiscal policy. We don't want a floating dollar. We want to know where the dollar should be pegged to put Canada back into the markets of the world. There is no single commodity in Canada, be it natural or manufactured, which does not benefit from a dollar pegged well below the American dollar. When we had the 92J-cent dollar we flourished. That was supposed to be the biggest mistake that Mr. Diefenbaker's government made; but it was the 92J cent dollar which put this country into the ten years of greatest prosperity we have ever seen. We had better decide now where we want the dollar pegged, or it will rise to U.S. $1.10.
I was also shocked to hear the Minister of Finance (Mr. Benson) say that the GNP was so high that we did not have to worry any more. This makes me ask the question: Who is making the money? Let us find out. If they are making so much money, then let us create jobs for our own people, and not only for the young people. There are many middle-aged and old people who need jobs. You cannot live on the old age pension today. Where can you live on $100 a month?
The universality of the old age pension makes me laugh. If you build a little shack and manage to save $5,000 in 40 years of work, then the supplement is cut off and you are expected to live on $80 a month. Talk about beating inflation! Are we beating it with the 42 cents given to the old people? That is all we have done in the last five years, give them 40 cents a week which would not even buy a good cigar-maybe seven six-cent stamps to write your Member of Parliament, maybe six seven-cent stamps; I leave it to the Minister of Finance to work that out.
What are our human resources? I suggest that because we are so ignorant about our natural and human resources we should put a couple of hundred thousand young people to work to find out what is our future and their future. I have faith that this country is worth developing. I have faith that the answer to our economic problems is not to sit around and wait for the Americans to solve them. The answer is to create jobs for our young people. They have the brains, the youth and the skill, and it is up to us to give them leadership. I believe that the few who are sitting around growing long hair are far outnumbered by the fine young people who have spent four or five years in high school or college to prepare themselves for the working world, for a bigger and better Canada. I do not think this government is big enough to handle the job.


Some hon. Members:: Hear, hear!


Frederick Johnstone (Jack) Bigg: Are we big enough to handle it? We had better be. This is the land of opportunity but there is no magic formula. It will take hard work and planning and emergency measures. It is not very often that I can wholeheartedly support a motion put forward by my friends on the left, but I feel there is a terrible emergency here and if my friends on the left do not shout about it, the very rocks from Vancouver Island to Newfoundland will shout about it.
There are no quick answers, Mr. Speaker. There are not even ten. We need a lot of answers and a lot of work. If the people on the other side of the House cannot do it, then I say call in the young people and let us survey our natural resources, our human resources, our technical resources, our fiscal resources-you name it. Put them to work, and now.
We have wasted two months already. I expect it would take another month to put them to work, but let's do it. Then let us see that when they come out of school next year we have a comprehensive plan which will mean that
rMr. Bigg.]
May 18, 1971

we are out looking for the labour markets of the world to help us carry on the ideas we have formed in this chamber. If we do not start here it is no good looking to the colleges, to Sparks Street Mall or the United States of America.
The problems of Canada Eire supposed to be solved in this chamber; that is what we are here for. If this government thinks it is incapable of doing it, if they can cynically state that we can stand 10 per cent unemployment in a vibrant and young country like this, then they have no alternative but to resign. I have confidence in the ideas of this party, Mr. Speaker. We can develop Canadian trade and have policies from coast to coast, with none of this divisive business. Let us see what the Maritimes people can produce. Perhaps we can produce a new race of mariners and give them the job of shipping our oil, our wheat and our bauxite around the world.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member. The hon. member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, as I listened to the Prime Minister (Mr. Trudeau) in recent weeks and to the minister of Finance (Mr. Benson) today I could not help thinking of them as characters in Alice in Wonderland-the worse things get, the more they shout that things are better and better.
In April, 1970, Canada had 544,000 people unemployed, and in April of this year unemployment had risen to 659,000, an increase of 20 per cent. If you compare April,
1970,	with April, 1971, you see that in Quebec unemployment rose from 203,000 in April, 1970, to 234,000 this year; in Ontario, unemployment rose from 145,000 in April, 1970, to 205,000 in April this year; in the Maritimes it rose from 66,000 in April, 1970, to 75,000 in April this year; in British Columbia it rose from 58,000 in April, 1970, to 72,000 in April this year.
If you look at the seasonally adjusted rates of unemployment for the last five years, which the Minister of Finance keeps telling us are looking better all the time, you see that there has been a steady increase. In April, 1967, the rate was 4 per cent; in April, 1968, the rate was 4.9 per cent; in 1969 the rate was 4.9 per cent; in 1970 the rate was 5.6 per cent, and this year the rate is 6.7 per cent. In Ontario, the wealthiest province in this country, the seasonally adjusted rate for unemployment in April,
1971,	was 5.7 per cent, the highest in the last ten years.
The unemployment which we are experiencing is not
an accident, Mr. Speaker. Canada has the highest unemployment rate of any country in the western industrial world. In Great Britain, the rate of unemployment has just gone over 3 per cent, and in last week's local elections the Conservatives lost over 2,000 seats. The election was fought on national issues and the people spoke out.
Our unemployment was brought about by a conscious decision of this government. In December, 1969, the Prime Minister said that he would not be deflected from the fight against inflation even if the result was that we
Measures to Improve Economy faced 6 per cent unemployment. The government cut back on programs and called on provincial and municipal governments to follow suit. It tried to implement a policy of voluntary restraints on wages and salaries but, of course, not on profits.
The fight against inflation was temporarily successful. Last year the cost of living rose by less than 2 per cent, but the result was precisely what the New Democratic Party in Parliament, and economists outside, had predicted-higher unemployment. As most economists predicted when the government implemented its policy of restraints, the increase in the cost of living could only be slowed down temporarily. I know of no economist, except some of the trained seals working for the government, who seriously argued that inflation could be stopped in Canada when costs were going up in the United States. After all, we sell most of our products to the United States and we import more from them than from any other country. It is almost impossible, Mr. Speaker, to keep prices in Canada from rising if they are doing so in the United States.
The inevitable happened, as had been predicted by everyone but the government. In the first four months of 1971 the cost of living rose by 1.8 per cent, an annual rate of 5.4 per cent. The Minister of Finance has suggested that this is only temporary and that the increase will slow down. There is no reason to believe that. The price war the supermarkets engaged in last year has disappeared. The temporary help we obtained by unpegging the dollar cannot be repeated. Therefore, costs in Canada will go up this year, as I have suggested.
Now we have the worst of all possible worlds, high unemployment and an increasing rate of inflation. The result of the government's policy has brought tragedy to tens of thousands of Canadians individually and to the provinces and municipalities. Some of the most highly-trained Canadian citizens cannot get jobs. Today, the Toronto Telegram predicts a long job hunt for many of the University of Toronto's 5,700 graduates. A survey undertaken by that newspaper shows that only 40 per cent of this year's engineering graduate class will find jobs at this time, whereas last year 85 per cent of the graduating class at this time of year had found jobs.
Today's Toronto Star reports Quebec Labour Minister Cournoyer as saying that Quebec's welfare recipients have increased by more than 500 per cent in the ten years between 1960 and 1969. They increased from 22,500 in 1960 to 114,3000 in 1969. At the same time, those receiving unemployment insurance declined from 139,000 in 1960 to
101,000	in 1969. The decline in the number of people receiving unemployment insurance in Quebec is not the result of lower unemployment in that province. As I said earlier, they are suffering from higher unemployment than ever before. In that province a tremendously large number of people have been unemployed for so long that they have used up all their unemployment insurance benefits. The figures for April, 1971, ought to have a sobering effect even on this government, for they show that 152,000 people have been unemployed for more than
5938

May 18, 1971
Measures to Improve Economy
six months and that 190,000 people have been unemployed for between four and six months. That increase is startling when one compares it with the number of people who were unemployed for four months or more in other years.
We call on the government to stop its insane preoccupation with inflation, which is a worldwide phenomenon which cannot be prevented and cannot be slowed up very much in one country, and to concentrate on implementing a policy of full employment. The NDP government of Manitoba has not only given this type of advice to the federal government at Ottawa but has implemented the kinds of policies to which I have referred. In February of this year 22,000 people were unemployed in Manitoba, the rate of unemployment being 6 per cent of the labour force. Between February and April of this year unemployment in Manitoba was reduced. It went from 22,000 in February to 18,000 in April. The rate of unemployment dropped from 6 per cent in February to 4.8 per cent in April. That trend has not been duplicated in any other province of this country.
It is no accident that that happened. It come about because the government of Manitoba rejected the idea that it ought to or could combat inflation. The government of Manitoba has taken the position that its objective is 'full employment. When they talk of full employment they talk about the 3 per cent unemployment level referred to in the report of the Economic Council of Canada. Last week the government of Manitoba proposed an expansionary budget designed to provide increased employment of people and resources in the province. The total estimated expenditures for the 1971 fiscal year are over $500 million. For the fiscal year 1971 that government plans a deficit on capital account of an estimated $300 million over and above ordinary revenues. They propose to invest large sums of money in housing, in the expansion of hydro facilities and in the expansion of telephone facilities.
The government of Manitoba has planned a massive public housing program for 1971. They propose to spend $33 million. They had intended spending over $50 million but the federal government would not co-operate and they therefore propose to spend, as I said, $33 million. This is still the largest amount in Manitoba's history, representing an increase of 154 per cent in public housing spending as compared with 1970. The number of housing units involved is in excess of 2,200, representing an increase of 107 per cent from 1970 and almost 1,000 per cent from 1969.
This is the kind of program we have been advocating ever since the government proposed curing the ills of this country by concentrating on the fight against inflation. We have proposed that the government should, instead, make its No. 1 priority full employment. This could be done if the government stopped talking about tax reform and got on with the job of introducing tax legislation which will do away with the inequitable, regressive and inefficient tax system we have at present.
We have proposed that the government adopt tax policies which will put the burden of taxation on those who
can afford to pay. We believe that a more equitable tax structure must be achieved by all levels of government and must be based as much as possible on ability to pay. May I say, in a practical way, that we need to increase income tax exemptions to $2,000 for single persons and $4,000 for married persons.
In the budget which the minister proposes to bring down one month from now we ought to reduce the taxes paid by people in lower income brackets. We ought to be thinking very seriously of increasing old age pensions. We ought to think in a practical way about beginning to put into operation the kinds of projects which are needed so badly in this country. We ought to think about a massive increase in public housing such as has been begun in Manitoba. We ought to think about helping schools and universities acquire new buildings and equipment which they need. We ought to think seriously about helping the provinces and municipalities to deal effectively for the first time with the pollution of air and the pollution of water, and to eliminate it.
There is not one municipality in Canada which does not have inadequate sewage disposal facilities and which does not need to put the squeeze on industries which pollute the air. If one goes no more than 100 yards from this very building one will see how badly the Ottawa River has been polluted. Asking the city of Ottawa or the city of Hull to do the job by themselves is asking for the impossible. The government at Ottawa, Mr. Speaker, ought to take the lead through grants and loans to enable the provinces and municipalities to work on the tremendously important task of turning this corner and to enable them to meet the problems of inflation. If we begin to do these things, we will stop the kind of unemployment we have experienced up until now.


Mr. Depuiy Speaker:: Order, please.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, this afternoon and evening we have listened to many reasons why the government feels it has acted in a proper manner. They tried to justify the Prime Minister's expression last fall when he said, "Push me and see how far I will go" and when he said that 6 per cent did not seem to be an unreasonable unemployment figure if it meant curtailing inflation.
Almost every country has a higher rate of inflation than Canada, but no country is paying the same penalty. Many of my colleagues have referred to the expense involved in people not working and the hardship it creates. But there will be a long-term problem with which we will have to live. I refer to the young people who are entering the labour market and are unable to find work. These young people will be discouraged before they even get started. The old adage may be true-if you keep a person on welfare for a period of time, that will probably be the pattern for the rest of his life. It may well be that we are creating a situation with which we will have to live for a very long time.
I was in northern Ontario this week. I found that the unemployment figures being used really do not apply to
[Mr. Orlikow.l
May 18, 1971

that part of the country. The actual unemployment figure is very close to 25 per cent. I am not referring to the seasonally adjusted figure, the Canadian average or the Ontario average. If 25 per cent are unemployed, the other 75 per cent will have to carry them.. This means that as soon as the seasonal benefits of unemployment insurance cease, the municipalities will be carrying the welfare load for many years.
It has been pointed out that the city of Ottawa will have a great deal of difficulty fitting the high cost of snow removal into its budget for several years. No doubt the cost of snow removal is high, but think of a municipality where 25 per cent of the wage earners are going to apply for assistance. It is true that the municipality will only pay 20 per cent of the cost, but in many areas where employment has been poor for several years this will bankrupt them.
I listened to the Prime Minister on television the other night. It was pointed out that the interview had been taped prior to delivery and was several weeks old. I suggest that the broadcast was several months old. The subjects and the discussion were months old. The program was taped before this calamity affected many of our communities. At the time it was taped, it could still be argued that we could economically afford to curtail unemployment, building, development and secondary industry, all for the sake of curtailing inflation.
Surely all the economists in the government are not archaic. Some should be table to tell the government that in other countries inflation is not a serious problem as long as the gross national product increases to the same degree or more. I agree that it costs more money to purchase commodities, but there is more money available. What advantage is there in the person who has been unemployed for seven or eight months knowing that if we are able to keep him out of work, we are able to cut down on the niceties of life and that a television set or drugs will cost less? He knows that the only place he can get money to buy food and pay rent is the welfare office. You can be holier than thou in terms of inflation but you cannot be holier than thou with regard to the needs of these people.
Another budget is going to be brought down. Until I heard some of the government members today I would have predicted that we could not possibly operate for another year with old age pension recipients paying income tax. I was sure this mess would have been straightened out so that we would not ask an old age pensioner receiving a guaranteed supplement to pay $70 income tax out of one of his monthly cheque. Something should be done for the man carrying the lunchpail who is still employed, so that his lot will be better and he will have a little more money to distribute and will enjoy the same purchasing power as the top one-third of the country. If I understood the government members correctly, they said that if you spread the load and give a concession across the board, this would be inflationary. They said he would spend the money, and you cannot give him a reduction.
Proceedings on Adjournment Motion
Canadians will not forget that this is not an emergency that has arisen, it is not a calamity that affects the nation, nor is it something that is happening in Europe. They will not forget that this is not happening in other countries. The situation in Canada today, with more unemployment than we have seen for many years, is a creation of the government which intentionally set out to have 6, 7 or 8 per cent of the people unemployed. The Canadian people will not forget that they have been made the tools of a government which is not interested in the welfare of the average Canadian but is more interested in those clipping bonds coupons, living on insurance benefits and enjoying the niceties that many of the working people have been unable to afford even in good times. In all humanity, this government will have to consider its citizens and make adjustments in the budget to put Canada back in the employment field, rather than on the welfare rolls.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. It being ten o'clock it is my duty to inform the House that pursuant to Standing Order 5801), proceedings on this motion have expired.


[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, my question tonight is: Is consideration being given at the federal level to providing an amount of money, possibly a percentage of federal liquor revenues, toward combating alcoholism and promoting temperance in Canada? As hon. members know, the province of Prince Edward Island and the province of British Columbia have recently moved toward this goal, but what is the federal government doing in this regard? I should like to put a few figures on the record in this connection. Ottawa takes in rather more than $1 million a day as its share of revenue from the sale of drink-that is, liquor, wine and beer. If we include the federal government sales tax, revenue from liquor totals close to $400 million a year.
What does Ottawa spend, having made this immense amount out of the sale of alcohol, on preventing people from becoming alcoholics or on educating young people particularly against the acceptance of drinking, or at least of overdrinking? It spends little or nothing, Mr. Speaker. It is true that the federal government shares in projects of health and welfare with the provinces and that some of this money goes in providing aid to alcoholics. But it is not this that I am talking about. What I am urging is that at least one per cent of federal revenue from the sale of liquor-that is to say, approximately $4
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May 18, 1971
Proceedings on Adjournment Motion million a year-be directed toward promoting temperance and publicizing the health and social problems that are caused by drinking to excess, very much in the same way as the health and welfare department some years ago embarked upon a program to educate young people against starting to smoke cigarettes.
It is not as though the federal government could not afford to earmark some of the revenue obtained from the drink trade for this purpose. Do you know, Mr. Speaker, that more than half of a bottle of whisky consists of water? Do you know that $5 out of each $6 bottle of whisky represents taxes? Canadians are actually drinking watered taxes. Even so, the result is tragic in many thousands of homes, families and businesses. As one who helped instigate the breathalyzer legislation, I know that the 15 per cent drop in fatal accidents since the advent of that law means that there are 760 Canadians alive today who otherwise would have been in the graveyard during the first year of application of the breathalyzer law.
The loss caused by alcoholism to Canadian industry and business is estimated to be $325 million a year, manifesting itself in multimillion dollar hangovers. There can be no estimate of the loss to Canada, caused by alcoholism, in broken homes and in rising crime. I raised this question some time ago and was told that Ottawa made a total grant of $15,000 a year to the Canadian Foundation on Alcoholism. A few days ago the minister of health told me that the government has no stated formal program in regard to combating alcoholism, though he said-and it is true-that Ottawa shares funds with the provinces, some of which go to assist victims of alcoholism. But, Mr. Speaker, I am not trying to get at this question. What I want the government to say tonight is what its attitude is to setting up a fund consisting of, say, one per cent of its annual income from the sale of liquor, which money would go to educating people against alcoholism, to preventing alcoholism-not to bind up the wound but to stop the wound from developing in the first place.
The federal government takes in $1 million a day in revenue from the sale of drink. When the sale of liquor promotes social ills, broken homes, death and disease I think it is the duty of the government to set aside some amount from its revenue from such sale in order to combat alcoholism and to educate people, particularly the young people, against the use of alcohol. My question is: Will the government consider setting up such a program, providing funds for the program and encouraging interprovincial action with the federal authority to combat alcoholism in Canada?


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the suggestion that all or a portion of a given tax source be earmarked for a particular expenditure is not uncommon. What it means is that a particular revenue item would be committed in advance to pay in whole or in part for a specific program. The specific program is invariably of the of unassailable virtue and unquestionable merit.
Notwithstanding the allure, the idea involves the abdication by Parliament of its control over spending. The
funds for a designated program would rise and fall with the tax received, without regard to the relative costs or public desirability of the program; Parliament would not have to consider that. The tax revenue once earmarked would automatically flow to the designated program, and to that extent Parliament would be relieved of its direct right and obligation to determine how much the government shall spend and the purposes for which it shall spend it.
The hon. member's suggestion may have some superficial appeal, but recognizing its implications for Parliament the government is not prepared to concur in the denial of the right and obligation of Parliament at each session to vote supply. With respect to the idea of the program itself, I will certainly refer it to the Minister of National Health and Welfare (Mr. Munro).


John Leroy Skoberg: Mr. Speaker, on May 17 I asked the following question of the Minister of Labour (Mr. Mackasey) as recorded in Hansard at page 5858:
I wish to direct a question to the Minister of Labour, Mr. Speaker. It is based on the practice of hiring pipeline welders in Edmonton or Winnipeg only for a Trans-Canada construction job in Saskatchewan, a practice which effectively prevents the hiring of welders from Saskatchewan. Would the minister investigate such hiring procedures and determine whether Saskatchewan welders are not entitled to a fair chance of such job opportunities?
The Minister of Labour replied:
I am not sure if this is a question I can answer adequately. Perhaps it should be directed to the Minister of Manpower. But it seems very likely to be a problem coming within provincial jurisdiction since it concerns hiring arrangements.
I then directed the following supplementary question to the Minister of Manpower and Immigration (Mr. Mar-chand), although it was not permitted at that time:
Could I ask the Minister of Manpower if he has any indication whether any Saskatchewan welders could be hired for work on this project?
Mr. Speaker, Majestic Construction Limited of Edmonton has a $55 million contract for a pipeline from Bur-stall to Moosomin, in the province of Saskatchewan. This is with regard to Trans-Canada Pipe Lines Limited. The welders belong to the International Brotherhood of Plumbers and Pipefitters. However, the hiring on jobs from Swift Current west is under the jurisdiction of the Edmonton hiring office, and the hiring from Swift Current east is under the jurisdiction of the Winnipeg hiring office.
It appears that this problem should have been resolved long ago by the union itself. There should have been hiring from the province of Saskatchewan in order that the welders in that province who qualify could have been hired at that hiring hall. I assure you that there appears to be no excuse for hiring practices such as are being carried on by this union. However, I believe the greatest challenge we have before us is in relation to the danger of balkanization of various provinces.

May 18, 1971

Many provincial governments are acting or reacting in such a way that they can do nothing but harm to this nation. We are fast approaching a situation where there will be ten provinces, each passing legislation denying the entry of anyone from another province to work within its borders. We have already heard words from Quebec that manpower should be under provincial legislation. We know what has happened in Quebec. They have suggested that construction workers should be hired from Quebec only, and that people from provinces other than Quebec should not be permitted to work on construction jobs there.
We also hear from British Columbia that government people are suggesting that only B.C. workers should be employed on any project within that province. A typical example was seen recently in Prince George where some Saskatchewan people went to obtain employment. Employment was available, but when they said they came from Saskatchewan they were told that only British Columbia people were being hired. We also hear that people in the province of Alberta are suggesting that people from Saskatchewan should go back to Saskatchewan rather than come into Alberta for job opportunities. We have to ask ourselves, where we are going with this type of provincial barrier?
We listened to the chicken and egg debate in this House of Commons concerning the movement of produce from one province to another. We now have a provincial immigration war going on across our nation. No better example could be used than having the Minister of Labour pass the ball to the Minister of Manpower and Immigration (Mr. Lang) in respect of this question. Surely the present pipeline contract over which this dispute arose was public knowledge for some time. This is what the Minister of Labour for Saskatchewan indicated in a press release:
I wish to make it known, in the bluntest of terms, that the government demands Saskatchewan residents be hired for work undertakings in the province. If this policy is not adhered to immediately, we will take whatever action is needed to facilitate its prompt and effective implementation.
Surely that Minister of Labour knew about the $55 million contract, if he wanted to set down guidelines for the hiring of Saskatchewan welders. I ask the parliamentary secretary whether his department intends to allow Canada to become a country of ten nations, or whether the federal government intends to get the ten Premiers together to bring sense and reason to bear on the real problem facing our nation at the present time.
There is no reason for having a Department of Labour or a Department of Manpower if each province makes its
Proceedings on Adjournment Motion own decision. The relocation grant will mean little if this is to continue and if each of the Premiers of the ten provinces are to set up their own little empires and hire only within their provinces. With regard to the contractor to whom I referred who refused to hire Saskatchewan welders, the union and the provincial government can only be held responsible for the situation which has developed in the province. Unless the federal government immediately moves on this serious problem in Saskatchewan and also in respect of each of the ten provinces in Canada, we will no longer be a nation.
I believe it is important that the parliamentary secretary attempt to answer tonight whether or not the department he represents will try to do something to bring about understanding among the ten provinces of Canada with respect to hiring practices. I am positive that unless understanding is brought about within the departments of labour in each of the ten provinces in Canada, we will become balkanized and a country of ten nations, which is something we must avoid at all costs.


Mr.   Chas. L. Caccia@Parliamentary Secretary to Minister of Manpower and Immigration: Mr. Speaker, it would seem that the concern of the hon. member is at two levels, one short-term and one a long-range solution. Evidently, if the hon. member is looking for a quick solution to the question the most effective place for the matter to be raised would be in the legislature of Saskatchewan. He has admitted that this issue comes under the jurisdiction of the provincial governments.
We have information to the effect that the collective agreements in connection with the pipeline construction project give jurisdiction over welders on this project to the Plumbers and Pipefitters Locals 254 in Winnipeg and 488 in Edmonton, and that other workers are under the jurisdiction of union locals in Saskatchewan. We also understand that pending settlement of negotiations between the plumbers and pipefitters locals in Winnipeg and Edmonton and the local in Regina, work on the pipeline will not commence.
Regarding the long-range issue that the hon. member is raising, as to whether provincial governments should or should not have jurisdiction on labour relations, as they now have for specific sectors, of course this would be a question that could be raised at any federal-provincial constitutional conference. But if a satisfactory solution to this specific issue or to similar issues is to be found within the context of the present Constitution, I would suggest that the approximate place for raising the question is in the respective provincial legislatures, and the hon. member knows that.
At 10.20 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 19, 1971