1971-12-16

Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, since the passage of Bill C-229 last June, an act respecting the Unemployment Insurance Act, we have been formulating within the Unemployment Insurance Commission regulations that are needed in conjunction with the new act, particularly because of the widening of the coverage to almost universality in this country. There has been some confusion at the provincial level, as indicated in conversations with several of the provinces, as to precisely what employment under Her Majesty in right of a province means, although this terminology had been used in the old act for many years.
In order to remove the ambiguity or concern as to precisely what is meant I felt it would be in the best interests of everyone that the pertinent section of the regulations which will be shortly published in the Canada Gazette, as to what is and what is not a civil servant should be made available immediately.
The proposed regulation reads as follows:
2. For greater certainty, employment in Canada by Her Majesty in right of a province, for the purposes of subsection (1), only includes employment in Canada of employees who are appointed and remunerated under the Public Service Act or Civil Service Act of a province or who are employed in Canada by a corporation, commission or other body that is for all purposes an agent of Her Majesty in right of the province.


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to state for the purpose of the record that this act as presently administered is in an awful mess. We find that the minister is now bringing before us an interpretation of a section of the act in respect of which we on this side of the House had some problems during our earlier deliberations on the bill. I remember repeatedly asking the minister, on behalf of this party, whether the province of Quebec and the other provinces were in fact satisfied with the bill, and we were continually reminded, and indeed chastised by the minister, that the bill was in order and that the provinces were willing to accept it as it stood. I understand that the province of Quebec is not now going to pay into this fund some $20 million. I wonder whether in fact the fund is actuarially sound.
I am very concerned about the whole act. We as members are continually being asked about the payment of claims for benefits to which people are entitled. This is
not a hand-out. These people are entitled to their money. They have paid their premiums and accordingly should be able to obtain their benefits in due time.
The minister and his staff continually told us in the past that they would lengthen the waiting period to two weeks and there would be no great inconvenience. Things have not changed one bit. People are sick and tired, having paid their premiums, of having to wait six, seven, eight or nine weeks before getting their money.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: There is something else which should concern us. Yesterday I posed a question to the minister concerning the lack of co-ordination between his department and the Department of National Revenue when drawing up regulations. Apparently regulations are being drawn up by the Department of Labour which are contrary to those being established by the Department of National Revenue. Co-ordination must be improved. I suggest the minister should spend more time on this aspect of the legislation and stake his political future on the workability of the Unemployment Insurance Act rather than concern himself about technological changes which will probably not be discussed until some time next year. We might then have an Unemployment Insurance Act which would be credible, viable, and more useful to all concerned.
I trust the minister will make every effort to ensure that these people who have paid money into the fund will be treated with respect and dignity and that their claims will be expedited as quickly as possible. This is what the act is all about.


Some hon. Members:: Hear, hear!


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, to the extent that the regulation read to us by the Minister of Labour clarifies the situation, we welcome it. I suspect that it does clarify the situation, at least with respect to teachers in most of the provinces of Canada. I believe there is one province, though, the province of New Brunswick, where there was a different situation before the act was passed. We understood this when we were dealing with the bill in committee. But I repeat that insofar as this regulation would seem to clarify the situation with respect to teachers in the other nine provinces, we welcome it.
Nevertheless, a point has to be made-I assure Your Honour that it is closely related-with respect to the provision in the act which says that in the case of employees of provincial governments they are either all in or all out. I think this was a mistake. We opposed that provision when we were dealing with this legislation. I draw the attention of the minister to the fact that the regulation he has now

December 16, 1971
Unemployment Insurance Act
tabled may have the effect of complicating that situation. He has now said that employees of certain boards, commissions and crown corporations will be defined as provincial civil servants. That is fine in the provinces which decide to bring the civil servants in, but in those provinces that decide to leave civil servants out they are excluded from unemployment insurance coverage. So I suggest it may be necessary to take this regulation back to the drafting board and have a further look at it. The minister shakes his head. I always enjoy the movements of the minister's head, whether they are lateral or vertical. But I remind him we were assured in the committee that all this had been attended to. Yet it became necessary for the minister to clarify this point today.
I submit that still further consideration has to be given to the position of provincial employees generally. Speaking as one who believes that unemployment insurance coverage should be universal, I hope the minister will do everything he can to achieve that purpose, one which he said, when he brought in the bill, was his purpose also.
May I endorse what was said by the hon. member for Hamilton West about the unfortunate delays which are taking place. I know that the minister and the Unemployment Insurance Commission officials like to tell us that they are dealing with millions of people and that the number of delays represents only a small percentage, but a small percentage in this instance involves quite a few people. The number from whom we hear is very large and I think that something has to be done to speed up the handling of unemployment'insurance claims.
The only other remark I should like to make is one that we in this group feel is extremely important. I hope the minister will come before the House within a few days with a new or clarified definition of income for the purposes of the Unemployment Insurance Act.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: It is our experience that it is the way in which income is being defined that is the most serious fault in the administration of this act. Many hundreds, perhaps thousands of workers, are being denied benefits to which they feel they are entitled because certain income is regarded as income for the purposes of the act. I hope that the tabling of this regulation today is a forecast of another one regarding the definition of income which will be tabled in a few days. [Translation]


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, this is a case where we might say that all things come to him who waits. We have just heard a statement that could have been made yesterday, if the House had so allowed. In fact, the statement is rather brief and contains only one section of the regulations concerning the Unemployment Insurance Act.
I thank the hon. minister for informing the House of this provision of the regulations, pending their full publication. The statement enables us to see a little better the situation of provincial employees.
However, there is something wrong in the regulations. For instance, employees such as teachers or hospital workers who, for all practical purposes, will never receive any unemployment insurance benefits, will have to con-

tribute to the unemployment insurance fund. On the other hand, other workers-and here I believe the responsibility lies with the provincial governments-such as employees of the Quebec Departments of Roads and of Public Works, who for the most part are not on a full-time basis- for instance, they do not work during the winter-cannot receive any employment insurance benefits because they make no contributions to the fund.
Such is the ridiculous part of the situation, Mr. Speaker. I think we should engage in further negotiations with the provinces so as to enter into an early agreement likely to cover the workers that I have just referred to.
In conclusion, I would like to suggest to the minister that, in the administration of the Unemployment Insurance Act as regards claims submitted by the unemployed, the delays between the application and the time when they draw benefits are much too long. Even though the minister often says that 98 per cent of cases are dealt with according to regulations, it takes at least five or six weeks to process requests for benefits and that is far too long. I think we ought to find ways to reduce the delay between the end of employment and the time when the claimant draws his benefits.



MANPOWER


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, I would like to table in both official languages, under the provisions of Standing Order 41(2), a report on the Canada Manpower training program, results of training for the year 1970.



IMMIGRATION


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I would like to propose a motion under Standing Order 43. The pressing and urgent circumstances relate to the inability of government immigration laws and policies to cope with serious current problems, particularly the continuous illegal entry of many aliens from or through Canada into the United States with the participation of organized criminal elements. If unanimous consent is given I would move, seconded by the hon. member for Edmonton East (Mr. Skoreyko):
This House, taking note of the failure of existing immigration laws and regulations and the refusal of the government to propose changes, which has resulted in many abuses and particularly large-scale smuggling of aliens from or through Canada to the United States, urges that immigration laws and regulations be referred to the Standing Committee on Labour, Manpower and Immigration to inquire into the above practices and recommend suitable changes.
December 16, 1971


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Peace River. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


EXTERNAL AFFAIRS
Hon. Mitchell Sharp (Secretary of State ior External Affairs):: Mr. Speaker, with leave of the House I would like to table in English and French a number of international agreements, to be exact 26, which have been concluded by Canada over the course of the last 14 months.



INDUSTRY


Mr. lack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I request unanimous consent of the House to propose a motion under Standing Order 43 on a matter of urgent and pressing necessity.
Few Canadian industries have been faced with as many and varied economic problems as have confronted the pulp and paper industry. The effects of the accumulation of ills have been evident this year in a series of plant closings, temporary shutdowns and lay-offs. The industry has been hit hard in all provinces where mill closings are accentuating an already serious problem of unemployment. Despite the gravity of the problem facing the mills, which employ about 75,000 workers in Canada, the government has shown little interest in doing anything to aid the industry.


Mr. Speaker:: Order, please. I am sure the hon. member knows that the purpose of Standing Order 43 is not to make a speech and argue a case. Hon. members know that in basic fairness, inasmuch as the Standing Order does not provide an opportunity for a reply, they should respect the spirit of the Standing Order and limit themselves to indicating the urgency of the matter. The hon. member is going beyond the terms of the Standing Order. He should indicate what the motion is that he proposes for the consideration of the House.


Jack Marshall: I therefore move, seconded by the hon. member for Grand Falls-White Bay-Labrador (Mr. Peddle):
That the Standing Committee on Finance, Trade and Economic Affairs meet immediately to consider the state of the pulp and paper industry in Canada, to recommend projects to assist the unemployed workers, and to recommend measures to restore capacity of the mills affected.
Motions Under S.O. 43


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Humber-St. George's-St. Barbe. The motion 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. The motion cannot be put.



UNITED NATIONS


Mr. Colin D. Gibson (Hamilton-Wentworth):: Mr. Speaker, partly because time allocation is working effectively in this place I ask for unanimous consent under Standing Order 43 to move the following motion:
That the government of Canada urge the United Nations rules committee, or the relevant agency thereof which constitutes its equivalent, to limit time on debates to 20 minutes per speaker, except with the consent of the Chairman of the General Assembly or committees thereof, in order to speed up the work of the United Nations, and in order to stimulate interest in debate-


Mr. Speaker:: Order, please. I have to address to the hon. member the remarks which I addressed a moment ago to the hon. member for Humber-St. George's-St. Barbe. The hon. member cannot argue a case. He has to indicate what the motion is.


Colin David Gibson: On a point of order, Mr. Speaker, the reasons for the motion are very short and, if you will bear with me for one sentence, I shall continue.
-and in order to curtail existing expense and delay.
Further, that the government of Canada, through all existing publicity agencies give this recommendation wide publicity throughout Canada.


Mr. Speaker:: Order, please. The hon. member should respect the Standing Order. He should indicate to the House what the motion is. He may have been mentioning it up to this point but if so I did not understand. If he has done so he might indicate to the Chair that he has.


Colin David Gibson: I have done so, Mr. Speaker.


Mr. Speaker:: I apologize to the hon. member. I did not realize that he was actually putting the motion at that point. Hon. members have heard the motion proposed by the hon. member for Hamilton-Wentworth. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. The motion cannot be put.

December 16, 1971
Inquiries of the Ministry



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is directed to the right hon. Prime Minister. In view of the statement of the Minister of Manpower and Immigration to the effect that overseas officers of his department have sometimes ignored the directives of the department outright by simply "not reading them or by dismissing them as propaganda"-I make no comment upon that-I should like to ask the Prime Minister what action the government is taking to ascertain the extent of the lack of control by the minister over the activities of his officers in carrying out the policies of the government?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I am not aware of this particular complaint and I shall gladly discuss it with the Minister of Manpower and Immigration. However, it has been the policy of this government to ensure that civil servants everywhere do carry out the policy decisions of the government.


Robert Lorne Stanfield: Mr. Speaker, this does not seem to be the case according to the statement of the minister. In view of the seriousness of the minister's charge if it is correct, and the seriousness of the damage to the morale of public officials if it is not correct, I should like to ask the Prime Minister whether a full investigation is under way?


Otto Emil Lang: On a question of privilege, Mr. Speaker, since what seems to be attributed to me would seem to suggest a rather serious maligning of some very hard-working and efficient people, I should like to draw to the attention of the Leader of the Opposition that what he seems to be referring to is some general conversation about why it is in a specific case someone may not have received a certain amount of information and it was related to speculating about specific cases, and nothing more than that. If anything in the report of what I said, which I have not yet seen, was anything more than that, I certainly-


Mr. Speaker:: Order, please. The Leader of the
Opposition.


Robert Lorne Stanfield: I have a further supplementary question for the Prime Minister or the minister. I should like to ask whether it is the intention of the Prime Minister or the minister to leave matters where they stand with these grave doubts as to the extent to which the policies of the government are being carried out or, on the other hand, grave doubts with regard to the insubordination of officials. In view of the statement by the minister, is it the intention of the Prime Minister and the government to carry out an investigation to clarify this matter which cannot be left in this intolerable position?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Surely, Mr. Speaker, it is not all that intolerable. It happens every day, I am sure-


Mr. Hees:: In all your departments.


Pierre Elliott Trudeau: -in any civil service the size of Canada's that some officials somewhere, some time do not always carry out their instructions in the best possible way. This may be through human frailty, through delinquency or some other explanation.


George Harris Hees: Lack of direction.


Pierre Elliott Trudeau: The government tries to ensure the greatest possible efficiency in the civil service. The minister has said and it is recognized on both sides of the House that we have one of the best civil services in the world.


Some hon. Members:: Hear, hear!


George Harris Hees: Which you are doing your best to dilute.


Pierre Elliott Trudeau: So to state that there are sometimes, somewhere, some inefficiencies, Mr. Speaker, is no reason for the government to do like the Leader of the Opposition and charge on its mount toward windmills that seem to be-


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Mr. Speaker, may I ask one further question.


Mr. Speaker:: Order, please. The Leader of the
Opposition.


Robert Lorne Stanfield: I wonder which is the windmill that I am supposed to be charging? Is it the Prime Minister?


Mr. Speaker:: Order, please. The right hon. member for Prince Albert.


Mr. Fairweather:: How do you like that, Buster?


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, in order to find out what Buster meant, may I ask the Minister of Manpower and Immigration whether he has found that immigration officers overseas ignore policy directives outright, either by not reading them or by dismissing them as propaganda? Is that a fact or is it not?


Otto Emil Lang: No, Mr. Speaker, it is not.


John George Diefenbaker: Then why did the minister say it?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


Mr. lames A. McGrath (St. lohn's East):: Mr. Speaker, may I address a supplementary question to the Minister of Manpower and Immigration. In view of the very serious statement by the minister that he is unable to get his immigration officials or offices around the world to carry out policy directives, may I ask what steps he has taken to correct this very serious situation and whether, in fairness to the loyal civil servants in his department, he will make a statement in the House?


Otto Emil Lang: In fairness to those loyal civil servants, I wish the hon. member would not take a straightforward no,
December 16, 1971

turn it into some kind of yes and continue this slur which is uncalled for.



ILLEGAL MOVEMENT OF ALIENS FROM CANADA INTO UNITED STATES-GOVERNMENT ACTION

Mr. William Skoreyko (Edmonton East):: I have a supplementary question, Mr. Speaker, for the Minister of Manpower and Immigration. Does the government intend to take any action to meet the situation referred to in confidential American Department of Justice and FBI reports recently leaked to the press about the continuing problem of substantial movement of aliens from and through Canada into the United States?


Otto Emil Lang: Mr. Speaker, I have indicated a number of times before in the House that Canadian authorities, both within the department and elsewhere, co-operate in every way possible in acting on a whole variety of illegal activities, and this conduct is continuing.


William Skoreyko: Mr. Speaker-


Mr. Speaker:: Order, please. I will return to the hon. member in a moment. I think we should try to limit supplementaries until we get the first round of questioning out of the way.


William Skoreyko: Mr. Speaker, my question is supplementary to the one I originally directed to the Minister of Manpower and Immigration. As the minister has been unable to secure approval from his colleagues for amendments to the immigration laws promised in the Speech from the Throne in October, 1970, will he co-operate in bringing the matter referred to before the appropriate standing committee and include in that reference a draft of the bill which cabinet refused?


Otto Emil Lang: Mr. Speaker, the question of any changes in legislation which have been required more to meet the problems of the appeal board has really nothing to do with this question of the control of visitors in our country. I do not think any of us would like to suggest measures which would in any way limit the relative freedom we extend in this country for visitors to come here. I know this can be a source of certain problems, but it is also a source of many advantages.



COMMUNICATIONS


Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Minister of Communications. Is he aware of two applications for rate increases made by Bell Canada to the Canadian Transport Commission, one called a principal application to increase revenues by $78 million and the other an interim application for an increase to come into effect on January 1, 1972, and for which no hearing is planned? If he is aware of these two applications, what steps is he taking to make sure that the
Inquiries of the Ministry
interim increase at least will not be granted to this well known, penurious organization?


Hon. Robert Stanbury (Minister of Communications):: Mr. Speaker, the hon. member knows, I think, that under our statutes the responsibility for making decisions on such applications is that of the Canadian Transport Commission and that the Minister of Communications cannot give any direction to that commission.


David Lewis: Perhaps the Minister of Communications has not had occasion to read all the relevant sections of the act.


An hon. Member:: Don't lecture.


David Lewis: Since under the act the Governor in Council is given authority to require the commission to give it all information, to supply it with all applications and to require information from the corporation asking for rate increases, has the minister taken any steps at all or is he planning to take any steps to look into this outrageous demand by Bell Canada for an interim increase to come into effect without a hearing?


Mr. Speaker:: Order, please. The minister may reply briefly. However, the hon. member will appreciate that that was more a speech than a question. In any event, I suggest the minister should reply.


Robert Douglas George Stanbury: Mr. Speaker, I am certainly interested in these applications, and the Department of Communications is certainly examining all available information concerning them, but that was not the hon. member's original question.


David Lewis: Will the minister at least suggest, if he will not request of the Canadian Transport Commission, that the commission should not agree to any increase in rates by Bell Canada, not even on their interim application, unless there is a hearing?


Robert Douglas George Stanbury: Mr. Speaker, I think the Canadian Transport Commission will no doubt take note of that representation.


David Lewis: You should make it. That is what the minister is there for.


Robert Douglas George Stanbury: I think the hon. member should go back and look at the act again.



MANPOWER


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration in connection with the local initiatives program in effect during the winter.
In the Quebec construction field, weekly wages of $150 are compulsory under an order in council. Is the minister

December 16, 1971
Inquiries of the Ministry
aware that such an order exists and what solution does the federal government or the minister himself intend to offer in order that the local initiatives program may be carried on in Quebec?


Otto Emil Lang: Mr. Speaker, we are well aware that a number of regulations, whether governmental or union, require certain wage levels and that some of these people who are subject to such rules may take part in the local initiatives program. Our rule does not in any way stop this kind of payment being made. It is related to the amount of the grant we can make per week or month, per man employed. That is an average maximum upon which our grant is based and there is nothing to exclude more or less being paid. There is nothing to exclude money obtained from other sources being used in connection with programs.


David Réal Caouette: Mr. Speaker, I should like to put a supplementary question to the minister.
Does that mean that, if the province of Quebec decreed a weekly salary of $150 instead of the $100 stipulated by federal law, the federal government will not contribute in any way to make up the difference if the province of Quebec does not supplement the $50 in the case of youth projects, for instance?


Otto Emil Lang: Mr. Speaker, the fact that a very large number of applications have come forward, most of them meeting our criteria, indicates that local and municipal groups in the province of Quebec can meet these criteria. The objective behind the criteria was to channel as many as possible of the jobs to those areas where they are needed most, areas where the people need them, which means-


Mr. Speaker:: Order, please.



FINANCE


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the Minister of Finance. Can the minister advise the House whether the United States has requested directly of Canada or demanded that Canada peg the value of the Canadian dollar, and whether that pegging should be in the upper ranges, relatively speaking, as between the major world currencies and the United States dollar?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, no such demand has been made.


Marcel Joseph Aimé Lambert: Would the minister advise the House whether the United States agreement in principle to devalue their dollar would be in exchange for a relaxation of certain non-tariff barriers by the Common Market? If that is the case, does Canada intend at tomor-

row's meeting to back the United States actively in the demand for relaxation of these non-tariff barriers?


Edgar John Benson: Mr. Speaker, I really cannot answer that question because I was not at the meeting with Mr. Pompidou.



INDUSTRY


Jack Marshall: My
question is for the Minister of Industry, Trade and Commerce. In view of the unstable international exchange rates, the United States 10 per cent surcharge, the floating appreciation of the Canadian dollar, and the widespread lay-offs in the pulp and paper industry, has the government decided to implement a specific program of assistance to the industry and the individuals who are being laid off daily?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Without agreeing to the postulates, because some are false, may I repeat Mr. Speaker, what has been said on a number of occasions? We met on December 6 with representatives of the pulp and paper industry. We discussed ten different items. Ten ministers were present. I am to meet with the industry again in early February. In the meantime, a number of studies have been undertaken.



CANADA-UNITED STATES-STATE OF NEGOTIATIONS ON AUTO AND DEFENCE-SHARING AGREEMENTS-POSSIBLE REMOVAL BY UNITED STATES OF CERTAIN AGRICULTURAL TARIFFS

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: have a question for the Minister of Industry, Trade and Commerce. Now that it appears likely there may be some solution to the question of the realignment of currencies, what progress is being made in the minister's discussions with the American government regarding what he calls irritants and, particularly, has any agreement been reached with regard to the Canada-U.S. auto pact or with regard to the defence-sharing agreement?


Jean-Luc Pepin: No, Mr. Speaker. I can only say that the discussions are continuing.


Thomas Clement (Tommy) Douglas: In view of the fact there is a wide variety of important agricultural products which under the Kennedy round will enter the United States duty free on January 1 and as a consequence will be exempt from the 10 per cent surcharge, has the minister in the course of his discussions ascertained whether * the American government intends to comply with the Kennedy round provisions and remove these duties on January 1?
December 16, 1971


Jean-Luc Pepin: Mr. Speaker, we have put this question to the U.S. administration on a number of occasions. We have not yet obtained a firm decision on the subject of the removal of certain tariff items in accordance with Kennedy round implementation.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for one last supplementary. I think I should remind hon. members that the number of supplementar-ies makes it difficult for other members to be recognized toward the end of the question period.


Thomas Clement (Tommy) Douglas: Does the minister expect to be able to make a statement to the House, if possible before the recess, on any agreement that has been reached with regard to the removal of the irritants to which he has referred?


Jean-Luc Pepin: I cannot promise that, Mr. Speaker, because I do not really know what the chronology of events will be in the following days.


Mr. Speaker:: Order, please. For the moment the Chair will try to recognize hon. members who were not recognized yesterday. I think I remember most of them.
 * *



RECONSIDERATION OF CANCELLATION OF GRANT TO NATIONAL CANCER INSTITUTE

Mr. W. B. Nesbitt (Oxford):: I have a question for the Minister of National Health and Welfare. In his absence, and because it is doubtful how much longer we will be here, I will direct it to the Prime Minister. It relates to a question I asked the Minister of National Health and Welfare about three weeks ago concerning the cancelling of grants for cancer research. At that time the minister indicated he would reconsider this. Can the Prime Minister inform the House whether these grants for cancer research in Canada have been reinstituted? It seems inexcusable that they should have been cancelled.


Pierre Elliott Trudeau: Mr. Speaker, I am sure the minister lived up to his commitment. I do not know the result of that reconsideration. Perhaps the hon. member can ask the minister that question when he returns from the meeting he is presently attending with the provincial health ministers.



INDUSTRY


[Stage Direction]
Canada
Mr. Edward Broadbent (Oshawa-Whitby):: My question is for the Minister of Industry, Trade and Commerce. In view of the fact that, if Canadians were producing in Canada that percentage of North American automobile products that they actually consume, such production would provide about 30,000 additional Canadian jobs, can 24725-37
Inquiries of the Ministry
the minister inform the House if in discussions with the Americans his officials have made a request for a change in the auto pact which would bring this about?
Hon. jean-Luc Pepin (Minister of Industry, Trade and Commerce): Mr. Speaker, it would take half an hour to deal with the question raised by the hon. member. I hope to do so in due course. In the meantime, I might say that I have already given an answer to that question a few months ago. I suggested at the time it would not be wise to tie ourselves to this particular target. I will make the necessary analysis in the House in due course. I have said on a number of occasions that I will take the House into my confidence before we reach any final agreement with the United States.


John Edward Broadbent: Can the minister inform the House if the state of negotiations on this subject is such that he expects an agreement to be reached before the Christmas recess and, if so, what form of announcement he plans to make in the House? Will it simply take the form of an announcement or is it the intention to have a debate on the issue?


Jean-Luc Pepin: Presumably, Mr. Speaker, I will make a statement. My hon. friend will have a chance to reply, comment and disagree with me, I am almost sure.



MANPOWER


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: My question is for the Minister of Manpower and Immigration. It pertains to the winter works project undertaken by the government at Petawawa in Renfrew County at the Department of National Defence and the forestry station. Can the minister tell me why unemployed people from the Renfrew, Eganville and Killaloe areas are refused employment on this project, despite the fact they are in the same area and same country, while applicants from Pembroke are acceptable?


Mr. Speaker:: Order, please. I respectfully suggest to the hon. member that the question can be interpreted as a representation for the consideration of the minister. To the extent it is a question, I think it can well be considered at the time of adjournment.



REGIONAL ECONOMIC EXPANSION


Mr. Herb Breau (Gloucester):: Mr. Speaker, I would like to ask a question of the Minister of Regional Economic Expansion.
Have the government of New Brunswick or Consolidat-ed-Bathurst Limited made a proposal to the minister in

December 16, 1971
Inquiries of the Ministry
order to find a solution which would provide jobs for employees laid off last week in Bathurst, or has the province of New Brunswick made a suggestion for new programs to create jobs for these workers?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I received a long telegram from the New Brunswick premier who is to meet me tomorrow morning in that connection.



UNEMPLOYMENT INSURANCE


Mr. Robert C. Coates (Cumberland-Colchester North):: My question is for the Minister of Labour. Is the minister in a position to indicate to the House the degree of the difficulties that have developed at the computer centre in Moncton with regard to the processing of unemployment insurance claims and the extent of the difficulties this is causing for claimants?


Mr. Speaker:: Order, please. I have serious doubts whether it is in order during the question period to refer to individual difficulties in relation to particular Unemployment Insurance Commission offices. Perhaps the hon. member might consider the possibility of having the question put on the order paper or of raising it at the time of adjournment. Possibly the minister might be prepared to reply quickly.


Robert Carman Coates: Mr. Speaker-


Mr. Speaker:: Order, please. I have allowed the minister to reply quickly so that we can get on with the question period.


Bryce Stuart Mackasey: Mr. Speaker, the computer in the Atlantic area broke down on Monday, December 13 at 4:30. It was operating again the next day at 11:30. In the meantime, a midnight shift was established. By the end of December 15, everything was back to normal and up to date.


Mr. Speaker:: Order, please. I see that several hon. members want to ask supplementaries and I suppose they will be related to similar problems in other parts of the country. For the present, in order to check on my assumption- [English]
I will recognize the hon. member for Victoria-Halibur-ton.


Mr. W. C. Scott (Victoria-Haliburton):: A supplementary question. Will the Minister of Labour consider discarding the computers and going back to manual operation in the preparation of these payments?


Mr. Speaker:: Order, please. This, of course, is a representation for the consideration of the minister.
{Mr. Breau.]



DISCUSSION WITH QUEBEC CONCERNING REGULATIONS

Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I have a supplementary for the Minister of Labour.
Further to his statement of today in the House on unemployment insurance, could the hon. minister tell us whether he has had discussions since yesterday with the Quebec government and what is that government's attitude with regard to the new regulations the hon. minister has announced today?


Bryce Stuart Mackasey: Mr. Speaker, I felt that in courtesy to the House of Commons I should first make the particular section of the regulations known to hon. members. I would imagine that events would flow accordingly.


Georges-J. Valade: Mr. Speaker, I have a supplementary question for the minister.
I would like to clarify my question and ask him if he has had, since yesterday, any consultations with Quebec in order to determine what position the government intends to take with regard to the decisions that his department is to announce soon.


Bryce Stuart Mackasey: Mr. Speaker, I think I should make it very clear that the new act, as did the old act, provides for exception of public servants in each and every province in Canada. Some provinces, however, have taken advantage of another provision in the act, despite this exception, to request inclusion of all their public servants. The problem with the province of Quebec has been in defining precisely the public servants, and I could imagine-


Mr. Speaker:: Order, please. I wonder whether the minister would like to return to motions to make a statement. The hon. member for Assiniboia.



EXHIBITION IN PEKING IN 1972-INCLUSION OF AGRICULTURAL PRODUCTS EXHIBIT

Mr. William Knight (Assiniboia):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the importance of the Canadian solo fair in China in 1972, has the minister considered an exhibit based on the agricultural products available to the People's Republic of China?


Jean-Luc Pepin: Mr. Speaker, it has already been announced that we will have a Canadian exhibition in Peking in the summer of 1972. Applications from Canadian producers are being received now. I do not know whether there is a selection being made by categories of industries but I will find out and report further.
December 16, 1971



UNEMPLOYMENT INSURANCE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Labour.
Since the Unemployment Insurance Commission cannot pursue negotiations with the United States or any of the American states in order to establish unemployment insurance benefit parity, does the minister intend to carry on these negotiations at the ministerial level so as to reach that goal?


Bryce Stuart Mackasey: Mr. Speaker, the hon. gentleman has raised this question on many occasions as a result of his concern for people in his riding. May I suggest to the hon. gentleman that early in the week we arrange a meeting with the hon. gentleman and the unemployment insurance commissioners in order to ascertain precisely what the situation is that is of concern to the hon. member.



ROYAL CANADIAN MOUNTED POLICE


Mr. P. V. Rynard (Simcoe North):: Mr. Speaker, may I address a question to the Solicitor General. In view of the reported fact that marijuana has now become the highest return cash crop per acre and its use is on the increase, would the Solicitor General state what steps are being taken by the RCMP, in conjunction with the Department of Agriculture and the Department of National Health and Welfare, to locate these growers and to prosecute the owners and distributors of these illicit crops?


Hon. lean-Pierre Goyer (Solicitor General):: Mr. Speaker, I would like to consult the other departments concerned.


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I have a supplementary question for the Minister of Agriculture. In light of the fact that Statistics Canada has found that marijuana has now become a national agricultural product, can the minister inform the House whether the government is considering this crop in a new agricultural income stabilization plan?


Hon. H. A. Olson (Minister of Agriculture):: No, Mr. Speaker, and it is not listed under other crops.


Mr. Speaker:: Order, please.
24725-37*
Inquiries of the Ministry AIR CANADA



SLOWDOWN BY GROUND PERSONNEL-ASSURANCE OF NO DISRUPTION OF PASSENGER SERVICE DURING CHRISTMAS HOLIDAYS

Lincoln MacCauley Alexander: Mr. Speaker, I should like to direct a question to the Prime Minister regarding the Air Canada slowdown. In view of the initiation of a work to rule campaign by ground personnel of Air Canada, can the Prime Minister inform the House whether the government has been assured there will be no major disruptions of passenger service during the Christmas holidays and, if not, are measures being undertaken so that such an assurance can be given in the next few days?


Bryce Stuart Mackasey: Mr. Speaker, I am not sure that the hon. gentleman who is an industrial relations critic, is suggesting that I should bring in emergency legislation to remove from the workers their right to strike if that right becomes legal during the Christmas holidays. I have made it clear in television interviews that I think work to rule is self-defeating and I would suggest to the union members that they drop these tactics between now and the time the conciliation report is made public.


Lincoln MacCauley Alexander: I wonder whether the Minister of Labour can assure the House that there will be no major disruptions over the Christmas holidays? I think that is the important point.


Bryce Stuart Mackasey: Mr. Speaker, the only way I can give that assurance is to take away from Canadian workers precisely what they are entitled to under the law of the land.


Mr. Speaker:: Order. This is becoming a debate between the minister and the hon. member.



SUGGESTED HIRING OF ADDITIONAL EMPLOYEES TO IMPROVE SERVICE

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, may I ask the Prime Minister or the Minister of Labour, who seems to be doing the answering, whether, in view of the high unemployment level in Canada and in view of the fact it is extremely difficult and time consuming to obtain a reservation from Air Canada by calling their reservation number, 237-5000, the minister will undertake to improve both the unemployment situation and Air Canada's service by asking Air Canada to hire some people?


Mr. Speaker:: Order, please. Again that is a
representation.



CIVIL LIBERTIES


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I want to ask the Minister of Justice a question in reference to personal liberties. The Minister of Justice has been quoted as saying that he was under strong, very high-

December 16, 1971
Inquiries of the Ministry
placed pressure to curtail certain personal liberties. What high places was he talking about and what civil liberties was he referring to?


Mr. Speaker:: Order, please. I have very serious doubts about this kind of question. Perhaps the hon. member might rephrase it, unless the minister can reply and give the information fairly quickly. It seems to me the question is more in the nature of debate or academic discussion between the hon. member and the minister. As I say, if the minister thinks he can reply quickly he can take the floor for that purpose.


Eldon Mattison Woolliams: Then may I rephrase my question, Mr. Speaker. The minister stated that personal liberties were in danger from pressure by certain people. Were these people within the government, and what personal liberties was he speaking of? This is a very important matter for the Canadian people.


Hon. John N. Turner (Minister of Justice):: In this interview, Mr. Speaker, I was striking a balance that I think every free society has to strike in the enforcement of the law between individual liberty, on the one hand, and the security of the people on the other.


Mr. Speaker:: Order, please. I see there are three hon. members who want to ask su'pplementaries on this subject. I must bring to the attention of hon. members that it is against the rules to debate in the House speeches that are made outside the chamber by ministers. Many ministers, I note from newspaper reports, make speeches outside the House from day to day, and if we were to spend most of our time during the question period inviting interpretations from ministers as to what they meant or did not mean, we would spend quite a bit of time debating this kind of issue. The hon. member has raised this matter so perhaps he might put his question directly.


Eldon Mattison Woolliams: I will make my question very short, Mr. Speaker, and I appreciate your courtesy. Is the government thinking of re-enacting some public order act, and is the Minister of Justice differing with other members of the government with reference to the implementation of such a new act?


John Napier Turner: Mr. Speaker, the answer to the first question is that there is a motion before the House allowing me, if called upon by the Standing Committee on Justice and Legal Affairs, or by the special committee contemplated by such motion, to express some views as to the balance to be struck between individual liberties and collective security. The answer to the second question is no.



PRESSURE TO LIMIT RIGHT TO DEMONSTRATE, PICKET AND TAKE PART IN MEETINGS-POSSIBILITY OF LEGISLATION

Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question to the Minister of Justice is supplementary to the question just asked him. Has he had any pressure placed on him by people who would like to see him introduce amendments to the Criminal Code to limit the right of citizens to demonstrate, to picket and to take part in

meetings? Can he assure the House that he is not contemplating such legislation?


John Napier Turner: I can give an assurance to the House that no legislation altering the balance between civil liberties and national security will be introduced, short of a crisis, without coming to Parliament in the way I have indicated to the hon. member for Calgary North.



POSSIBLE LEGISLATION TO ESTABLISH OMBUDSMAN

Mr. R. N. Thompson (Red Deer):: I wonder whether the Minister of Justice, in planning new legislation, is considering legislation which would set up the office of ombudsman as this would really help to protect civil liberties?


John Napier Turner: The hon. member and I have debated this in every session of Parliament since we have both been here.



INCOME TAX


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I have given notice of this question to the Minister of Finance and I think his answer might be helpful to the debate later today and tomorrow. Would the minister propose making retroactive certain of the amendments to the income tax legislation to be introduced in the new year?


Edgar John Benson: Mr. Speaker, that will depend on the nature of the amendments. I mentioned a few last Friday that were being contemplated by the government. For example, the one dealing with deferred profit-sharing plans would have to come into effect at the same time as Bill C-259, at the beginning of the year.



GOVERNMENT ADMINISTRATION


George Harris Hees: Mr. Speaker, I have a question for the Prime Minister. As more than a month has now passed since the government launched its investigation into the leak of the so-called Gray report, and as no report has been made to Parliament so far, can the Prime Minister advise us what results, if any, have been obtained from this investigation?


Pierre Elliott Trudeau: I will check to see whether any results have been obtained.


George Harris Hees: As, obviously, there are no results to be reported by the Prime Minister, I will ask him this supple-
December 16, 1971

mentary: which member of his cabinet is he shielding and what is the reason for it?


Mr. Speaker:: Order, please. That is not a proper question.



ADMINISTRATION OF JUSTICE


Mr. John Gilbert (Broadview):: Mr. Speaker, I have a question for the Minister of Justice. Bearing in mind the mean, despicable and unsportsmanlike actions of some snowmobilers who chase and kill animals from snowmobiles, would the hon. gentleman amend the Criminal Code to prohibit this cruel practice?


John Napier Turner: I would have to ascertain whether the existing provisions of the Criminal Code are sufficient to substantiate that type of prosecution. I will take the question under consideration.



AGRICULTURE


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Agriculture. I should like to ask him whether his department will be acquiring extra help, or has it the use of a computer which makes it possible to make payments with respect to subsidies.


Horace Andrew (Bud) Olson: I do not
understand the purport of the question. If it is whether we need additional staff to operate computers, I do not think there is such a need.


Stanley James Korchinski: We were told by the minister in the Committee on Agriculture that subsidies could not be paid because there was an administrative burden. I wonder how the department is getting around this difficulty.


Mr. Speaker:: I believe the hon. member for Mackenzie is rising on a point of order.


Gerald William Baldwin: There is something coming over from the States right now.


Mr. Speaker:: Order. Obviously there is something wrong with the hon. member's microphone. Perhaps he could wait a moment while adjustments are being made. He will be recognized later, or perhaps he might, by leave of the House, move to another seat. Order, please. It might be useful if I were to suggest to hon. members that we proceed without the assistance of the microphones for a few moments and allow the hon. member to direct his question. If we are all peaceful and quiet we can hear the question and the answer can be heard also.
Inquiries of the Ministry


Stanley James Korchinski: I have no difficulty there, Mr. Speaker. I should like to rephrase the question I put to the Minister of Agriculture a few moments ago, because he did not comprehend that I was referring to the payment of the butter subsidy. I am wondering whether he is employing extra staff, or whether his department has had the use of a computer in the last few years to calculate the amounts of money to be paid to these producers.


Horace Andrew (Bud) Olson: Yes, Mr. Speaker. Records of all producers are kept by a computer and we can draw this information from the computer tapes.


Stanley James Korchinski: Bearing in mind the fact that some creameries have been closed, may I ask how the minister is able to cross-check to confirm that these creameries are closed?


Mr. Speaker:: Order, please. I suggest we are entering upon debate at this point.


Stanley James Korchinski: What is wrong with that?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.



COMMUNICATIONS


Mr. John Roberts (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, I have a question for the Minister of Communications. Is my hon. friend considering action to deal with the rapidly accelerating take-over of credit agencies in Canada by United States firms and the consequent danger that personal and confidential information will be stored in the United States rather than in Canada?


Robert Douglas George Stanbury: have no mandate to deal with credit bureaux, but we are aware of the possibility of the transfer of personal information to computers and, particularly, to remote computers. We are studying the implications of this. I personally, would consider it a matter of concern if personal data on Canadians were transferred by Canadian companies to any foreign country.



EXTERNAL AFFAIRS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to ask the Secretary of State for External Affairs whether he is in a position to reply to my question of yesterday concerning the state of our latest contribution to relief for Pakistani refugees?


Mitchell William Sharp: No, Mr. Speaker. I am not in a position to answer

December 16, 1971
Inquiries of the Ministry
the question immediately. I am having my officials check the situation. I would like to answer the whole of the hon. member's question, not only by telling the House what has been distributed to date, but also what recommendations will be made in view of the new situation we face now with the collapse of the East Pakistan army and the recognition by India of the state of Bangla Desh.


NATIONAL DEFENCE
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is directed to the Acting Minister of National Defence. It has to do with a directive issued recently to news editors on Canadian Forces Bases across Canada banning the use of news material from the Public Service Alliance. Can the acting minister tell us why a form of censure has been imposed upon the receipt and utilization of such news material at this time?


Jean-Luc Pepin: I am sorry. This question is not answered in the minister's briefing book I was given a few minutes ago. I will check and answer the question tomorrow.


CONSUMER AFFAIRS
Mr. Max Saltsman (Waterloo):: Mr. Speaker, I should like to direct my question to the Minister of Consumer and Corporate Affairs. Has the minister's attention been drawn to the extensive distribution of unsolicited credit cards by the Canadian Tire Corporation, charging 24 per cent interest, and does he intend to take any legislative action against the sending out of unsolicited credit cards?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, no, it has not. If the hon. member will send me the credit card I would be happy to take a look at it. There is no federal law at the moment against the use of unsolicited credit cards, although several provinces have acted in this area.


FINANCE
Mr. Henry Latulippe (Compton):: Mr. Speaker, I would like to ask the hon. Minister of Finance a question.
[Mr. Sharp.)
Could he tell the House whether he is prepared to comply with the request of the head of the Canadian Chamber of Commerce and of three provinces asking for a devaluation of the Canadian dollar so that our products may compete with American products on the United States market?


Edgar John Benson: No, Mr. Speaker.


REGIONAL ECONOMIC EXPANSION
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion. On December 13 I asked the minister a question concerning the Argentia task force and whether it was still in existence. He offered to reply later. Is he now in a position to answer my question?


Jean Marchand: Mr. Speaker, the task force is going to make another report. Because of certain circumstances in the province of Newfoundland it has not been possible to have a meeting until the last few days. As soon as I receive the report I will be able to inform my hon. friend of the contents.


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


Mr. Mazankowski:: Mr. Speaker, I should like to direct a question to the minister in charge of the Wheat Board but I see he has left the House so I shall leave it until tomorrow.


VETERANS AFFAIRS
William C. Scott: Mr. Speaker, my question is for the Minister of Veterans Affairs. It deals with a newspaper report that several hundred Canadian war veterans living in Great Britain are suffering undue hardship because of regulations governing the payment of war veterans allowances. Would the minister say whether or not his department is prepared to review the existing regulations to determine whether some veterans are being wrongfully denied pensions or allowances under the act?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, no veteran is wrongfully denied his pension. A veteran's pension follows him wherever he goes in the world. However, with reference to war veterans allowances, which are a very special social measure, it is very difficult to administer them in other countries. This is why there is a qualification of at least one year's residence in Canada. The qualification was established by Parlia-
December 16, 1971

ment in 1962. All those who otherwise qualify, and who have lived for at least one year in Canada since the war, are receiving their war veterans allowances.


Mr. Speaker:: The Chair will recognize one last supplementary and then call orders of the day.


Jack Marshall: Mr. Speaker, would the minister advise if he is prepared to amend the War Veterans Allowance Act to repeal the one-year residence rule for those veterans who are in the United Kingdom?


Jean-Eudes Dubé: Mr. Speaker, this Parliament has already considerably enriched war veterans allowances and disability pensions. What the next Parliament will do I do not know, but we are always heading in a more generous direction.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE


Gerald William Baldwin: Mr. Speaker, may I be permitted to ask the government House leader about the business. In my anxiety about the breakdown of communications I forgot to ask the government House leader about the business he has for the House for the remainder of this week, next week and following.


Mr. MacEachen:: Mr. Speaker, the business for tomorrow is fairly well known to hon. members but I should like to mention the remaining items on the order paper that I would like to have disposed of before we terminte this part of the session. These items are as follows: Bill S-9, which I understand will require a very short further discussion, Bill C-176, Bill C-260 and Bill C-261, the latter two being the budget bills emanating from the June budget. I should also mention that there will be a further budget bill arising from the so-called budget statement of the Minister of Finance in October, which will give effect to the tax changes that will take place in this calendar year, so that by proceeding in that way we will not run into the procedural difficulty that we might have encountered had we attempted to put in one single bill the total tax changes involving this year and next year. This is not necessarily the order in which I will call these items. I have already discussed with the House leaders opposite my wish to have the Northern Canada Power Commission bill and the Canadian Wheat Board bill, which are at the report stage, reinstated reasonably close to that stage or at that stage when we commence the new session.
The termination of this part of the session, Mr. Speaker, will depend upon the readiness of the House to deal with these items I have mentioned and also when we will have Royal Assent affecting these bills and particularly Bill C-259. I should say, to provide some reasonable certainty to members, that in the event we are still dealing with business on Thursday next at ten o'clock it would be my intention not to have the House sit the following day and to have transport arranged definitely for hon. members to travel to their respective constituencies with less difficulty
Business of the House
than may be expected at this time of year. But that is looking a bit farther ahead than may be necessary at the moment. However, I did want to mention it so that hon. members will be certain that in any such contingency it will be possible for them to be in their homes for Christmas.


Gerald William Baldwin: Mr. Speaker, could the minister also indicate, within the reasonable limitations which he has mentioned, when we may expect to come back following our departure and whether he has heard from his parliamentary neighbour, after we do come back, how long we will stay before we depart for other adventures.


Allan Joseph MacEachen: I regard the last question as being really a frivolous one and not really serious. I have some tentative dates I would like to put in a motion indicating when we would come back and when we would commence the new session, but I would like to have a word first with the House leaders on that point before putting it in the form of a motion or before announcing it in the House. I have no idea concerning what is going on in the other place-


Mr. Bell:: There is a wake on there.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -but I hope they will follow their own lead.


Stanley Howard Knowles: Mr. Speaker, does it follow from what the President of the Privy Council has said that such business as the government wants through in this session it wants completed before we break, and that at that time it is to be simply an adjournment leaving prorogation until the day on which we return?


Allan Joseph MacEachen: Yes, I think that would be the intention for a number of reasons.


David Réal Caouette: Mr. Speaker, I rise on a point of order.
I suggest we are "muzzled" by the sound system. When government members are talking, we can hear them, but whenever opposition members have the floor, we cannot hear a thing.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, December 15, consideration of the motion of Mr. Benson for the third reading of Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, and the amendment thereto of Mr. Knowles (Winnipeg North Centre) (page 10464).
[Stage Direction]
December 16, 1971
Income Tax Act
Mr. Allen B. Sulatycky (Rocky Mountain):: In enumerating the very positive benefits which will result to the people of Canada from the new and improved tax legislation that we have before us now, one of the important items not to be overlooked is the employment expense deduction of 3 per cent of employment income up to a maximum of $150 a year for which no receipts will be required. This is something that the working people of Canada have long demanded. It is a real inequity when a person is required to purchase special equipment, tools or clothes in order to maintain a job and yet is not allowed to claim those expenses as legitimate expenses to earned income.
With this new provision in the Income Tax Act, anyone who has employment income will be able to claim up to $150 a year without receipts for those expenses. It will work very much like the medical expense claim which has existed in our income tax structure for many years. A claim for $100 for medical expenses is made as a matter of right by all taxpayers. Beginning next year all taxpayers in Canada who have employment income will be able to claim in addition either 3 per cent of their employment income or $150 as a legitimate deduction because that amount of money is considered to have been an expenditure they have made in order to carry on their employment. I think this is a very important improvement in the interests of working Canadians.
As I said earlier, the aspect of this bill which gives me the greatest satisfaction deals with the senior citizens of Canada, the people of Canada who have reached the age of 65 years or more. Up to now, taxpayers of 65 years or over have enjoyed only the same personal exemption as any other taxpayers. Those 70 years of age or over have an additional $500 personal exemption. When this bill is passed, not only will the taxpayers over 70 have that additional deduction but all taxpayers 65 years of age or over will have an additional exemption which will be increased from $500 to $650. In my opinion this represents another important step forward in the interests of our senior citizens.
There are a couple of other important improvements so far as the personal income tax structure is concerned. One is the allowance for moving expenses as a deductible item from income tax. Henceforth, from January 1, 1972 taxpayers who change jobs and are required to move will be able to claim the expenses of moving their households.
Lastly, the item I want to mention is the employer-paid living expenses for jobs at distant work sites. Until now, under our system, many employees were receiving living expenses when working at a distant work site. There are many people in my constituency who are in this category. The employer is paying the living expenses of that employee, and the employee must show those living expenses as an item of income and must pay income tax on the living allowances. The government has now recognized that in many cases this is an injustice. It is unfair to those taxpayers who are required to live at long distances from their home and for whom the employer pays the living expenses. In future, those living expenses will be a deductible item from the income tax.
I would like to touch briefly on some of the points that members of the opposition parties have made in the debate on this amendment and on some of the attitudes of

the opposition parties which I believe should not go unanswered. I have described in some detail the benefits of this legislation for the average taxpayer in Canada. These benefits will result in a total tax reduction for the Canadian people of one and a half billion dollars, which represents about 10 per cent of the total federal budget. In fact, it represents a very substantial tax reduction taken as an aggregate. But despite this reduction, the very important programs of the federal government must continue and revenues must be raised in order to continue those programs.
In addition to that, any system of taxation which we have must be seen to be fair. The people who pay the taxes must not look at the system and say that it contains many loopholes which are available to certain categories of taxpayers. In order to bring about justice and to close these loopholes, it is perfectly clear that some categories of taxpayers, certain businesses, and certain special interest groups will have to pay more tax. No one is attempting to deny that. This is a fact that no one can hide.
However, what the Leader of the Opposition (Mr. Stanfield) is attempting to do is to protect those people who will be required to pay more taxes when he says that we should split the bill, give the benefits, but not pass any other portion of the bill until we study it further. I am sure that none of us really believe that the people of Canada are stupid, but that appears to be what the Leader of the Opposition is almost about to believe when he thinks that the people of Canada will accept that sort of suggestion. The people of Canada understand that when we are going to make massive tax cuts, as there are under the bill, someone will have to pay more. In searching for words to describe this lack of understanding on the part of the Leader of the Opposition-


Robert Norman Thompson: Don't search too hard, Allen.


Allen B. Sulatycky: -the first word that came to my mind was "unaware". However, I would not want to accuse him of being unaware and it seems to me more appropriate to refer to the Leader of the Opposition as being "underaware". I would think that the Leader of the Opposition is "under-aware" of the facts and of the wishes of the Canadian people. Especially in these cold winter months,-


Mr. McBride:: He is long on johns and short on dollars.


Allen B. Sulatycky: -people will think of the Leader of the Opposition as being "under-aware" when they think of his stand on this particular bill.


Robert Jardine McCleave: What dignity you people add to this place.


Allen B. Sulatycky: The Leader of the Opposition also said that it is a complex bill. Naturally it is complex. Any tax statute dealing with income tax in a complex, modern society must be complex. If it were not going to be complex why would it have required ten years to produce something that would obviously be regarded as fair?
There is only more point I want to make with respect to the attitude of the Conservative party and the Leader of

the Opposition. Last week when speaking in this House, the Leader of the Opposition said he would hazard a guess that if the estate tax provisions were left in the bill they would produce the revenues necessary to make up the difference resulting from the tax cuts. That is a pretty hazardous guess, Mr. Speaker. It is almost as hazardous as the guess he made when he said that what Canada needs now is a tunnel to Newfoundland, or when he said Canada needs a guaranteed annual income, or when he said what it really needs is a heavy water plant in Glace Bay that will probably never work.


An hon. Member:: Not even now?


Allen B. Sulatycky: The wrong decision was in building it here. It should have been built in western Alberta.
I now wish to refer to the comments made by the hon. member for Winnipeg North Centre (Mr. Knowles) when he moved the amendment to which we are speaking. He took the time allotted to him in this debate to go through a history, but only a partial history, of the personal tax exemptions under our income tax laws. He tried to convince the House and the people of Canada that what is being done here does not, in fact, result in a substantial improvement in the personal exemptions allowed Canadian taxpayers. I want to go into a little fuller discussion than the hon. member did with respect to that particular aspect.
The hon. member started from a point in the 1920's. He said at that time the personal exemptions were $1,200 for a single person and $2,400 for a married taxpayer. During the depression years, in 1933, the exemptions were reduced to $1,000 single and $2,000 married. During the Second World War, they were reduced even further to approximately $600 single and $1,200 married. The hon. member then said that in 1949, when they were increased to $1,000 single and $2,000 married, they were only being brought back to the 1933 level. Mr. Speaker, I suggest that the only way you can examine this logically is to go back to the beginning of the income tax system in Canada and look at how personal exemptions evolved in the Income Tax Act.
Under the first Income Tax Act passed in Canada the exemptions were $1,500 single and $3,000 married, or roughly the level that they will be after this bill is passed. Of course, tax rates were lower then, and governments provided few services. In addition to that, the general tariff rate was between 35 per cent and 40 per cent, and many of the taxes in this country were hidden taxes. They were not direct taxes, evident to everybody, as is the income tax.
If you follow the course of personal exemptions from 1917 on, it is very evident that as the government increased its programs and the benefits it provided to the Canadian people, the tax exemptions became lower. They reached their lowest point in the early 1940's at which time the government had become heavily involved in a number of very important social programs. But from that time on we have had a gradually increasing level of personal exemptions, and the increase in the exemptions being provided by this bill are the largest that have ever taken place under the income tax system in Canada.
Income Tax Act
It is also important that we remember, and that we point out that the personal exemptions in Canada are the highest of any country in the world. This is something of which any government could be proud, and of which even Canadians sitting on the other side of the House can be justifiably proud. We can be even prouder when we put that together with the fact that we now pay the highest old age pensions and the highest veterans allowances in the world.


Mr. Peters:: I don't think those are the actual facts.


Allen B. Sulatycky: If the hon. member has facts to contradict what I have stated, let him get up and disclose them. Mr. Speaker, I took part in this debate for a particular reason. I had not intended to, but I received one letter and one telegram telling me to get in and fight for the people, and vote against this bill. They came from very prominent Conservatives in my riding, so I decided I should get in and fight for the people, and see to it that this bill is passed as quickly as possible in order that the ordinary people of Canada will get the benefits when the bill is enacted on January 1, 1972.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, we had an interesting debate on the amendment moved by the hon. member for Winnipeg North Centre (Mr. Knowles)-


The Acting Speaker (Mr. Laniel):: Order, please. I am told that the difficulty in the sound amplification system has not been solved, but if the hon. member could speak from the front row he would be heard. Would the House give consent to allow the hon. member to speak from a seat in the front row?


Some hon. Members:: Agreed.


Randolph Harding: Mr. Speaker, we have had an interesting debate on the amendment moved by the hon. member for Winnipeg North Centre. I fully endorse it. Unfortunately, government members have failed to deal with the substance of the amendment. They have talked about everything else, but have carefully avoided giving reasons this type of tax relief should not be accepted by the House. The amendment which we are debating contains a very important principle. It suggests that a tax credit system be used by the government to provide tax relief to those who really need it.
What will this amendment proposed by the NDP do to the legislation before us? It will reduce the income tax rate on the first $500 of taxable income from 17 per cent to 2 per cent. This will result in a reduction of tax payable on the first $500 of taxable income from $85 to $10. It will, in effect, increase the exemption levels to about $2,000 for a single person and to about $3,300 for a married couple. It will benefit the most those in the low income brackets, although all taxpayers in the categories outlined in the paragraphs of section 117(1) will benefit to the extent of $75.
Over the years we have had a series of studies on poverty in Canada. A number of groups have made surveys and listed recommendations for minimum income levels. It is time the government fully recognized this problem. It could at least set minimum income levels and
10530

December 16, 1971
Income Tax Act
then ensure that no income tax was levied on any income below those levels. This tax bill does not adequately meet in any sense the fair and equitable tax reform desired by most Canadians. May I point out to the House the sharp increase in the cost of living index over the years. Sometimes we forget this and do not relate it to the present-day conditions. I feel it is certainly an important factor in outlining the need for the tax reduction proposed by our amendment.
I will go back to 1949 when the income tax exemptions were raised to the $1,000 for a single person and $2,000 for a married couple. At that time the cost of living index stood at 77.4. Today it stands at'just over 135. This is almost a 75 per cent increase in living costs over the past 22 years. It means, in effect, that there has been a drastic reduction in the purchasing power of the dollar, it seems to me that exemptions in the present legislation should at least meet this increase in the cost of living over the past 22 years. Our amendment will do better than this, but even then I feel it will not be high enough to meet those minimum standards of income which should be met and which should be tax exempt. An example of the present purchasing power of the dollar will be found in the fact that an article or a service which today costs $1.35 could have been purchased in 1949 for 77 cents. This erosion of purchasing power hurts everyone, especially those in the very low income brackets. We feel that the acceptance of this amendment would be a step towards the implementation of a tax system that would recognize the income needs of those Canadians who are most in need of tax relief.
Two days ago, the hon. member for Winnipeg North Centre pointed out some of the tax exemptions which we have had in Canada over the years. The previous speaker did a little more research and went back even further than the hon. member for Winnipeg North Centre. I should like to say here that the figures given by the previous speaker substantiate the position taken by the hon. member for Winnipeg North Centre when he pointed out that the exemptions proposed in the bill are not high enough. He pointed out that in the 1920's, the exemption levels were $1,200 for a single person and $2,400 for a married couple. In the 1930's, the exemptions were dropped to $1,000 for a single person and $2,000 for a married couple. During the war, the levels dropped again to $660 for single people, but after the war in 1949 the exemptions were raised again, this time to $1,000 for single and $2,000 for a married couple.
Those exemptions will remain until the bill currently before us becomes effective, then the new exemptions will be $1,500 for single individuals and $2,850 for a married couple. When someone talks about these exemptions being the highest in the world, it rather amuses me. Someone is always taking credit for something. Out in British Columbia, we have a route over one of our lakes which is called "the largest free ferry trip in the world". I suppose it is of political interest to the governments of the day to make these claims. But this government really has no justification for turning down an amendment which is going to give some tax relief to those who need it most on

the basis that we have the highest exemptions in the world.
I cannot agree with the Liberal member for York North (Mr. Danson), and a number of his colleagues, who claim that the debate on this important issue is both repetitious and a waste of time. I point out that it was the initial detailed and informative discussion which the opposition forced on those sections of the tax bill dealing with the co-operatives and credit unions that finally forced the government to reconsider their original proposals. It gave the members of the co-operatives and the credit unions time to mount a full campaign against the legislation. The combined result was a complete reversal of proposed government policy and a victory for those who believe in the co-operative and the credit union movements.
There are just one or two more points that I should like to deal with before I resume my seat, Mr. Speaker. I have listened to members from the government side of the House debating the amendment currently before us. I am surprised that every speaker carefully avoided giving any reason why we should not endorse the principle of the tax deduction called for by the amendment. One of their chief arguments is that a reference back to committee which this amendment calls for will open up debate On the whole bill. This is not a fact, Mr. Speaker. If we refer this particular section, it is the only section that will be dealt with by the committee.
I should like to point out to our liberal friends who say it is wrong to refer this section to the committee that this is the only method open to us on third reading. I will tell my friends on the government benches that if they agree to the amendment, the section can be referred to the committee and passed within a few minutes.


Some hon. Members:: Oh, oh!


Randolph Harding: I understand that all opposition groups endorse it, and if government members will do the same, we can pass it and get back to the general debate with very little delay. I urge government members to support the amendment or to object to it on sound grounds, rather than on the phony issue of referring it back and indicating that it would take weeks of time.


Murray Arndell McBride: Don't get political.


Randolph Harding: Some of the inadequacies of this bill will be improved by the acceptance of the proposal to reduce taxation on the first $500 taxable income from 17 per cent to 2 per cent. A saving of an additional $75 in taxation means a great deal to anyone, especially those living at or below the poverty level. Not only should this amendment be accepted by the House, but we should go on to set adequate income standards for all Canadians and then ensure that we do not take back in taxes any part of the income required to maintain that standard. I fully endorse the amendment moved by the hon. member for Winnipeg North Centre and urge the House to endorse it also.


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


Some hon. Members:: Question.


Mr. Speaker:: I declare the amendment lost. The question is on the main motion. The right hon. Prime Minister.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, we did have a good party last night, but I hope the applause will not disturb the electronic system further.
I should like to say at the outset that I anticipate a twinge of disappointment when this bill passes into law. The disappointment will not be over the bill, for it is a very good one, but over the fact that this exercise in tax reform will fall short by several months from occupying one full decade.
24725-38}

December 16, 1971
Income Tax Act
It was in 1962 that the government of the right hon. member from Prince Albert (Mr. Diefenbaker) established the royal commission on taxation. Now, in the closing days of 1971, more than nine years later, the exercise is coming to a conclusion. Has nine years been enough time? No, no, says the opposition. Let us keep at it still longer. The only thing that has dragged on as slowly in Canada in recent years is the heavy water plant started by the Leader of the Opposition (Mr. Stanfield) when he was premier of Nova Scotia.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I might add that with Liberal assistance, both of these projects will conclude successfully.
This legislation will place Canada's tax system in the forefront of any of the industrialized nations. It is a reform of the present outdated act with its hodge-podge of amendments, loopholes, plugs, interpretations and confusion. All of this will be replaced by a single modern tax structure. That in itself is reason enough to pass this bill and to be proud of our efforts. Sweeping away the cluttered debris which has accumulated since 1949 and putting in its place a rational tax system is in itself an accomplishment of considerable merit. This bill, however, is much more than a comprehensive income tax statute. It is relevant to the day's needs and it is sufficiently flexible to permit it to adapt to the needs of tomorrow.


An hon. Member:: You are reading.


Pierre Elliott Trudeau: Above all, it is fair and equitable. It is fair because it removes from low income groups much of the disproportionate income tax burden which they now bear. One million Canadians will be removed from the tax rolls. A further 4.7 million will pay less tax.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The legislation is fairer because the tax burden has been spread so as to include those persons who benefit through capital gains; no longer will the load be concentrated only on salary and wage earners and businessmen.
It is fairer to mothers who wish to work, because it permits deductions for child care expenses, removing a deterrent which has kept many women in the home.


An hon. Member:: You are reading.


Pierre Elliott Trudeau: It is fairer to those who are mentally or physically handicapped or disabled. Payments to schools for the care and training of such persons will now be deductible.
It is fairer to the elderly. The existing exemption will be increased and applied at age 65 rather than age 70 as at present.
It is fairer to all members of the labour force for it permits broad deductions of expenses incurred in moving oneself and one's family to another part of the country in order to accept a new job. A new employment expense allowance provides deductions in respect of special clothes, books and tools required for a job, putting the wage and salary earner on a more equal footing with the self-employed.


An hon. Member:: You are reading.


Pierre Elliott Trudeau: All this'may be too complex for the opposition. It may be incomprehensible to them. But I suggest, Mr. Speaker, that it is not incomprehensible to the Canadian taxpayer.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: It is not incomprehensible to the low income groups, to the elderly, to the handicapped, to working mothers. But hon. members opposite will protest. They will say they are in favour of cutting taxes. Mr. Speaker, the Conservative party is only opposed to taxing others. That is the essence of fiscal irresponsibility.


An hon. Member:: You're reading.


Mr. Speaker:: Order. I bring it to the notice of the House that any hon. member, even the Prime Minister, has a right to make a speech without being interrupted.


Some hon. Members:: Hear, hear!


Mr. Muir:: Tell them all that.


Mr. Speaker:: My remarks are addressed to all hon. members equally. I am saying this objectively and with all kindness. I am inviting hon. members to bear in mind that it is difficult for the Chair to follow the speech which is being made, and uphold the dignity of this institution, if hon. members do not have respect for the rules.


Marcel Joseph Aimé Lambert: Then let us take the speech as read, Mr. Speaker.


Some hon. Members:: Oh.


Mr. Maclnnis:: On a point of order, Mr. Speaker, I would ask whether from now on it is permissible for any member of the House to read his speech, or does the present rule only allow hon. members on the front benches to read their speeches?


Mr. Speaker:: The hon. member has referred to the rule which has often been quoted. My experience in the chair is that while a number of hon. members do make speeches without reference to notes, or copious notes, or prepared texts, other hon. members on both sides of the House do refer to texts from day to day. Hon. members on both sides of the House do refer to prepared texts at various times and I would think the leniency the Chair has exercised in this regard continues to apply. I would think it should apply in the present instance.


Some hon. Members:: Hear, hear!


Donald MacInnis: On the
same point of order, Mr. Speaker, I would ask again if it is the intention to shut off the hon. member for St. Boniface (Mr. Guay) when he is on his feet.


Mr. Speaker:: It is aimed in the direction of all hon. members. I can assure hon. members I will try, objectively and fairly, to invite all hon. members not to interfere with hon. members who have the floor. I am not suggesting of course that members are not entitled to make interruptions or are not entitled to some degree of heckling, because after all this is the House of Commons and I
December 16, 1971

am prepared to accept this to some extent. However, there must be some measure of respect for the general rule that the member who has the floor is entitled to be heard. I appreciate that this applies to all hon. members and I shall continue to attempt to the best of my ability to enforce the rule in relation to all hon. members.


Pierre Elliott Trudeau: Let me help those gentlemen opposite who are not yet able, or willing, to grasp the essentials of this bill. One of its consequences will be an encouragement to Canadians to invest in Canada. It does this by substantially increasing deductions for contributions to retirement plans. This will raise substantially the level of personal savings available to finance capital investment in Canada.
The bill contributes to Canadian investment in still another way. Foreign investment of pension plans, deferred profit-sharing plans and registered retirement savings plans now may not exceed 10 per cent of assets if these plans are to qualify for tax-free treatment. This change will channel millions of additional dollars into Canadian investments.
The progressive reduction in the general corporate tax rate from 50 to 46 per cent in 1976 will bring this tax down to a level below that in the United States, our chief business competitor.
Canadian ownership of small businesses is encouraged by making the lower tax rate available only to Canadian-owned companies, and by penalizing non-resident control.
Canadians of all walks of life will be more likely to invest in risk activities because capital losses may now be set off against gains, and not lost totally as in the past. This feature of the United States tax system has long been cited as one of the main reasons why Americans invest in equity stocks while Canadians have sought the more assured shelter provided by life insurance and the bond market. Speculative losses incurred in the area of resource industries will be reduced.
An improved dividend tax credit will be an added incentive for Canadians of modest income to invest in shares of Canadian corporations.
And the bill puts Canadians on the same footing as some foreign nationals in mounting, or meeting, take-over bids. Heretofore Canadian corporations have not been able to deduct as an expense interest on funds borrowed to finance the purchase of shares in another corporation. American corporations have. Canadians will now be given an equal advantage.
Incentives in the resource industries will be related directly to exploration, and developing carried out in Canada.
And in response to these incentives, Mr. Speaker, the Conservative party cries shame. Bad for Canada, they claim. Their reaction shows what a poor idea they have about what is good for Canada.

Relevance, fairness, growth incentives-these are bad? No wonder the Leader of the Opposition (Mr. Stanfield) confessed, on television and in living colour to bloody-mindedness. Canadians would be hard pressed otherwise to figure out what he was up to. Until that confession was made, I was convinced that the hon. gentlemen did not
Income Tax Act
know where they were going. The ingredients of Conservative tax policy seemed to be the text of paid advertisements by affluent interest groups, seasoned with the latest statistics from some mail-in pressure campaign, then cooked for two hours in the heat of the weekly Conservative caucus meeting.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: When the white paper was published in the fall of 1969, the Conservative Party responded in that instinctive, reactionary fashion of all federal tories. "Attack it, attack it" they cried. "Don't believe the government", they said. "The government will not make changes; we must stop this whole exercise", they called out. And so, as early as 1969 the people of Canada learned just how those hon. members viewed participatory democracy. They learned, too, how accurate was their leader's political forecasting, for we did make changes, just as we had said all along we were prepared to do.
Chapter two in the incredible odyssey of these wanderers in pursuit of a political issue revolves about the work of the Standing Committee on Finance. Hon. members will recall that at this time most provinces submitted briefs. The NDP took a stand. Canadians by the thousands expressed their views. The Conservative Party, however, declined to vote either for or against the report. This was their way of showing leadership. This was the expression of a credible alternative to the government.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Perhaps so many members of that party were out with fingers in the air testing the political wind that none could be spared for the committee on another matter. The opposition then claimed credit for the changes proposed by the committee. Their only worry, they said, was that the government would not accept them. The government, of course, did accept the bulk of those suggestions. Now, the hon. gentlemen argue against them. The road to glory is seldom without detours! I believe it was better stated by the right hon. member for Prince Albert (Mr. Diefenbaker) who said "It is a long road that has no ashcans".


John George Diefenbaker: The Prime Minister proved the truth of this when he evaded the constitution in 1968.


Pierre Elliott Trudeau: Those on the other side complain of lack of time; lack of time to study this bill and lack of time to debate it. The first point that they could not study the bill during the summer is not so much a complaint as an admission of their own inefficiency. Copies of the bill were distributed in the normal fashion to all hon. members and to the opposition parties' research staffs by July 12. If those on the other side were otherwise engaged throughout the summer, I cannot comment, but the facts are reasonably ascertainable. One can easily inquire concerning when the distribution office distributed this bill. It was done on July 12.
It is a matter of record that we are today on the 49th day of debate on this bill. Those cries from the other side, Mr. Speaker, come from those who do not feel that 50 House days of debate are sufficient on this item. I congratulate them on their ability to talk so steadily all that time. The

December 16, 1971
Income Tax Act
taxpayers of Canada shall forever be grateful to certain Members of Parliament for contributing so much useful information to Hansard and the permanent record.
At times, however, Hansard readers will assume that they have opened the pages not to a debate on taxation but to one on foreign affairs. The hon. member for Crowfoot (Mr. Horner) talked on October 22 about shortages of meat, fruit and fresh vegetables in the Soviet Union. The hon. member for Oxford (Mr. Nesbitt) was waxing eloquent about a room in a grocery store in Minsk when he was called to order on October 13. On October 20, the hon. member for Calgary North (Mr. Woolliams) was predicting difficulties in our relations with the United States as a result of something Premier Kosygin was reported to have said.
Some of the debate was even further out than that. The hon. member for Peace River (Mr. Baldwin) on October 18, delivered some remarks on witch doctors and about going to the bathroom.


Robert Lorne Stanfield: It is always relevant.


Gerald William Baldwin: That is what they use the bill for in Peace River.


Robert Norman Thompson: Don't talk about leaks over there.


Pierre Elliott Trudeau: I am not sure it was so much a political movement-


Some hon. Members:: Hear, hear.


Pierre Elliott Trudeau: I rather suspect the hon. member wanted to deduct his expenses for such trips.


Gerald William Baldwin: It was a Liberal movement.


Pierre Elliott Trudeau: The occult was also present in the speech of the hon. member for Mackenzie (Mr. Korchinski) when, on November 15, he made references to the devil. [Translation]
Mr. Speaker, we on this side are proud of this important tax-reform measure.
We have little doubt that the vast majority of the Canadian people support our efforts.
For the first time in Canada, a government has invited the population as a whole to participate with it in the formulation of a major policy. That exercise in democracy has drawn from the opposition the charge, on the one hand, of uncertainty and, on the other, of arrogance. We leave it to the people of Canada to say what they think of such contradictory charges.
Mr. Speaker, the government created this opportunity for public participation more than two years ago; the public has responded during those two years, and this legislation, we believe, reflects that response. The two parliamentary committees held lengthy hearings and received submissions from thousands of Canadian individuals and organizations. As well, nearly every province put forward submissions.
This bill takes into account many of the basic concerns voiced by them. It reflects many of the recommendations of the Senate committee and it includes virtually all the

important recommendations of the Commons committee. Above all, the government went as far as was feasible to accommodate the views of the public.
Still the opposition wants more. More debate, more time. Mr. Speaker, I say that they have more than made clear their indecisiveness. The government and the vast majority of Canadians are ready for decision.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for Halifax-East Hants (Mr. McCleave). Order, please. I apologize to the hon. member.

The hon. member for Temiscamingue, on a question of privilege.


David Réal Caouette: Mr. Speaker, I rise on a question of privilege. Before the amendment was put to the vote this afternoon, I was about to rise when a government member came to see me and ask me to postpone my intervention until after the vote. I agreed also to allow the right hon. Prime Minister (Mr. Trudeau) to make his statement after the vote. But now I am being ignored, without warning, and the floor is being given to a member of the Progressive Conservative party.
I wonder whether that was what was agreed upon before the vote was taken.


Mr. Speaker:: The hon. member for Temiscamingue will surely understand my problem. Of course, I was not aware of the agreement reached by the hon. member and the representative of another party. In any event, I doubt that such an agreement can be binding on the Chair. As far as I am concerned at this point, I believe I should give the floor to the hon. member for Halifax-East Hants (Mr. McCleave), and then, to the hon. member for Temiscamingue. I could hardly do otherwise.


Robert Jardine McCleave: Mr. Speaker, first I wish to express my appreciation for the courtesy in allowing me to use a place where the electronic apparatus in this House is still working.
It would be a temptation to deal at great length with the almost-maiden speech of the right hon. gentleman who has preceded me, but because it was an almost-maiden speech, and because I have some important things to say which I intend to say while at the same time keeping the debate on as high a level as possible no matter what the provocation, I will not be deterred long by what the right hon. gentleman did say. But he deserves correction, and correction he must receive. When he said that the tax reform procedure would fall short of a decade, he obviously forgot that his own Minister of Finance (Mr. Benson) was telling us on Friday that come next year, and early next year, we would be receiving amendments to the bill which we are now being asked to pass. Indeed, the Minister of Finance indicated this afternoon in answer to a question of mine that one of these would deal with deferred profit sharing plans. So, when the right hon. gentleman waxed lyrical about deferred profit sharing plans I was tempted to ask: which law is he referring to,
December 16, 1971

the law that we are going to have imposed upon us in a tew days or the law that will be suggested to us in a few weeks time by the Minister of Finance?
In short, Sir, we have not done the job in this Parliament which should have been done with regard to tax reform. I see no mystical properties in numbers. Whether we deal with it in 50 days or 500 days, the important thing surely is that we deal with it properly instead of leaving large segments of it-and I shall be pointing these out later on-to the future session of this parliament and indeed to future parliaments. If we have only tackled about one quarter or one third of the job properly, then surely there is a lot of catching up to do in our housekeeping in the years ahead. This is unfortunate, because so much of the stuff is technical that to get into it you really have to do a lot of homework, the results of which in time evaporate and you have to go back for a refresher course.
Then the right hon. gentleman, following the lead developed so ably by the parliamentary secretaries in the last few days, put in some thrusts, not germane to this debate, against the Leader of the Opposition (Mr. Stanfield). But I will tell the right hon. gentleman this. He may not have been aware of events in Canada when heavy water started its rather unusual history, but the first people bounding and capering about at that stage were the President of the Treasury Board (Mr. Drury), the President of the Privy Council (Mr. MacEachen) and the present premier of the province of Nova Scotia. The laurels and halos with which they adorned themselves were somewhat wondrous to behold.
The third point in the Prime Minister's speech is one that has been used over and over again by government members. They are saying that next year one million people will be struck from the income tax rolls. What a confession of ineptitude that is, Mr. Speaker, an admission by the strangest yardstick of all that there simply isn't enough prosperity in Canada to go around.
When the Prime Minister talks about incentives to invest in Canada he forgets that the Patina Corporation has thrown up its hands because of the tax law, and has taken advantage of international taxation to move outside this country. It will treat us as hewers of wood and drawers of water because it can make more profit that way. This reminds me of a point that I will be making later, since it is a good example of the fact there are large parts of this tax bill that we have never properly dealt with in committee or on third reading. The flow of international capital and that sort of thing are matters we have not got our teeth into at all. Yet there has been concern about foreign investment in Canada. It is one of the liveliest issues of our time, but the record is pretty well silent with regard to it.
I do not know what kind of democracy the Prime Minister does visualize for Canada, or what he visualizes as the role of this place, but I thought it was a place to debate issues until they were properly resolved. I refuse to accept the fact that one man, or one man surrounded by 800 advisers in his office, or 165 trained seals in this Parliament, is going to tell me and my colleagues what is proper for Canada. We will play our role. They can play their role.
Income Tax Act
I come now to the main burden of my remarks, Mr. Speaker, but before doing so, and thinking about the wisdom that came out of the original white paper, I would like to ask the Prime Minister whatever became of those delightful creations known as the widely-held and the closely-held corporations? They were sunk without a trace, as common sense continued to improve on the original somewhat outlandish proposals put forward in the white paper. On that score, the record will clearly show that the Leader of the Opposition and other hon. gentlemen were responsible for raising alarms and cries at the first opportunity in order to get some kind of shape put into some pretty wild proposals.
Sir, I will be moving an amendment at the close of rr.y address after the supper hour, and so that nobody will be surprised I can say it concerns an old friend that may be found at page 10,272. My first observation is that we are operating under a time allocation. In this respect I agree with that verbal purist, the hon. member for Hamilton-Wentworth (Mr. Gibson). It must be nice for him to have a friend in the House because this afternoon the government House leader didn't care a hoot for him. However, I must agree that it is time allocation and not closure.
Time allocation, Sir, in relation to closure, bears the same relationship as the devastation wrought by a hydrogen bomb bears to that wrought by old fashioned atomic bomb. Time allocation-what an innocent phrase; you can almost imagine it being used in proper debating societies. But what devastation it creates when brought into a Parliament where, within two hours, one can transform a meaningful type of debate into a hateful type of debate such as we have been asked to undergo for the last couple of days. And it is hateful. There is nothing more injurious to the spirit of a Member of Parliament than to be told that at some point in time the rope is to be applied to him and he will be hauled off stage, and particularly when so much of the work on this tax measure remains unfinished.
When I sat down to compose my speech-it is on this little piece of paper and will not be read-


An hon. Member:: No speech writers?


Robert Jardine McCleave: No, not even one. In the spirit of Christmas, I set down the points in this income tax bill that I thought would be acceptable to all of us in Parliament. The Prime Minister has covered some of them, but I will refresh his memory on what we have been dealing with in this House. We have been dealing with exemptions; extra exemptions for the elderly; extra deductions for the blind; the matter of moving expenses; the matter of child care expenses; medical expenses; the changes for the co-ops, credit unions and caisse populaires; the income averaging for those on the income escalator, but unfortunately not for those going down; capital gains not to be applied to principal residences; the federal estate tax to be eliminated. There is a bit of mixed blessing about the last one, Mr. Speaker, because the provinces now seem to be moving rapidly into that field, so that instead of the government getting rid of the double whammy with the capital gains tax, and the estate tax it is reduced to a 11 whammy, in that the capital gains tax will apply plus whatever provincial rate of succession duty or estate tax that is decided.

December 16, 1971
Private Bills
I thought also that there was a remarkable amount of common sense in the proposals put forward by the finance committee. Some of us worked hard for them on that Finance Committee which has received such a kicking around in the last couple of days. I think the Minister of State for Science and Technology (Mr. Gillespie) made his contribution there. He did an outstanding job, as did other members in all parties. We worked, and much of our accomplishment was reflected in the legislation. Those, Sir, are the provisions that I think can be welcomed. I gather it is five o'clock, and when I resume at eight I may be permitted to discuss provisions that are abhorrent, that never did get a good going over in this Parliament. I will point out one of the breaches of faith with a former Liberal prime minister that the government has committed, and then I will move my motion.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Brandon-Souris (Mr. Dinsdale)- National Library; the hon. member for Greenwood (Mr. Brewin)-Transport; the hon. member for Algoma (Mr. Foster)-Agriculture.
It being five o'clock p.m. the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, private bills, notices of motions (papers), and public bills.



PRIVATE BILLS


[Stage Direction]
The House resumed, from Thursday, September 16, consideration of the motion of Mr. Sulatycky that Bill S-16, respecting Mic Mac Oils (1963) Ltd. be read the second time and referred to the Standing Committee on Transport and Communications.
Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion? Carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Transport and Communications.
Allen B. Sulatycky: Mr. Speaker, on a point of order. I wonder if I might have the unanimous consent of the House to have all stages of this bill passed this afternoon.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: The motion has been adopted. Accordingly, the said bill stands referred to the Standing Committee on Transport and Communications.



UNITED BANK OF CANADA

Mr. D. Gordon Blair (Grenville-Carleton) moved: that Bill S-22, to incorporate United Bank of Canada, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, the bill before us was proposed-


Mr. Deputy Speaker:: Order, please. I understand this is also resumed debate.


Some hon. Members:: No, no!


William Arnold Peters: Mr. Speaker, I imagine there is some merit in this bill that the mover would like to mention and, if so, I should like to hear what he has to say.


Mr. Deputy Speaker:: I think that would be fair. The Chair apologizes to hon. members. I was under the impression that it was resumed debate and that the hon. member sponsoring the bill had spoken. Is there consent for the Chair to recognize the hon. member for Grenville-Carleton (Mr. Blair)?


Some hon. Members:: Agreed.


Duncan Gordon Blair: Mr. Speaker, this is a proposal to create a new bank and it comes before the House in the standard form of the bill which is attached as an appendix to the Bank Act. This bill is sponsored by a group of eminent Canadians. One reason for advancing this particular proposal has been the feeling that there is room in the banking business in Canada for representation of a wider spectrum of Canadians than appear to be represented in the present banks.
The sponsors of the bill are those who are listed as provincial directors and their names are: Mr. B. V. Levint-er, Q.C., a barrister and solicitor in the city of Toronto and his father Mr. Isadore Levinter, Q.C., of the same city; Mr. Zenon Gutkowski, a chartered accountant from the city of Toronto; Mr. Adiuto John Pianosi, a prominent resident of Copper Cliff presently associated with the University of Sudbury, and the building trades in that city and Dr. Gerald LaSalle of Sherbrooke.
The bill proposes an initial capital of $20 million and in all other respects it conforms with the requirements of the Bank Act and the Superintendent of Banking. It has been discussed at length in the other place where the provisional directors appeared and explained the proposed operation of the bank in detail.
Mr. Speaker, this is one of the proposals which comes before us by way of being a bill for the incorporation of a bank or a private company. The most important thing from the standpoint of this House is to receive full explanation and full evidence from those who are making the proposal. This can only be done by the people who originated the proposal for the bank in evidence to the appropriate committee, in this case the Committee on Finance, Trade and Economic Affairs.
December 16, 1971

I commend this proposal to the House and hope that the House will be disposed to permit the bill to come quickly to the Standing Committee so that a full exposition of all aspects of this new bank can be given to the committee and hence to this House.


William Arnold Peters: Mr. Speaker, from time to time we have had banks, investment companies and agencies coming to us with a proposal to establish a new bank. In recent years most of these banks have failed, though one has been partially successful. This raises a very important problem which must be faced by Members of Parliament.
Unlike the United States where someone with a lot of money sets up a bank and is in the lending business, in Canada banks have been restricted by legislation as to the areas in which they can lend, the circumstances of lending, and have been restricted by law as to the proportion of reserves they must hold. There is also a responsibility on behalf of the Canadian public to see that no depositor may be in fear of losing his money. The history of Canadian banking is as good as that of any country in the world and we should take credit for that type of legislation, for the sense of responsibility of our legislators and the operation of the banking institutions, as well as the fact that in many, many years we have not seen any difficulty with the banking institutions in Canada. This record has not been duplicated in many countries. Our banking institutions are spread across many lands on several continents. They have joined with other banking institutions in Switzerland, the United States and Great Britain and have provided a service that is generally accepted to be of a very high level.
If this is so, and I think most people would agree that it is, then we have a responsibility to see that the situation does not change. Just the other day when someone remarked that money only comes from taxes and the government does not have any, the leader of the Social Credit party asked, "Why not?" I am sure most Canadians have asked themselves this question. When we need more building, more capital for agriculture, more capital in the area of resources and development why can the money not come from the banks? Why do we have to set up an Industrial Development Bank which says that before it will give approval to a proposition put forth by an entrepreneur, he has to have been rejected by two chartered banks? Obviously, we have not said that a proposition has to be turned down by six banks because if it is turned down by one it will probably be turned down by any number.
The question asked by the leader of the Social Credit party was about the role Canadian banks play in the development of our economy. He also asked, what role can they play in the expansion of industry and employment or are they only institutions to lend money, to make deposits and make investments on behalf of depositors? That is an important question and one to which I would like an answer. I really am not sure whether the banks have a right and, in fact, a responsibility to act in a larger sphere than that in which they now operate.
I know that in cases there may be a particular individual operating a particular bank which gets a reputation of being a collector. Sometimes, if a bank gets into serious
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difficulties in a community another bank manager is appointed. The new manager may be nice; that is, he may lend money more readily than the fellow he replaced. Then, when the bank has trouble collecting the money lent, another manager is installed and he might be known as a collecting manager. Under him the bank will start collecting and foreclosing mortgages.
In the main, however, there is absolutely no competition in the banking industry, as we know that industry. People who want to deposit their money will get the same rate of return at one bank as at another. Recently, however, there have been changes. The banks have been going into the small loans business because they are not under the same restrictions when lending small amounts that would otherwise apply. For instance, the rate on small loans does not have to be about half a percentage point within the rate set by the Bank of Canada. There is nothing like that in this field. The banks borrow this money at a certain rate, and lend it. They make a reasonable markup. Also, the banks have gone into other fields. I heard that the Bank of Commerce was talking about setting up a mortgage company. Apparently the bank will lend that company money for housing and investing, the idea being that such a company can lend money at rates higher than the bank would normally be able to charge. It seems that such subsidiary operations can be more valuable to the bank than its main banking operation.
According to my reading of the proceedings before the Senate Committee on Banking, Trade and Commerce, the people backing this bank want to go into the banking business to make lots of money. I know that they talk about social and economic conditions. Nevertheless, it is interesting to note this comment appearing in Issue No. 37 of Wednesday, October 6. On being asked why he thought the investment houses thought this bank would be worthwhile, Mr. Dennis Dwyer, President of Chartec Limited said in part:
The comments made by those who were positive may be summarized as follows: One, investor interest in Canadian chartered bank shares in general is high, in view of the high return on capital investment. Investor interest in the United Bank, solely on the grounds of the provisional board's responsible and deliberate actions to date, has given the impression that the investor believes that the basic policies of the bank will ensure a profitable operation.
I am not interested in banking institutions being profitable investments. In this connection may I say I was shocked when I heard that a former member of this House advised a friend of his to buy Bank of Montreal stock because, as he said, that stock would soon be split and profits would be made. You know, for 20 years the banks did not split their stocks. The banks were considered blue chip investments. If you wanted an investment as safe as the rock of Gilbraltar, you bought bank stocks. Although you might not get rich, you at least were not buying speculative stock. I asked a number of people, because I thought that was pretty silly advice, what they thought of it. They agreed it was pretty silly advice. Well, it did not turn out that way. After this person had bought several thousand shares of Bank of Montreal stock, that stock was split and he made a considerable profit. What interested me was the fact that this particular bank stock

December 16, 1971
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proved as rewarding as any major speculative stock in the resource area.
Even though some may suggest that bank stocks are good investments and that if the free enterprise system is to work we should set up another bank, I am not at all sure that we need to set up any more banks. Actually, I am not convinced that the trend that has developed in banking in Canada during the last 20 years is not a good one. The Dominion Bank amalgamated with the Bank of Toronto, to become the Toronto-Dominion Bank. The Imperial Bank joined up with the Bank of Commerce. I could give more examples. I think most major banks seem to have amalgamated with other banks in the last few years. Now we are getting down to the point where there are only five or six major banks in this country, if we exclude one small bank in Canada that operates in a peculiar way under the Bank Act because it is not Canadian owned or controlled. By amalgamating, the banks have grown bigger. They have branched out into subsidiary operations, small loan operations and mortgage operations. The trend has not been towards the development of another bank.
I was going to say, Mr. Speaker, that if I go to borrow money at the bank the rate I will pay on that money is fixed. That, however, is not quite true. If I do not need the money, the rate will be lower than if I need it badly. It is easier for me to borrow money when I do not need it badly. When I need it desperately, I may not get it, and when I do not need it the banks will lend it to me. That has been my experience. However, if I needed a loan desperately, I would be "hosed" with regard to interest rates no matter whether I borrowed from the Bank of Nova Scotia, the Royal Bank or any other bank. I think the financial pages will tell you what you normally have to pay for a loan. That is to say, you know how much the central bank charges the chartered banks. That rate does not vary as between banks. Of course, from an investor's point of view, bank stocks are lucrative, since banks are making considerable profits. However, speaking as an individual who does business with the banks, I say that if you discount the personality of the bank manager and ignore the makeup of the people who work in a bank, there is really no difference between one bank and another. Therefore, why should there be another bank?
It costs a great deal to set up banks. In my town, which has a population of 3,000, there are three banks. Other towns with populations of 17,000 or 18,000 enjoy the services of perhaps seven or eight banks. It appears that in some towns there are more banking institutions than companies that bank money. Old bank buildings are not abandoned. The banking operation is carried on in buildings which no longer belong to the bank that carried on business there. Even after amalgamation, old leases are kept in force. The banks like to operate a second branch in a community. For example, on Sparks Street there are two banks of the same name and occasionally when I just put "Sparks Street" on my cheques and not the full address of the bank, my cheques are sent back NSF. I do not have money in the big bank; I only keep it in the small one. Clearly, we have ended up with more buildings than we need in the area for the provision of banking services.
Surely, social reasons have not been a factor behind the setting up of banks. If you go to the caisse populaire or

credit union to borrow money, you will be treated differently than you would be by the small loans department of one of the chartered banks. They have a different method of handling loan operations. Also, if you go to a finance company, you will be treated differently again. Of course, I am told that finance companies handle collections in a way that is totally different from the way credit unions, caisses populaires and banks handle those collections. I suggest, Mr. Speaker, that we must be very careful before we set up any vehicle for the making of money in banking. Frankly, I want to see a bit more competition in the banking field. I should like to be able to go to one bank and, after hearing they will only pay 4 per cent on my deposit, go to another bank which might offer 4.25 per cent, or to a third bank which might only offer 3.75 per cent. If that were possible there would be some competition in the banking field. At present I do not think there is. If one bank changes the rate on deposits, all other banks in Canada follow suit. There seems to be absolutely no value from the general public's point of view in having seven or eight banks in this country. There is a cost. It is a bit like an insurance company. If an insurance company moves into a town, it costs money to erect a building. Someone has to pay. I am inclined to believe this cost is added to my car or life insurance. It is added there and in the end, I may pay. If an insurance company is established, it will make money. It is a good investment. However, it may not be in the interests of the nation.
Members opposite talk about competition. I am sure no member opposite will indicate that he knows of competition in the field of banking. It may be a great way to make money on an investment, but as far as the general public is concerned there is no competition between banks. Banks do not serve the needs of the people to the level they should. If they did, we would not have the Industrial Development Bank or Central Mortgage and Housing Corporation. We are the people who are taking all the risks in the investment field in this country. We handle all the bad investments and allow the banks to handle the good ones. It seems foolish to allow a number of people to come before Parliament and say that they have talked to 80 investment companies, that these 80 investment companies have visited and questioned the people who invest with them and have decided that a new bank is a good investment, a good place to make money. It is a place where you can put your money with a good chance of a high rate of return.
I am no more sure than the member who asked the question whether the banking institutions should not play some role in the development of our industries. We have plenty of banks to supply the necessary competition. If we do not believe that, then members of Parliament in the past were derelict in their duty to Parliament and the Canadian public. I do not know of any banks merger that was turned down. There has never been any consideration given to turning one down.
We have decided that bank mergers do not come under the Combines Investigation Act. These mergers are not the type that will contribute to abuses of the competition system. You cannot use that argument, however, and at the same time maintain that we are a free enterprise
December 16, 1971

oriented people and we want another bank. What is wrong with having 100 or even 1,000 banks? Are there any Members of Parliament who say that we have too many?
We have the same situation with gasoline outlets in every community. One outlet is a total necessity. You cannot run any motor vehicle without a gasoline outlet. It may even make sense for each major company to have an outlet in a community. In the small town where I live, most major companies have three outlets. There is no possibility whatsoever of each of them making money. Many are not being operated as service stations. Competition does not exist. The price of gasoline in my area is five cents or six cents more per gallon because the gallonage distributed in that area is so low. Service stations cannot afford to have a reasonable staff and pay their overhead. They regularly go broke. Some service stations perpetually have a "for lease" sign on them. With 1,000 banks in Canada, we could reach the point where many of their buildings would have vacancy signs on them. If members agree that 1,000 banks would be too many, then how many should we have?
To date there is no evidence to show that the number of banks we presently have is not sufficient to meet the needs of the Canadian public or that any additional banks, no matter for what purpose, operated under the Bank Act would serve any purpose that is not being served by the chartered banks now in existence. They have a very high proficiency. For many years they have provided good service to the depositors and others involved with those institutions.


Mr. Roland Godin (Portneuf):: Mr. Speaker, the House is now considering Bill S-22 "An Act to incorporate United Bank of Canada" which was introduced in the Senate. The preamble of this bill reads as follows:
Whereas the persons hereinafter named have by their petition prayed that it be enacted as hereinafter set forth, and it is expedient to grant the prayer of the petition:-
Section 2 of the bill provides that:
The persons named in section 1 shall be the provisional directors of the Bank.
Mr. Speaker, the perusal of certain documents which we have received concerning this bill would lead us to believe that the establishment of this bank as provided by Bill S-22 would be the implementation of one of the most humanitarian programs.
Actually, the persons whose names appear in the bill have attempted to explain to us by other documents that they wish to operate the bank in an area which lacks appropriate banking services.
That may be so, Mr. Speaker. It is possible that the new bank will serve minority groups. Even then, however, I cannot ignore the fact that this bank would operate according to the provisions of Bills C-190 and C-222 which have been passed by tljis House thanks to the support of Liberal members who, as is the case today, were in power in March 1967.
Since business transactions in this country indicate that less than 10 per cent of banking operations are carried out with money released by the Bank of Canada, that is coins and bank notes, we have to conclude that the new bank which might open its doors if Bill S-22 were adopted
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would operate in the same manner as other chartered banks in Canada which means that it will have the authority to extend credit. If that bank receives, for example, bank notes that the saver was keeping at home, it will be able to use it to create further deposits in the form of loans. Considering that banks need to keep on hand only a certain amount of bills, roughly 7 per cent of their assets, they will be able to use the rest, keeping at the same time a statutory reserve, to create currency.
Mr. Speaker, I imagine that all hon. members know quite well that banks may not lend their deposits but that they can use coin and paper currency committed to them to create more credit by increasing their statutory reserve. This is what is called multiplication of credit pursuant to the federal act which allows them to do so. Under the authority presently granted to them the banks determine the amount of money in circulation in our country.
When a bank grants a loan, either to a contractor, to a businessman or a government, new financial credit is born. The banker writes down the amount of the loan granted in the account of the borrower as if he had deposited that amount. The borrower neither brought it in nor deposited it because he came to the bank to get money he did not have. The borrower may draw cheques on that account that he did not have when he went in but that he did have when he went out.
No other account of any other client of the bank has been reduced. So it is an account added to those already there.
It is correct to say that without any danger to the depositors banks can in this way create 16.6 times more currency. The chartered banks do not print bank notes but they open accounts and create new credit that they use to make loans as if they had saved the amounts of such loans.
This creation of credit can total up to 16.6 times the initial amount. The present federal act authorizes banks to issue, for example, $1,666 in the form of new credit provided that they increase their statutory reserve by $100.
A person makes a $100 deposit in his savings account. The bank will be able to issue, under the form of credit, as many $100 as there are $6 in the $100 savings. In short, that boils down to the fact that every year, the chartered bank can get an interest of 9 per cent on $1,666, namely $160, whereas it had at the outset only $100 as savings deposit.
You will agree with me that, when it comes to yield on an investment output, one can hardly find anything better.
By enabling the people whose names appear in section 1 of the bill, namely Messrs. Isadore Levinter and Benjamin Victor Levinter, barristers, as well as Mr. Zenon Gutkow-ski, chartered accountant of Toronto, and Mr. Adiuto John Pianosi, executive, of the town of Copper Cliff, in the district of Sudbury, to establish a bank, we are granting them a very special privilege, I think. Five years ago, one might have said they struck a gold mine. But as the price of gold is unsteady at the present time and as extracting it means hard work, the power that will be

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granted those gentlemen-if Bill S-22 ever goes through- to incorporate themselves in order to lend money is much greater than any of the benefits enjoyed by concerns other than banks.
And the British associate-secretary to the Treasury, Mr. Ralph W. Hawtrey, was aware of that kind of operation since he dared state once, and I quote:
Whenever a bank lends money, it creates money out of nothing.
Mr. Speaker, I would like to quote a few articles I have been reading in various pamphlets:
The multiplication of credit by banks is a recognized fact.
1-	The Bank of Canada balance sheet for each year from 1957 to 1960 reveals that coins and paper currency make up 8.2 per cent of our money in circulation while credit created by banks accounts for 91.8 per cent.
2-	We have many statements from authorities in this field:
(a)	-A Canadian financial authority, Mr. M. W. Trimble from the Ryerson Institute of Toronto, wrote in his book Understanding the Canadian Economy: "We already know that the most considerable form of money is credit and that most of the credit is created out of nothing by banks. Banks lend money which comes from nowhere and which goes back nowhere when the loan is reimbursed. Practically all bank revenues derive from interest paid on money which does not exist."
Mr. Speaker, I would like to emphasize the last sentence by quoting it again:
Practically all bank revenues derive from interest paid on money which does not exist.
And I go on with the quotation:
(b)	-The Governor of the Bank of Canada, Mr. Graham Towers, appeared in 1939 before the parliament committee on banking and commerce and revealed the extent of credit created by chartered banks.
Here is the text of an exchange between Mr. Graham Towers, former Governor of the Bank of Canada, and a witness during a meeting of the committee on banking and commerce:
Question: You say they cannot lend what they do not own?
Answer: That is true. Banks cannot make loans with depositors' money. They have no control over what depositors do with their savings.
Question: What if they happen to have deposits to lend?


Mr. Towers:: They do not lend those deposits.
Question: But there is no doubt that the bank provides a means of exchange?


Thomas Gordon Towers: That is true. That is why they exist-These are banking transactions, in the same fashion as steel plants produce steel-Here the manufacturing process is to make an entry on a card or in a book with pen, ink and a typewriter. That is all.
Question: 95 per cent of our business consists in withdrawals on bank accounts, that is in entries in bank ledgers, against which people issue their cheques.


Thomas Gordon Towers: I believe that this statement is true.
Question: When the government delivers a $1,000 bond to the bank, how does the bank purchase it? Does the transaction involve the creation of additional money?


Thomas Gordon Towers: It involves the creation of additional money.
Question: In other words, when $1 million worth of bonds is offered to the banks, new money or the equivalent of $1 million is being created?


Thomas Gordon Towers: Yes.
Question: The same happens when a municipality or a province borrows?


Thomas Gordon Towers: Or an individual borrower.

A distinguished English banker, Mr. Reginald McKenna, who was for some time Minister of Finance in his country and then many years as chairman of the Midland Bank, one of the larger banks of England, said at the 1934 annual meeting of the shareholders, and I quote:
People generally ignore that the money supply depends on the action of the banks. Any bank loan, direct or unsecured- increases outstanding credit, and any reimbursement of a bank loan cuts the supply by that much.
Having been a Minister of Finance, Mr. McKenna knew very well which of the two powers was stronger, the bank or the highest government of the country. He was even candid enough, a rare occurrence among bankers at that level, to declare:
They (the banks) control the nation's credit, direct government policies and hold in the hollow of their hands the fate of the populations.
Mr. Speaker, in short, if United Bank of Canada opens its doors, it will be empowered to issue money and credit, to condition the money and credit supply, to determine the duration of that credit supply, the power to demand reimbursement at a date set in advance, under the penalty of seizure of the debtor's assets which are the outcome of his labour, setting also the terms for the discharge or reimbursement and requiring some guarantees.
The bank, empowered to lend money originating from nowhere, will belong to the group of banks that control the national credit, establish government policies and hold in their hands the fate of the people. Even if there is another institution to help them, those who control money and credit will not grow a single stalk of wheat, sew up a pair of shoes, build a single house or part of a road.
Mr. Speaker, by allowing the creation of another bank, we are merely adding to the number of institutions exploiting all levels of governments as well as all classes of society.
As regards individuals, corporations and governments, this new bank will control the right to mobilize the talents, good wills and natural resources of the nation. It will grant or refuse, but it will get into debt all those who will come up to its counter.
Mr. Speaker, if Bill S-22 passes, it is obvious that the old parties will have one more institution that will subscribe to their electoral funds.
And since I have been elected with quarters collected by volunteers among my electors, I have no qualms about asking senators to prepare another legislation likely to make changes in the present system which enables banks to exercise their power like bandits.
For the information of Canadians, bills like Bill S-22 must be opposed. What we need to satisfy the requirements of the community is an act to improve the monetary system in Canada.
The state must get its financial sovereignty back, as well as its control over the issue and volume of money and credit.
Mr. Speaker, Canadian experts know it and, if they are honest, they will say that all we need now is to establish a commission with full authority which it could get from Parliament.
December 16, 1971

In 1935, the right hon. Mackenzie King stated, and I quote:
As long as control over currency and credit has not been restored to the government and acknowledged as being its most obvious and most sacred responsibility, any talk of democracy and Parliament supremacy is vain and futile.
If my party is re-elected, we will assert our monetary policy in the greatest battle between high finance and the people ever witnessed by Canada.
Mr. Speaker, the great battle announced by the right hon. Mackenzie King never took place. That is why, following a series of treasons, we are advancing rapidly towards the ruin that he predicted.
The very serious question of public debts on which high interests must be paid, and of the taxes unjustly imposed for this purpose and which will never be reimbursed, should make the Canadian people stop and think.
The public debt has reached such high proportions that one wonders whether the kettle will not explode.
The question is so serious that it can be said that it is the scandal that beats all scandals: the original source of subversion.
Mr. Speaker, we Creditistes are alone in denouncing this, while the opinions of one's father, one's mother, one's teachers, the school authorities, and the Church sire all challenged. Everyone is proceeding blindly, being occupied with mere futilities. Nothing is said, however, about the scandal that beats all scandals, but the facts are there: the federal government, the provincial governments and the public bodies get into debt at an increasing and shocking rate. Their debts, together with personal debts total $100 billion.
A publication of the Treasury Board reveals the following, and I quote:
In 1867, the total debt of Canada amounted to slightly more than $93 million.
In 1900, it amounted to over $346 million.
In 1933, it reached $3 billion.
At the end of the war, it was close to $10 billion.
In 1971-72, it will amount to roughly $40 billion.
Mr. Speaker, what is true of Canada is also true of the individual. Be Devoir for March 9, 1971 reported, and I quote:
-consumer credit, at the end of 1970, amounted to over $11.3 billion.
With ever increasing personal debts, it will likely reach $12 billion by the end of the year. That is $12 billion of personal debts for 20 million Canadians.
All in all, Canadians owe to financial magnates these astronomical amounts: Canada, $40 billion; provinces, jurisdictions of all kinds, public societies, municipalities, school boards and hospitals, $48 billion; individuals, $12 billion, a grand total of $100 billion, Mr. Speaker.
Every Canadian is therefore doomed to pay taxes in order to pay interest on debts which will never be reimbursed but which are increasing at an incredible pace.
So as to pay interest on debts which governments will never reimburse, year in year out the taxpayer has to shell out the following approximate amounts: $2 billion for the national debt, $3.5 billion for provincial, municipal and school debts, a total of $5.5 billion in interest paid each
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year by the Canadian taxpayer, unfairly taxed. Such funds simply fill the coffers of banking and financial institutions here and abroad.
Mr. Speaker, in his book entitled "Demain, c'est l'an 2,000", economist Gaston Bardet stated, and I quote:
-the almost magical power of banks. Not only do they create and destroy currencies, but also business. They provoke booms, artificial crises, overactive periods or unemployment according as, like a coquettish woman, they fancy granting or not granting their favours . . . They are mistresses of the "trade cycle". Their power is invicible, no matter what political party is temporarily triumphant. They gradually concentrate everything in their hands, on the nations' ruin."
Mr. Speaker, that is why I say we don't need bills like this one, Bill S-22. We can do without them. And, once again, I say that the state must regain financial sovereignty and control over the supply of money and credit.


Mr. Stanley Haidasz (Parkdale):: Mr. Speaker, I welcome the opportunity to make a few remarks apropos Bill S-22 introduced by the hon. member for Grenville-Carleton (Mr. Blair) to incorporate the United Bank of Canada. The measure was thoroughly studied by the Senate Standing Committee on Banking, Trade and Commerce and was passed by the Senate on October 7.
I believe there is room today for another federally-chartered bank to serve our people and to introduce more competition. As the federal member for the cosmopolitan constituency of Parkdale, I was pleased to read the names of the provisional directors of the proposed United Bank of Canada and to learn of their aim to give representation to all the groups of our community and to involve all our people in the banking system. This is why I should like to commend the bill to all hon. members and have it referred to the appropriate committee of the House.


John Gilbert: Mr. Speaker, it is not my
intention to talk out this bill. Members of the NDP are prepared to consent to the second reading of this bill and its reference to the Standing Committee on Finance, Trade and Economic Affairs. The hon. member for Park-dale (Mr. Haidasz) has just mentioned that he represents a cosmopolitan riding in Toronto. I do, likewise. The people who are incorporating this bank represent a broad spectrum of the different nationalities which compose this country. If we were to look at the history of chartered banks in Canada from confederation to the present time, we would find a strong flavour of Anglo-Saxon ownership and control.
I would think that many new Canadians have experienced difficulties when dealing with the present chartered banks. I had the privilege of sitting on the finance committee during its review of the Bank Act. I heard the observations of some of those who spoke on behalf of their banks. I saw the pressure that was applied in respect of the lifting of the 6 per cent ceiling on interest rates. I am very familiar with what has happened and the necessity of having credit unions and other organizations fill the gap that the chartered banks have failed to fill in this regard, and the needs of ordinary folk in Canada no matter whether they are Anglo-Saxon or any other nationality. If this bank could help fill the gap the chartered

December 16, 1971
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banks have not filled, then it would be performing a very useful function.
The credit unions have been criticized with regard to the interest rates they have charged on loans. Experience indicates that the net effective rates of credit unions have been much lower than the rates of chartered banks. I see the hon. member for Essex (Mr. Whelan) nods his head in assent. He has wide experience in respect of credit unions and I am sure he agrees with me.
If this bank can bring a competitive aspect to the almost monopoly control the chartered banks have, it will perform a useful social and economic function within the community. Therefore, on behalf of members of my party I ask members of the House to give second reading to this bill and have it referred to the standing committee where we can meet some of the problems raised by hon. members who have participated in this debate.


Gérard Laprise: Mr. Speaker, I should not like to miss an opportunity of saying a few words about Bill S-22, incorporating a new bank, entitled: "An Act to incorporate United Bank of Canada".
This bill prescribes that certain persons, businessmen, have got together, carefully chosen among different nationalities, in response to a need-
Do you hear me well, Mr. Speaker? I notice that my microphone is not working.


Mr. Deputy Speaker (Mr. Boulanger):: Order. The hon. member is being heard quite well, as the microphones of the first row of benches are working.


Gérard Laprise: Mr. Speaker, they made a point of grouping people of different nationalities in response to a demand, apparently, for service to Canadians who are neither English-speaking nor French-speaking.
That is a very good idea. As the saying goes, the road to hell is paved with good intentions. The intentions of the promoters of this bank are certainly good. I never wondered whether they are about to take the first step toward the aim I just mentioned.
When I was very young I experimented the big crisis in the early 1930's. Before that, business was fair and people invested in land or in small businesses. When the crisis came, individuals promptly went bankrupt following the breakdown of the economy and the sharp decline in employment. Every time those people lost their land or their small business-


Duncan Gordon Blair: I rise on a question of privilege, Mr. Speaker. With regret and with great respect to the hon. member who is speaking, I call attention to the fact that we are nearing the end of private members' hour . I also call attention to the fact that because we are close to the end of the session it is unlikely this bill will progress to the committee unless it is given approval now. I appeal to hon. members to allow the people who are behind this bill an opportunity to make their presentations to the committee, after which Parliament can decide whether or not to pass the bill.
(Mr. Gilbert.]


The Acting Speaker (Mr. Boulanger):: As there is no question of privilege here, I will recognize the hon. member for Abitibi again.


Gérard Laprise: Mr. Speaker, I am sorry I have only a few minutes left, for I still have a number of things I would like to say.
I was extremely surprised to see this bill introduced right at the end of the session. We have been sitting for over 230 days. This is a situation I do not understand and cannot accept. I also regret that the sponsor of this bill and his colleague who supported it in the House did not explain to us more fully the purpose of this bill-the reason for establishing a new chartered bank. This is why we have a number of things to say concerning this bill. We have already had closure forced upon us twice this month, and I do not think we can accept it once more.
Mr. Speaker, may I call it six o'clock?


Mr. Robert Kaplan (Don Valley):: I wonder, Mr. Speaker, whether it would not be possible to keep on discussing for a few minutes after six, in order to finish with this bill.


The Acting Speaker (Mr. Boulanger):: Order. In order to do this, the unanimous consent of the House is required.
Is there unanimous consent?


Some hon. Members:: No.


Some hon. Members:: It is six o'clock.


The Acting Speaker (Mr. Boulanger):: Order. The hour assigned for the consideration of private members' business has expired.
It being six o'clock, I do now leave the chair. The House will meet again at eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act be read the third time and do pass.
Robert Jardine McCleave: Mr. Speaker, before private members' hour at five o'clock I listed several items in the new income tax bill which I thought could be welcomed by all sides of the House, although I ended up with one which might be a doubtful blessing, that is, the elimination of the federal estate tax. There were signs that the provinces would move into the field, so
December 16, 1971

that estates, even with generous exemptions, would be put in an element of double jeopardy, first from the standpoint of capital gains taxation and second from the standpoint of provincial taxation through succession duties or the like.
Then I indicated that I would like to discuss some of the matters into which we never got our collective teeth by way of debate. I also indicated that I would like to list some of the things which I thought were abhorrent in the old legislation and on which no reform whatsoever was being carried out. May I now list them in perhaps rather brief fashion because there are others who want to make speeches and who have not taken part in the taxation debate, and I want to be fair to them.
The first item which was mentioned by the Prime Minister (Mr. Trudeau) in his speech this afternoon concerned corporations being allowed full deductions, income tax-wise, for interest on the money that they borrowed to buy shares in other corporations. The point here is that it might have been valuable to have a debate on the matter to determine how far reaching this rate should be. Should Canadian companies, for example, be allowed the right to buy companies operating in other countries, and what would be the effect of companies owned substantially outside of Canada trying to use that right to buy companies that are operated wholly within Canada? We all know the furore and intellectual ferment that has been caused on this matter of domestic versus foreign ownership. This subject might have provided a very useful debate, but we never had it because of the time allocation.
Then there is the very interesting section in the bill dealing with the sale of "nothings" and goodwill, which has never been discussed properly by us in committee. I do not think anybody touched on it very much at any stage of the debate, yet what the minister and the department have done is to set up a brand new type of language to cover a whole flock of new definitions.
A rather interesting question of commercial law is involved there. I am not a commercial lawyer and I make no pretence to be one. I could add very little, if anything, to such a debate but I would say that considering the over-all consideration by this chamber of the income tax law, perhaps the largest group who can complain about our perfunctory consideration and the fact that we have not considered all elements of income tax properly is the business group of this country. They are the backbone, the people who provide jobs, and I do not think they have been treated fairly because of the time allocation on this debate.
Then a matter in which I am very much interested and on which I would have liked to speak in the debate is rental property and the question of capital cost allowance classes and depreciation, and the fact that a separate class is created for each rental building costing $50,000 or more under the new legislation. We have had good, expert opinion both from the Toronto Real Estate Board and from a group in greater Vancouver who question whether the proposals in the white paper have been translated into the bill, whether these proposals are good enough at a time when Canada still has a substantial need for accommodation for its citizens, more particularly in the vast metropolitan areas where this point was made forcibly to us.
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I would have liked to discuss that element alone and whether or not what is proposed by the government is a good measure. I say this because there are all sorts of people in the House who, if unleashed from the government whip and allowed to participate in such a debate, would be able to throw out a great many common sense ideas on the subject of rental accommodation. We never touched on the matter at all, yet I think only the other day the hon. member for Spadina (Mr. Ryan) and the hon. member for Hamilton West (Mr. Alexander) pointed out in this House, through questions to the Minister of State for Urban Affairs (Mr. Andras), the very serious accommodation problems now being faced in the city of Toronto.
I myself in the past have referred to the almost unholy explosion in population in the megalopolis that is developing between Montreal and Windsor. I am almost a Paul Revere in this regard, shouting, "The megalopolis is coming," trying to arouse some interest in the government so that it will be aware of a problem of mammoth proportions that is rapidly coming in the area of Canada between Montreal and Windsor. Surely somewhere along the line we should have had an opportunity to decide, after considerable debate, whether the proposals in this new income tax law with regard to rental property are sensible or not, and whether they should be modified.
Much has been made about the role of the finance committee of this House in dealing with the bill. With respect to the committee report, I accepted the recommendations of the majority in that regard, although it is true that some of that report was disregarded by the government. But I would hate to think that even a group of knowledgeable people, and I think they were knowledgeable people in that committee, should have the sole hand in suggesting the sort of tax legislation we should have. I think our housing problems are serious enough that everybody in this chamber should have had that right. But for some reason, within the last couple of weeks the government decided that time allocation, the most hideous weapon in the armament of the gag, should be invoked in this chamber.
As a result, for the next decade we will probably carry on the process of tax law reform because every year will turn up instances of where the legislation was imperfectly drafted or where the ideas were imperfectly conveived. It simply means that future parliamentarians may look back to this Parliament and wonder why the government chose the course it did and choked off meaningful debate on tax changes.
Sir, another thing we never really got our teeth into was the international capital business-I mentioned this earlier-foreign source income and dividends. We never really got our teeth into the manner of the treatment of the professional taxpayer who is now practically on the same basis as the fellow who peddles radios, TV's, other merchandise and the like, who could be classified in a different position. Those are only some of the things we did not debate. I think I have listed five or six, all very important, Mr. Speaker, but thanks to the divine right methodology of a few despotic people in this chamber we are not to have that kind of discussion.

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Third reading would have been a very appropriate stage to bring in a new amendment every day, even up to a month, to test all the different ideas that should be put to the test and should be determined by the chamber because now, under the new rules, third reading is really the place where one decides on questions of principle. But a fat number of questions of principle we can decide, thanks to the time allocation rule that has been imposed upon us!
I also said that there are provisions in the bill that are absolutely abhorrent and that if we had any tax change that was worthy of the name of tax reform, surely changes could have been made in the areas that I will now proceed to list. One is the mamma and papa small business operation. I raised this question very early in the debate, so that the minister and his advisers had all the time in the world to try to come up with equity for this couple. Instead, mamma is to be the slave of papa, or papa the slave of mamma under the unique provisions of this bill lumping them together, and all we are told is that it is administratively difficult to separate mamma and papa. It should not be administratively difficult for mamma and papa to separate some of the Liberal members from their seats when the next election comes along, because they will know that they have been treated unjustly. This issue has been well scouted and I merely touch on it now.
The farming provisions of the bill are also the subject of debate here. I do not think the mistakes made in this legislation, which will become apparent when it comes into effect on January 1, 1972, can ever be sufficiently repaired by future amendments unless they are introduced very early next year. If such amendments are not introduced early, the family farm will have had it, and it will have been a deliberate decision by the government. We are all supposed to crowd into the cities, and a few large, baronial holdings will grow the food that we Canadians are to eat. That seems to be the effect of it. I don't know what everybody is expected to do when they get into the cities unless, I suppose, they sell insurance to each other.
Finally, there is the power given in the bill to the Minister of Justice whereby a person can be hauled into court on summary procedure for failing to deal properly with the Income Tax Act and, if convicted, faces a fine. But if the Minister of Justice says, "We will try you by indictment," then the mere fact of conviction means the miscreant must go to jail. What a power for any minister to have! In effect, if you have two similar cases he can say, "This one pays a fine, but that one goes to jail." All this could have been taken care of through the very simple amendment offered by the hon. member for Edmonton West (Mr. Lambert), who has been a medium of common sense in this whole debate, leaving the option of how to proceed with the minister but leaving it to the judge to decide whether, in addition to a financial penalty, he should impose a jail sentence.
In other words, the judge is faced with the evidence and he decides whether the difficulties that the taxpayer is in are really of such a criminal nature that he should not only be punished with a fine but should go to jail as well. That is a decision that should not be made by the Minister of Justice, no matter how well intentioned he may be, nor
(Mr. McCleave.]
should it be a matter decided by his officials. That point was made, and of course we got nowhere.


An hon. Member:: Hear, hear!


Robert Jardine McCleave: Somebody cheers. I do not know who it was. If he is on this side, I imagine he would be endorsing the scorn in my remarks, but if he is on the other side he would be saying the Minister of Justice is right. In tax reform or in something like that I would sooner be a compassionate fool than a heartless idiot.
Earlier today I indicated that the government had not kept faith with a former Liberal Prime Minister in bringing in certain sections of this legislation. I now wish to deal with that matter and put it clearly on the record. Back in April, 1964, Mr. Speaker, this House was considering the social insurance number plan that was being piloted through by the President of the Privy Council, then Minister of Labour, and a great furor was made about whether the scheme would be widely used or would be restricted. People are very suspicious of being given a number and treated as part of a computer system.
I wish to read into the record part of the exchange that took place at that time. At page 1918 of Hansard dated April 8, 1964, appears the following:


Allan Joseph MacEachen: Mr. Speaker, my hon. friend will recall that the Glassco commission made a proposal that there be a common system of government record keeping and I am saying-and this is all the responsibility I can take-that this information is to be used for the unemployment insurance system and for the Canada Pension Plan.


John George Diefenbaker: And nothing else?


Allan Joseph MacEachen: I am not in a position to indicate at this stage what system of government record keeping will be involved in the future, but that is the present attitude of the government.


John George Diefenbaker: Oh; income tax, and so on?


Mr. Pearson:: Certainly not.


John George Diefenbaker: The Prime Minister is butting in. I ask him, will he give the undertaking on behalf of the government that this information will not be made available to other departments of government? We want to know that this is not a snooping operation for the use of the government.


Some hon. Members:: Oh, oh!


Lester Bowles Pearson: Mr. Speaker, the same and, I would hope, more effective precautions will be taken in this regard as were taken under the regime of the right hon. gentleman.


John George Diefenbaker: All this means is that it is going to be used.
As usual, the right hon. member for Prince Albert (Mr. Diefenbaker) was not whistling Dixie when he said that, because that is precisely what will happen under this new Income Tax Act. Anybody who looks at the day care provisions will know this was a breach of faith in respect of a policy statement made by a former Prime Minister of this country.
Then as reported at page 1919 of Hansard for April 8, 1964, a member of the Ralliement Creditiste said:


Mr. Raymond Langlois (Megantic):: A supplementary question to the Prime Minister concerning this system. Is the government considering whether this system is going to be extended to other departments than those of the unemployment insurance commission and pensions?


Lester Bowles Pearson: There is no necessity for extending this particular system for this particular purpose to any other department.
December 16, 1971

There it is. What a sorry commentary on smuggling something in and then gradually extending it for other purposes! A sorry record indeed.
Mr. Speaker, in a moment I intend to move an amendment but first, since it is the Christmas season and one likes to settle one's debts, I think that earlier in the debate I was wrong when I made a statement regarding a journalist in the press gallery, Mr. Dan Turner of Canadian Press. I thought about it and reviewed what I said, and am convinced that I was in error. I would not like to be unjust and, accordingly, in my place, I apologize without reservation for what I said at that time.


Some hon. Members:: Hear, hear!


Robert Jardine McCleave: The amendment which I propose, Mr. Speaker, is an old friend, previously entered in debate by the Leader of the Opposition. It reinforces the point we have made over and over again in the debate, that this House is simply not giving full consideration to all the elements that make up the proposed Income Tax Act. We have given good consideration to some parts of the bill and amendments have been offered. I see the hon. member for London East (Mr. Turner) here this evening. He is responsible, with the hon. member for Moose Jaw (Mr. Skoberg), for a very important amendment. These are small satisfactions, but important ones.
The fact is, we have covered parts of the field very thoroughly and other parts not at all. We know that the process of so-called tax reformation is by no means completed when the axe falls on our heads tomorrow afternoon and this measure is paraded to the other place for consideration. We know that if there is any intention to carry out meaningful tax reformation, it has to be a process which occurs over a considerable period of time. For example, on the deferred profit-sharing plans apparently the minister intends to bring in something to deal with them early in the new year. Why could not such an amendment be brought in now, so that at least that part of the tax story could be cleared up and people would not have to live with anxiety for months until the minister drops the other shoe, so to speak? The government has a strange way of operating, and I am glad to belong to a party that has resisted-


Mr. Danson:: "Change."


Robert Jardine McCleave: -utter foolishness. They can go around the country all they want, Mr. Speaker, saying that we should have cleaned up this bill in 50 days. If we started a criminal code from scratch, how long do you think it would take Parliament to deal with it, when everybody is interested in whether such and such an action should be designated a crime? It would probably take six months. While I do not recommend six months consideration in Parliament on tax reform measures, or tax change measures-there is not much tax reform in this bill-at least discussion should have had its full course and should not have been allowed to run to the end of the year and then be stifled.
I say, Sir, the government has not permitted us to do our job adequately with regard to tax retorm. We should be back in committee of the whole. I would not have minded being in committee of the whole on Christmas Day if we
Income Tax Act
were going to have some kind of meaningful debate. I do not consider very meaningful what the parliamentary secretaries have been babbling in this House for the last couple of days.


Some hon. Members:: Hear, hear!


Robert Jardine McCleave: It was childish and filled with misstatements. I heard that "Guay" contributon again, Mr. Speaker. They must be proud of him in St. Boniface, for all his time spent uttering two words in the House of Commons. I wonder what kind of water he is going to get himself into.


An hon. Member:: Water on the brain.


Robert Jardine McCleave: In a moment of charity earlier I promised that I would try to be positive. Accordingly, I move, seconded by the hon. member for Simcoe North (Mr. Rynard):
That Bill C-259, an act to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be not now read a third time but be referred back to committee of the whole with an instruction that the committee have power to consider amending the bill by providing:
That clause 1 of the bill be amended by deleting lines 1 to 3 on page 1 and substituting therefor the following:
"1. Parts I to IIIA and Parts V to VII of the Income Tax Act are repealed and the following substituted therefor so as to apply, subject to the said act as hereby amended and to Part III of this act, to the 1972 and subsequent taxation years but the said act as hereby amended, excepting thereout those portions thereof containing an arrangement, revision and consolidation of the provisions of the said act as the said act is amended by the application mutatis mutandis of the provisions of sections 6 and 8, subsection 12 of section 20, and sections 62, 63, 109, 110 and 117 of the said act as hereby amended, shall not come into force and have effect as law until a day to be fixed by a proclamation that shall be subject to affirmative resolution of the House of Commons:"


Mr. Mahoney:: Is that one amendment?


Robert Jardine McCleave: I understand that there may be difficulty about the last line, and if Your Honour should so decide, rather than touching off a procedural debate I would be willing to have all the words after "proclamation" struck out, because in the final hours of this debate it is more important for hon. members to make their contribution on the merits of the bill than for them to become enbroiled in procedural arguments.


The Acting Speaker (Mr. Laniel):: Order, please. I am sure the hon. member was not trying to read the mind of the incumbent of the chair, principally because of what has been said in committee. I feel that there might be some reservations about the procedural acceptability of the amendment in its present form. After presenting his amendment, the hon. member suggested that he or his party would be ready to eliminate some of the words from the end of the motion. It is very difficult for the Chair to pass judgment on this amendment, either as it is now or as it might read if the last part were eliminated, and I think I ought to invite comments from hon. members who might have opinions to express about the procedural acceptability of the amendment.
Before inviting hon. members to comment, perhaps I ought to refer to something that happened in committee in

December 16, 1971
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connection with the acceptance of an amendment on one basis by the chairman of the committee. As hon. members may recall, the chairman of the committee at that time said quite plainly that it would be impossible for the Leader of the Opposition (Mr. Stanfield) to redraft the amendment he had presented because of the very limited time available. I am sure that this limitation does not apply any more because hon. members who may have heard the remarks of the chairman of committee afterwards had ample time to consider the drafting of the amendment in question. This is not to be taken as an argument in favour of acceptance of the present amendment moved by the hon. member for Halifax-East Hants (Mr. McCleave).
I wish to refer to another basic difficulty with regard to the amendment. This is more a constitutional difficulty than a procedural one. I wonder to what extent the Chair can go beyond the constitution of Canada in accepting amendments that would more or less limit the powers of Parliament. After Parliament has passed a piece of legislation, can that power be limited by making that legislation subject to further affirmative resolutions of the House of Commons which makes up one part only of our parliamentary system? That is the point on which I should like to hear comments. I see the hon. member for Edmonton West (Mr. Lambert) becoming somewhat impatient while I talk.


Marcel Joseph Aimé Lambert: Your Honour has forgotten some legislation we have passed.


The Acting Speaker (Mr. Laniel):: I do not want to decide without first hearing from hon. members. I wish to tell the hon. member that even though he may have expressed his views on that point in particular, I may not be ready to decide immediately, in view of this very important difficulty.


Marcel Joseph Aimé Lambert: Mr. Speaker, I will limit my remarks to the narrow point which seems to give Your Honour difficulty. I suggest that the argument used the other night in accepting or, shall we say, glossing over any difficulties was, frankly, one that I myself would never have accepted. I mean, a motion will either stand on its own feet or it will not. If one looks at the arguments advanced with regard to the Leader of the Opposition's motion, one will see that from the procedural point of view it was never attacked. That point was never commented upon. Therefore, it makes little difference saying that it is too late to accept a change or a redrafted version.
If there is any difficulty about the words "shall not come into force-until a day to be fixed by a proclamation that shall be subject to affirmative resolution," I would invite Your Honour to look at legislation we have passed during the present session. In the Statutory Instruments Act there is a statutory direction to that effect. There is a provision resulting precisely from the government's own use of language saying that if at any time in future bills are passed by this House whereby power is given to the governor in council to pass regulations, if the bill stipulates that there are to be these regulations, they may be passed. It is provided that these shall be subject to affirmative or negative resolution.
[The Acting Speaker (Mr. Laniel).!
One must be careful not to draw an artificial distinction between the granting of power by this House and the ability of the governor in council to pass certain orders in council that shall be subject to either affirmative or negative resolution. We are, by the changes to our standing orders, providing for affirmative and negative resolution with regard to what procedures must be followed.
The amendment moved by my colleague from Halifax-East Hants (Mr. McCleave) is perfectly legitimate. Its parentage is sound. It draws its inspiration from the government's own statutes. Although we may not have had, shall we say, in the immediate past precedents of this kind, I would invite Your Honour to look at what the government has done in the case of the Statutory Instruments Act. I think there is an exact parallel here. The amendment asks the committee to recommend to the government that certain sections of the act shall be proclaimed, as indicated- the motion is absolutely clean and impeccable in that respect-and that the remainder shall be subject to proclamation on a date fixed in the proclamation after there has been an affirmative resolution of this House.


Mr. Hogarth:: That is nonsense.


Marcel Joseph Aimé Lambert: The hon. member for New Westminster (Mr. Hogarth)-


An hon. Member:: The Queen city.


Marcel Joseph Aimé Lambert: It is a very fine place. I am only surprised that the hon. member does not shine any more brilliantly on behalf of his constituents when he wants to talk about procedure.
If it is in contemplation of an affirmative resolution or a negative resolution under the Statutory Instruments Act, as a matter of fact there is a motion on the order paper to set up a committee on statutory instruments which will make provisions for the rules because this House will have to decide precisely the procedures. We are not talking about something new or constitutionally strange. It is fully within the power of this House, if it is to have the power under any other act as provided for under the Statutory Instruments Act. If Your Honour is to rule that this type of amendment is out of order by reason of the fact that the constitutional powers exist, the Statutory Instruments Act is wrong and any action by this House following the procedure laid out in that act would be beyond its power.
I also ask whether the Chair does rule on the constitutionality or legality of certain actions. I submit the amendment of the hon. member is quite in keeping with this stage of the debate.


The Acting Speaker (Mr. Laniel):: Is the hon. member rising for the purpose of asking a question?


Colin David Gibson: On the point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: The Chair will recognize the hon. member for Winnipeg North Centre (Mr. Knowles) and then the hon. member for Hamilton-Went-worth (Mr. Gibson).


Mr. Guay (St. Boniface):: 
Stanley Howard Knowles: That is what my friends need tonight-magic. I had intended to sit this one out, partly because I agree with the hon. member for Halifax-East Hants (Mr. McCleave) that in the closing hours of this debate the time should be spent on the substance of the bill rather than on procedure, and also because I always feel a bit uncomfortable taking issue with my friend, the hon. member for Edmonton West (Mr. Lambert). After all, as opposition members we have to make common cause most of the time.
Even so, I feel I must draw to the attention of Your Honour and the hon. member for Edmonton West that there is quite a difference between the references of the Statutory Instruments Act to regulations passed under an act that can be kept from coming into force until there has been an affirmative resolution of the House of Commons and the proposal that sections of an actual act shall not come into force until there has been an affirmative resolution of just one House.
Another reason I am uncomfortable on this point is that my attitude toward the Senate is well known. However, the fact is that under our constitution, statutes are not passed except by the action of both Houses, plus royal assent. If this amendment were passed and written into the act, we would be giving this House the power sometime next spring, by the action of this House alone, to delete from Bill C-259 certain sections that had been passed by both Houses.
Please give me credit for the fact that I am trying to make my remarks brief. That is the only point on which I shall speak. The hon. member for Edmonton West has failed to distinguish between regulations that can be made subject to an affirmative resolution of this House and sections of an act already passed by both Houses.


Colin David Gibson: Mr. Speaker, I tried to get the floor ahead of the hon. member for Winnipeg North Centre (Mr. Knowles). In many respects, I agree with the point he has made. He has hit on the very kernel of the weakness in the argument of the hon. member for Edmonton West (Mr. Lambert). The hon. member for Edmonton West, who did not sit on the statutory instruments committee, fails to realize the breadth and scope of that committee. It has very wide powers. Some of the recommendations made by that committee are wide enough to almost encompass all the weakness or flaws, or all the potential weaknesses or flaws that could be raised by the hon. member for Edmonton West, assuming that he was even in the ball park on the argument.


The Acting Speaker (Mr. Laniel):: Order, please. I thank hon. members for their learned opinions on the amendment before the House. I am sure they understand that the Chair must decide upon a very difficult question. Although I still have strong reservations as to the point made by the hon. member for Edmonton West (Mr. Lambert), and I still maintain these reservations strongly, I cannot accept the amendment as it stands. I leave the choice to the hon. member for Halifax-East Hants (Mr. McCleave) to abide by the suggestion he made to delete part of the amendment, and because of the limited time for debate the House could proceed, or I will take the amendment under advisement, consider it and arrive at a
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decision. At that point I might have to refuse the amendment in its totality.


Robert Jardine McCleave: Mr. Speaker, if the House is agreeable, I will delete the words after "proclamation" so that debate on the substance of the amendment can proceed.


The Acting Speaker (Mr. Laniel):: If there are no comments, the Chair will put the amendment to the House with the deletion made by the hon. member for Halifax-East Hants. It is moved by the hon. member for Halifax-East Hants:
That Bill C-259, an act to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be not now read a third time but be referred back to committee of the whole with an instruction that the committee have power to consider amending the bill by providing:
That clause 1 of the bill be amended by deleting lines 1 to 3 on page 1 and substituting therefor the following:
"1. Parts I to IIIA and Parts V to VII of the Income Tax Act are repealed and the follwing substituted therefor so as to apply, subject to the said act as hereby amended and to Part III of this act, to the 1972 and subsequent taxation years but the said act as hereby amended, excepting thereout those portions thereof containing an arrangement, revision and consolidation of the provisions of the said act as the said act is amended by the application mutatis mutandis of the provisions of sections 6 and 8, subsection 12 of section 20, and sections 62, 63, 109, 110 and 117 of the said act as hereby amended, shall not come into force and have effect as law
until a day to be fixed by a proclamation."


David Réal Caouette: Mr. Speaker, the amendment just moved, once amended by its mover, does not make much sense. I shall therefore confine my comments to the general discussion on third reading of Bill C-259.
I listened this afternoon to the commments which the Prime Minister (Mr. Trudeau) made concerning this famous tax reform bill which will have been under consideration for 50 days tomorrow.
The Prime Minister started by saying that the need for tax reform was indicated in 1962 by a Progressive Conservative government. There was talk then of tax reform, of the need for a new tax structure in order to assist the less privileged sectors of Canadian society. Strangely enough, the very economists who were suggesting tax reform to the Progressive Conservative government are now making the same suggestions to the present government. The economists have not changed.
A white paper was published two years ago which was the subject of endless comments and caused many disappointments, even legitimate misgivings among various groups of citizens: workers, farmers, professionals, industrialists and businessmen. Everyone was concerned.
The white paper proposals came out in the form of Bill C-259 which is presently before us. This bill is roughly four times thicker than the white paper that came out two years ago.
Mr. Speaker, the Prime Minister said this afternoon- and he was right-that the Progressive Conservative party was advocating tax reform. This is true. And we

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from the Social credit party realize that the two old parties are exactly identical.


Mr. Gilbert Rondeau (Shefford):: It is so true.


David Réal Caouette: They are exactly the same.


Gilbert F. Rondeau: It is so true!


David Réal Caouette: If the Progressive Conservatives were sitting where the Liberals are presently sitting because they both use the services of the same economists we would have this same Bill C-259 before us.


Gilbert F. Rondeau: It is so true!


David Réal Caouette: It is being discussed for the sake of discussion.
Mr. Speaker, the Prime Minister said that because of Bill C-259 one million citizens of this country would be taken off the tax rolls.


Some hon. Members:: Hear, hear!


David Réal Caouette: There they go. This afternoon I saw people applauding like the one I see on the other side of the House.


An hon. Member:: Do not look at me.


David Réal Caouette: They applaud and do not even know why they are applauding. The Prime Minister said this afternoon that the opposition did not understand this legislation but that everybody else in this country did.


Gilbert F. Rondeau: Is that right!


David Réal Caouette: Everybody understands it. There are not even five Liberals in this House who understand this bill.


An hon. Member:: Wrong.


David Réal Caouette: Even the Prime Minister does not understand it.
As for the economists-one of them will speak after me, namely the former Minister of Communications-they do not agree more than he does on this bill because they know it is unfair.
The Prime Minister says that the Canadians do understand the bill. And yet we have received, as the government did, protests from all kinds of associations, from economists who do not share the views of the government economists, and from consumers organizations which object to Bill C-259. We have even received protests from the Institute of Chartered Accountants.
An accountant, the responsible member for Laurier (Mr. Leblanc), spoke the other day about the dictatorship of the member for Temiscamingue. But who will impose this damn dictatorship in the House tomorrow by using the closure rule which will prevent us from debating this bill and taking exception to it? Let us speak about dictatorship! They are imposing it!
When they have nothing to say they attack people.
I can understand that the member for Laurier, as an accountant, has been able to attack the member for Shefford (Mr. Rondeau) by arguing that he was a chartered accountant. But when it comes to figures, the member for

Shefford has nothing to learn from him. In fact there are a few things we know better than he does; he claims that two and two make five and we claim it makes four. There is a difference.


An hon. Member:: What a strong argument!


David Réal Caouette: The member for Laurier should have presented valid arguments on Bill C-259. He does not understand anything in it.


An hon. Member:: You cannot read it.


David Réal Caouette: Mr. Speaker, I have read his speech. His arguments are as hollow as empty 20-pound buckets. So is the member for Laurier.
Mr. Speaker, the Prime Minister said this afternoon that everybody understands Bill C-259. I can well understand that the hon. member for Laurier can blush till his ears are red. He well deserves to have them redder still.


Mr.   Fernand-E. Leblanc@Laurier: You did not see your own.


David Réal Caouette: No, because boys like the member for Laurier never got on my nerves, and moreover they are no match for me.


Mr. Leblanc (Laurier):: Tell us about your son.


David Réal Caouette: Mr. Speaker, the hon. member is referring to my son whom he defeated in his constituency, but he is not saying how he stole the election with his election organization.


Fernand-E. Leblanc: I defeated your son twice, in spite of the 500 Creditistes who tried to steal the election.


David Réal Caouette: The hon. member for Laurier has his head full of telegraph poles. That's what people think of at election time, to defeat honest people.
Mr. Speaker, I was saying that the Chartered Accountants Association was against Bill C-259, as well as associations of professionals and industrialists. Businessmen and tradesmen are against Bill C-259. I was in western Canada, scarcely three weeks ago, and I also visited the Maritime provinces. I met Liberals who are opposed to Bill C-259.
The Prime Minister will now turn around and say to the House that the Canadian people want Bill C-259 to go through. It is not true. Nobody can prove that the Canadian people want this bill passed. It is being forced upon the people and this is called democracy.


An hon. Member:: Ah, ha!


David Réal Caouette: Mr. Speaker, listen to the braying of the donkeys on the government side.


An hon. Member:: A donkey-


Fernand-E. Leblanc: Look at yourself!


David Réal Caouette: Mr. Speaker, this afternoon while the Prime Minister was speaking-
December 16, 1971


Mr. Speaker:: Order. I regret to have to interrupt the hon. member for Temiscamingue, but I thought I might try to restore order to a certain extent. The hon. member for Temiscamingue has the floor and it would be much more simple to let him deliver his speech.


Fernand-E. Leblanc: Mr. Speaker, I rise on a point of order.
The hon. member for Temiscamingue attacks me constantly. However, I think I can answer him quite easily, and for doing so I avail myself of the freedom granted the members of this House.


David Réal Caouette: Mr. Speaker, the hon. member is not even familiar with the Standing Orders although he is called a chartered accountant. It might be more to the point to call him a feather-brained member.


Mr. Speaker:: Order. I suggest to the hon. member for Temiscamingue that he should rather revert to his text or to the views he intended to express.


David Réal Caouette: Mr. Speaker, while the Prime Minister had the floor this afternoon, I too objected to interventions fromt he opposition side, hoping to hear him, and once you called the opposition members, to order so that the Prime Minister could get on with his speech. I agreed to that. However, when an opposition member has the floor, whom do we hear on the other side of the House?


Mr. Speaker:: Of course, I cannot enter into a debate with the hon. member, but may I remind him that if I interrupted the hon. member a while ago, it was precisely to urge the hon. members not to interrupt their colleague from Temiscamingue, since he has the floor.
The hon. member for Laurier could have realized that and I ask all hon. members to allow the hon. member for Temiscamingue to continue his remarks.


Fernand-E. Leblanc: I rise on a point of order.
I agree that we should listen to the hon. member for Temiscamingue, but if he launches out into personal attacks, I feel singled out and I cannot help answering. If the hon. member intends to discuss Bill C-259, I am ready to listen to him, even if he wishes to speak all evening.


David Réal Caouette: In fact, Mr. Speaker, if the hon. member is not happy, he can withdraw behind the curtains.
Incidentally, the hon. member for Shefford (Mr. Rondeau) made an observation that is true. Instead of calling him a "chartered accountant", we should say "retarded accountant". It is not quite the same thing!


Mr. Speaker:: Order. The hon. member for Temiscamingue will admit that he is not making things easier right now. I invite the hon. members for Laurier and Temiscamingue to come back to the bill before the House.


David Réal Caouette: Mr. Speaker, the Prime Minister spoke of a million Canadians who will pay no income tax. He did not say those million Canadians represent people who earn the least amongst single people. In fact, they are single people who earn less than $1,500 a year, and married people who earn less than $2,850.
The Prime Minister should have told us how much those people will save by no longer paying income tax. They
Income Tax Act
scarcely paid any previously. Now, between almost nothing and nothing at all, there might be a difference of about $7 or $8 a year or 10 to 15 cents a week.
However, the Prime Minister did not say so. He told us a million-it sounds good-Canadians will not be paying income tax and that 1,300,000 will pay less. How will the taxpayers pay less income tax? Even if it were only $100 a year, it comes to $2 a week. But not a word about it! No. It is mentioned in a general way that 1,300,000 Canadian taxpayers will pay less income tax. They are bamboozling the people!
And the Prime Minister tried this afternoon to suggest that the members of the opposition were talking about anything except Bill C-259. He said that the Progressive Conservative had talked about India, potato growing in New Brunswick, wheat exports to China, trade with India, and that we forgot to speak to Bill C-259.


An hon. Member:: That is true!


David Réal Caouette: Mr. Speaker, that is correct, but I heard the speeches of certain Liberals which were not that much more substantial than those made by Conservative members. What is true, as I said it at the beginning of my remarks, is that if the Progressive Conservatives were in the place of the Liberals, we would be considering exactly the same legislation, because the economists of this government are the same as those of the government of ten years ago, who prepared the "gimmick". That is what we are dealing with now. So, let us not be timid. Others do not hesitate to say it.
Tuesday, during the debate on the motion to apply Standing Order 75c, I heard the Minister of Public Works (Mr. Laing) say to the Leader of the official Opposition (Mr. Stanfield), and I quote:
I suggest that the intelligence of the Leader of the Opposition is exceeded by his sensitiveness to public opinion. No government has any money of its own.
That is an admission on the part of a minister of a sovereign government.


Mr. Albert Bechard (Parliamentary Secretary to Minister of Justice):: Why not?


David Réal Caouette: Yes, I said "Why not?" And why shouldn't I? Why can't the government, through Parliament, use the services of the Bank of Canada?
I will remind the House, Mr. Speaker-and I see the Minister of National Defence (Mr. Macdonald) nodding his approval-that the former Liberal leader, whom the Minister of Public Works, himself a former Liberal leader of British Columbia, followed like a little dog, said in 1935, when I was a liberal:


Some hon. Members:: Hear, hear!


David Réal Caouette: And the Minister of Public Works said yesterday-


Albert Béchard: Those were the good old days.


David Réal Caouette: One thing is true perhaps: I have remained a true Liberal while the Liberals have become socialists.

December 16, 1971
Income Tax Act
Mr. Speaker, I quote what the Right Honourable William Lyon Mackenzie King said in August 1935, and this, for the information of the hon. member for Laurier (Mr. Leblanc) since he finds Social Credit so funny.

Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Usury, once in control will wreck any nation.

Let us see if the situation is not exactly the same as the one we find ourselves in with this Bill C-259.


An hon. Member:: What date?


David Réal Caouette: In August 1935.

Until the control of the issue of currency and credit is restored to government, and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and democracy is idle and futile.
A former Prime Minister of Canada said that.


An hon. Member:: He is dead.


David Réal Caouette: He is dead. My hon. friend will die one day, Mr. Speaker.


An hon. Member:: Everyone has to die.


David Réal Caouette: But one thing is true: that Prime Minister was right. And today, we believe that it is high time to proceed with a reform in depth, not a fictitious one, like this one, which is meant to take away from those who have and to give to those who have not. This is the objective of Bill C-259. The rich will benefit from exemptions, the poor will gain very little and the middle man will pay everything.
Mr. Speaker, that is exactly what we are told by accountants and businessmen. Some accountants in western Canada say frankly: "It's pure confiscation of private property." For the hon. member's information, those are not Creditiste, but liberal or conservative accountants, and they all say the same thing.
Mr. Speaker, some time ago I suggested to the House the establishment of a social security program using the services of our financial institutions, particularly the Bank of Canada. Some people said it would be ridiculous to change the whole social security system which exists in Canada at present. No figures were given at the time. But we now have figures to show; we did the necessary research to get the official figures.
The federal government spends $7,722,661,607 every year on social security in Canada. Crown corporations spend $80,025,837 on social security. The total expenses of all Canadian provinces amount to $6,814,500,000, and those of municipalities, to $286 million-for a grand total of $14,903,249,444. That is what we pay at present in Canada for social security.
My colleagues and I urged that a single social security plan be set up for all Canada instead of 25 different schemes. We must set up a plan applying to every Canadi-

an earning less than $15,000 a year because we consider that those earning that much a year have security! We have proposed giving, from age 18, $1,500 to all single people and $2,500 to married couples and an extra $250 for each child up to the sixth and up to a maximum of $4,000.


An hon. Member:: For hon. members too?


David Réal Caouette: Not for hon. members, because their annual income exceeds $15,000.
Then, Mr. Speaker, we would cover students, people who are handicapped or disabled, who would, if they are alone, receive $1,500 a year, which is $125 a month, instead of $80, $75 or $65 as is now the case.
When students 18 to 23 years of age would reach the end of their studies, they would receive $125 a month. A family of four would get $3,000 a year. Of course, if they could make some money besides their social security, they would be entitled to it, without being penalized or deprived of the guaranteed social security up to $4,000 a year.
Mr. Speaker, such a system would cost less than the present one, because we now make all kinds of expenditures without any reason and those who need it most do not get anything. The most needy are given as little as possible and we find thousands of examples throughout the country. This very day, welfare recipients from Montreal were in Parliament to complain about the lack of attention we give them. Try as we may tell them that this is the responsibility of the province of Quebec, Quebecers know that 50 per cent of welfare allowances come from Ottawa. Mr. Speaker, under that program, $200 a month would be paid everyone at age 60, and $150 a month to the spouse. That means that a married couple of 60 or more would receive $350 a month. I dare any member to tell me that $350 a month for old people or $125 a month for students, that is roughly $1,500 a year, is too much.
When I suggested the implementation of that program, I asked hon. members to study it seriously, not to win votes in the next elections but to achieve a just society in Canada. I urge, in all sincerity, the Liberals in power to adopt that social security program for the Canadian people as a whole. If they do so, I promise to vote for the present government in the next elections. It is as simple as that!


Albert Béchard: Mr. Speaker, would the hon. member allow me a question?


David Réal Caouette: Of course.


Albert Béchard: Mr. Speaker, if the policy outlined for the second or third time by the hon. member for Temis-camingue were implemented by the Liberal party, would he go back to their ranks?


David Réal Caouette: This would mean that the Liberal party is again becoming truly Liberal. And then, I have not-


Fernand-E. Leblanc: Mr. Speaker-


The Acting Speaker (Mr. Honey):: The hon. member for Laurier.
December 16, 1971


Fernand-E. Leblanc: Would the hon. member for Temiscamingue allow me a question?


David Réal Caouette: Certainly.


Fernand-E. Leblanc: After the statement that the leader of the Social Credit has just made-a most interesting statement by the way-I wonder what would happen if the municipalities which, at the present time, spend about $800 million, or some $200 million, on social welfare, were told by the federal government: As of tomorrow, we will administer all social security programs, and this will cost us $14, $15 or $20 billion; and then, the provinces and municipalities will have no say in the matter. I wonder how the provincial and municipal autonomy could be reconciled with such an interference by the central power?


David Réal Caouette: Frankly, I do not think there would be any discussion or debate. The provinces, of course, would not accept this scheme without discussion, but if we want for Canada as a whole a scheme which would succeed in reaching each individual, I think that it would be advisable for the provinces and municipalities to come to an understanding with the federal authorities in order to establish a single scheme for Canada. Moreover, I do not think that this would prevent Quebec from being Quebec or Ontario from remaining Ontario. We would have a comprehensive plan which would be less costly to finance than different schemes, that is one for each province. Such is my opinion and that of my colleagues. I understand that we-
Mr. ]acques-L. Trudel (Montreal-Bourassa): Would the hon. member for Temiscamingue allow me a question?
Mr. Speaker, this is not the first time that the hon. member for Temiscamingue makes this speach and blames us for not accepting his ideas or not listening carefully to what he is saying in the House.
The last time he made it, Mr. Speaker, I asked him a question. He told me that he had not managed to figure out the cost of the programs he was advocating. I wonder if he would be willing now to give the answer I was asking him then?


David Réal Caouette: I have just given that answer, Mr. Speaker. We are spending at the present time $14,903,000,000, and with just about $15 billion, we could apply the system I am advocating. So it comes to about the same thing.
An. hon. Member: Just about $15 billion?


David Réal Caouette: Just about $15 billion dollars, yes. At the present time, we are spending $14,903,000,000, which is not very far from $15 billion, but even if there were a difference of about $2 or $3 billion this year, we had to go to financial institutions in order to get $1.7 billion. And the Prime Minister told us that if we did not have enough, we would find more. And that billion dollars did not exist in Canada. It is a deficit that the government simply and purely created. We did not take it out of the pockets of the people. And they are ready to create another deficit.
I am asking a very simple question: Should war break out tomorrow, and should we have to take part in it, the
Income Tax Act
government would not ask if there were enough money. We would find all the millions and billions of dollars that would be necessary for the war.
Why are we not doing the same thing to establish a peace system at home, a social security system that would allow everybody to feel at home? It seems to me that it is easy to understand.


An hon. Member:: The poor man!


David Réal Caouette: Now, Mr. Speaker, there is-


An hon. Member:: That is socialism!


David Réal Caouette: No, that is not socialism. We are not against private enterprise; on the contrary, we encourage it.
We do not intend to scuttle private enterprise.


Fernand-E. Leblanc: Mr. Speaker, I wish to put a question to the hon. member in order to clarify a figure which he quoted a moment ago. In fact, he said that the federal government is now spending about $7 billion-that is 50 per cent of its total budget of $14 billion-on social benefits of all sorts. Could we have more detail to support the figure of $7 billion? The hon. member is certainly in possession of that information.


David Réal Caouette: Yes, I can give that information to the hon. member.


Mr. Deputy Speaker:: Order, please. I am sorry to interrupt the hon. member for Temiscamingue (Mr. Caouette) but I feel that hon. members are straying considerably from the subject under debate. While his remarks are very interesting, I say with respect that the hon. member for Temiscamingue is straying from the subject matter. We have before us an amendment to the motion for third reading which in effect would delay the coming into effect of some parts of the bill. As this is the matter under debate, I invite hon. members to stay fairly close to that subject.


David Réal Caouette: Mr. Speaker, the hon. member is asking for a breakdown and I can meet this request since I have all the necessary figures.
Federal expenditures for social security for thp fiscal year ended March 31, 1971, including National Health and Welfare-not including the transfer payments to the provinces-old age insurance, allowances for the blind or the disabled, family allowances, social assistance, unemployment insurance and medicare, amount to $2,359,534,000. Substracting from this amount the adminiytrative costs for the Food and Drug Directorate and the Amateur Sport program amounting to $23 million, the balance is $2,335,791,000.
The non-budgetary operations: old age security fund: $914 million; Canada Pension Fund: $1,024 million; unemployment insurance fund: $771 million; other accounts- annuities, insurance and pensions for federal civil servants, armed forces, members of Parliament, members of the Senate, Royal Canadian mounted Police, $999 million. Total: $7,043,791,000.

December 16, 1971
Income Tax Act
Manpower and immigration: retraining, manpower mobility and assiytance to the provinces: $340 million; Veterans $109 million; Indian and Eskimo Affairs (schools, housing, health and welfare, pension and annuities) $229 million. Grand total $7,722,661,107-


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: You said $14 billion a while ago.


An hon. Member:: No, this was the total.


David Réal Caouette: The hon. member for Limoilou-


Gérard Duquet: You said $14 billion.


David Réal Caouette: Yes, $14 billion is the total. I am now speaking of the federal government.


Gérard Duquet: I must say to the hon. member that there is no member for Limoilou. I am the member for Quebec East.


David Réal Caouette: I am speaking about the federal government. If the hon. member wants to add the amounts relating to the provincial government, it is about the same thing for the municipalities.
As for the grand total, the provincial expenses for the fiscal year ending March 31, 1972, they amount to $6,814,500,000.


Gérard Duquet: Yes, but are the 50 per cent included in the federal government expenses?


David Réal Caouette: No, they are not included; those are expenses shared equally by the province and by the federal government.


Gérard Duquet: Yes, by the federal government?


David Réal Caouette: When I say here-


An hon. Member:: It is all figured out?


David Réal Caouette: Yes, it is substracted; everything is figured out here, the province pays and the federal government provides the total amount of $14,903,249,000. That is what social security is presently costing in Canada.


An hon. Member:: Does that include municipalities?


David Réal Caouette: Yes, it includes municipalities, cities like Montreal, Quebec and Rouyn-Noranda.
Mr. Speaker, this is a plan we are submitting. It can be studied; the economists can wallow in it if they want, and figure it out.
Now, the point I want to make is that we must at all costs adjust the financial system to the physical requirements of our country, that is to say make financially possible what can physically be accomplished. Everybody can understand that easily. We used to hear Mr. Georges-Emile Lapalme, former provincial Liberal leader, say it over and over again on television and radio.


Gérard Duquet: That cost a lot.


David Réal Caouette: Mr. Speaker, last week I was talking to students of three universities in Montreal, McGill, Loyola and Sir George Williams. Last summer, those students

were looking for jobs and the government with its Opportunities for Youth program was supposed to get them some. We provided jobs for 400,000 young Canadians through programs set up by the government, but 900,000 students were unable to find a job during the summer.
I tell the younger generation in plain words, if a war was to break out tomorrow, each and everyone of you would find a job in the Canadian army. They would be dressed, fed and even paid to go and fight for Christianity and civilization. Why do we not start respecting Christianity and civilization at home, in Canada. Instead of meddling with financiers who dream up such bills as Bill C-259, let us bring about the necessary monetary reform by subordinating money to the human being and not the human being to money as would presently be the case should Bill C-259 be adopted.


Hon. Eric W. Kierans (Duvernay):: Mr. Speaker, I am glad to have this opportunity to speak on the bill and also to take advantage of the statement of the Minister of Finance (Mr. Benson) that the bill in its complexity obviously leaves some things to be desired and undoubtedly the government will be taking steps to amend the bill and to improve it. I should like to point out this evening some of the measures which I think the government should take the opportunity to imprpve as quickly as possible.


Almonte Douglas Alkenbrack: Now.


Eric William Kierans: I think there are certain elements in this bill which are the basis of creating even further problems for the Canadian people and the Canadian economy.


Some hon. Members:: Hear, hear!


Robert Norman Thompson: Mahoney, you should listen to him.


Mr. Lefebvre:: You can learn from a Liberal, so listen.


Eric William Kierans: These sections of the bill can lead to further concentration in the Canadian economy, which no one wants. They can lead to an increase in foreign ownership of Canadian industry, which no one wants-


Some hon. Members:: Hear, hear!


Eric William Kierans: -and they can also lead, by their continuing emphasis on the resource industries, to grave effects on the government's efforts to increase employment, income and growth in this country. A tax bill, and especially a bill that is called a reform bill, which comes before this House after ten years of work, or since 1962, can only be at the centre or the heart of an integral part of an over-all economic policy. Such a tax bill can only be formulated after a country knows what its objectives are, in what directions it is going, how the bill itself will integrate with monetary policy, with resource policy, with commercial policy and all the other elements. It does no good if a tax bill works in reverse to a commercial policy, or if a manufacturing policy works in reverse or is detrimental to resource policy, or vice versa.
Mr. Speaker, I think everyone in this House is in agreement with the reduction in corporate rates from 50 per
December 16, 1971

cent in 1972 to 46 per cent in 1976, and the reduction of federal tax on lower incomes from 17 per cent on the first $500 to 6 per cent by 1976. But this is not necessarily reform and is not the whole part of it. What is recognized here is that more buoyant tax revenues from personal and corporate income taxes in an expanding economy should lead to a reduction in tax rates and not necessarily increased federal expenditures. As Professor Daly has shown, Canada's gross national product in the 1953 to 1968 period grew at an average annual rate, compounded, of 7.2 per cent, while personal income taxes increased at a 10.4 per cent rate, compounded. Thus, the rate of growth of personal income taxes far exceeded the rate of the gross national product.
In July, 1971, my colleague, the President of the Treasury Board (Mr. Drury), issued a statement of the financial operations for the country for the first four months of the current year. On page 16 of that statement, table III, one sees that in 1961-62 35 per cent of all federal government tax revenues came from the taxes on individuals. One also sees that in this last current year not 35 per cent of government taxes came from people, but 41.4 per cent. One sees at the same time, Mr. Speaker, that the government collected 231 per cent of all of its tax revenues from corporations in 1961-62, but today it only collects 191 per cent of its tax revenues from corporations. So the impact on persons has been gradually increasing during the last decade.
These reductions today, while welcome for the lower income groups, do not in fact ease the load on those with medium salary and wage income. And I would point out the following fact, that in the last ten years, with an increasing rate of tax revenues coming from the individual, from wages and salaries, and a declining percentage coming from the corporate sector, it is very little wonder that today our young people find it difficult to get into business for themselves, on two grounds, that governments now take more from personal income, which makes it that much more difficult to save, and on the other ground that they take very much less proportionately from businesses which are thus much more able to defend themselves from people who might want to enter particular industries.
Fairness in taxation, as it was conceived by the Carter commission, demands that persons with equal amounts of income pay equivalent amounts of tax and that persons with larger or smaller incomes pay proportionately different rates of tax. This principle was enunciated clearly in their report, but this principle no longer obtains. Income is still divided into two classes, income from labour and from enterprise and from effort, and income from rolling over wealth, that is, capital gains. And whatever the rate that applies to workers on wages and salaries, the gains on wealth are going to be taxed at exactly half that rate. Persons in similar circumstances are not treated in the same manner.
Also, Mr. Speaker, I would like to insist that the argument that people would not invest because of a capital gains tax has been disproved over and over again. There is no reason to accept this kind of threat, because they have no choice. If they do not invest for gain, for income or for dividends, then they will have to live off and eat off their own capital, which is far worse.
Income Tax Act
A second measure here is in the "Summary of 1971 Tax Reform Legislation," where the Minister of Finance introduces for the first time a new exemption for corporations. Corporations will be allowed full deduction of interest if they borrow money to buy shares in other corporations. The primary effect of this clause will be to create conglomerates, firms whose only objectives are growth, growth of assets, growth of revenues and growth of net income. But growth and accumulation are wealth, and wealth is that part of annual income which is not taxed, which is not distributed. To favour wealth and accumulation is to favour size and the concentration of power, and this is neither fairness nor justice. This is the opposite of the main objective of the Carter commission, to make corporations more responsible to people, to shareholders and consumers alike.
How is this going to work? Take the example of major corporations. Imperial Oil had a net income in 1970 of $105 million, Union Carbide had $11 million, Noranda, a Canadian company, had $58 million, and Distillers Corporation, also a Canadian company, had $60 million. On the basis of this new act, Imperial Oil is making as a net income of $105 million on oil and gas and its various subsidiary activities, and it could borrow and reduce the tax burden on that net income something in the order of $500 million. And with $500 million they can buy out MacMillan Bloedel, Domtar, CPR, F.P. Publications and still have a lot of it left over.
This adds to concentration, and one of the curious things about this is that the investment they make in the companies that they buy out, or whose shares they buy, is non-taxable in their hands, but the costs, the interest on making that investment is deductible as a cost from whatever their current operation is. I do not think we have any objection to paying the real costs of gas and oil in this country. But I think we have reason to object when part of the costs that are deducted by the oil company, the distilling company or whatever it may be, is used to buy out other companies in the pulp and paper industry or whatever it may be.
Similarly, Mr. Speaker, I do not think that businessmen are too happy about this. When speaking recently to the president of a very large corporation who thought this was a good section in the act, I pointed out to him, "You are thinking of buying out so and so," and he said, "Yes." I asked, "Have you thought that so and so can also buy you out?" It just leads to more concentration in the Canadian economy at a time when the country itself is looking for more competition.
One could be surprised that we have a bill before this House, Mr. Speaker, which seeks to improve competition, to protect the consumer, to reduce mergers, and at the same time we have a section in the tax reform bill that serves only to force that concentration, and increasing mergers that will be inevitable as a result of this section. I think that the officials of the Department of Consumer and Corporate Affairs and the officials of the Department of Finance might well get together to find out in which direction they are going, or if they are meeting each other in crossing.


Some hon. Members:: Hear, hear!

December 16, 1971
Income Tax Act


Eric William Kierans: I should like to point out something else, Mr. Speaker. This particular exemption applies to all Canadian corporations-not just to Canadian corporations that are wholly owned or controlled, but to all Canadian corporations. On the basis of value alone, Distillers could buy a controlling interest in Imperial Oil, Imperial Oil could buy a controlling interest in MacMillan Bloedel and Distillers, and so on, but it only works one way. Imperial Oil could buy the controlling interest in the two Canadian companies, but the two Canadian companies could not buy the controlling interest in Imperial Oil because that resides in the United States. At a time when we are worried about foreign ownership we give an "open sesame" to foreign subsidiaries that are here already to go out and buy more Canadian companies. Then the Minister of Finance tells them, "We will pay half the cost by allowing you to deduct that interest cost from whatever profit you are making and whatever business you are in".


Some hon. Members:: Shame!


Some hon. Members:: Hear, hear!


Eric William Kierans: Mr. Speaker, as most of my hon. colleagues know, I have been extremely concerned at the emphasis in this country for the last 20 years on the policy that we can build a strong Canada by selling our resources.


Gilbert F. Rondeau: Selling, or giving away?


Eric William Kierans: When he returned from the Group of Ten meeting in Rome, the Minister of Finance said that he was congratulated by all the finance ministers in the group on having the most remarkable and modern tax bill. I do not think they read it, those other ten ministers of finance. And if they did read it, I do not think they understood it or that they agreed. But they did agree to one thing. If you, Mr. Speaker, were the minister of Finance for Japan, Germany or the United States, you would have said, "Have you done anything to change that give-away tax program on resources that you have in Canada?" The answer would have been no, and they would have been very pleased with the bill.


Some hon. Members:: Hear, hear!


Eric William Kierans: They all depend on resources, Mr. Speaker-all of them. If Canada stays with cheap taxes-


Joseph-Phillippe Guay: Mr. Speaker-


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member for St. Boniface (Mr. Guay) is rising on a point of order.


Gilbert F. Rondeau: He wants to make a speech.


Joseph-Phillippe Guay: It is not a speech, but I could do that, Mr. Speaker. This is the only time that someone is making a point, and I should like to listen to it because members of the opposition have not contributed anything. We have listened to them, so I wish they would keep quiet.


Mr. Dinsdale:: He is quoting the opposition, Joe.


Eric William Kierans: If Canada stays with cheap taxes-and by cheap taxes I mean the oil and gas industry in pipeline and oil wells which pay taxes of less than 6 per cent of the

profits they earn; by cheap taxes I mean the mining industry in their metal mining operations which pay taxes on 13 per cent of the profits they actually make-and with this kind of policy, then the foreign ministers of finance who want these resources are going to like our tax policies very much. They can also use them to beat down developing nations in the world whose only possibility of ever taking off into industrial growth would be to obtain an adequate return when they come to sell their own resources so that they can industrialize even in the most modest way.
These ministers of finance know that the more we insist on selling our resources as we do in this way, we show our preference for taxing these kinds of exports at such phenomenally low rates and manufactured exports at much higher rates; as long as we are willing to do this they are willing to buy, and they know that every hundred million or billion dollars worth of our resources that they buy, that money coming into this country makes it that much more difficult for the Canadian manufacturing industry to compete, because our dollar goes up and Canadian manufacturing finds it more difficult to compete in the export markets that they may have, or to defend themselves against import competition at home.
When virtually every other nation in the developing, industrialized world follows a policy of conserving and reducing the drain on its industrial resources, by outrageous tax concessions accorded to no other sector of our economy we encourage the exploitation and sale of our resources. The official position of the Department of Finance has been and I quote:
There is no inherent reason why Canada cannot be a major exporter of raw materials and of manufactured goods at the same time.
This is demonstrably false, Mr. Speaker. You cannot have both. When each of our major trading partners-and we know since August 15 the emphasis they place on balancing their trade account-is searching for a balance in their merchandise trade with us, they will be striving to pay for the import of our raw materials with their manufactured goods.
An additional $1 billion export of energy to the United States, for example, would give us in this country $68 million in wages and salaries. But that balancing inflow on which Mr. Connally and Mr. Nixon are insisting in manufactured goods could mean that we are importing anywhere from $200 million to $350 million in their wages and salaries, depending on the industry. If it is the furniture industry, we would be exchanging $68 million for $330 million. If it is the textile industry, 26 per cent or $260 million on an average of their output is composed of wages and salaries. If it is agriculture, wheat or products like that-and I am at no time speaking of pulp and paper or wheat and fish and hydroelectric power, which are renewable resources; I am speaking of non-renewable resources and agricultural products-the average is 26 per cent. If it is pulp and paper, the average is again 26 per cent. So we are exchanging 6.8 per cent or $68 million out of $1 billion, for $260 million. We cannot have our cake and eat it too. It is some exchange! There may be a balance of trade in dollar terms, but there is no balance of trade in jobs or wages and salaries.
December 16, 1971


Gilbert F. Rondeau: Right. No wonder we are so poor.


Eric William Kierans: Mr. Speaker, a nation's natural resources are not past-production; they are the wealth of its soil and waterways. As such, they cannot be viewed in the same light as current production, as goods and services that we produce each year. Those goods can legitimately be disposed of at will by the people who produce them currently in any given year. Resources are a trust. They have been received from the past. They are to be husbanded by the present generation and they are to be passed on to future generations. A generation that deliberately squanders a nation's natural wealth-I emphasize "deliberately squanders"-to enhance its own standard of living will have much to answer for.


Some hon. Members:: Hear, hear!


Eric William Kierans: A government that deliberately pursues a policy of selling off the natural wealth of its people to achieve short-run gains breaks faith with its own future. It reveals, by the forced sale of its assets, its inability to devise the set of objectives and economic policies that will increase output and distribute it more equitably on an annual basis. It admits that the standard of living we enjoy today depends on the selling of our capital in natural wealth as well as on our own efforts.
Unfortunately, Canada decided in the late forties and early fifties to ensure a rapid rate of growth by selling off its non-renewable resources. This policy was permanently enshrined in our tax legislation in 1955 and still survives, despite the bill before us today. The current attempts of the resource industries-we have all received letters and been under pressure from these people, particularly from the Mining Association of Canada-to prove their unboubted value to the Canadian economy are based on considerable exaggeration and sometimes border on hysteria. Their use of the multiplier, which one sees so much of in their advertising would, if accepted and applied to all sectors of the economy, force on to conclude that there are between 12 million and 14 million people presently employed in this country instead of 8 million plus the half million unemployed.
I have been constantly amazed, Mr. Speaker, by the violent and vehement representations of the captains of our resource industries as they fight to maintain their existing exemptions. I realize that a privilege once enjoyed is hard to forgo. One can accept their self-interest; but they must also admit the rights to measure their private and immediate gains against the longrun social advantage.


Some hon. Members:: Hear, hear!


Eric William Kierans: They exist, not by some divine right but by the will of the people as represented by the members of this House, and I think their current intransigence and threats could easily lead to nationalization. If we were to eliminate all the concessions, depletion, accelerated depreciation, capital cost allowances exceeding actual funds invested by between 15 per cent and 33-1/3 per cent, and so on, the federal government could reduce the corporate tax rate to 35 per cent on all firms in all sectors of the economy without any loss of revenue. At the present time, 24725-39.'
Income Tax Act
the outrageously low effective tax rates in the resource sector directs investment into those low employment sectors and discriminates against investment in the heavier employment manufacturing and service industries. A corporate tax rate that would affect equally all branches of economic activity would not distort the investment decision-making process to the extent that is achieved by our present system.
If the government should agree that a 35 per cent corporate tax rate without concessions, without exemptions and without special immunities would yield the same revenues, I see no reason why this rate cannot be confined to wholly-owned or controlled Canadian companies. Every nation favours its own citizens in one form or another. We have only to cite the most recent example, the United States with its investment allowance, its 10 per cent import surcharge and its DISC program. Those programs do not favour Canada by any means. So far as I know, they favour American firms. If we were intelligent and sovereign, we could devise tax rates that would favour our own Canadian firms in the very difficult situation in which they find themselves. Let the corporate tax rate on foreign subsidiaries be whatever that rate is in the home country of that subsidiary. If the rate is 52 per cent, as in the United States-and it is that high because of all their tremendous objectives, their military efforts and their flights to the moon-let the rate for American subsidiaries in Canada be 52 per cent.
If the rate is 40 per cent, as in the U.K., the rate for U.K. subsidiaries in Canada ought to be 40 per cent. In no instance, however, should we allow that rate to be less than the Canadian rate of 35 per cent. On the basis of their existing initiatives the Americans could only say that we are in accord with their policies because we would be avoiding encouraging new American subsidiaries to locate in this country and we would really be acting within the spirit of their DISC program.
Similarly, we could enlist the entire Canadian entrepreneurial community in trying to reverse and turn around the trend toward increasing foreign ownership. This cannot be done alone by a Canada Development Corporation, or by half a dozen such corporations. This would require the united effort of all elements in the Canadian business and financial community.


Mr. Benjamin:: How would you get them to do that?


Eric William Kierans: It has not been my experience that the company with the 50 per cent tax rate drives out the Canadian company with the 35 per cent rate. Rather, the trend of the last few years would be turned the other way around. I should simply like to say-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member-


Some hon. Members:: Continue.


Eric William Kierans: I would be only a few more minutes, Mr. Speaker.


Leslie Gordon Benjamin: Let us not see the clock.


Patrick Morgan Mahoney: On a point of order, Mr. Speaker, since as I understand the hon. member is about to conclude his

December 16, 1971
Income Tax Act
remarks, I wonder whether there might be unanimous consent to allow him to do that.


Some hon. Members:: Agreed.


Mr. St. Pierre:: On the same point of order, Mr. Speaker, may I point out that no less than six of the 130-odd members of the national press gallery are listening to the hon. member's speech. That is almost a record number.


Mr. Deputy Speaker:: Order, please. I was about to ask if there was unanimous consent for the hon. member to continue. Is there such consent?


Some hon. Members:: Agreed.


Eric William Kierans: Let me quote what Professor Gordon, professor of finance at the University of Toronto, has said:
-on its own, Canadian industry cannot provide an adequate response to the challenge of foreign competition. Strong and efficient competition is required in the area of taxation and beyond it as well. The alternative is a drift down the road toward a Venezuelan type economy-a large modern resource extraction industry that provides very little employment, a large unproductive government bureaucracy,-
Those are his words, not mine.
-an inefficient weak manufacturing sector, increased imports of manufactured products, and rising government expenditures to provide for the unemployed.
Tax policy, Mr. Speaker, should be restructured. It should be neutral, but it should nevertheless favour those sectors of the economy that will give us the most employment and the most growth.


Leslie Gordon Benjamin: Then it cannot be neutral.


Eric William Kierans: The relative productivities of the Canadian and American economies are not equal. When one finds that the Canadian dollar is equal to the American dollar, one says at the same time that our productive capacity and our climate is the same as theirs, our financial resources are the same as theirs and the size of our markets is the same as theirs. Yet when one gets into business he knows it costs more to build a plant here, with our heavy construction and heavy heating costs. All of this would argue that our productivity, while as good as theirs in the abstract, cannot measure theirs in the concrete. When policies suddenly result in two equivalent dollars, when neither the resources nor the productivities of two nations are the same, one must argue that such monetary policy is itself at fault.
One only has to look at the tightness of our monetary policy in the last decade to find that we have caused a great deal of our own problems. The higher interest rates have forced provinces to go to New York, borrow there, bring the money back here and increase our exchange rate. Also, our resource policy emphasizes the exports of those industries.
I thank Your Honour for your patience, and I thank my colleagues in the House. I am aware that some of my colleagues will disapprove and will be disappointed in what I have said. But let me look at it on the positive side. Ten years ago a group of men were named to draft for

Canada a fair and just taxation policy that would emphasize growth, employment and stability in the economy. I do not think that task is over. All I want to do is remind the Canadian people and the Canadian government tonight that after ten years that task is not over. This task has to be begun again. I sincerely believe this government can put together all of the elements of an economic policy that will give us growth and employment. In any event, I certainly hope so.


Some hon. Members:: Hear, hear!


Gilbert F. Rondeau: Would the hon. member who has just resumed his seat allow me a question?


Eric William Kierans: Of course.


Gilbert F. Rondeau: Would the hon. member tell us whether he will vote for or against the bill?


Eric William Kierans: We shall find out tomorrow when the question is put.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Walter Gilbert Dinsdale: Mr. Speaker, last week I directed a question to the Secretary of State (Mr. Pelletier) regarding the appointment of a board that would support the work of the national library as provided for in the National Library Act. The National Library Act was approved by this House some two years ago. One of the very vital parts of the act was the provision of an advisory board, council, or whatever you like to call it, that would assist the national librarian and his staff in providing the most effective library service for Canadians everywhere.
When I posed the question, rather flippantly, the Secretary of State replied that the board was going to be appointed quite soon. That was the same answer he gave a year ago almost to the day. When the act was being considered by a parliamentary committee, the National Association of Librarians came before us expressing concern that they were not going to be too closely involved in the functioning of the new national library. Those Members of Parliament who were on the committee strongly sympathized with the viewpoint expressed by the library association, and in his appearance before the committee the Secretary of State expressed his desire to seek the advice of representative librarians in all the provinces of Canada. This is why I think the matter of appointing the board has become one of extreme urgency.
The establishment of a national library in this country was far too long delayed. It was not until 1962 that the Conservative administration of the day cleared the way
December 16, 1971

for the establishment of a library. Dr. Charles Lamb, who had been designated as the national librarian-he had been originally the dominion archivist-was appointed to head up the project, and it was regarded as the dawn of a new age in terms of the provision of unbiased information for Canadians concerning all aspects of life in Canada.
It was hoped that the national library would co-ordinate with the university libraries. It was also anticipated that the national library, through an advisory board, would be able to co-ordinate with the provincial libraries. I think that one of the reasons the national library, notwithstanding the fine accommodation that has been made available, has not been functioning at maximum effectiveness is the long delay there has been on the part of the government in appointing this advisory board.
Tonight I should like to know the reason for the delay from whoever will be speaking for the government. I suggested the other day during the question I asked that it might because the Secretary of State is preoccupied in establishing another information service known as Information Canada. I referred to that informational centre as the chosen instrument of propaganda for the government. Why so much emphasis on Information Canada, and why de-emphasize such an important institution as the national library of Canada?
I do not know what Information Canada is doing in terms of providing widespread knowledge to Canadians in all parts of the country. But I did examine the latest report that came out covering the activities of Information Canada for October and I noticed that in the national inquiry centre here in Ottawa there were some 176 items, amounting to about eight per day, including such important subjects as congratulations to the Hon. Martin O'Connell on his appointment to the ministry, one complaint that Toronto had to wait too long to receive government information out of the bookstore, and one complaint about the futility of Information Canada's feedback role.
Again it is a matter of emphasizing priorities. Surely the national library takes precedence as an unbiased source of information, as an information Canada centre, over the Johnny-come-lately government information propaganda bureau, if I may use that term, Information Canada. I trust we shall be given an assurance tonight that an advisory board will be appointed, not "very soon", which was the answer given a year ago, but immediately, so that this vitally important institution, the national library of Canada, may play its full role as a centre of genuine, unbiased information.


Mr. Gerald Richard Cobbe (Parliamentary Secretary to Postmaster General):: Mr. Speaker, consultation with all interested parties with respect to the appointment of the national library advisory board is complete. We are at present urging that all vacancies in our agencies be filled, and the national library advisory board is considered a priority. Thus, the hon. member can expect action to be terminated before the spring of 1972.


Stanley Howard Knowles: Terminated?
Proceedings on Adjournment Motion



TRANSPORT-METRO CENTRE DEVELOPMENT, TORONTO-ESTABLISHMENT OF COMMITTEE TO WORK WITH PROVINCIAL AND MUNICIPAL AUTHORITIES-STUDY OF TRANSPORTATION NEEDS

Francis Andrew Brewin: Mr. Speaker, last Friday I asked the Minister of Transport (Mr. Jamieson) a question concerning a project which would have a massive impact on metropolitan Toronto and, indeed, on southern Ontario generally-a billion dollar super-scheme which in ten or twenty years will dominate the future of the city. I refer to the metropolitan centre development project.
It is proposed to build a complex on 190 acres of the most important part of the land available in the neighbourhood of Toronto. There is talk of 50,000 offices to be constructed, of 20,000 housing units, of the use of the former Union Station, known to many visitors to Toronto, to be changed and the building to be incorporated somehow or other in the plan. I asked the minister whether, in light of the importance of this proposed billion dollar project, the government would set up an intergovernmental committee to work with the other authorities concerned in connection with the problems arising out of such a development.
The minister said that there had been consultation with parties to the project as far as the transportation aspects were concerned, though he was not sure he could say that a formal working party had been set up, either intergovernmental or interdepartmental. I found the minister's reply to be altogether unsatisfactory, although I appreciate his expressed willingness to discuss with any interested group the federal role in the project.
There are three major elements in the federal role. The first concerns transportation. This is a development of the railways, the CN and the CPR. Many studies have been made with regard to it, and what I should like to see is some disclosure to the public of the results of these studies, some consideration given to the way in which future development of the area will be affected. Has the minister sought, in discussion with the developers, to secure adequate safeguards for an extended passenger commuter train service? Is he considering the provision of rights-of-way for future developments in transportation, such as air-cushion vehicles?
The second area in which the government has an interest is housing. Only a few days ago the president of CMHC called attention to the acute housing shortage in Toronto. Does this scheme provide adequate accommodation of the kind most required? One of the great needs in this area is low cost housing. Will the scheme be developed on this basis, or will it be designed to produce the highest possible profit?
Another subject of extreme importance from the federal point of view is that of pollution. What will the sewage from 20,000 residences and 50,000 or more office workers do to the whole problem of pollution in that area, which is already something of a blighted area rendered unfit for human habitation by the foul stench which comes from the Ashbridge Bay sewage plant?
These three aspects, transportation, housing and pollution are all matters the federal government is concerned with, and what the public in our area wants to know is

December 16, 1971
Proceedings on Adjournment Motion
whether or not there is a co-ordinated approach, whether or not there is planning in respect of this matter and whether the project and the agreement the developers want to make with the city of Toronto will provide adequately for dealing with future developments in this field. It is of the utmost importance that there be public participation in this scheme. The planning staff of the city of Toronto was overridden by the council of that city. Safeguards in the planning legislation of the provincial government have been set aside by special legislation dealing with the subject. It is important that the federal aspect be one which is open to public participation, public knowledge and public concern.
I should like to conclude by saying my point is simply that such massive redevelopment of a vital piece of Toronto demands widespread critical attention and public scrutiny. The scale of this attention and scrutiny must match the colossal scale of the development itself. There is a philosophy which ought to lie behind an examination of this matter. It is that the quality of life has become a fundamental concern. Bigger is no longer better. Development does not reside in building more and growing bigger. Development must mean qualitative improvement of the working and living conditions of the citizens of this city, one of the great metropolitan areas of our country.
I want to hear from the minister. I know the parliamentary secretary will not be able to answer all these questions tonight, but I give him notice that I and members who represent other interested areas-I see one in the House tonight-will show our concern about this matter and will see that there is public participation in this massive project which will affect the future and the lives of a very large number of the citizens in this part of the country.


Gérard Duquet: The hon. member for Greenwood (Mr. Brewin) raised two main points in his question of December 10 to the Minister of Transport (Mr. Jamieson) concerning metro centre development in Toronto. The first one was whether there was inter-governmental liaison on matters such as transport in the metro centre development.
Mr. Speaker, several committees have been formed. The intergovernmental liaison committee includes federal, provincial, metro and city of Toronto representatives. In addition to this there is a second group called the intergovernmental technical co-ordinating committee. Again, it consists of senior representatives of various federal, Ontario, metro and city departments. Overlapping problems are discussed at this level and there is a full measure of co-ordination on matters of transportation policy.
The second question put by the hon. member was whether any studies had been undertaken by the government to establish the transportation needs of the Toronto centre region. The answer to this was, of course, yes. A good many studies under federal auspices are under way. The minister mentioned one, the Toronto commuter rail study. This involves representatives from both major railways, from Ottawa and the province, metro Toronto and the Toronto Transit Commission. There is a great deal of

work being done at all levels to ensure effective liaison and co-operation between all those involved and between the public and private sectors.
As for the many other points that have been raised by the hon. member, there is no doubt in my mind that most of them must be part of the studies under way. Nevertheless, I have taken good note of the points mentioned and I shall bring them to the attention of the minister.



AGRICULTURE-SPECIAL LOANS TO EXHIBITIONS- EXTENSION OF PROGRAM TO INCLUDE CLASS D FAIRS

Mr. Maurice Foster (Algoma):: Mr. Speaker, my question to the Minister of Agriculture (Mr. Olson) on December 15 was to ask him to extend the $10 million loan program recently announced for class A and B fairs to class C fairs and to the smaller communities of this country. You suggested that there is no urgency in this question because fairs are not held at this time of the year. However, I say to you that this money is part of the emergency budget brought forward by the Minister of finance (Mr. Benson) in October to provide winter employment, and therefore there is urgency in this question.
I applaud the action of the government to make low interest loans available to exhibition commissions, not only for winter works but as a continuing program, and I understand that the minister plans to make $100 million of loan funds available under this program over the next 15 years. The loans can be up to 90 per cent of the cost of the buildings, and paid over a 30-year period. With interest rates at a very minimum, just a fraction of a percentage point above the level at which the federal government can borrow money, it is easy to see that the value of this program cannot be questioned. These buildings will serve not only for agricultural purposes but for community activities, recreation and sports activities.
However, having said all these good things about the program, now I must tell the bad. This program is only available as announced to class A and B fairs. These are found only in the larger centres. The program as it is now will only be available, I believe, to one community in northern Ontario, that being Thunder Bay which happens to have a class B fair. However, communities that do not have any fair board will be ineligible for this program. There are five fairs in my constituency, all of which are of class C size. They are located at Bruce Mines, Iron Bridge, Massey, Providence Bay and Manitowaning. Each of these fairs makes an outstanding contribution to the community. Their directors work diligently every year to improve their annual exhibitions, fairgrounds and exhibition buildings. They do this without pay. The only reward they get is the satisfaction of improving and aiding their communities.
This program should be to serve these smaller fair boards as well as the large ones. The Ontario government gives grants of up to $10,000 on a total expenditure of $40,000 for community centre buildings. This is available to all communities and all sized fairs, big and small. This is a grant which the Ontario government provides, whereas the federal program is only a loan program. It really does not cost the federal government very much to provide this. All we are really doing with this program is using the federal government's borrowing power to aid
December 16, 1971

communities to provide these public buildings at the lowest possible cost.
So I ask the minister to expand the program to help the smaller towns and communities across this country which need it. I would also ask that the regulations be brought forward immediately and that application forms be made available as well, so that the public may make use of this program and communities who need these funds will have them as soon as possible. For instance, the town of Bruce Mines in my constituency has an expansion undertaking going on at its fair exhibition building during the winter months. It needs this program. I would ask that the program not only be expanded but that the regulations, application forms, and ultimately the loan funds, be made available as soon as possible.


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, since the minister announced this program a few weeks ago the department
Proceedings on Adjournment Motion
has received many representations from hon. members and from organizations throughout the country. I would first like to express my sincere appreciation and transmit the appreciation of the Minister of Agriculture (Mr. Olson), to the hon. member for Algoma (Mr. Foster) who has raised this matter on more than one occasion with the minister and who has written him on the subject.
Tonight it is my privilege to tell the hon. gentleman that his confidence in the department will bring him some pleasure, because within a few days the minister will be in a position to table the rules and regulations that will cover those grounds, and at the same time they will be applied to the type of fair about which the hon. member has been talking, and expressly to fairs in class C. I hope this program will be useful throughout the country and that we will be in a position to help as many people as possible. I thank the hon. gentleman for having pressed the matter so strongly with the department.
Motion agreed to and the House adjourned at 10.30 p.m.

Friday, December 17, 1971