1971-03-11

ORAL QUESTION PERIOD


Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed Bill C-3, an act respecting investment companies, with amendments, to which the concurrence of this House is desired.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that a communication has been received which reads as follows:
Government House
Ottawa, 11 March, 1971
Sir,
I have the honour to inform you that the Right Honourable Gerald Fauteux, P.C., Chief Justice of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 11th of March, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be,
Sir,
Your obedient servant, Louis-Fremont Trudeau Brigadier General
Assistant Secretary to the Governor General



ROUTINE PROCEEDINGS


[Stage Direction]
Twelfth report of Standing Committee on Finance, Trade and Economic Affairs, in both official languages.- Mr. Kaplan.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I hope I may induce the Minister of Finance to come into the House as I should like to direct a question to him.


Some hon. Members:: We want Ben!


Mr. Paproski:: We want Bad Ben!


Mr. Baldwin:: Here he comes carrying his brown paper with him.


Robert Lorne Stanfield: I would not want the minister to feel unwanted, Mr. Speaker. I should like to ask whether the Prices and Incomes Commission has advised the government of Canada against a program to create jobs at this time in view of the possibility of this being inflationary and in view of the fact that even if the government did accept the inflationary risk and changed its fiscal policy it would not have any effect on the job picture for about 18 months? Has the chairman of the Prices and Incomes Commission given this advice to the government that he has given to the people of Canada?


Hon. E. J. Benson (Minisier of Finance):: Not to me


Mr.   Speaker.Mr. Stanfield@: Is it the view of the government of Canada that in fact a program to create jobs would be inflationary, would not affect the job picture for 18 months in any event and that the only course for those who are impatient is to support local community projects to help those who are suffering from unemployment, as the chairman of the Prices and Incomes Commission said in Toronto?


Edgar John Benson: Mr. Speaker, no, that is not the opinion of the government.


Hon. George Hees (Prince Edward-Haslings):: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. In view of the warning about inflation given by the chairman of the Prices and Incomes Commission in Toronto recently, has the government considered how it can stimulate the economy to produce the level of employment which we want, and must have,


Inquiries of the Ministry
without, as the chairman has warned, bringing back the high level of inflation we experienced a year ago?


Edgar John Benson: Yes, Mr. Speaker.


George Harris Hees: When may we expect the government to outline the policies that it expects to follow in this regard and to begin implementing them?


Edgar John Benson: Mr. Speaker, if my hon. friend would read my speeches, he would see this.


Some hon. Members:: Oh, oh!


George Harris Hees: On a point of order, Mr. Speaker, I have read the minister's speeches and they do not outline how he intends to deal with this matter.


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Mr. Speaker, since the minister has repudiated the views publicly expressed by the Chairman of the Prices and Incomes Commission, may I ask whether the commission and its chairman continue to enjoy the confidence of the Minister of Finance?


Edgar John Benson: Mr. Speaker, I think that the Prices and Incomes Commission has served a very useful purpose for the past 15 months in Canada, as is evidenced by the fact that the rate of inflation in Canada has been much lower than that of any other western country. I respect the Chairman of the commission and-


Mr. Diefenbaker:: Our unemployment has also been much higher than anybody else's.


Edgar John Benson: -I appreciate his point of view, but he was not necessarily expressing the government's view. He is an independent commissioner and can express his own opinion.


George Harris Hees: There is no government view to express.


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Mr. Speaker, may I ask the Minister of Finance whether the Prices and Incomes Commission is there for decoration or to give advice to the government?


Edgar John Benson: Mr. Speaker, the Prices and Incomes Commission is free to give advice to the government. The government can accept or reject the advice. I have not read the particular speech that my hon. friend speaks of, but I will be pleased to read it and to digest everything that was said by the chairman.


Gerald William Baldwin: The minister should be careful. It may give him indigestion.


Mr. Speaker:: Order, please. The hon. member for Nanaimo-Cowichan-The Islands.


Mr. Woolliams:: Mr. Speaker, I rise on a point of order. I think I should bring to Your Honour's attention that on Thursdays, under the roster system which members of the opposition do not endorse, seven ministers are to be
absent. Today seven other ministers are absent as well making a total of 14, if one includes the Prime Minister, who are absent. I do not know how we can carry on an intelligent question period in the circumstances. I see that the Minister of Justice has just come in.


Mr. Laing:: On a question of privilege, Mr. Speaker, the Prime Minister is accepting an invitation from the chairman and mayors of Metropolitan Toronto to see them today.


Some hon. Members:: Hear, hear!


Mr. Nesbitt:: Why do that at two o'clock?


Arthur Laing: He is accompanied at that meeting by the Minister of National Defence, the Minister of National Health and Welfare, the minister in charge of housing and the minister responsible for Information Canada.


Some hon. Members:: Hear, hear!


Arthur Laing: Mr. Speaker, in light of the representations we have heard for the last several weeks from the other side of the House in respect of-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Eldon Mattison Woolliams: Mr. Speaker, may I-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I wonder whether the hon. member has not made his point. The Acting Prime Minister has risen on a question of privilege. I wonder whether the matter should be pursued. I have some doubts whether it would be very helpful. Perhaps, for the moment, the Chair might recognize the hon. member for Nanaimo-Cowichan-The Islands.


Eldon Mattison Woolliams: Mr. Speaker, with the greatest of respect, there is probably a reason for the Prime Minister's absence, but surely he could arrange his timetable differently so as not to hold a cabinet meeting during the question period, or at the very least he could inform the House. It is all very well for the minister who has just spoken to whitewash the thing, but there would have been 14 cabinet ministers absent if the Minister of Justice had not just come into the House. I do not think the whitewash by the Acting Prime Minister has added to the decorum of business in this place.


Some hon. Members:: Hear, hear!



FINANCE


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I have a question for the Minister of



Finance arising out of the continuing upward pressure on the Canadian dollar and the distinct possibility it may reach or exceed parity with the American dollar. In view of the serious, adverse effects this will have upon the export industries of this country and the employment situation, what steps is the government taking to ensure that the Canadian dollar will not exceed parity with the American dollar? Is the minister considering such matters as the possibility of reducing interest rates or expanding the money supply? What steps is the government taking to meet this situation which may be upon us very soon?


Edgar John Benson: If the hon.
member recalls, interest rates were reduced about ten days ago. I believe that in the past the hon. member has been a very strong advocate of a floating dollar in Canada.


Thomas Clement (Tommy) Douglas: The minister is talking about a floating dollar. One of the reasons for unpegging the dollar was that it would prevent tying up large sums of money in foreign currency reserves. Since we have reserves of some $4.85 billion which are not being used effectively, what steps is the government taking to reduce these very large reserves which Canada is holding at the present time, such as the purchase of Canadian securities in the hands of persons in the United States?


Edgar John Benson: Mr. Speaker, the use of the foreign exchange reserves is, as the hon. member knows, quite limited by parliamentary action. I really cannot add anything beyond that.


Thomas Clement (Tommy) Douglas: Am I to assume from the minister's answer that despite the fact that some banks in the United States today have further reduced their prime rate the Minister of Finance intends to take no action at all with respect to the upward pressure on the Canadian dollar and no steps with regard to the very large foreign reserves which we are building up in this country?


Edgar John Benson: No, Mr. Speaker. The hon. member is not entitled to make such an assumption.


Hon. D. S. Harkness (Calgary Centre):: I wish to ask the
Minister of Finance whether the government is prepared to allow the Canadian dollar to go to a five-cent premium over the American dollar, which is predicted by a leading economist as a likely development unless the government takes some action?


Edgar John Benson: Mr. Speaker, it is not usual in the House of Commons for the Minister of Finance to indicate what action is to be taken with regard to the level of the Canadian dollar.


Mr. Max Sallsman (Waterloo):: I have a supplementary question for the Minister of Finance. In view of the rather tantalizing suggestion the minister made in reply to my leader's question that he is limited as to the use of
Inquiries of the Ministry
foreign exchange reserves, as he feels there is such a limitation on the use of the foreign exchange reserves is it his intention to come to Parliament and ask that this be changed?


Edgar John Benson: If I had any such intention, Mr. Speaker, I would make it known to Parliament in the usual way.


John George Diefenbaker: Mr. Speaker, I was interested in the statement made a few moments ago by the Minister of Finance to the effect that if answers are required to questions asked in the House we should read his speeches. Will the minister table these speeches? I have not read them previously because I only read for interest or profit.


Mr. Speaker:: Order, please.



TAX ADVANTAGE OF UNITED STATES INVESTORS IN CANADA

Wallace Bickford (Wally) Nesbitt: A supplementary question to the Minister of Finance. Will the minister take steps to remove the tax advantage which American investors possess when making investments in Canada as compared with Canadians investing in their own country?


Edgar John Benson: First, in answer to the right hon. member for Prince Albert may I say that I read all his speeches. Second-


Some hon. Members:: Order.


Mr. Speaker:: Order.


John George Diefenbaker: I am glad to hear that. I would have expected some action.


Wallace Bickford (Wally) Nesbitt: On a point of order, with reference to the question I put to the Minister of Finance a few minutes ago, Mr. Speaker, the minister rose to his feet and said he wished first to reply to my right hon. friend from Prince Albert. As he began to answer my question there was a certain amount of uproar in the House and perhaps Your Honour did not see him.


Mr. Speaker:: I was looking in another direction. Perhaps the minister might be allowed to reply to the question asked by the hon. member for Oxford.


Edgar John Benson: As I have pointed out previously, this is an extremely complicated question; it is one which was asked by the Leader of the Opposition some time ago and I replied to it at that time. The position is partly alleviated by the proposals in the white paper on tax reform, and I trust all hon. members opposite will support the proposals that will ultimately be brought forward by the government with respect to tax reform.


Inquiries of the Ministry REGIONAL ECONOMIC EXPANSION



PROVISION OF DOCKING FACILITIES AT COME-BY-CHANCE, NFLD.

Mr. Walter C. Carter (St. John's West):: May I address a question to the Minister of Regional Economic Expansion. On Friday, February 25, I inquired concerning the status of the proposal to build dock facilities at Come-By-Chance and whether public tenders would be called. Is the minister now in a position to reply?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: I believe this project is under the jurisdiction of the Minister of Public Works.


Walter C. Carter: Then may I direct the question to the Minister of Public Works?


Arthur Laing: In respect of the proposal to build a dock at Come-By-Chance, negotiations are still proceeding. At the present time they cannot be regarded as complete.



USE OF MADE-IN-CANADA DRILLING EQUIPMENT OFF ATLANTIC COAST

Mr. Lloyd R. Crouse (South Shore):: I wish to direct my question to the Minister of Industry, Trade and Commerce. Is the federal government considering a made-in-Canada rule to govern the equipment and apparatus used in oil drilling off the Atlantic coast and, if so, when may we expect the details of this policy to be made public?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Not to my knowledge, Mr. Speaker, but I will inquire and report to the House if I am wrong in assuming there is no such consideration.



FINANCE


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to put a question to the Minister of Finance.
Have international financial authorities recently been in touch with the Canadian government with a view to pegging the Canadian dollar?


Edgar John Benson: No, Mr. Speaker.


Mr. Speaker:: Does the hon. member for Richmond wish to ask a supplementary question?


Léonel Beaudoin: Yes, Mr. Speaker,
What position does the Canadian government intend to take if the Canadian dollar continues to rise above the exchange rate of the American dollar?


Mr. Speaker:: The hon. member will agree that the question has been asked earlier. I would not know if the minister has given a satisfactory reply to the hon. member who asked it, but, anyway, it has already been asked.



USE OF WAGE AND PRICE CONTROLS TO PREVENT INFLATION

Mr. Paul Yewchuk (Athabasca):: My question is
addressed to the Minister of Finance. Can the minister tell us whether the government intends, in order to prevent a recurrence of inflation, to bring in compulsory wage and price controls?


Edgar John Benson: This is a hypothetical question.



ACTION TO INCREASE EXPORTS OF MANUFACTURED PRODUCTS

George Harris Hees: I have a question for the Minister of Industry, Trade and Commerce. In view of the fact that exports of manufactured products, which are the products that produce the jobs, are 5] per cent lower so far this year than they were in the same period last year, following a year in which the rise was very small indeed, will the minister take the first opportunity on motions to outline to the House what steps, in addition to the single development loan he signed recently with Argentina, he and his department intend to take to reverse this trend?


Jean-Luc Pepin: Mr. Speaker, I expected this question and I had this subject thoroughly analysed. The report I have, which I will share with my hon. friend if he so wishes, indicates that exports for the first two months have been very good. There has been in particular, a revival in Canadian exports to the United States.


George Harris Hees: I am talking about manufactured goods. Answer my question.


Jean-Luc Pepin: I will. This development reflected in particular a resurgence in the export of motor vehicles to the United States following the major strike at the end of 1970. The study made by professional economists con-
[Mr. Benson.)


eludes by saying that present trends will be reflected in a higher ratio of end products in our total exports for 1971.


George Harris Hees: Is the minister aware that our total exports this year are down 3i per cent? How can he claim that this is a good and satisfactory picture?


Mr. Speaker:: Order, please. I suggest this is a debate between the hon. member and the minister.



INDUSTRY


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the Minister of Industry, Trade and Commerce arising out of the announced lay-offs by Chemcell Industries and his answer relayed to me on March 4. In view of the consultations which the minister indicated were taking place between officials of Chemcell and representatives of his department, is the minister in a position to indicate to the House whether any suitable arrangements have been made or negotiated with a view to averting the mass lay-offs announced by Chemcell?


Jean-Luc Pepin: Mr. Speaker, conversations did take place and a full explanation was provided by the company. It is not government policy to prevent a closure when a company makes an assessment that this is necessitated by factors of international trade, as in the present case. The government is not now, nor might it ever be, in a position to tell companies to remain open when the assessment of owners of the company is that it should not.


Donald Frank Mazankowski: In view of the fact that the federal government has indicated to the premier of Alberta that the problems which have developed in the chemical industry, particularly with respect to Chemcell in the province of Alberta, are problems of a federal nature, can the minister indicate whether the government is prepared to accept responsibility and provide an equitable solution?


Jean-Luc Pepin: Mr. Speaker, in my previous answer I indicated that the main reason for the partial closure of this plant was international trade. It is apparently the case that our petrochemical plants are not as big as they should be to be internationally truly competitive, and this is because of the limited size of the Canadian market. We are working on this problem at the moment.


Donald Frank Mazankowski: A further supplementary to the Minister of Regional Economic Expansion. Would the minister indicate to the House whether the government of Alberta has been in touch with his department in regard to the consideration of a special joint program to deal with the loss of jobs created by the announced lay-offs by Chemcell?
Inquiries of the Ministry


Jean Marchand: Not to my knowledge, Mr. Speaker, but I shall look into it.



THE CENSUS


Max Saltsman: Mr. Speaker, I should like to direct my question to the Minister of Industry, Trade and Commerce. Last week I asked the minister whether he would look into the question of student hirings and he indicated he would have something to say on that matter.


Jean-Luc Pepin: Yes, Mr. Speaker, I did. I am informed that there will be 2,700 processing clerks jobs in Ottawa with Statistics Canada for the census of 1971. These jobs will be for approximately 13 weeks. These positions are to be filled through the Canada Manpower offices on university campuses. I would advise my hon. friend and other members of the House to tell students requesting jobs to go to these offices. There will also be 700 or 800 other census jobs which will be for a shorter period of time.



LABOUR CONDITIONS


Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I have a supplementary or perhaps a related question. In view of the fact that during the last several months unemployment statistics have been released by DBS by the tenth or eleventh of the month, can the minister say when we may expect the release of this month's figures, and can he also indicate whether trouble with any new formula has been experienced?


Jean-Luc Pepin: I do not expect so. I have not been informed of any difficulty and I expect the usual timetable will be followed. If there is difficulty somewhere I will find out and report.



POSSIBLE MACKENZIE VALLEY PIPELINE-USE OF CANADIAN LABOUR, EQUIPMENT AND MATERIALS-DISCUSSIONS WITH SASKATCHEWAN AND ALBERTA

Eldon Mattison Woolliams: Mr. Speaker, I should like to direct a question to the Minister of Energy, Mines and Resources. Normally I would have put


Inquiries of the Ministry
it to the Minister of Indian Affairs and Northern Development but he is not here. As the Minister of Indian Affairs and Northern Development has stated that the government would entertain a United States project to build a pipeline down the Mackenzie Valley through the Prairies, has the Canadian government set down terms under which Canadian labour, equipment and pipeline supplies will be used if such a project is undertaken by the United States?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: Mr. Speaker, I think the guidelines issued last August, which represent the government's position in respect of a pipeline, were very clear in this respect. Guideline number one, I believe, indicates there will be a clear preference for maximum Canadian content in any application that is made in respect of the construction of a pipeline.


Eldon Mattison Woolliams: Mr. Speaker, is the minister in a position to advise us whether there have been any discussions with the governments of Alberta and Saskatchewan in reference to their position regarding such a pipeline which will go through their territory, and have there been any guarantees given to these two provincial governments that producers of natural gas and crude petroleum in those provinces will get a share of the oil flow going to the United States or elsewhere in Canada?


John James Greene: There have been discussions of a general nature with the governments of both Alberta and Saskatchewan but not in respect of the specifics of a proposed pipeline. Until there is an application we cannot indicate to the provinces exactly what might be their interests and what might be the resolution in respect of their property rights.


Eldon Mattison Woolliams: In view of the fact that the Minister of Indian Affairs and Northern Development has said to the United States that the government would likely entertain such an application for the construction of a pipeline by the United States, does the minister not consider that, because of the jurisdiction of the two Prairie provinces I mentioned, some form of discussion should be had now with them before any further suggestion is made to or negotiations carried on with the United States? I ask this question in view of the fact that this proposed pipeline will go through the territory of the two Prairie provinces.


John James Greene: Mr. Speaker, in the normal course when there is an application in respect of the building of a pipeline the provinces are represented at the hearing before the National Energy Board. They make their cases very clearly and their viewpoints are always considered. It may well be that in a matter of this national importance, and because of the fact this will be such a tremendous economic undertaking to the benefit of Canada, if it goes ahead, there should be earlier discussion. We are certainly prepared to consider that at the appropriate time.



POSSIBLE MACKENZIE VALLEY PIPELINE-ECOLOGICAL STUDIES

Thomas Clement (Tommy) Douglas: Mr. Speaker, some time ago the Minister of Energy, Mines and Resources said that an application for the construction of such a pipeline would be considered by the National Energy Board and that it has the responsibility for ensuring the safety of the ecology. I should like to ask the minister whether the National Energy Board has carried out ecological studies and has the necessary staff to do so, or whether it will use the surveys which have been made by the Department of Indian Affairs and Northern Development?


John James Greene: Mr. Speaker, there is a very clear emphasis placed on the ecological safety of such a line. The National Energy Board has very competent engineers who consider these questions on a continuing basis. The private sector, both at Normal Wells in respect of a gas line and at Inuvik in respect of an oil line, are doing very comprehensive research. The Department of Indian Affairs and Northern Development has a very clear responsibility, which it has undertaken, as enunciated again by the guidelines of last August. That department is responsible for the area in the territories, and the entire federal government responsibility in respect of ecology is being correlated by an interdepartmental committee on the ecological safety of pipelines in the north.


Mr. Speaker:: Order. Hon. members will notice that there are at least four hon. members seeking the opportunity to ask supplementary questions on this matter. Very shortly we will be running out of time, and I wonder whether we should spend another five or ten minutes on this important subject. For the moment the Chair will recognize the hon. member for Nanaimo-Cowichan-The Islands.


Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that the National Energy Board Act deals mainly with safety and makes no reference to the protection of the ecology, although a broad interpretation could be placed on the words "safety and public interest", can the minister assure the House that all the research which has been carried out and will continue to be done in respect of the ecology of the north will be placed before the National Energy Board when this application is heard, in the event that such an application is made?


John James Greene: Mr. Speaker, in the first instance I believe that in accord with the guidelines the ecological question will have to be considered and approved by the Department of Indian Affairs and Northern Development. That department has the primary ecological responsibility. The evidence of the department's findings and its views would then be placed before the board. As my hon. friend has pointed out, the actual wording of the National Energy Board Act refers to safety and the public interest. It may well be a valid suggestion that the Act



should be amended to make specific reference to pollution and ecology.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I have a question-


Mr. Speaker:: Order, please. I regret to interrupt, but the hon. member for South Western Nova is rising on a point of order.


Mr. Comeau:: Mr. Speaker, I rise on a point of order. 1 suggest there are many supplementary questions because of the existence of the roster system in the House.


Some hon. Members:: Oh, oh!


Louis-Roland Comeau: Because of the roster system we are only permitted to ask questions of certain ministers on certain days. This is why we have so many supplementary questions.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I do not quarrel with the point made by the hon. member, but there still has to be some limitation. Hon. members will realize that the discretion is left in the hands of the Speaker. I see a number of other members to my left who have been trying to ask questions for two days. If I consulted them I am sure they would recognize, as I do, that although the matter on which questions are now being asked is very important there are other important matters on which they would like to direct questions to the government, with or without the roster system.



REGIONAL ECONOMIC EXPANSION


Joseph Adrien Henri Lambert: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion.
I would like to ask him whether he is aware of a resolution of the municipal council of the city of Mont-magny mentioning the intense unemployment situation in Montmagny and the neighbouring region and asking that Montmagny and its suburbs be designated as special zones, or else be included in a new development program to be set up as early as possible.
I would also ask the minister whether he has taken action on this request. If so, could he tell the House what steps will be taken to cope effectively with this request which, in my opinion, is quite justified?


Jean Marchand: Mr. Speaker, Montmagny is included in a
Inquiries of the Ministry
designated area, which means that industries wishing to locate there are entitled to subsidies from my department. In spite of that, not many new industries have settled in that locality. I do not think that the fact of making Montmagny a special area would greatly alter the situation.


Mr. Andre Foriin (Lolbiniere):: Mr. Speaker, I have a supplementary question.
Would the Minister of Regional Economic Expansion tell us if he has received such a request from the authorities of the town of Montmagny?


Jean Marchand: Mr. Speaker, I recall having read a resolution from the council of the Town of Montmagny. I would have to read it again to be sure if such a request was contained in the resolution.


Joseph Adrien Henri Lambert: I should like to put a supplementary question, Mr. Speaker.
I did understand the explanations of the hon. minister regarding designated areas, but my question is as follows: Since the minister has introduced a legislation, which was passed by the way, to benefit certain regions which have been labelled "special areas" and under which municipal councils may draw financial advantages for certain public utility projects, would he be prepared to answer favourably the request put in by the municipal council of Montmagny?


Jean Marchand: Mr. Speaker, we have received a great number of applications from several municipalities in Canada. We shall soon review our program, probably this year, and see whether in the order of priorities Montmagny or some other centre must be selected.



FISHERIES


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is for the Minister of Fisheries and Forestry. Would the minister advise whether he has had any reports from his officials in southwestern Newfoundland indicating there have been violations of the 12-mile limit by foreign draggers?


Hon. Jack Davis (Minister of Fisheries and Forestry):: have not had any reports, Mr. Speaker.


Jack Marshall: In view of the fact that reports emanating from Newfoundland fishermen indicate that foreign draggers are fishing within three miles off Cape Ray and Cape Anguille, and since it is now obvious that they are ignoring the declaration of the 12-mile limit north of Cape Ray, would the minister advise what action he now intends to take to enforce the declaration and finally resolve the problem?


Inquiries of the Ministry


John (Jack) Davis: Mr. Speaker, in view of the fact that we have several fisheries protection vessels in the area and as it is also being continuously overflown by Department of National Defence aircraft, I have reason to doubt very much the reports allegedly made by inshore fishermen.


John Howard Lundrigan: Mr. Speaker, since reports from lighthouse keepers and other persons in the area indicate that most of the fishing within the 12-mile limit is carried out after dark, can the minister say if he has any night patrol? If not, are there any plans to bring about a night patrol in an effort to enforce the 12-mile limit?


John (Jack) Davis: Yes, we do have a night patrol.
[Later:}


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


John Howard Lundrigan: Mr. Speaker, this is not in any way intended to obstruct the business of the House, but we have had official reports from fishermen and lighthouse keepers about the very critical problem off the southwestern shore of Newfoundland at Cape Ray and the minister in his statement seemed to question the credibility of the reports and therefore of our fishermen. I think he should make a clarifying statement and guarantee that there will be a stepping up of activity by his department to try to identify the nature of the reports, which are also broadcast on the CBC.


Mr. Speaker:: Order, please. That is hardly a point of order. The hon. member has asked what is perhaps a supplementary question. The minister might be allowed to reply to that part of the question asking whether he would make a statement.


John (Jack) Davis: Mr. Speaker, I really do not know what to say. The allegation is that individual fishermen, in the dark of night, have seen vessels either just inside or just outside the 12-mile limit. I cannot comment on that.



STUDY OF EASTERN CANADA'S FUTURE GAS REQUIREMENTS

Mr. Rod Thomson (Balileford-Kindersley):: Mr. Speaker, I wish to direct a question to the Minister of Energy, Mines and Resources if I can get his attention. In view of the fact that Trans-Canada's gas pipeline is operating at 98 per cent of capacity and in view of the fact that Trans-Canada Pipe Lines is asking for an increase in the price of gas to consumers in eastern Canada, is the minister making a study of the future needs in respect of this form of energy in eastern Canada?


John James Greene: Mr. Speaker, I think there is continuing study and there was a very comprehensive study published a year ago last December, I believe, in respect of the future needs and future supplies that were available.
I do not want to comment on the matter before the National Energy Board, which is really sub judice, but I believe the need will be met by continually increasing availability of the pipeline. I think the inherent question is whether or not the price of gas is sufficiently high to enable such a pipeline to be underwritten. That is the basis of the application.



PUBLIC SERVICE


André-Gilles Fortin: Mr. Speaker, I should like to put a question to the Minister of Industry, Trade and Commerce.
Can he tell us whether it is true that the heads of his department are reviewing the higher positions in order to have more French-speaking Canadians with salaries over $18,000 per year.


Jean-Luc Pepin: Mr. Speaker, the press reported yesterday that I had unduly intervened to increase the number of French-speaking Canadians in my department. This allegation is now being considered by the Department of Labour and the investigation will follow the normal course of procedure taken by that department.
The last time this charge was made against me, it had been said that it was more difficult for someone who was not French-speaking to be hired by my department than for a Jew to become a Pope. However, at that time, my executive assistant was a Canadian of Jewish origin.



AVAILABILITY OF &quot;SPAN&quot; RAPESEED

Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have a question for the Minister of Agriculture in connection with the special rapeseed known as "Span" now being reproduced in the Imperial Valley in California for Canada. In view of the great importance of the rape crop to our western economy, can the minister assure us that this special rapeseed will be available in time for spring planting?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, the whole idea of renting some land in southern California was to increase the seed during the winter months so as to have enough seed available for the seed growers in Canada to again increase the supply during 1971, as well as to have a reasonable quantity available for crushing into oil to do the research and testing that is necessary on the oil.



UNEMPLOYMENT INSURANCE


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, my question is for the Minister of Labour. Would the minister report any progress he has made in recovering the recent 10 per cent increase in unemployment insurance on behalf of the Cape Breton miners?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, I have never made any effort to recover it. 1 think the question should be best directed to the appropriate minister, the Minister of Regional Economic Expansion, who could explain in all probability that the 10 per cent unemployment insurance increase will be reflected in increased benefits to the miners.


Donald MacInnis: On a point of order, Mr. Speaker, I am not too sure I heard the minister right. Did he refer to 2 per cent? I am speaking of the 10 per cent made available on January 3, 1971. My question is directed to the minister who has jurisdiction over that department. No other minister is permitted by the rules of the House to answer for the Unemployment Insurance Commission.


Bryce Stuart Mackasey: Mr. Speaker, I can say simply that anybody entitled to unemployment insurance benefits anywhere in Canada at the present time is receiving the additional 10 per cent that was spelled out in December.


Donald MacInnis: I have a further supplementary, Mr. Speaker. Can the minister assure the House that the UIC funds made available to the men are being distributed to their advantage or have they been taken over under some scheme by a Crown corporation that will deprive them of this increase?


Bryce Stuart Mackasey: Mr. Speaker, if this fund is being used improperly or immorally by a Crown corporation and the Crown corporation is the one to which the hon. member appears to be referring, then I suggest that he refer the question to the appropriate minister.


Mr. Speaker:: Order, please. The Chair will allow the hon. member a further supplementary, but we are running short of time.


Donald MacInnis: Mr. Speaker, I should like to ask the minister, regardless of whether it is improper or immoral, whether he would care to see me after the question period when I will produce the written evidence which has been signed by the minister himself.


Mr. Speaker:: Order, please. The hon. member for Surrey.


Donald MacInnis: On a question of privilege-


Mr. Speaker:: I apologize to the hon. member for Surrey. I will recognize him in a moment, I hope.


Donald MacInnis: Mr. Speaker, my point of privilege arises from the question of morality the minister brought into this particular situation. I see no reason the minister should be allowed to get away with the answer because I
Inquiries of the Ministry
can give him the written evidence signed by the minister himself-


Mr. Speaker:: Order, please. I suggest this matter might be discussed, as the hon. member suggested, privately between the minister and the hon. member.



CONSUMER AFFAIRS


Mr. Barry Mather (Surrey):: Mr. Speaker, I have a question for the Minister of Justice. Is the minister aware of the coupon give-away by Mark 10 cigarettes in which the company undertakes to provide a coloured television set to anyone who turns in 88,000 coupons, which at one coupon per pack per day would require that a person smoke these cigarettes for 243 years?


Mr. Speaker:: Order, please. Perhaps this is the type of question which might better be considered at the time of adjournment.



REGIONAL ECONOMIC EXPANSION


Mr. Pierre De Bane (Matane):: Mr. Speaker, I would like to ask the Minister of Regional Economic Expansion if, considering the serious social problems of the city of Montreal, he could reassure the House that the federal government will not in any way get involved in prestige projects of the Olympic Games, but that it will instead help the city in other much more urgent areas, which would be of more benefit to the citizens of Montreal?


Jean Marchand: Mr. Speaker, I believe this question should probably be directed to the Minister of National Health and Welfare. At any rate, the federal government has not undertaken to give any amount of money to the city of Montreal.



PRESENCE OF CANCER CAUSING SUBSTANCE, DEMETHYL-NITROSAMINE, IN FOOD

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, in the absence of both the Minister of National Health and Welfare and his parliamentary secretary, I will address this question to the Minister of Public Works, the Acting Prime Minister. In view of the recent revelation that the cancer causing substance, demethyl-nitrosamine, has been found in such foods as bacon, sausages and mushrooms,
23966-52J


Inquiries of the Ministry
would the Acting Prime Minister convey to the Minister of National Health and Welfare the great concern of the public using those foods and perhaps suggest to the minister that he make a statement on Monday?



STATUS OF WOMEN


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is directed to the Acting Prime Minister and perhaps he will want to refer it to the Prime Minister. In view of the fact that the Minister without Portfolio (Mr. Andras), speaking in the debate last Tuesday on the status of women, indicated that the government might be willing to designate a minister of the Crown to co-ordinate the implementation of the royal commission's recommendations, can the Acting Prime Minister tell the House if this action will be taken and when it will be taken?


Arthur Laing: Mr. Speaker, I thank the hon. member for his interest and I promise him that I will draw this matter to the attention of the Prime Minister.



REGIONAL ECONOMIC EXPANSION


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to direct a question to the Minister of Regional Economic Expansion. In view of criticisms levelled at the regional industrial incentives program by the Industrial Developers Association of Canada at their recent meeting in Toronto and the criticisms also expressed by leading mayors across the country that the Act is not properly co-ordinated and is not fulfilling its function, as further substantiated by the disparity in the dispensing of funds under the program, can the minister tell the House what steps he is taking to ensure that this program is being carried out as Parliament intended?


Jean Marchand: Mr. Speaker, I will be rather brief in replying to this speech. I oppose the criticism expressed, as we are trying in fact to distribute money in keeping with the employment situation in each region of Canada.


James Aloysius McGrath: May I ask the minister if he intends to take some new initiatives in the light of the experience with the program, to ensure that the funds are more equitably distributed on the basis of provinces?


Jean Marchand: Mr. Speaker, I believe that funds must be distributed according to the employment level and not necessarily according to the number of provinces.


James Aloysius McGrath: That is precisely what I meant.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE


Gerald William Baldwin: Mr. Speaker, may I ask the President of the Privy Council, the government House leader, about the business for the rest of this week and next week? At the same time, in view of the great interest shown in the question of the transportation of Arctic oil to the south, may I ask him whether the government is considering setting aside a day for debating this very important issue?


Mr. MacEachen:: Mr. Speaker, after disposing of the first item on the order paper for consideration today, namely, statutory instruments, we will move to the budget bill, followed by the packaging and labelling measure, textiles, bail reform, Yukon minerals, young offenders, Canada Labour (Standards) Code and the Unemployment Insurance Act amending measure. All these will be called in that order except I would reserve the opportunity on Monday to discuss further with House leaders a possible rearrangement of that order or the continuity of that order. In response to the final part of the hon. member's question, we would like to establish two opposition days next week, probably on Tuesday and Friday, but that also can be discussed.


Gerald William Baldwin: On the point raised by the President of
the Privy Council, Mr. Speaker, and as the government will not set aside a day, I give him notice that we will be discussing the matter tomorrow.


George Harris Hees: On a point of order, Mr. Speaker, at the beginning of the session today the Acting Prime Minister excused the absence of the Prime Minister and several cabinet ministers because of an important meeting they were having with the mayor of Toronto and members of the Metropolitan Council. If this meeting was sufficiently important to justify the absence of these hon. gentlemen, why was a former mayor of Toronto, the hon. member for York West, not invited to attend because obviously he could have made a very good contribution at that meeting?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Perhaps the hon. member himself might have raised the matter as a question of privilege.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Orders of the day.
Division Messrs:


Mr. Dinsdale:: Mr. Speaker, I rise on a point of order. I tried to get Your Honour's eye for the past 25 minutes. The reason I rise now is that I want to ask a question of urgent importance to the grain producers of western Canada. It relates-


Mr. Speaker:: Order, please. I appreciate the position in which the hon. member is placed. I admit that he has not been recognized during the question period, and unfortunately he is not alone. The hon. member for Hillsborough in particular I was anxious to call today, as well as others, but unfortunately we did run out of time. As a matter of fact, we extended the question period by approximately five minutes. Perhaps the hon. member, by unanimous consent-


Some hon. Members:: No.


Mr. Speaker:: Apparently there is some difficulty. If the question might wait until tomorrow I can assure the hon. gentleman I will see that he is called immediately we begin the question period. Orders of the day.
Hees
Homer
Howe
Knowles (Winnipeg North Centre) Korchinski Lambert
(Bellechasse)
La Salle Latulippe Lundrigan Maclnnis (Cape Breton-East Richmond) Maclnnis (Mrs.)
MacLean
Macquarrie
McCleave
McCutcheon
McGrath
McIntosh
McKinley
McQuaid
Marshall
Mather
Mazankowski
Monteith
Moore
Muir
Nesbitt
Nielsen
Nowlan
Nystrom
Orlikow
Paproski
Peddle
Peters
Rodrigue
Rondeau
Ryan
Rynard
Saltsman
Schumacher
Scott
Skoberg
Southam
Stanfield
Stewart (Marquette)
Tetrault
Thomson
(Battlef ord-Kindersley) Valade Winch Woolliams Yewchuk-82.
NAYS Messrs:
	GOVERNMENT ORDERS	Allmand
		Anderson
STATUTORY INSTRUMENTS ACT		An dr as Badanai
PROVISION	FOR EXAMINATION, PUBLICATION AND	Barrett Basford
	SCRUTINY	Bechard
The House resumed, from Wednesday, March 10, con-		Beer Benson
sideration of the motion of Mr. Turner (Ottawa-Carleton)		Blair
for the third reading of Bill C-182, to provide for the		Borrie
examination, publication and scrutiny of regulations and		Boulanger
other statutory instruments, as reported (with amend-		Brown
ments) from	the Standing Committee on Justice and	Buchanan
Legal Affairs, and the amendment thereto of Mr. Rowland		Cafik
(p. 4156).		Chretien
		Clermont


Mr. Speaker:: The question is on the amendment.		Cobbe Comtois
The House	divided on the amendment (Mr. Rowland)	Corbin
which was negatived on the following division:		Corriveau Crossman
	YEAS	Cyr
		Deachman
	Messrs:	Deakon
		De Ban6
Asselin	Diefenbaker	DruryBaldwin	Dinsdale	DuprasBarnett	Dionne	FaulknerBeaudoin	Douglas	ForestBeH	Downey	ForgetBenjamin	Flemming	FosterBigg	Forrestall	FrancisBrewin	Fortin	GendronBurton	Gauthier	GervaisCadieu	Gilbert	GibsonCarter	Gleave	GivensCoates	Grills	GoodeCode	Gundlock	GoyerComeau	Hales	GrayCrouse	Harding	GreeneDanforth	Harkness	Guay (St. Boniface)
Guay (L6vis)
Haidasz
Hopkins
Howard
(Okanagan Boundary) Hymmen Jerome Kaplan Kierans Laing
(Vancouver South) Lang (Saskatoon-
Humboldt)
Langlois
Leblanc (Laurier) LeBlanc (Rimouski) Lefebvre Lessard (LaSalle) Lessard
(La c-Saint-Jean)
Lind
Loiselle
Macdonald (Rosedale)
MacEachen
Mackasey
McBride
Mcllraith
McNulty
Mahoney
Marceau
Marchand
(Langelier)
Marchand
(Kamloops-Cariboo) Munro Murphy Olson Orange Osier Otto Ouellet Penner Pepin


Income Tax Act Messrs:
Pringle
Prud'homme
Richard
Richardson
Roberts
Robinson
Rock
Roy (Timmins)
Roy (Laval)
Smith
(N orthumberland-Miramichi)
Smith (Saint-Jean)
Stafford
Stanbury
Stewart (Cochrane) Stewart
(Okanagan-Kootenay)
St. Pierre Sulatycky Sullivan Thomas
(Maisonneuve-Rosemont)
Tolmie
Trudeau
Trudel
Turner (Ottawa-Carleton)
Walker
Watson
Weatherhead
Whelan
Whicher
Whiting
Yanakis-110.


Mr. Speaker:: I declare the amendment lost. By special order of the House adopted yesterday, the question on the main motion will now be put.
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
* *
*

[Stage Direction]
The House resumed, from Thursday, March 4, consideration of the motion of Mr. Benson that Bill C-225, to amend the Income Tax Act and to amend an act to amend that act, be read the second time and referred to a Committee of the Whole.
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, last Thursday, the House dealt with the amendments we proposed to Bill C-225.
It worries me to see so many members leave the House at this moment because this is an important bill since it seeks to tax Canadians for one more year.
The explanatory notes to clause 2 of Bill C-225 read as follows:
This amendment would extend for one year the temporary surtaxes imposed under Part IA of the Income Tax Act.
The surtax on an individual is 3 per cent of his "basic tax" in excess of $200. It would be extended to apply to the 1971 taxation year.
And it is also stated:
The surtax on a corporation is 3 per cent of its tax computed under section 39 or 69 of the Income Tax Act. It would be extended to apply to profits earned in 1971.
The specific and only purpose of this bill is to extend this tax for another year, namely, to April 1, 1972.
I should have liked, Mr. Speaker, to commend the Minister of Finance (Mr. Benson), but as the economic
situation in Canada, for which he does not bear the whole responsibility, but the major part of it is very bad, particularly with regard to unemployment, more especially in Quebec. I find that instead of praising him I must tell him that he and his government have failed in attempting to find solutions to the economic problems of Canada.
Mr. Speaker, we are members of the sovereign Parliament of our country which has all the authority required to eliminate any anti-human conditions created by man. This is not a municipal council with no authority to legislate in financial matters. This is the sovereign Parliament which is all-powerful in the field of finance. It is not in a sovereign Parliament such as ours that financial limitations must be discussed. The financial resources of a country may be limited only by its economic resources. If there are financial limitations in a country of unlimited resources such as ours, it is only because there are financial limitations due to the ignorance of those whose responsibility it is to govern the country. The difficulty lies within human brains which are conditioned by ignorance and finance, or are contaminated by them.
Mr. Speaker, the financiers' intellectual constipation is at the basis of all our economic problems.
Recently, the hon. member for Frontenac (Mr. Cor-riveau), in the only speech he has made in this House since he was elected, taught us a new expression in the economic field. He said that there was a "capitalism of the mind", but he did not explain what was this "capitalism of the mind". I never saw, in any book of political economy, the explanation for "capitalism of the mind".
The hon. member said also that it was necessary to increase our production in order to solve our problems. He should go and say that to the Frontenac farmers, who are presently penalized because they have produced or are still producing too much milk. He should say that to the farmers of western Canada who are in the same position. And immediately afterwards he said we should produce more and sell our surpluses.
Finally he said that there was a puzzle to solve.
Mr. Speaker, if there is a puzzle, it is not where the hon. member for Frontenac and many others think it is, but it is in his imagination, in his head.
You may recall however that the government did and promised everything in order to get that champion of the "capitalism of the mind" elected.
"It should sit at the negotiation table", he told us. What kind of negotiations? Where are their results?
Once more the expectations of the people of Frontenac have been disappointed. The election campaign in the riding is now over, and so are the wild utterances. Let us now look at the only results, which are negative at all levels of the national economy.
Last year, I often happened to listen to a popular program on the Hull radio, which invariably began by the same words: "The world is sick". The speaker, through this remark, unfortunately was reflecting the economic climate in which we live, which the present Minister of Finance (Mr. Benson) complacently enforces on the Canadian people.

Since 1968, we have been witnessing the government's political and economic somersaults and we must recognize that the government, and particularly the Minister of Finance, that financial quack, who is not in the House this afternoon, have no remedy to offer which is likely to solve the country's economic problems and bring Canada back to the prosperity it formerly experienced, so that the people could also live again, because Canadians are still prepared to make the necessary efforts to bring economic prosperity to Canada.
As reported in Hansard of December 3, 1970, on page 1743, the Minister of Finance said, and I quote:
-I have no new general tax measures to propose tonight-
That sums up the speech made by the Minister of Finance and this government fiscal policy: "No tax measures to propose". That means we shall continue to suffer our ills and have the same troubles that we have had for the last several years. We shall continue to be economically ill.
This means also that we shall continue to walk blindly, to retreat, to go round in a circle, progressing towards a just society for some, as we have known it, especially in the last few years.
The people, a large proportion of which is unfortunately too easily misled by the government's well-organized propaganda, continue to believe in the financial quackery of the Minister of Finance.
A quack, Mr. Speaker, is a man who is always trying something new and who, when a patient consults him says: Take these white pills; we shall see what happens. When they do not produce the expected result, he will say: Take these pink pills. They contain the same ingredients, only the colour is different. The pink pills having failed, he will be given a new green liquid: Try that, then come and see me again. The quack thus continues his experiments, exploiting the patient who hopes to be cured.
These past 100 years, financial quacks have given us similar results. Who can tell the difference between the liberal taxes and the progressive conservative taxes, between the liberal debts and the progressive conservative debts that have been inflicted upon us for 100 years? What is the difference between "red" and "blue" taxes or between the liberal tax to which we are going to object but which, unfortunately, the government will still pass?
What difference is there between "red" and "blue" crises? Between "red" and "blue" bankruptcies? Between "red and "blue" rationing? Between "red" and "blue" inflation? Between "red" and "blue" misery? Between "red" and "blue" bureaucracy? Between "red and blue" unemployment?
Mr. Speaker, I could keep on indefinitely with the list of these economic ailments under the present system treated by the quack doctors of finance who are interested in keeping Canada and Canadians economically ill, so as to carry on with their practice of financial quackery.
Income Tax Act
All those who still believe in quacks, such as our present Minister of Finance, and who are still taking red or blue pills, can for a long time to come expect to pay the price of our Canadian economic ills such as those for which we have paid over the last century, since Confederation. I have just mentioned a fair number of them.
From a monetary point of view, we are at the present time living under a humbug system, that of the "taxing machines" of the Minister of Finance, as evidenced by Bill C-255.
Mr. Speaker, this Parliament is a manufacturing plant for a host of bills which tend in the short or long run to slowly but surely fleece the Canadian taxpayer.


Jean Marchand: This is not true.


Gilbert F. Rondeau: If, for instance, we look at the descending curve of private enterprise in Canada since the last war, we can only admit that our governments have failed to protect private enterprise and personal initiative.
Mr. Speaker, Canadians still love their country and have faith in its productive capacity. But because of the tremendous speed at which the government is heading towards a socialist state, private enterprise and the initiative of Canadians are completely, or nearly, paralyzed. Steps can be taken to promote regional economic expansion through the minister (Mr. Marchand)-who is presently in the House-but any accountant or wise businessman knows very well, or can easily ascertain, that the subsidies that the minister grants or has granted in my constituency-and I do not blame him in any way in this regard-constitute, in fact, the financing of the 11 per cent sales tax on the investment of the factories that will be devoloped and the personal income tax that individuals will have to pay during the first six years after the factory has received subsidies. These subsidies are the immediate financing of taxes which will be paid by industrialists and employees of the companies during the first six years.
Mr. Speaker, our economic system shows symptoms of being a sick economic system, which makes social life sick and makes our world become more and more of a sick world, as a Hull radio announcer said every morning for some time.
The quack Minister of Finance is responsible for the circulation of the economic blood, which is money, and responsible also for the quality of this economic blood. Instead of treating our financial anemia, he deals, like every true quack, with the effects of the sick and vitiated economic blood.
Instead of using the Bank of Canada as a monetary reservoir to balance the monetary circulation of the country with its production capacity, he acts like a quack. I keep on repeating this word, because it is very important. The minister acts like a quack or like an amateur mechanic. Instead of fixing the distribution system of fuel from the tank to the carburetor which is defective, like the whole economic system of financial distribution, the Minister of Finance reduces thousands of Canadians to unemployment. He forces some of them


Income Tax Act
to apply for a pittance to welfare organizations, condemns others to utter misery and compels those who are still able to pay for these social services, to bear a crushing tax burden, they who still believe in the economy and still have some initiative, but who, in their political simplicity-


Mr. Bechard:: What solution do you propose?


Gilbert F. Rondeau: The hon. member for Bonaventure (Mr. Bechard) should know because the Creditiste solution has been explained time and again for years. But he has ears and does not hear apparently. We have repeatedly stated in this House that the Bank of Canada should be used to supply our Canadian economic life blood. I am sorry, Mr. Speaker. I keep explaining this to him, but he will not listen to me.


Albert Béchard: This is not serious.


Gilbert F. Rondeau: Mr. Speaker, the Minister of Finance is getting ready to stifle the Canadian people economically.
What I find most shocking is how the government can, on the one hand, show such ability, through the Minister of Finance, in stifling private enterprise and, on the other hand, thanks to its well planned publicity-and Information Canada will soon confirm this-convince the Canadian people that they are being stifled for their own good.
Unemployment and bankruptcies are the symptoms of an ill-planned economy. The FLQ, in Quebec or elsewhere, is another economic symptom. The millions of people on welfare are yet another economic symptom. The widespread dissent as well as the strikes are as many economic symptoms. And if the Minister of Finance is unable to root out the causes of all our economic ills, either he is a quack or he is party to our economic system which keeps the country and its people in a state of economic illness.
As for me, Mr. Speaker, I believe the Minister of Finance is more a quack than an accomplice. And I feel only pity for the poor Canadian people who will have to pay, in 1971, more than $2 billion in interests on the national public debt, because of a Minister of Finance who does nothing but deprive the people in order to make finance thrive all the more.


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I have in hand a copy of Bill C-225 entitled: An act to amend the Income Tax Act and to amend an Act to amend that Act.
The title itself is ambiguous. No doubt this is due to the confusion that existed in Parliament in 1968, when the Liberal partisans, caught off their guard, had to make important concessions to taxpayers and refund overpayments under a legislation which had not yet been passed.
What a contrast between the slowness of the government to seek answers to unemployment and other problems and its undue haste to carry out regulations establishing the right to tax. They are the ones who accuse the members of the Ralliement creditiste of delaying the proceedings of the House. Yet taxpayers are in no hurry to be taxed, either under an amending bill or another legislation such as Bill C-225 now under consideration or any other money-pumping method to get at the generally insufficient income of Canadians.
The moment income tax is mentioned, very few citizens are enthusiastic, except the lackeys of the financial system who do not seem to realize all the problems they are creating for Canadian workers with their taxing gimmick that takes the most different forms they are forced to imagine because of the stupid system they try to defend.
For a long time, various categories of workers, particularly forest workers and others, have been trying to make the Minister of Finance (Mr. Benson) understand that travelling expenses incurred in their search for a job, the purchase of costly tools such as power saws and others should be deductible under the Income Tax Act. No improvement is coming in that regard.
It is only after 20 years of making representations that Canadian workers who were helping red or blue governments ease the unemployment problem by going to work for the forest industry in the United States, particularly in Maine and New Hampshire, that authorities on both sides of the border understood that they should allow those workers to get unemployment benefits when they were out of work. The "tax pumping" system begins to work from the very first working days. In order to please the tax-happy people in the United States Canada and Quebec, the worker who has to work hard to earn a living must file three income tax returns, with all the complications involved. It is therefore easy to understand why the workers revolt at times.
We are living in a period when laws and regulations are being extended for the purpose of maintaining a taxing right, which at the outset was to last only a year. We must therefore condemn such extended taxes. Even though the supporters of such a system do not like to be reminded of the ill effects of their laws and regulations, they must recognize that only indebtedness is making some progress.
I have here an article from the March 9, 1971 edition of La Presse, bearing the title: Canadian indebtedness increases. Canada's Minister of Finance keeps on sailing through those stormy circumstances, tossed about by the elements of an artificial financial system, that is creating taxes, debts, unpaid and unpayable, under the present system. By means of the surprising acrobatic stunts he resorts to at times, he succeeds in maintaining the dollar in a floating position.


An hon. Member:: It is the last straw.


Charles-Eugène Dionne: His rather eccentric behaviour reminds us of the recent enough story of a ship that sailed for some time at random, and was sold later for less than the cost of repairs and painting. Let us hope that the ship of state will succeed in overcoming the imaginary waves of inflation and that it will finally reach a port



where competent engineers will be able to perform the necessary repairs to its rudder.
If we look at the way the government is spending the money which it succeeds in taking from the taxpayers thanks to disguised taxes of all kinds, we quickly agree with the Auditor General about the administrators' blunders.
I have with me an editorial of the CJMS broadcasting station of February 20, 1971, which shows that the taxes paid by the Canadian taxpayers are not always properly used. And I quote:
-In the same week, two facts have come to our attention. Further inquiry might multiply them by ten, twenty and even more. Let us take the case of adult education. Everybody knows that for retraining purposes, a person can be paid $35 to $80 per week depending on family conditions provided he is attending adult training courses. However, do you know that, in Montreal, a part-time teacher is teaching on the Canadian novel to permit workmen aged 20 to 35 and more to obtain the credits they need to complete grade 9 while his own education stopped at grade 8? This teacher is paid $25 per night for a 2-hour course and the others are paid, as we said, to attend such courses which will be useless to them when they get back on the labour market. This is incredible nonsense which shows the lack of seriousness of those responsible for the programming of these courses. And this is done with our money, with taxpayers' money. Another case-
Since he came to Montreal, a German immigrant has first attended French lessons. He was paid to attend. Once the French course was over, he registered for English lessons. Again he is getting paid. When he has acquired a knowledge of English and French, it is possible that he will immigrate this time to the United States, after having lived here two years at the expense of the Canadian taxpayers. All this is not serious. I am prepared to get the publication put out by the federal government and entitled: "How your tax dollar is spent". I am eager to know whether such facts are recorded in that publication. To you, to me, taxpayers, rotating teachers' strikes are costing $50 million. And what about the postal strike? Taxpayers are fed up and rightly so.
The supporters of the Ralliement Creditiste positively state that the purchasing power which is in the hands of Canadian consumers is inadequate to buy Canadian production, taking into account prevailing prices. It is not by taxing them that the problem will be solved.
Although there are many causes to that state of affairs, it is possible to demonstrate easily the validity of that statement.
The banking system is the source of all the Canadian money which is issued in the form of loans. However, the banking system lends money on the sole condition that a larger amount-capital and interest-than that which has been loaned will be paid back. Therefore, when a producer borrows to finance his production, if he is to remain in business, he must include that charge in prices when he sells his product. But since the equivalent of that additional amount has not at any time been distributed as purchasing power to the consumer, it is obvious that the consumer is unable to pay the prices charged by the producer for his products.
Income Tax Act
In his book entitled Distribution of Production, Major Douglas states:
Banks can create money in five minutes and this is what they have been doing for centuries.
On the other hand, Mr. Reginald McKenna, of Great Britain, at the annual meeting of the Midland Bank, on January 25, 1924, had this to say, and I quote:
The amount of money in existence varies only through the action of the banks, as they increase or decrease the deposits. Any bank loan destroys a deposit.
Banks can create and destroy money and bank credit amounts to money. It is with the help of that money that most transactions are being performed and not through what we usually call dollars.
Moreover, I am in agreement with the remarks that Mr. Hawtrey, under-secretary of the treasury in Great Britain, over the B.B.C. network, in London, on March 22, 1933; he asserted his agreement with Major Douglas explicitly:
Moreover, I agree with him (C. H. Douglas) when he says that the banks create money and economic crises are created by the banking system.
When a bank makes a loan, it creates money out of nothing.
In his book The Art of Central Banking, the author also says:
When a bank provides a loan, it creates credit. While a loan is being shown as a credit in its books, an equal amount is being registered as a liability.
Finally, Lord Keynes, economist, and during the last world war, governor of the Bank of England, had this to say:
There is no doubt that all bank deposits are created by the banks.
In conclusion, may I quote from the evidence Mr. Graham Towers, governor of the Bank of Canada, gave before the committee on banking and commerce in Ottawa, in 1939:
Each time a bank provides a loan or buys securities, new banking credit is created-new deposits-truly new money. Generally speaking, all new money is created by the banks under the guise of loans.
In 1965, Mr. Paul A. Samuelson, internationally famous economist, in a book that was translated into French under the title L'economique: techniques modernes de I'analyse economique, explained how the banks provided an irrefutable answer to the question: Where does the money come from?
Unfortunately, Mr. Speaker, the phenomenon is not too well understood. Most people have heard that, thanks to some sleight-of-hand trick, banks are able to make money out of nothing. Few people, however, realize how that is done. In this regard, I will quote from page 277 of Samuelson's book:
In fact, there is nothing magic or unintelligible about bank deposits. Any intelligent person can follow step by step what happens to bank accounts. The real explanation of the creation of deposits is a simple one. The only difficulty is to understand the false versions which continue to abound.


Income Tax Act
According to such frivolous explanations, managers of normal banks can, by a stroke of their pens, lend several dollars for each dollar deposited with them. There is nothing surprising about the fact that seasoned bankers see red when accused of such action.
They would surely be only too happy to be able to do this. But they know better than anybody else that no banker can invest funds which are not at his disposal-and any money used to purchase securities or to grant a loan must immediately leave his bank.
This is why bankers often go to the other extreme.
Since a small bank can only create money to a limited extent
They readily maintain that on the whole, the banking system is also unable to coin money. "After all, they say, we can only invest the funds left to us by our customers. We do not create them. We only put the community savings at work." Now, the bankers who put forward this argument are completely mistaken. They have been snared by an old acquaintance of ours, the rhetorical sophism-but we must not forget that what is true for each of us is not necessarily true for all. The banking system on the whole can accomplish what a single bank is unable to do.
We there answer in the affirmative to the question which heads the present section:
CAN BANKS REALLY CREATE MONEY?
Yes, the American banking system and the American public jointly create approximately $5 worth of bank deposits for each dollar taken out of circulation and handed over to the banks.
In the same book, in order to back up his statement, the economist uses four tables starting with the first bank stage and tracing the chain reactions of a $1,000 deposit on the other banks.
This explanation may be understood by all those who are willing to go to the trouble of studying the system thoroughly.
Let us recall the following words of the wisest of statesmen, Abraham Lincoln:
The privilege to create and issue money is not only the sovereign prerogative of a government, it is also the greatest creative power.
Money must circulate for the sake of the country's development, just as if Canada were at war, and we are actually at war against internal foes, that is unemployment and hardship.
If this government really wanted to establish the just society that its leader promised the Canadian people during the 1968 election campaign, it could do so. A serious effort, a simple decision would be enough, and Canadians would be assured of a decent living, of freedom and security, because the two always go together. Our ancestors have fought for those two ideals in order to be able to pass them on to us. Even if the people enjoyed security from the cradle to the grave, as some socialist and communist leaders claim to be able to guarantee, in losing their freedom the people would also lose their soul. There is no happiness in security if one becomes a slave, if one loses one's right to choose.
On the other hand, what kind of happiness may we expect from this freedom of ours if we have lost our security? The one without the other serves no purpose. We can and we must enjoy freedom and security at the same time in a country such as Canada.
Let us consider the vast natural resources with which our country has been blessed by Providence. Let us consider the fertile lands from which we could draw more food than we need. Let us ask ourselves whether there is not enough of this plenty to provide economic security for our whole population for hundreds of years to come? What is preventing us enjoying it all? With more riches per capita than any other country, we should enjoy the highest standard of living in the whole world. Why is it not so? We, Creditistes, maintain without fear of being contradicted, that it is this deteriorated and outmoded financial system controlled by trusts, fostered and supported by stupid politicians, which prevents the nation from distributing the abundance that surrounds us.
To be truly consistent with man's natural aspirations, the real solution will have to be sought in an increased freedom for all individuals, and not in new limitations of the freedoms they have left. Such a solution would in no way be incompatible with the security that governments impose upon us on the grounds that it is the wish of the public. Citizens do demand a minimum of security, but they do not ask for a straight jacket. Security must be confortable and pleasant if we are to enjoy it fully. It must not stifle us and become execrable under the clumsy hands of its makers. Individuals can achieve it, if only governments would remove the obstacles that they themselves have put in the way, if only governments would consolidate the foundations of our economic structure instead of merely making occasional repairs. Sooner or later, the building will collapse. A chronic headache cannot be cured by taking tablets: the pain may be temporarily eased off, but its cause still remains.
Once the building has collapsed, the only thing left for our progeny will be to write our history and they will gaze with amazement at the unbelievable spectable that we will have supplied them with. If we were to be confronted with them, their opinion would shame us. They may write: "The people of the twentieth century had a strange behaviour! They were great masters in the art of producing goods and wealth but unsuccessful in distributing them. These same people, rather than increase figures, for fear of shortage preferred to restrict the production of goods. Their greatly advanced knowledge enabled them to reach the uninhabited moon while whole populations on their own planet remained inaccessible and destitute.
They feared production more than destruction: they restricted money deliberately in order to limit production, consumption and life. Money flowed profusely and without limits to stir up war and hasten demolition and death. They wasted with unspeakable lavishness the time of thousands of their fellow citizens as they condemned



them to unaccountable unemployment. They sowed broadcast, happily, remorseless, the precious time of other thousands of citizens, to dole out to these unemployed a relative security from savings previously forced upon them.
They asked for an acceleration of production in order to cut down prices, and they recommended decreasing consumption with for the same purpose. Out and out imports were considered a disaster, the source of all misfortunes for a nation: a citizen was neither virtuous nor patriotic if he consumed imported products. But strangely enough, the citizens as a whole would become patriotic and virtuous if they succeeded in imposing this calamity to another people through out and out exports. Their big mistake was failing to realize that time is the only wealth that can be lost irrevocably. All other riches can wait until man is ready to exploit them to his own profit.
All this is strange, bizarre, extraordinary! But nowadays just mentioning these self-evident truths is enough to be branded as a dreamer, to make other people shrug their shoulders.
Advocates of this theory will be asked to be realistic, they will be suspected of being a little off the beam, but no one will never try to prove them wrong. They will be given the chance to admit it freely, that is if someone takes the trouble to listen to them, but they will never venture on the field of evidence. Obviously, they are wrong and they are told that they do not think the same way as the masterminds of our century. And yet, the truth is so simple that it seems incredible: the time of man is the only resource needed to develop matter, and it is the only one which is unrecoverable once it is lost.
Taking into account the present situation in Canada, the government authorities should not take too long before deciding to establish the "just society" that all Canadians aspire to.
Mr: Leonel Beaudoin (Richmond): Mr. Speaker, no member of this House can offord to miss the opportunity of blaming openly the present government for its fiscal policy, as stated in the bill now under study, namely Bill C-225, entitled "An Act to amend the Income Tax Act and to amend an Act to amend that Act".
Last Wednesday night, March 3, I took part, with a few colleagues from the opposition, in a discussion with the management of the Canadian Labour Congress. We discussed with this organization, which represents a million workers or more, the implications of the brief they had submitted to the government of Canada last March 1.
I agree generally with what is included in this brief, and I fully endorse a paragraph on page 13 dealing directly with the bill we are presently studying, which reads:
It seems that a number of measures could be taken, most of them having a rather immediate stimulating effect on the economy in addition to bringing some relief to the people who need them. We should like to propose, for instance, an immediate personal income tax reduction in favour of lower income groups. Since those people have a strong tendency to spend any extra income or savings they might have, this would
Income Tax Act
stimulate economy. Moreover, we cannot see any reason for maintaining the 3 per cent additional tax, and we therefore recommend its abolition. We are well aware that your government has undertaken to introduce shortly a new tax legislation, but the unemployment problem is so urgent that tax reductions should be considered first.
We then find in this bill that the government has completely ignored, as usual, the proposals of the Canadian Labour Congress. I realize that for the government, this brief has been prepared by mere workers but all the same, the government should at least have considered it and delayed the passage of the bill now before us.
With regard to clause 2 of the bill, the explanatory notes read as follows:
This amendment would extend for one year the temporary surtaxes imposed under Part IA of the Income Tax Act.
The surtax on an individual is 3% of his "basic tax" in excess of $200. It would be extended to apply to the 1971 taxation year.
The surtax on a corporation is 3% of its tax computed under section 39 or 69 of the Income Tax Act. It would be extended to apply to profits earned in 1971.
And the same old story repeats itself today. Having reached that stage, why does the Minister of Finance (Mr. Benson) not seek a temporary extension-to use his own words-of that surtax, for an indefinite period? Thus, the population would not know where it stands with such a government and, at the next general elections, it would know what to do.
Mr. Speaker, in order to believe in those temporary extensions, one must really have divine confidence in our leaders, which I, unfortunately, do not have.
Not only do they continue to tax Canadians with such laws, but they also contribute to get us bogged down in a system which has already proved, and which is still proving every day how illogical it is.
I consider that taxes, as they are used in the present system, are to say the least a little dishonest because, in my opinion, they must exist only to withdraw the excess money in circulation, in the face of the obvious fact that there is a lack of consumer products. But are there really too many products? I do not believe so. Is there a surplus of money? Certainly not, at least as far as I am concerned, and I would be glad to know anyone who is in the opposite situation, except naturally the few politicians who continue to believe that there are such people.
Why not at last realize that it is not the taxes which maintain a healthy economy, but a system adequate to the needs of consumers. We all know that bills like the one before us have been introduced since the coming into existence of the system and that we shall have more of them as long as the system exists in its present form.
What would be the use of freeing the producer within the industry, if the whole economic system, including the producer and the consumer and therefore industry itself and its elements, remains under the yoke of banks, which seem to be the "parents" of the present system? The only thing to do in order to free the community would be for the State, brain of the social body, to administer the


Income Tax Act
banking system and oblige it to serve the people and not enslave them as it does, especially since we have been hearing about the just society from this government which I look upon as the most autocratic the Canadian people, have ever know.
Through this bill, we are laying for another year a new fiscal load on the taxpayers who have not enough money to get what would be necessary for a decent living, while there is an abundance of products in this country. Therefore I regard this extension of the 3 per cent surtax as pure and simple robbery or at least like something dishonest. If a concern is the site of a burglary over and over again, we look upon its owner as a very unlucky man. I believe the Canadian people are really unlucky. It has been like that for three years and it seems that things will not change.
Why not use the reins of power we have to reform the Canadian economy? Why manage in such a way that the taxpayer cannot provide for his most basic needs, by getting out of him the little money that would enable him to live decently?
On the contrary, the Canadian people have to pay absurd taxes like this 3 per cent surtax that the government was to put into force for a year only, a few years ago.
If the government removed the 3 per cent tax, this would encourage the workers, merchants and businessmen, it would help to stimulate the economy which is being jeorpadized by a burden of taxes, surtaxes and temporary taxes of all kinds, the plague of our citizens, especially small wage-earners, industrialists and businessmen.
If the government finally decided to face the truth, and specially to keep the promises made at election time, it would withdraw the bill or at least delay its passing until less drastic solutions are found to restore the Canadian economy. It is high time to do so. It is imperative for the Canadian government to do everything in its power to enable our economy to catch its breath.
To my mind, there are glaring contradictions in the means used by the government in managing our country. When that so-called temporary tax was levied several years ago, it was mainly to control alleged inflation.
Now, on December 3, the government stated that inflation-a term used to conceal the government's mistakes- had been checked. Then, why has that temporary surtax become permanent? Perhaps in anticipation of new inflation or perhaps the government is using that measure to play politics, reserving the right to repeal it before the next election.
After all, as recently stated by the minister, the people who are drawing social welfare or unemployment benefits are wel lpaid by the government. The surtax will increase unemployment still more, because it will take from the Canadian consumers part of their purchasing power which will reach some $245 million for the financial year 1971.
Thus, the government may add that amount to the one already allocated for the support of the unemployed.
Indeed, 25 per cent of the budget is now appropriated for social welfare and 14 per cent for development and economic support.
Mr. Speaker, we are spending more money on people doing nothing than to get the economy back on the road. Thanks to the amount produced by this 3 per cent surtax, the government will find funds to increase unemployment insurance benefits.
Hard as I try, I cannot begin to understand the logic behind this government, which leaves people unemployed, and then assists them through all sorts of social welfare schemes. I want to make this clear: I am not against the principle of social welfare, but against whoever wants to keep people out of work, as this is happening now.
This is nonsense, in such a rich country, and I would surely not want to be in the position of the Minister of Finance who can see numerous debts falling due and finds himself forced to keep a great number of Canadians in poverty, because of the shortcomings of the present system.
As long as the wheels of the Canadian economy have not been changed, Canadians will be forced to keep on pulling this wagon toward a destination which looks rather gloomy.


Mr. Oza  Teiraull@Villeneuve: Mr. Speaker, Bill C-255, which the Minister of Finance (Mr. Benson) is asking us to extend for another year, seems somewhat dishonest to me, since in 1968, the same minister levied a 3 per cent tax which was to have been for a period of one year. The Minister of Finance will be reducing the income of those earning small salaries by some $200 million in purchasing power.
Mr. Speaker, taxes are robbery when applied to taxpayers who do not have enough money to acquire the requisites for a decent life while there is an abundance of products in the country. Taxes are robbery so long as there are unsold products, forced unemployment, unused productive capacities due to lack of sales of products resulting from lack of purchasing power.
Mr. Speaker, taxes are robbery in a period such as the one in which we live, because they reduce purchasing power, result in the overstocking of products and despoil the population just as inflation does.
Mr. Speaker, we of the Ralliement creditiste, are against the extension of the provisions of Bill C-225 for the following reasons: taxes should be intended only to take excess money out of circulation when products are scarce. When there is a shortage of money, the answer is not more taxes but a distribution of the purchasing power by means of a dividend or a compensated discount which would bring prices back to the level of the actual cost of production.
The financing of governments and public investments must be achieved through new financing or new credits according to the actual needs and the production capacity of a country.
To be efficient and socially adequate, an economic system must fulfil two conditions. Firstly, it should be



able to produce goods to meet the needs of the people, and secondly, to distribute those goods in such a way that they meet the needs where they exist.
The Minister of Finance (Mr. Benson), in introducing Bill C-225, goes against the logic of that "just society," about which the Prime Minister (Mr. Trudeau) talked so much during the 1968 election campaign.
At the present time, there is not enough purchasing power to meet the needs of our many workers.
Do we in Canada lack anything necessary to fill the temporal needs of our Canadians, Mr. Speaker? Are we without sufficient food to satisfy the hunger of all? Do we lack shoes and clothing? Are we incapable of producing enough goods to meet the general demand? Do we lack railroads and other means of transportation? Do we lack wood and stone to construct a good house for every family? Are there not enough contractors, carpenters and other types of workers necessary to build them? Is there an insufficiency of machinery? As a matter of fact, we have all these things and more; in fact, we could have a lot more in Canada if our Minister of Finance (Mr. Benson) would only stop taxing the poor.
We have three-quarters of a million people who want to produce for the benefit of those in need, but they are paralyzed by the unfair policy of the Minister of Finance. Mr. Speaker, if there are a great many things to sell in a country, then logically there must be a great deal of money in order that these goods may be purchased. The more people and goods the more money there must be in circulation, otherwise the flow of goods is stopped. Money was created for the purpose of moving products into the hands of consumers. Why, then, does the necessary money not find its way into the hands of the people in amounts equal to the flow of goods from the production line?
The founder of Social Credit, Major Douglas, had this to say, "The industrial system, which makes goods, is not to blame for poverty; it is the financial system." We will never build a strong Canada by taxing those with low income for the benefit of those with high income, Mr. Speaker. This proves to us that the government always protects the strongest in the country
With Bill C-225, our Minister of Finance is attacking not only the individual with an ample income but also the individual with the bare minimum of income. He is taxing what is necessary to life, and that is money. People cannot live without money, even though we have plenty of everything in Canada.
When the Bank Act was passed, the Rothschild brothers, under date of June 25, 1863, wrote as follows:
It (this act) gives the National Bank almost complete control of national finance. The few who understand the system will be either so interested in its profits, or so dependent on its favours, that there will be no opposition from that class...the great body of the people, mentally incapable of comprehending will bear its burden without complaint.

Mr. Speaker, a while ago I noted that some ministers in the House seemed to find the Social Credit opposition
Division
strange. In 1934, the Right Hon. Lyon Mackenzie King, then leader of the opposition had this to say:

Once a nation parts with the control of its currency and credit it matters not who makes the nation's law. Usury, once in control will wreck any nation. Until control of currency and credit is restored to Parliament and recognized as its most sacred responsibility, all talk of sovereignty of Parliament and of democracy is idle and futile.

Mr. Speaker, I believe that the words spoken by the former Prime Minister of Canada are clear enough to convey to the government that this is truly the case at the present time.
There is an abundance of goods, the people want to work, but, because of our financial system, they cannot do so and must rely on welfare to support their families.
I believe, Mr. Speaker, that it is unfair, especially to the workers of Canada, to maintain the 3 per cent tax.


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?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Burton:: When this bill was being considered at the second reading stage, a number of hon. members raised questions concerning the effectiveness of the proposed changes in capital cost allowances as they applied to the manufacturing and processing industries. I wonder whether at this stage the Parliamentary Secretary to the Minister of Finance, or the Minister of Finance himself, who I see is just leaving his place, has any comments to make on the points which were made. I know that only one member on the other side of the House chose to take part in the debate during the second reading stage and that was the Parliamentary Secretary to the Minister of Finance when he spoke introducing the measure.


Some hon. Members:: Hear, hear.


John Stratford Burton: Government supporters cannot be very proud of this bill because not a single one of them stood up to speak in its favour. All they could do was stand up to say yes when the time came.


Some hon. Members:: Hear, hear!


John Stratford Burton: I can understand their lack of enthusiasm for it. I should like to ask the Parliamentary Secretary to the Minister of Finance whether he would care to make any comment on this particular aspect of the bill as provided for in clause one. In fact, I would invite him to make any comments he might wish to make, though perhaps he would not wish to begin now, because I see it is almost five o'clock. I believe it would be appropriate for us to hear from the government with regard to the various points raised during second reading.


The Acting Chairman (Mr. Richard):: Order. It being five o'clock, it is my duty to rise, report progress and request leave to sit again later this day.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Richard):: 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 Oxford (Mr. Nesbitt)-Agriculture-Alleged trafficking in industrial milk quotas-request for information; the hon. member for Portneuf (Mr. Godin)-Unemployment Insurance-Montreal-Inquiry as to government's intention to repair supposedly defective computer; the hon. member for York-ton-Melville (Mr. Nystrom)-Youth-Cancellation of conference sponsored by Canadian Council on Social Development.
It being five o'clock the House will now proceed to consideration of private members' business as listed on today's Order Paper, namely, notices of motions.



PRIVATE MEMBERS' MOTIONS FOR PAPERS


Mr. John Gilbert (Broadview) moved:: That an humble address be presented to His Excellency praying that he will cause to be laid before this House a copy of the contract between the Atomic Energy of Canada Limited and the Atomic Energy Council of Taiwan regarding the sale of a nuclear research reactor.
He said: Mr. Speaker, on November 4, 1970 I asked that the contract between Atomic Energy of Canada Limited and the Atomic Energy Council of Taiwan regarding the sale of a nuclear research reactor be tabled in this House. The reason I asked that the terms of the contract be tabled is that there is a growing suspicion among many Canadians that we are having difficulty in selling reactors in the export market. This growing suspicion was confirmed in the month of March 1971 by the Minister of Energy, Mines and Resources (Mr. Greene), who admitted that Canada's attempt to sell nuclear reactors in the export market has been a dismal failure. The minister went on in no uncertain terms to cite the poor record Canada has in this regard and indicated that efforts to sell nuclear reactors in Finland, Argentina, Yugoslavia, Roumania and now Australia had failed.
I note that some members on the other side of the House look on this matter rather lightly, failing to realize the tremendous loss suffered by Canadians not only in terms of profit but in terms of employment. I am sure that when they have heard my remarks, and the remarks of some of my colleagues, they will take a more serious attitude to this question. We in Canada had high hopes that our CANDU system would make its mark in the sale of nuclear reactors throughout the world, that it would create not only a great deal of employment for Canadians but would produce a profit as well. The minister has stated that Canada stands little chance of beating a British bid to build a $150 million nuclear power plant in Australia. In other words, we have been up to bat five times and have struck out five times. The question there-
Atomic Energy
fore arises whether we are in the right league in this expensive and important field. Perhaps it is a field that is too expensive, one from which Canada should withdraw.
I suggest there is a comparison here with the ill-fated Arrow project. You will recall, Mr. Speaker, that back in 1958 and 1959 Canada launched a program to sell aircraft to other countries. After an expenditure of some $300 million we had to cease production of the ill-fated Arrow, resulting in a great loss of money and, more importantly, loss of employment and potential markets. It was said at the time that the reason for the loss of sales was that many of the major powers that would have been purchasing the ill-fated Arrow had insufficient confidence in the ability of 20 million people to produce such a high powered and high priced aircraft. We now have an analogy in the nuclear reactor field. This is the reason I have brought this matter to the attention of the House, and I am asking that the details of the contract between the Taiwan government and the Canadian government regarding this sale be put before the House so that a study can be made to determine whether we should withdraw from this field.
One is reminded of the glowing optimism displayed by the Minister of Energy, Mines and Resources a year ago March when he literally put his cabinet portfolio on the line with regard to the potential of the CANDU system, saying that we stood an excellent chance of penetrating the market, making sales, creating employment and producing profits for Canadian companies. Now, like a dog with its tail between its legs, he is running for cover, trying to cloak himself with excuses. The minister may be right. We may be in a very expensive field in which our research know-how is insufficient to compete with that of the United States and some European countries. As the minister indicated, it looks as though we are going to fail in our bid to sell a $150 million reactor to Australia. However, I would remind the minister of the remarks he made about the CANDU system, which uses natural uranium and heavy water to moderate an atomic reaction and to transfer the heat to the generating turbines. If I am correct-and I must admit to very limited knowledge of this specialized field-this would mean that countries in the world would not have had to depend on our neighbour to the south which is the main supplier of enriched uranium.
It is very easy to have hindsight and to be able to criticize a government that has failed so many times. But, Mr. Speaker, I think you should appreciate that my intention, and the intention of the members of my party, was to draw the attention of the minister and members of the government to the serious situation that prevails. We wanted to know what were the terms of the contract between the Canadian and the Taiwan governments since it would have been foolish for the minister to misrepresent the position of Canada in this very important field.
One is quick to realize the limitations of a country like Taiwan, which is why one becomes rather suspicious that in announcing a sale to Taiwan the government may be attempting to cover up. In fact, this is not a sale in the real sense of competing with other countries in the


Atomic Energy
supply of a nuclear reactor but more an extension of foreign aid to this particular country. It therefore behooves me, as a member of the New Democratic Party, to ask why the government refuses to place the terms of this contract before members so that we may study them. It may be said that the terms are very confidential and that to disclose this information might be detrimental to Canada's position in bidding in this field. I am sure that the members of our party, as well as members of the opposition, are fair and reasonable men and if the minister had said that he would agree to a meeting of the natural resources committee, the meeting could have been held in confidence. Let me point out to you the difficulties we are having in competing in foreign fields. The contract between Taiwan and Canada was more in the nature of foreign aid than the result of high powered competition among countries throughout the world. Had it been otherwise, members of the committee might have been able to report their satisfaction.
I have had great respect and regard for the Minister of Energy, Mines and Resources throughout the years. I know he has had legal training and has a legal mind. He has been able at times to persuade Canadians, in a rather shallow and empty way, to accept certain matters. When I look at some of his energy policies, I am acutely aware that we must be alert at all times to make judgments which are objective rather than subjective, completely dependent upon the minister and his officials.
Therefore, I have great confidence that the minister will agree to this motion this afternoon. I am sure he will agree to refer the matter to the appropriate committee and will appear before that committee with his officials to give the details of this contract as well as the problems we are facing regarding the sale of nuclear reactors. I would think if he sets forth the problems he has, and listens to the constructive criticisms of members of the committee, he may be able to salvage something in respect of this very important undertaking. I will not take any more of the time of the House because I have the greatest confidence in the minister. I know he will present his problems so we can study them and be better equipped to suggest solutions.


Mr. Leonard Hopkins (Renfrew North):: Mr. Speaker, it does my heart good to hear the hon. member for Broadview (Mr. Gilbert) admit in this House that the Minister of Energy, Mines and Resources (Mr. Greene) has a large department to handle and that he is handling it well. I know that his liaison with Atomic Energy of Canada Limited is extremely efficient because he has an excellent link between one of its major parts and A.E.C.L. in Renfrew North. The questioning of the expenditures in respect of Atomic Energy of Canada by the hon. member has raised some questions in my mind. Not very long ago, the committee on National Resources and Public Works visited Chalk River and Deep River. I am sure there was no intent on the part of the hon. member for Broadview, but at a dinner for us sponsored by the town of Deep River he criticized the government for not going ahead
with the intense neutron generator at a cost estimated at that time of $150 million. Today in this House he has criticized this government for spending money in respect of Atomic Energy of Canada.


An hon. Member:: That is not very consistent.


Leonard Donald Hopkins: These statements are in conflict. There is one very important point I should like to put on the record at this time. On June 23, 1969, during a speech I made in this House, I brought out facts about the Glace Bay heavy water plant which, as we know, has been the subject of an expenditure of something in excess of $110 million. I criticized the Leader of the Opposition (Mr. Stanfield) for decisions he made in the beginning regarding the construction of that plant. After I sat down, the hon. member for Dartmouth-Halifax East (Mr. Forrestall) stood up and made the following statement while looking at me:
Mr. Speaker, it is a great temptation to go rabbit hunting but I will not do that tonight. I simply say to the previous speaker that the events of this summer and fall will prove the point. I know the hon. member is a sensitive individual, and I know he will be quite embarrassed when the announcements are made that will indicate to the people of Canada, and in particular of Nova Scotia, the wisdom of the then premier of that province moving into this field.


Some hon. Members:: Hear, hear.


Leonard Donald Hopkins: That is what the hon. member for Dartmouth-Halifax East calls wisdom. The present Leader of the Opposition in this House supports the expenditure of $110 million on a heavy water plant in Glace Bay which is still not producing heavy water. If he is going to run the province of Nova Scotia into that kind of debt, God help Canada if he ever becomes Prime Minister.
The hon. member for Broadview has questioned whether we are in the right field, and whether we should be involved in this area of development. Let me say to the hon. member for Broadview that I am one of the members in this House who has on previous occasions, at public meetings, in reports, on radio and on television, stated that if Canada is to play its role in the future of this world it will have to spend more money on research programs in many fields, not only scientific but trade, commercial and technological. The perfect example of this can be found in the fact that the Japanese are building specific types of ships. They are buying Canadian wood from the west coast of Canada, manufacturing plywood, and selling it to Canada and the United States cheaper than we can produce it here in Canada.
I am sure it was not the intention of the hon. member for Broadview to leave the impression that people on the government side of the House are not interested in research projects. Let me make it very clear that it is deplorable that the science community in Canada has been criticized to the extent it has in the past few months. Every one of us in this House knows that we must carry out research in order to obtain realistic answers to our problems. Mistakes have been made in the past. Is there anyone in this House who is willing to say that from now on every science program to be undertaken will be perfect from beginning to end? This is not
[Mr. Gilbert.)


the meaning of research. There are many cases in which the trial and error method must be used. If we are not willing to take such a gamble Canada will stand still and will drag farther behind the other nations of the world who are willing to take that gamble. We must spend money to build up such industries as Atomic Energy of Canada Limited. When the hon. member for Broadview was speaking I could not help but wonder what the Hon. C. D. Howe would be thinking if he were able to hear his speech. In spite of all the citicism that has ever been made inside or outside this House about the Hon. C. D. Howe-


Mr. Knowles (Winnipeg North Centre):: The Right Honourable.


Leonard Donald Hopkins: Thank you; I am glad to be corrected because I have always held him in very great esteem and have always considered him as a great Canadian. Last summer I had the pleasure of attending the unveiling of a plaque in his honour in my constituency. We, as Canadians, owe a great debt to this statesman who placed us in a forward position in respect of scientific research in this field. He was a very capable administrator and should certainly be remembered in this House during such a debate.


Some Hon. Members:: Hear, hear.


Leonard Donald Hopkins: Mr. Speaker, recently there has been a great controversy in Canada concerning heavy water. There certainly has been a great controversy in my constituency because recent reports about the scarcity of heavy water have placed doubt in the minds of the 2,350 employees who work at the Atomic Energy Plant at Chalk River. In a riding such as mine, this number represents a large portion of the total labour force in the area. I have been informed by Atomic Energy of Canada Limited there is no danger that the research work being carried on at Chalk River will be affected by the situation in respect of heavy water, so the people employed there can feel secure in this regard. This is the report I have received from AECL. Despite the failure of the Nova Scotian plant at Glace Bay, Canada has been fortunate in being able to purchase 187 tons of heavy water from Sweden.


An hon. Member:: At $30 a pound.


Leonard Donald Hopkins: I am glad you mentioned the figure. I have not checked it. This is the figure you are giving me, and I do not wish it to be considered as my figure. I do happen to know that if the heavy water had been produced in Canada we would have been able to buy it for $7 less per pound. The consequence of our depending on the people who built the Glace Bay heavy water plant for our source of heavy water is that we are paying over $7 a pound more for heavy water for all our research plants, and for the commitments we have made to such institutions as Ontario Hydro and others using reactors or generators.


An hon. Member:: Shame.
Atomic Energy


Stanley Howard Knowles: Sin no more.


Leonard Donald Hopkins: I should like to point out to the hon. member for Broadview that it seems to me every time there is a labour settlement with Atomic Energy of Canada Limited his party seems to like to take full credit for all the negotiations and for all the increases the employees receive. Well, Atomic Energy of Canada Limited employees have been receiving their increases from Liberal governments in this country and they owe the birth of that industry to a Liberal government. I think this should be placed on the record and remembered very well by hon. gentlemen.
As late as three weeks ago, the personnel working on behalf of this Liberal government made a settlement with 600 people, mostly tradesmen, at Atomic Energy of Canada Limited at Chalk River. There are still other negotiations to be completed but I believe they are progressing very well. So, I just wish to place on the record, on behalf of my colleagues on this side of the House, the fact that it is not always the NDP which does the major part of the work for labour.


The Acting Speaker (Mr. Richard):: Order, please. I do not like to interrupt the speech of the hon. member but we are a little far away from Taiwan.


An hon. Member:: But he is telling the truth.


Leonard Donald Hopkins: Geographically, Mr. Speaker, and possibly even verbally, we are away from Taiwan. I think, however, that we should consider the historic perspective of this whole program of atomic energy in Canada because I do not think hon. members opposite have done all their homework, nor do I pretend to have done all mine.


Stanley Howard Knowles: That is obvious.


Leonard Donald Hopkins: Historically, Canada's position as one of the five most advanced nations in atomic energy development may be said to have had its origins in the discovery and exploitation of uranium deposits for the production of radium in the 1930's. The switch during the war to interest in uranium for nuclear weapons development, concurrently with the need for a base for the British atomic energy research program, brought Canada into the tripartite council with the UK and the United States. Moreover, French scientists, who had pioneered the idea of the heavy water natural uranium chain reactor, were working with the UK team. Canada undertook, jointly with them, to develop the heavy water reactor for the production of plutonium. Based on pilot experiments with the ZEEP, a zero energy pile which started operating at Chalk River, Ontario, in 1945, the adjacent NRX reactor was built and came into operation in 1947. It was so successful that in 1949-50 both the United States program of giant heavy water production reactors at Savannah River and the combined research and production reactor, NRU, at Chalk River, were committed.
To conduct the growing program of atomic energy research and development involving reactor construction and operation and the production of isotopes, the Crown


Atomic Energy
company, Atomic Energy of Canada Limited, was formed in 1952 to take over the research from the National Research Council and the radioisotope business from a sister Crown company, Eldorado Mining and Refining (1944) Limited.
The direct cost of the NRX reactor did not exceed $10 million. The NRU reactor, completed in 1957, cost $58 million but earned a revenue of more than $30 million from the sale of plutonium to the U.S.A. Since 1951 these two main reactors at Chalk River have also produced radio-cobalt-cobalt-60-and other isotopes for commercial sales and use in cancer therapy units, and in irradiators for sterilizing packaged medical supplies and other purposes.


An hon. Member:: How much of it is going to Taiwan?


Leonard Donald Hopkins: The Canadian isotope production business has increased from about $500,000 in 1952 to a sales volume of more than $10 million per year. Research and development have grown from prime interest in nuclear physics, chemistry and biology to embrace basic materials research and large-scale engineering for nuclear power.
Canada's development of a distinct line of highly economical nuclear power reactors has now reached the stage of initial commercial acceptance by electric utilities. This has been achieved in spite of the fact that our expenditures for nuclear power development have been very modest compared with those of the U.S.A., U.S.S.R., U.K., France, and now Western Germany and Japan. Much benefit has been derived from technical collaboration with the U.S.A. and U.K. Similar collaboration is being established with France. Since 1955 there has been successful collaboration with India which has led to the operation since 1961, near Bombay, of the CIRUS reactor similar to NRX and to a sequence of Canadian-designed power reactors of 200 megawatt electrical rating now under construction.
The total employment roll of Atomic Energy of Canada Limited has risen from 1,396 at its formation in 1952 to 4,685 in 1970-not a bad employment record in spite of the remarks of the hon. member for Broadview who said more employment should have been brought about by this particular industry. A more extensive history has been published under the title "Canada's Nuclear Story," by Wilfrid Eggleston.
In conclusion, Mr. Speaker, Canada's position so far as heavy water is concerned would be much better if the Nova Scotia government had hired expertise from the scientific community of Atomic Energy of Canada instead of running off to the U.S. to hire someone else. But today, with Atomic Energy officials looking into the heavy water plant at Glace Bay to see whether it can be repaired or salvaged in any way, I am sure that production of heavy water in Canada is now in far more capable hands.


The Acting Speaker (Mr. Richard):: I wish to advise the hon. member that having travelled from Chalk River to
Nova Scotia to France, the United Kingdom, Germany and Italy, we never did get to Taiwan.


Roderick J. (Rod) Thomson: Mr. Speaker, I wish I had known earlier that this topic was coming up for consideration today because I have some quite definite feelings on it. I would like first to comment on the remarks of the hon. member for Renfrew North (Mr. Hopkins). He suggested that the Leader of the Opposition (Mr. Stanfield), when he was Premier of Nova Scotia, made some serious errors in regard to the heavy water plant at Glace Bay. That is quite obvious, and probably no one regrets it more than the Leader of the Opposition.


Mr. McBride:: There is small comfort in that.


Roderick J. (Rod) Thomson: But there is one thing that I think should be mentioned relating to our export sales, to the fact that we do not produce heavy water to accompany any possible sales of plant that we make abroad and to the difficulty we have acquiring enough heavy water for our own use. It is the fact that Atomic Energy of Canada Limited cannot be absolved of all responsibility in regard to the Glace Bay plant. When Atomic Energy signed a contract with the government of Nova Scotia it should have made certain that the production methods at Glace Bay were of a satisfactory nature. To my knowledge this was never thoroughly checked out by Atomic Energy. If it did not do so, why did it sign the contract on behalf of the federal government? This is a point that should be emphasized.
But, Mr. Speaker, all that is in the past. We want to concern ourselves now with the production of atomic energy in Canada and with sales of plant abroad. We would like to know more about sales abroad; this is the purpose of the motion. Are we going to be able to sell more atomic energy plants abroad? I have visited two atomic energy plants in Canada, the Pickering plant where one unit is completed or practically completed, with three more units under construction, and the prototype plant at Gentilly, Quebec. As a result, I cannot help feeling that the government should have got the lead out sooner with regard to new ideas in the scientific field covering new methods of producing atomic energy.
I was impressed with one of the new ideas being used at Gentilly. One of the main criticisms of the CANDU operation is its high capital cost. The plant at Gentilly is reducing considerably its capitals cost in the sense of boiling light water for steam instead of using heavy water. When one considers that heavy water costs $30 per pound you realize this will reduce the plant's costs and it also cuts out the costs of a heater changer. The plant does not have to worry about losing heavy water at $30 per pound, because what does it matter if it loses only a little ordinary light water. I may be speaking without proof that the plant at Gentilly is going to work. But if I were in the market for an atomic energy plant I would hesitate about purchasing an installation such as the one at Pickering. I would look seriously at the prototype plant in Gentilly because I believe it has good possibilities.



It has been said that capital costs involved in the production of atomic energy are too high. I would point out that these days the costs of producing energy in all fields are going up. When costs in these other fields rise, atomic energy will come into its own. Mention was also made of the late C. D. Howe. I suggest that the present government is not approaching the production of atomic energy, and many other things, with the enthusiasm that Mr. Howe displayed. I believe that if Mr. Howe had had an opportunity to collaborate with Japan in producing enriched uranium he would already have talked Japan into a contract. The present government has not made that progress. Further, if we hedged our bets a little by producing something which we do not use in our own atomic energy plants, if later on we decided that our type of production of atomic energy is not the best we could change, particularly if we had an enriched uranium plant in Canada.
There are one or two other items I would also like to mention. Just the other day I read that an American experimental group is producing energy from hydrogen. This is a new concept and one which we may use in the future. There is no radioactive waste in connection with this production. If we are to keep up to date in producing atomic energy, I feel we must invest more money in research. I compliment the hon. member for Renfrew North for recognizing this fact, but part of the problem in any scientific project is paying the development costs. If we have only two or three plants, the development costs are high compared with the cost of the plants themselves. If we could sell 10 or 15 plants, obviously the cost would come down. If we had 15 plants for sale we could afford to invest more money in research. It is a cycle that would logically grow. First of all, however, we have to sow the seed and have some faith.
* (5:40 p.m.)
I commend the government for the faith they have had in moving into some of these fields. I feel they could have done much more in developing new ideas and spending more money on research. Employing our own technicians and engineers here in Canada rather than letting them go abroad to do research would be a better arrangement. I wish I were in a position to quote figures in connection with some of the research done in other countries, and the return on the dollar invested.
I am impressed with the general principle that if we want something, atomic energy plants or anything else, we must sow the seeds in research and try out our ideas. In view of the savage competition from abroad, if we demand that some countries pay us in American dollars for atomic energy plants they may well ask themselves: Why not buy plants made in the United States?
We have seen that Britain has tied itself to a tobacco deal with one country, and there is also evidence that in negotiations with Australia other factors are involved in trade which Canada is not willing to consider. If we want to sell for straight cash and not be bothered with any other form of trade, we may have to be prepared to take second place or perhaps not sell at all. I should commend
Atomic Energy
the hon. member for Broadview for initiating this discussion. I feel something more should be done in the committee and in our scientific community, and a lot more should be done in the Department of Energy, Mines and Resources.


Mr. Mac T. McCutcheon (Lambion-Keni):: Mr. Speaker, I thought in this private members' hour we would be debating the production of papers, specifically papers in this particular field. However, in my humble opinion the hon. member for Renfew North (Mr. Hopkins) has turned this hour into one for making a very political speech which, with great respect to him, has no place in private members' hour. This is one of the things the loudmouthed preacher from Renfrew-


Mr. Bell:: He would not know any better.


Maclyn (Mac) Thomas McCutcheon: -should remember, too. He should not let his politics stick out all over the place. I enjoyed the remarks of my friend from Renfrew North-


Murray Arndell McBride: Now you are just being personal.


An hon. Member:: The parsimonious parson.


An hon. Member:: Please keep quiet.


Maclyn (Mac) Thomas McCutcheon: Mr. Speaker, let it be on the record that the former Premier of the province of Nova Scotia is on record in this House as welcoming the construction of the heavy water plant at Glace Bay. He made a statement here that he was very happy and proud about it. What is more, in the last two months he has been optimistic about the rehabilitation of the plant when speaking on television, and we were too.


Murray Arndell McBride: Mr. Speaker, would the hon. member permit a question?


Maclyn (Mac) Thomas McCutcheon: Just as soon as I am through.


Murray Arndell McBride: Is the hon. member aware that there were $42 million of federal money-


An hon. Member:: He said no.


The Acting Speaker (Mr. Richard):: Order, please. The hon. member for Lambton-Kent (Mr. McCutcheon) has the floor.


Maclyn (Mac) Thomas McCutcheon: Thank you, Mr. Speaker. I will only be a minute and when I am finished I will be happy to entertain any intelligent question. The fact remains that we are obviously out of our depth in this big league of atomic energy, and the correspondence no doubt would prove it to this House. That is the purpose of the exercise today, to discuss the production of papers.


Murray Arndell McBride: Would the hon. member permit a question now?


Maclyn (Mac) Thomas McCutcheon: I don't think there is time, Mr. Speaker.


Murray Arndell McBride: He makes charges which he is afraid to substantiate.


Atomic Energy


Mr. Keith Hymmen (Kitchener):: Mr. Speaker, I am very pleased to enter this debate and speak on the motion introduced by the hon. member tor Broadview (Mr. Gilbert). At the outset I would say that I cannot accept the notice of motion as presented, but with other members I appreciate the opportunity to comment on atomic energy, nuclear power and the agreement with the Taiwan government.
In his remarks the hon. member for Broadview mentioned the concern-I believe he said suspicion, but there is concern-about the fact that the Canadian atomic energy program, so eagerly anticipated for different parts of the world, has not as yet met expectations. However, he misquoted the Minister of Energy, Mines and Resources (Mr. Greene) and I should like to set this straight for the record. The minister said that the CANDU reactor, based on the use of natural uranium and heavy water, would stand on its own merits against any other atomic energy system-in our own domestic market. Of course, we have many reactors completed or under construction in Canada: the Rolphton reactor, the one at Douglas Point, Pickering One, Pickering Two, Three and Four are projected, the Gentilly reactor and the Bruce reactors One, Two, Three and Four which are projected in the future.
I want to make it quite clear that the minister was very definite in his statement regarding our domestic market. Of course, in the international market many factors can be involved. We are all aware of the recent discovery of uranium ore in Australia. Of course, our government thought that this would assist us in our discussions and anticipations regarding reactors for Australia. Unfortunately, the British nuclear power group has offered to share with Australia its program on the manufacture of uranium.
There is no question that the CANDU reactor's capital cost is higher, but the operating cost and the differential in price between natural and enriched uranium can play an important part in operating expenses for any power reactor. Of course, the Minister of Energy, Mines and Resources says that he is not fixed to the CANDU program. In a speech he made, or at his press conference in Japan last December he suggested it was possible that some capital assistance could be obtained from countries of the Pacific rim to develop a plant for the enrichment of uranium in Canada. I think we have to consider all these factors in regard to the potentiality of our role in nuclear energy in the world.
I now wish to make a few general remarks about the Taiwan contract. I think the hon. member for Broadview and other hon. members would be interested to know that the contract for the reactor was signed in September, 1969. It is not a power reactor, but a research reactor.


John Gilbert: That is what my motion talks about.


Kieth Reinhardt Hymmen: The hon. member did not say that, I submit. As I say, this is a research reactor. The hon. member failed to stress that point in his remarks.


An hon. Member:: Shame.


Kieth Reinhardt Hymmen: The hon. member talked about the failures of the Liberal government. Once in a while I think
we want to hear about some successes.


John Gilbert: So do we.


Kieth Reinhardt Hymmen: It is nice to hear of the successes of various organizations and agencies serving this country under a Liberal government. The reactor in question is a research reactor similar to the one at Chalk River. It is intended to produce cobalt-60, one of the discoveries of Canadian nuclear research scientists.
May I at this point refer to the first report of the Senate Special Committee on Science Policy, volume 1 of which criticizes considerably Canada's efforts in the field of nuclear energy. It completely ignores the fact that the heavy water and research program carried on at Chalk River resulted in cobalt-60, one of the important discoveries in the treatment of cancer. As a result, people suffering from cancer can be treated in our own country and can be so treated in the republic of Taiwan. Instead of always talking abour our failures, hon. members ought to recognize that this is one of our successes.


Some hon. Members:: Hear, hear!


Kieth Reinhardt Hymmen: The total cost of this project in Taiwan is approximately $35 million, the Canadian content of which will be some $28 million. It is a 100 per cent commercial contract, with no lending arrangements or other special financial considerations. Atomic Energy of Canada Limited is the prime contractor. Most of the Canadian content will be provided by Canadian firms in the form of engineering services, fuel and project management. Construction began at the site in 1970 and is going ahead well, and there is every indication that the project will be completed by 1973. I know that hon. members will be interested to know that the Taiwan authorities agreed to accept the application of the safeguard system of the international atomic energy agency to ensure that the reactor is used for peaceful purposes only.
The Taiwan research reactor, as my colleague said, is a development of the NRX reactor that was first started in Chalk River in 1947 and has twice been rebuilt since that time. Capitalizing on and benefiting from the experience with our NRX reactor, the Taiwan research reactor is a highly sophisticated research and development reactor and was selected by the Taiwan Atomic Energy Commission after much careful consideration of the various research reactors available in the world. It is similar to the CIRUS reactor, originally called the Canada/India Reactor, or CIR, at Trombay, near Bombay, India. This reactor, completed in 1961, was based on the NRX design. Its success and contribution to the Indian atomic energy program undoubtedly influenced the Taiwan decision in favour of a Canadian reactor.
Atomic Energy of Canada Limited hopes, and indeed expects, to market its reactor elsewhere. Roumania has shown serious interest in acquiring one of these NRX reactors for its national atomic energy program.



Roumanian interest was sparked by the integrated nuclear program of India, with its heavy water research reactor and a series of heavy water power reactors starting with the two emits in Rajasthan which are modelled on the design of the Canada, Douglas Point, nuclear power reactor.
Other countries interested in natural uranium-fueled power reactors recognize the merits of the NRX reactor and are potential customers. International bidding for large and expensive items of equipment is intense and contenders, for good reason, do not show any more of their cards than is absolutely necessary. When a job has been obtained it is normal for the total price to be divulged and, possibly, the value of some of the components.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Right Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills: An act to amend the Export Development Act An act to amend the Farm Improvement Loans Act. the Small Businesses Loans Act, and the Fisheries Improvement Loans Act An act to implement an agreement for the avoidance of double taxation with respect to income tax between Canada and Jamaica
An act respecting the Electoral Boundaries Readjustment Act An act respecting the Electoral Boundaries Readjustment Act An act respecting the Electoral Boundaries Readjustment Act An act respecting the Electoral Boundaries Readjustment Act An act respecting the Electoral Boundaries Readjustment Act An act to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system and Air Canada for the period from the 1st day of January, 1970, to the 30th day of June, 1971, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and certain debentures to be issued by Air Canada.
At 6.10 p.m. the House took recess.

AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration in committee of Bill C-225, to amend the Income Tax Act and to amend an act
Income Tax Act
to amend that act-Mr. Benson-Mr. Richard in the chair.
On clause I-Deemed capital cost of certain property.
John Stratford Burton: Mr. Chairman, I see that my comments just before five o'clock failed to induce the Minister of Finance or his parliamentary secretary to rise and deal with some of the points which were raised on second reading.
I believe it is one of the functions of the committee of the whole to consider the points which have been raised in debate in a realistic and honest fashion, and I hope a statement will be forthcoming from spokesmen on the government side of the House dealing with some of the observations which have been made concerning cost allowances. In an effort to bring the parliamentary secretary to his feet, I should like to address a question to him at this point. Possibly this was reported at some point and I overlooked it. Could I be informed how much the government expects to lose in revenue through the application of this provision? At the same time, while it is not immediately relevant to the clause under consideration, could the committee have figures with respect to the gain in revenue that will be achieved as a result of the extension of the 3 per cent surtax on both individual income tax and corporation tax for the year 1971?


Mr. Mahoney:: Mr. Chairman, with regard to the first question, this was dealt with in the speech on second reading. It is estimated that the manufacturing and processing enterprises which are likely to be able to take advantage of this incentive undertake some $3 billion worth of capital investment annually. This would entitle them to claim extra capital cost allowance over the fifetime of the assets in the sum of $450 million. It is expected that for the fiscal year 1971-72 the cost of this incentive to the treasury will be $25 million.
With regard to the second question, which relates to clause 2, it is my understanding that the estimated revenue from the 3 per cent surtax for the current year would be $240 million.


John Stratford Burton: I wonder whether the minister would make further comments about some of the observations that have been made about the capital cost allowance program as it is proposed in this clause.


Patrick Morgan Mahoney: Mr. Chairman, if it will please the committee, and particularly the hon. member, I will do so. In his comments immediately prior to private members' hour he invited discussion of the government's assessment of the efficacy of the measure proposed in clause 1 of this bill. He also remarked during second reading that I had been the only government member to speak on the bill as I had introduced second reading on behalf of my minister.
In reply to the latter point, I suggest to the hon. member that he would not, I am sure, have made that point had his parliamentary duties required him to attend in the House and listen attentively to the entire


Income Tax Act
debate, as I did. Had he done so he would have recognized that except in a couple ol rare instances the debate did not deal specifically with Bill C-225 but, rather, was of a general nature which really continued the six-day budget debate for a further period, three days so far. Government members participated fully in the six-day budget debate. Being no doubt respectful of the rules of this chamber, and being in accord with the government's economic policies in general and those reflected in this bill in particular, they feel no compulsion to join in extending the budget debate beyond the six days that the Standing Orders provide and which the House had completed prior to the introduction of this bill.
I am here ready, willing and able to deal with specific questions regarding this bill, including those that the hon. member alleges were posed during the second reading debate, although if there were many of them they must have escaped me in spite of my attentiveness. The government is confident that the measure proposed in clause 1 will be an effective incentive for the rather specific purpose for which it is designed, namely, the encouragement of capital investment in new manufacturing and processing facilities. This in turn will have a direct, positive effect in terms of increased employment.
Since the measure will apply to capital expenditures made between December 4, 1970, and March 31, 1972, it is not possible to assess the impact of the proposals with precision at this time, and it will not be possible to do so until after the income tax returns of businesses taking advantage of the incentive have been filed for the taxation years ending between December 4 last and March 31, 1972. What is certain is that the direct effect of the 115 per cent capital cost allowance base on the cash flow of qualifying taxpayers constitutes a very real and significant incentive when taken into account with the cost of financing capital expenditures. Its exact value to a given taxpayer will depend on a number of factors, including depreciation class, interest rates, term of borrowing and so on. Inquiries concerning the proposal, as well as announced capital expenditure intentions, confirm the government's assessment of the value of the incentive.
I might say that I took the opportunity during the dinner hour to review the hon. member's speech on second reading on March 3. I found none of the specifics that he alleged earlier today in his speech. There was a specific in the speech of the hon. member for Edmonton West, who was concerned that the 115 per cent base would be available only for prescribed property not previously used for any purpose whatever. That is precisely the intention, to inspire new plant and facilities, and we make no apology for it.
I commend clause 1 to the committee. If the hon. member has any specific questions relevant to the clause I shall be pleased to hear them and to have an opportunity to respond to them.


Robert Lorne Stanfield: Mr. Chairman, perhaps the parliamentary secretary could clarify one matter that has puzzled me a little. I refer to the incentive to encourage enterprises to decide to move forward investment decisions; I
presume that is the purpose of the measure. I am a little puzzled as to the appropriateness of this provision by itself, in view of the forecast of business investment for 1972 received by the Economic Council of Canada, which showed quite a dismal expectation for that year. If the effect of this provision is to encourage enterprises to make investments in 1971 and as far as April 1, 1972, which they would otherwise have made in the year 1972, then it looks like a pretty feeble effort in view of the anticipated investments reported to the Economic Council.


Mr. Basford:: They were made before this bill.


Robert Lorne Stanfield: Yes, they were. I would be happy to engage in a debate with the Minister of Consumer and Corporate Affairs who, if he is not careful, may become Minister of Finance himself one day. My point is that since the purpose of the measure seems to be to move forward investment decisions, if the investments to be moved forward are very insubstantial in any event then surely the Parliamentary Secretary to the Minister of Finance ought to present to this committee some more substantial stimulus in view of the very weak expectations reported to to the Economic Council for 1972 through to 1975.


Edgar John Benson: Mr. Chairman, may I simply say that the forecasts of business expenditures have been out in the past, as my hon. friend has seen for himself today. Last year people were saying that it was a terrible year, whereas the increase in capital expenditures in Canada was 8 per cent, much above what was expected by the Dominion Bureau of Statistics. If we are talking about creating jobs now by means of this kind of incentive and one can write off 15 per cent beyond the cost of a particular asset, I suggest this is certainly a great incentive to moving the installation of that asset back into 1971 as compared with, say, 1972 and 1973. I am not at all worried about the economic forecasts in 1972 and 1973.
I think the economy of Canada is moving upwards and I think it will continue to move upward in spite of the great concern the Leader of the Opposition has expressed. He realizes that this is the case; he knows the economy will move upward in 1971 and through 1972. He knows that is why we are including this particular incentive at this time. In the over-all picture it will mean that a lot of assets will be put in place in the fiscal year 1971-72 which would not otherwise be in existence, in that time.


Some hon. Members:: Hear, hear!


Edgar John Benson: Mr. Chairman, this is exactly what we want to do: we want people to move their capital expenditure programs forward in order that we can create jobs as soon as possible without creating inflation. My hon. friend has talked a great deal lately, even during the question period today, about what is and what is not happening. This kind of program represents an incentive



which businessmen really understand. They understand that when they are investing in their assets the most important thing to them is the cash flow, how much they can write off and the amount of capital available to them and when. I maintain this is a very strong incentive in respect of the movement forward of capital expenditures into the current fiscal year instead of putting them off until the fiscal year 1972-73.
I would simply like to say again that I am not worried about what will happen in 1972-73, although I know this is important to my hon. friend because there might be an election about that time. I think the Canadian economy is moving upward. I am sure it will continue to do so. This will create jobs, and we want jobs as fast as we can get them.


Gerald William Baldwin: It is not fast enough.


Robert Lorne Stanfield: Mr. Chairman, I was not really asking the minister whether he was worried about investment expectations in 1972-73, because it is quite irrelevant whether he is worried. The fact is that the most accurate and most reasonable indication we have had is that investment in 1972-73, on the basis of the present policies of the government, will be poor. I suggest that the minister should try to move forward in another way rather than following this weak method. He ought to be encouraging expansion in the next few years instead of simply attempting to move forward the investments which have been forecast.
I have made many suggestions to the hon. minister, to which he has paid no heed at all, as to what he might do to stimulate economic growth and investment confidence in this country. Whether the minister is worried, and regardless of the forecast he has made, I would be less than honest if I did not take this opportunity to say I have no more confidence in his forecast today than I had in his forecast in 1968. At that time he forecast a surplus, and we ended up with a deficit of about $700 million.


Edgar John Benson: In answer to that, Mr. Chairman, I should like to say that I have no more confidence in the Leader of the Opposition than I had when he went into Deuterium of Canada Limited. I simply say that the economy is moving upward. This bothers the Leader of the Opposition. He has been running all over the country talking about an election in 1971. He has suggested that we have to call an election now because he knows things are going to be good in 1972. He does not want to see the economy move upward: this is because of political reasons and nothing else. I believe that the Canadian economy will move forward and upward. I believe that in the fiscal year 1971-72 we will find a decline in seasonally adjusted unemployment. I am sure we will also find an increase in the gross national product. People outside this country forecast a much greater increase than I forecast in my budget speech in December. We will also find an increase in productivity in Canada.
I can understand how this upsets the Leader of the Opposition. He really has had a very tough time. He wants to upset everybody in Canada by suggesting that we are not doing things for 1971. All the time in the House of
Income Tax Act
Commons he suggests that we should be creating more jobs now. He suggests the Minister of Finance should be worried about creating jobs in 1972-73 but should not be worried about creating jobs at this stage. I suggest that a government which is responsible must be worried about creating jobs now. A responsible government must be concerned about moving forward, as this government is now doing, with a sound economic policy for Canada. Such a government must adopt a policy to increase the number of jobs, increase the gross national product and decrease unemployment in the economy without undue inflation.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I should like to reply to the Minister of Finance. I am not surprised that the country is in the state it is now, in view of the way the minister has attempted to twist what I have said into the suggestion that I am concerned only about unemployment in 1971. What I am saying is that the measures being put forth by the minister are inadequate to sufficiently stimulate employment in 1971. His suggestion that I am worried is irrelevant. The fact is that there are about 750,000 unemployed people today as a result of the government's inflationary policy.
I am surprised that the minister would play politics with an issue as important as this. I suggest to him that it is not adequate to provide an incentive designed to move investment forward in 1972-73 to 1971. This is particularly true when the forecast by the Economic Council of Canada is so dismal in respect of these years. What the minister ought to be doing is listening to someone other than himself. He should be attempting to stimulate investment generally, rather than relying on a forward movement in the coming fiscal year. He is thinking in terms of investment which has already proved to be inadequate. Instead of this mockery in which he is engaging he should be stimulating sound investment during 1971-72 and 1973. I am suggesting that his policies are inadequate to create employment in 1971. I have tried to explain to him why his policies are inadequate, but he does not seem to understand.


Edgar John Benson: Mr. Chairman, I am sorry that the Leader of the Opposition has brought politics into this debate. I suppose the place for politics is the House of Commons. I believe that the policies developed by this government are the best possible. I am sure it upsets the Leader of the Opposition that we are overcoming inflation to a large degree. He never really overcame inflation or unemployment in his province. I like to think back on his speeches last year in which he talked about inflation. I recall his colleague, the hon. member for Prince Edward Hastings, standing up and saying that a .5 per cent monthly increase means we will experience a 6 per cent inflation ratio during the year. This is the sort of thing I heard said a year ago. I am sure the Leader of the Opposition is very upset about the successful developments in the economic situation.


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Robert Lorne Stanfield: I am very upset about the unemployment situation.


Edgar John Benson: The hon. member did nothing about the unemployment situation in Nova Scotia when he was Premier. He is responsible tor starting that province in the direction of a serious debt position. That province will And it very difficult to recover from that situation. In spite of his experience with Deuterium of Canada, he stands up now and says that we should stimulate the economy. How to stimulate the economy at this particular time is really a matter of judgment. We have moved through a period in which the economy has bottomed out and started moving upward. We have done much better in this regard than our neighbours to the south. We have had less increase in unemployment. We have had an increase in our gross national product, whereas theirs has declined; and we have had a price performance which is almost twice as good as that of the United States.
I do not know how much the Leader of the Opposition would expect the Canadian economy to achieve. I would say, however, we are looking forward in Canada-and indeed economists throughout the world and those in Canada say we are looking forward-to a basic growth in our economy. The one thing we must worry about, which I consider to be a very serious matter, is that we do not get back onto an inflationary spiral in this country. The economy is moving upward and is doing much better than any other economy in the western world.


Eldon Mattison Woolliams: Don't give us that.


Edgar John Benson: Mr. Chairman, I challenge the Leader of the Opposition to read the reports by independent economists, including a report in Business Week a couple of weeks ago which said we are miles ahead of what is happening in the United States, to look at what is happening to the Canadian economy and see if he can say we have not moved through this difficult period, a period which really started about 10 years ago when we moved through an expansionary period in Canada, when we got rid of the last Tory government and moved through a very dangerous inflationary period in Canada.


The Deputy Chairman:: Order. I hesitate to interrupt the Minister of Finance, but we are getting a little away from the subject of the bill. We are talking about things which are not covered by the bill. However, perhaps the House wishes to hear more of the same.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Go ahead; finish.


Eldon Mattison Woolliams: Even one of your own chairmen cannot take it.


Edgar John Benson: Mr. Chairman, I really do not want to speak at length on this because we discussed the economic situation in Canada during the budget debate. I think the economic situation in Canada looks very favourable. I
can understand that this upsets the Leader of the Opposition. If I were sitting over there it would upset me too. We have had very great problems in Canada which we had to overcome.
The situation in Canada in respect of the United States has been very favourable through the current period in moving through very high inflation which caused all kinds of difficulties to all the people in Canada, not just the unemployed but everybody who is working in Canada and particularly those people who do not have the power to force their demands upon the Canadian economy. I think we have moved through it reasonably well and are looking toward a period of expansion. I can understand why it upsets the Leader of the Opposition. I sympathize with his position, but nevertheless this is happening in this country and I have not heard him deny it.
Mr. Chairman, I should like to ask the Leader of the Opposition, if we were to accept all his suggestions and inject another billion dollars into the Canadian economy this year, what would he be saying 18 months from now when inflation in this country would be away ahead of inflation in other countries and we would be unable to compete in the export markets and carry on with the relatively easy prices we want to achieve in Canada?


Gérald Laniel: I recognize the Leader of the Opposition once more, and after that I think we should go on to another member.


Robert Lorne Stanfield: Mr. Chairman, I wish to say something that is relevant to the bill. As I did when I started, let me say that when the minister talks about my being concerned, I am very concerned about the unemployment that exists. I am very concerned about the inadequacy of the measures proposed in this bill. I am concerned about the increase in taxation, which is a step in the opposite direction to that which the opposition proposes at the present time. I am concerned that the clause with which we are dealing is very inadequate for the purpose for which it is designed.
The minister can talk all he likes about his confidence, his forecasts or anything else, but the fact is that there are some 750,000 people out of work. He says this figure is moving down. I say as I said before, that I see no forecasts by independent economists this year which indicate any expectation of growth based upon the present policies and which would cut into unemployment to any degree. I am not talking about unemployment moving down as summer approaches; I am talking about unemployment seasonally adjusted.
The minister cannot point to any prediction by any independent economist that any growth forecast this year will cut into unemployment to any extent. We read a statement made yesterday by the chairman of one of his own commissions to this effect. I urge the minister not to be so stubborn, to listen to advice that is being given to him by others and recognize that the measures he is taking will not in fact reduce unemployment this year.
He spoke a few minutes ago about the measures I propose as being inflationary. One day he says these



measures are inflationary and the next day he says they are not. I say to the minister there is no reason to believe the kind of tax reduction I have proposed would be inflationary in the present circumstances. The minister admitted the other day in the House that he was not making that complaint. Now he has reversed himself and is arguing that it is inflationary.
Dealing specifically with the bill, I say that this provision is directly opposite to what is required today; it is a deterrent to expansion. This measure is inadequate. One reason in particular it is inadequate is that investment forecasts for 1971, 1972 and 1973 are too weak in any event, and there is not in this measure any encouragement to investment.


Mr. Barneti:: Mr. Chairman, I am not rising to attempt to say whether the Minister of Finance or the Leader of the Opposition has the greatest cause to be worried. I am inclined to agree, as the Leader of the Opposition has indicated, that by the vigour of his rhetoric the Minister of Finance at least sounded a bit worried. I suggest to the minister that we consider the politics-as I understood him to use that word a few minutes ago-of the particular clause which is before us. I was a little amazed at the argument the minister advanced in supporting what he sees as the merits of this provision, because he launched into a rather windy dissertation on the causes of unemployment and what one should do to correct it.
I could have understood it if the minister had stood up in the House and suggested that in his view this capital cost allowance arrangement was designed to increase the long-term efficiency of the industrial machine of Canada by encouraging firms to invest in modernized equipment. This would have made political and economic sense. But if the minister is going to argue that it will help cope with the current unemployment situation and will have the effect of reducing unemployment, I would like him to bring some cold, hard statistics and facts before the committee to bolster and verify his argument.
My own observation is that the immediate result of the introduction of new machinery into plants is a reduction in the level of the work force required in a particular form of production. As a matter of fact, unless the minister can prove otherwise, this is almost axiomatic. There may be a long-term effect in the stimulation of the economy that over a period of time will lead to a total increase in the level of economic activity and which will have a beneficial impact in respect of the numbers of people required in the work force, but that was not the basis of the minister's argument.
The minister was trying to tell the committee that this clause would have an immediate beneficial effect on the unemployment picture. He could argue that there would be more employment in construction, but if he wants the House to give serious consideration to his proposal he should say exactly what he means. He should say how much this will improve employment, and in what sector of the work force, for how long it will improve it and what will be the net result in relation to construction
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activity as compared with the reduction, if any, that will take place in the production work force.
To give an example of what I have in mind, Mr. Chairman, I remember that we had a discussion on this very point when the President of the Privy Council first made the announcement in the House about the decision to construct the heavy water plant at Glace Bay, Nova Scotia. I asked him questions on this very subject. He had made a statement to the effect that it would be a great stimulation to employment in that area of Nova Scotia. But when some of us tried to pin him down, we discovered that while there might be a very temporary increase in the number of employed, the actual number of permanent jobs to be created by that project would be very small.
Rather than taking off into flights of fancy about what this clause will do in relieving unemployment, it seems to me the Minister of Finance should analyse the effects of his proposal, for the benefit of the committee, in such a way that those of us who are prepared to give it serious consideration on its political and economic merits would have some grounds to go on.


Donald MacInnis: Mr. Chairman, I rise because of references that have been made to a matter which is of great concern to me, to many Nova Scotians and to Cape Bretoners in particular. First of all, I take strong exception to the remarks of the Minister of Finance suggesting that the Leader of the Opposition said the minister should not be interesting himself in creating jobs. In suggesting that the Leader of the Opposition said he, the Minister of Finance, should not worry himself about creating jobs, the Minister of Finance reached far overboard to accuse the Leader of the Opposition of something he did not say.
The Minister of Finance has brought the question of Deuterium into the debate this evening. I am concerned about the effect of those remarks and about the sniping that has been carried on by the preacher from Renfrew who does not know anything about what he is talking about, whether it be about heavy water or about his own constituency-


Murray Arndell McBride: Read the record.


Donald MacInnis: I will give you something to read. If you want to read the record, read it tomorrow morning. I am very concerned about the attitude taken on the other side of the House, with the government's remarks more or less pointing in the direction that the heavy water plant at Glace Bay may not be rehabilitated. I am sorry to say this is the interpretation I have taken from their remarks. I hope I am wrong. Recently the government made a considerable amount of money available for further study of the project, and there is no question that the Premier of Nova Scotia at every possible opportunity has expressed the hope that the plant will go on.


Edgar John Benson: So do I.


Donald MacInnis: I am glad to hear the minister say that. I will repeat that he said, "So do I."


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Edgar John Benson: I hope we can afford it.


Donald MacInnis: The minister has made another crack, which I won't try to interpret, about Nova Scotia not being able to afford it. I wonder what consideration the government of the day gave to what Nova Scotia could afford when it pushed that province into a position which it did not want to occupy. I will give the minister a few facts which he can check out. I say that the federal government at that time pushed the province of Nova Scotia into an investment far above what it first intended, when it insisted at the time the heavy water plant was being initiated as a result of the efforts of the Nova Scotia government-


Mr. Gibson:: Mr. Chairman-


Donald MacInnis: Sit down.


Colin David Gibson: Mr. Chairman, I submit that the remarks being made by the hon. member are completely out of order in that they do not relate to the bill. I submit that his remarks are diverging from the point of the debate and are irrelevant, and that he should be brought to order.


Donald MacInnis: Mr. Chairman-


Jean-Thomas Richard: Order. I do not think the hon. member has a point of order, although I am still waiting for the hon. member for Cape Breton-East Richmond to indicate how he relates these remarks to the clause in question.


Donald MacInnis: Mr. Chairman, dealing with the point of order, I submit that the hon. member for Hamilton-Wentworth should go home and dry behind his ears. So far as the basis on which I am making these remarks is concerned, I have taken my precedent from the fact that the Minister of Finance on many occasions this evening referred to the deuterium plant at Glace Bay.
I have stated that the federal government pushed the Nova Scotia government into an investment far above that which it intended, when the federal government insisted upon 51 per cent ownership. One of these days I wiff tell the complete story. I suggest that the Minister of Finance look back at who took the credit for the heavy water plant. I would remind him that it was the then minister of industry, Mr. Drury, and the then Minister of Labour, Mr. MacEachen, in a joint statement, one in Ottawa and the other in Halifax, who laid claim to bringing that plant to Nova Scotia.
If he wants more proof he can look into the record at a question asked by the then hon. member for Halifax, now the Premier of Nova Scotia, when he stood up in this House of Commons and asked the then Minister of Labour whether he would continue the same type of representations that brought the heavy water plant to Glace Bay. I say the record is quite clear. They claimed credit at that time when it appeared to be a very sound investment, and I still say it is sound.
[Mr. Maclnnis.)
What has happened there is technical. It is a difficulty which I am sure the engineers can correct, given the proper opportunity to do so. But the record shows that it was the then minister of industry, who is now the President of the Treasury Board, and the then Minister of Labour, who is now President of the Privy Council, who claimed credit for this, as well as the premier of the province of Nova Scotia who is on the record as having given full credit to the then Minister of Labour for bringing this plant to Nova Scotia. Furthermore, it is on the record of the House that the then Minister of Labour, who also represents the province of Nova Scotia, took full credit for the fact that there will be 2,000 jobs involved in the construction of this plant.
I am telling the Minister of Finance that this is only part of the story, and if I get into the details of it I will give him a few more shocks. It is within the power of the government to correct the mistake with which they have burdened the Nova Scotia government, whereby the province is in the position of trying to finance something which, as the minister said, is above their means. This they did at the insistence of the federal government of the day. The record is clear. I ask any member on the other side of the House who would like to contradict me to stand up now and tell me that I cannot produce from the records of this House the claims made at that time by the then minister of industry, the then Minister of Labour and the present premier of Nova Scotia. They are all on record as claiming the credit. Now let us see them go ahead and bring about what I want to see in Glace Bay.
The minister need not point the finger any more, because there is a great deal of responsibility over there. The minister might want to refer to the fact that if the plant had not been originally brought into Glace Bay, there is no question that a plant would not have been established in Port Hawkesbury. When it comes to the question of Deuterium of Canada, I could say something about this and thereby tell a tale which the minister would not want recorded in this House. But if he wishes to insist on this point, the minister will do a great disservice, not only to the heavy water industry but to the Atomic Energy Commission of Canada.
The handwriting is on the wall with regard to the remarks made by the Minister of Energy, Mines and Resources. He made his comments in Halifax but then he ran away. He did not want the image of a small town lawyer so he ran away from Renfrew. The question being asked in Renfrew these days is: What is the matter; is Greene yellow? Now we hear reflections from the preacher who knows nothing about the situation.


An hon. Member:: Read the record with regard to Bill C-5. Where were you during the committee hearing?


Donald MacInnis: Where were you when the people of Renfrew were looking for a decision from here?


Some hon. Members:: Oh, oh!


Jean-Thomas Richard: Order, please. I think the hon. member will appreciate that he has made his point.


Donald MacInnis: No, Mr. Chairman, I have not concluded.


Jean-Thomas Richard: This is not the
place to make that point. I think many members have been out of order tonight. It has been entertaining, if nothing else. Some of the remarks made by the hon. member for Cape Breton-East Richmond might well have been made earlier during private members' hour, because the comments he is now making were made at that time. However, I think he has been allowed to make his point and perhaps he should develop it in another debate. At present we are on a very simple clause which, as the hon. member for Comox-Alberni explained a while ago, refers to everything but that which has been mentioned this evening.


Donald MacInnis: May I continue my remarks, which were initiated by the Minister of Finance who was not called to order on this matter?


Jean-Thomas Richard: Order, please. I think the hon. member should be fair to the Chair. I called the Minister of Finance to order, and we have not heard statements of that type since. I think the hon. member has had as much time as the Minister of Finance on this matter.


Donald MacInnis: I rise on a point of order, Mr. Chairman. I should like to deal with the interjection of the hon. member for Renfrew who went on national television not long ago and told the people that he was going to speak to certain ministers and to the Prime Minister, if he could. That gives you an idea of the direction this government is taking under a Prime Minister who cannot even speak to his backbenchers.


Some hon. Members:: Oh, oh!


Jean-Thomas Richard: Order, please.


Murray Arndell McBride: I rise on a question of privilege, Mr. Chairman. What the hon. member has just said is categorically untrue. I did not say on television, nor did I say either inside or outside the House, that I was going to speak to the Prime Minister, if I could.


Donald MacInnis: I apologize to the hon. member for Renfrew. He did not say he was going to speak to the Prime Minister, if he could.


Murray Arndell McBride: I am not the member for Renfew; I am the member for Lanark-Renfrew-Carleton.


Donald MacInnis: Again I apologize, Mr. Chairman; I did not know the hon. member was from Lanark-Renfrew-Carleton. I made a mistake in referring to him as the member for Renfrew. However, did you notice that he himself had trouble in naming his constituency? He staggered over the name.
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Jean-Thomas Richard: Order, please. I would ask the hon. member to co-operate with the Chair. The Chair has been very generous and understanding, which is not in accordance with my Irish temperament. However, I will allow the hon. member to continue.


Donald MacInnis: I have one more remark to make with regard to the concern of the Minister of Finance for the unemployed of this country. I wonder if the Minister of Finance realizes that his government is supporting a board of directors who can pass a bylaw which would violate existing working agreements and contracts. I wonder, also, whether he is aware of the fact that there are about 1,500 miners walking the streets of Cape Breton who receive a cheque every second week amounting to one cent. I have here one dated October 12, and another one made out to the same person, dated October 26, for the sum total of one cent, in other words, half a cent a week. If the Minister of Finance wishes to check this, I will lay these samples on the table for his benefit.


Gerald William Baldwin: Table them.


Donald MacInnis: I will table them for the benefit of the Minister of Finance, to demonstrate the generous approach of this government. This is the retirement allowance for a whole month for one man. If the minister wants to question that further, I can say something more on it. To return to the situation in Glace Bay, where the people of the province, including the Premier, hope that the situation will be corrected and that jobs will be provided, I can only repeat what they ask in Renfrew: Is Greene yellow?


John Stratford Burton: Mr. Chairman, some of the exchanges that we have heard tonight between members of the government and members of the official opposition remind me of two schoolboys who start a dialogue that goes something along these lines, "You are a stinker," followed by "You are a stinker too", followed by "You are a bigger stinker", and on and on it goes.
However, I want to thank the parliamentary secretary for providing an answer to one of my questions tonight when he gave the figure of $450 million as being the total benefit which the government estimated would accue to corporations, for the most part as a result of the extension of capital cost allowances between December 4, 1970, and March 31, 1972. He also pointed out that of this sum, $25 million would be written off, it was estimated, during the 1971-72 fiscal year. The minister also pointed out in answer to my question that it was estimated that the revenue increase as a result of the proposals contained in clause 2 to extend the 3 per cent surtax in 1971 would amount to $240 million. The greater proportion of this $240 million will of course be charged against individuals as they pay their individual income tax, and a portion of it will apply to corporations paying corporation income tax. So when we say the sum approaches $200 million, I am not sure what the exact figure is in terms of the ratio between the two taxes. It will approach $200 million which will be charged to individuals as a result of the changes to be effected under this bill.
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There will also be a net benefit of $450 million to corporations, less the extra amount that they will have to pay in corporate income tax on the other side of the ledger, as a result of this legislation. Thus we see that we have a transfer of benefits as a result of this legislation, Mr. Chairman. Under the proposals contained in clause 1, corporations and business enterprises of this country will achieve a significant saving; they will benefit a great deal. If it could be safely said that this would stimulate the economy and make it healthier, possibly some justification or rationale could be developed to support the government in the proposals we are now considering.
I noted that the parliamentary secretary in his remarks after 1 had asked him some questions shortly after eight o'clock, indicated that he had reviewed my speech of March 3 during the supper hour. I do not know if he had read it before then. However, he seemed to indicate that he did not find too much to comment on in the speech. If that is his view, he is entitled to it. I ought to point out to him, in case he happened to overlook it, that I referred to the impact and some of the consequences that would flow from some of the proposals in this legislation. I draw his attention to the statement to be found near the bottom of the first column on page 3930 of Hansard of March 3, where I said:
There are really two Important consequences which arise out of this which should be noted. The first is that businessmen could accelerate their investment plans or proceed with investment plans that had previously been marginal, both in order to take advantage of the more generous allowance being proposed. Secondly, businessmen who had already made investment plans will receive a windfall gain.
The proposition that such a change in capital cost allowances as is contained in this clause will benefit enterprises which might be considered marginal does, of course, involve some judgment and might be difficult to support in argument one way or the other. I simply advanced it as a point which should be subject to further study. I do not know whether the government has studied this point or whether it has conducted any studies on the consequences of this proposal. The other suggestion was that businessmen could accelerate their investment plans. This may be so. I want to deal with that point later, Mr. Chairman. That, of course, is another point that I feel deserves consideration and further comment by the government.
The other point I raised was with respect to businessmen whose investment plans had already been made. I suggested that they were going to be the beneficiaries, for the most part, of a windfall gain resulting from this change in capital cost allowances. That, of course, is not just my assertion or suggestion; that proposition has been brought forward by reputable people who have given the matter close study. I noted later in my remarks that I felt the proposals presented by the government with respect to the proposed change in capital cost allowances would not have very much impact in 1971; they would not have very much impact right now-and this is the time, of course, when the economy needs stimulation.

I pointed out that there could be some resulting distortions in terms of benefits received as a result of this change in capital cost allowances. I also pointed out that the DBS survey of capital spending intentions for the 200 largest companies in Canada indicates an 11 per cent increase in 1971. That survey was taken before the Minister of Finance made his budget statement. I pointed out that the increases in the manufacturing sector are expected to be rather moderate. That by itself could be used as justification for some policy change, if it would have a beneficial effect on the economy.
I also pointed out that while the over-all change in capital investment in manufacturing be considered rather moderate in impact, there were considerable differences as between various sectors of manufacturing industries. It was noted that the Economic Council of Canada, in its medium term capital investment survey, projects about a 9 per cent increase in 1971 for all industries and some 6.2 per cent in the manufacturing sector. For foods and beverages there is an increase of only 1.2 per cent; for pulp and paper there is a drop of 11.9 per cent; for primary metals, an increase of 40.8 per cent; for chemicals, an increase of only 11.4 per cent; for transportation equipment, a drop of 36.6 per cent; and for others, an increase of 15.7 per cent.
The primary metals industry, which is to experience a 40 per cent increase in its capital expenditures during 1971 as a result of plans made prior to the budget statement of last December 3, will benefit a great deal as a result of these proposals. The pulp and paper industry on the other hand, which is currently suffering from overcapacity, will not receive very much from these proposals. Thus we see a very uneven impact on the economy as a whole resulting from this proposal.
Later, Mr. Chairman, I also noted that a Financial Post survey published in the December 12, 1970, issue suggests that the immediate reaction of companies surveyed was not one of enthusiasm for the proposal of the Minister of Finance. I drew the attention of the House to part of an article in the Financial Post of that day which reads:
Ottawa's policy makers are counting heavily on the budget's extra write-off to spark new capital investment in 1971-but so far industry is reacting coolly to the incentive.
Finance Department officials told Financial Post they expect that the rise in capital cost allowances to 115 per cent will have the biggest economic impact of the various measures proposed.
Industry-to judge by an FP round-up of opinion this week- thinks the incentive will provide "only minor stimulus" to industrial expansion.
That is the view of most makers of pulp and paper, food equipment, plastics, steel, computers and other products canvassed by FP. Only a few companies said Benson's proposal might have any effect on their expansion plans.
I drew the attention of the House to some of the reasons for this situation as pointed out in this Financial Post article. In that connection I read these paragraphs:
But design, land, purchase, and other preliminary activity would take about a year and a half. Construction could probably only be started when Benson's program was ending.
Ironically, companies that had already made expansion decisions but had not yet received machinery or equipment or


taken possession of new buildings will receive an unexpected windfall.
Thus it seems to me that we must consider a serious problem. If the Minister of Finance and his parliamentary secretary have learned anything as a result of their studies, or as a result of their contacts with business and industry, which would counter the propositions put forward in this article we should like to hear them say so. The House and the committee are entitled to hear them because, Mr. Chairman, we are considering a very generous new capital cost allowance to business and industry. We have to make certain that it will achieve the objective hoped for by the government and that in fact it is introduced in an equitable fashion. I think there is little hope for the latter. That is a question we could argue at considerable length: it is a very important matter.
We still have not heard the government's assessment of the situation with respect to its stated objective of stimulating economic growth in Canada. As I indicated earlier, one of the major points we made on second reading was that this proposal would have very little impact at the present time. It will have very little impact during the life of the proposal. It may encourage or stimulate some further activity. However, Mr. Chairman, I suggest the time for economic stimulus is now. There are 668,000 people out of work. When the latest figure is published shortly it will probably be somewhere in the area of 750,000. Most reputable studies indicate that the pick-up in the economy through most of 1971 will be relatively slow. It will be near the end of 1971 before there is any build-up of economic activity. That will be near the end of the period when the benefits will be available.
In his exchange with the Leader of the Opposition earlier, the Minister of Finance expressed his concern about inflation in the future. I wish we had some evidence that his financial proposals are constructive. The proposals contained in this bill are such that they will contribute to any inflationary trends that may develop during 1972. I suggest that we have a quite different consideration. It has been suggested on a number of occasions that the government is not very concerned about economic activity being stepped up quickly at the present time. The government would like to pace it. In fact, the government would not be at all unhappy to see economic activity really begin to build up near the end of 1971 and continue into 1972. The situation in 1972 would then be as suggested earlier by the Minister of Finance. The reasons for this are not only well known to the Minister of Finance but to all members of this House.
If a different course were adopted and there were a tax cut, an increase in exemptions or a changeover to a tax credit system now, this would be of direct benefit to Canadian taxpayers. It would provide the needed stimulus in the economy at the present time-not six months, nine months or a year from now-when the minister would like to see the highest level of pick-up in our economy. We need stimulus now to deal with the problem of the thousands of people out of work. In his earlier
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remarks the minister spoke about the success of the policy of the government. I am sure those words sound very hollow to those out of work at the present time.
In my remarks on second reading I pointed out-the parliamentary secretary seems to have overlooked this- some remarks made by the Minister of Finance in an interview with a reporter of the Monetary Times in September, 1968. He pointed out that he had some doubts about the way the capital cost allowance program was working. It has been stated on a number of occasions that the government is going to review the capital cost allowance program and the manner in which it is working. I do not know what stage that review has reached. There are further features built into this program as a result of the proposals of the government. The government is going to use the capital cost allowance program as a further stimulus. They think this will help the economy, while at the same time they have serious doubts about the entire program. This is a matter of real concern.
There are two other concerns which should be noted. One, which I referred to in my remarks of March 3, is in connection with the regional implications of this program. What effect will it have in terms of regional development in Canada? Is there any co-ordination between our regional development programs? There is now a very high level of assistance to many companies in various parts of Canada to expand their secondary manufacturing and processing facilities. This is of very material benefit to many of these companies.
Serious doubts are being cast on this program at the present time. I do not intend to deal with them now. However, it must be noted that there are implications involved in terms of the proposals presented by the government in this legislation. We need to examine what impact this measure will have on the entire regional development program.
I wish to comment on one further point which deserves consideration. That is the question of the relationship of the government' proposals in this clause to its forthcoming policy on foreign ownership. We presume this will be brought forward within a reasonable time. Has there been any attempt to take account of the government's policy in the coming weeks, months or possibly years, if it drags on that long? I presume that this legislation will be of as much benefit to American and other foreign-owned concerns as to Canadian concerns.


Russell Clayton Honey: Order please. I regret to interrupt the hon. member, but his time has expired.


Mr. Latulippe:: Mr. Chairman, I shall be brief. I have a few questions to ask the Minister of Finance (Mr. Benson).
Why has he forced Canadians into unemployment under the pretext of fighting inflation? If he imposed the 3 per cent tax to control inflation, how come we are told today that inflation has disappeared all of a sudden? Why in the name of economic conditions, is there now a proposal to extend the application of this surtax under


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the pretence that it will allow investments, reduce unemployment and create incentives?
Could the minister explain what is logical in all this?


Edgar John Benson: I very much respect the opinions of the hon. member for Compton. When the government introduced its budget last December it had to make the very serious decision whether it would stimulate the economy through increasing expenditures in selected areas of Canada where unemployment was very high, or whether it should take general measures with regard to a tax reduction. At that time the government decided it must choose to spend money in selected areas rather than make a general, across the board tax reduction.
I appreciate that one is walking a thin line: how much can a government raise from the public in order to carry out its activities? The change in the government's position over the past two years has been remarkable. Whereas the government in 1969-70 was taking net cash out of the economy, we are moving into a position where this year we shall be putting more than $1,500 million into the economy and the figure will run over $2,000 million in 1971-72.
It is a matter of choice. We cannot have it both ways. If the government is to put substantially more into the economy by spending in particular areas, tax levels must continue along the same lines, unless it can both reduce taxes and increase expenditures without causing interest rates to rise or pressure on the dollar to increase.


John Stratford Burton: I wish to put a question to the Minister of Finance having to do with the application of this proposal. It has been suggested that it would be of greater benefit to the Canadian economy if some way could be found whereby the benefits proposed in this clause could be restricted to machinery, equipment and facilities which were manufactured in Canada.
I recognize that this might be of benefit to certain Canadian firms, enabling them to raise their prices in an unnatural way. At the same time, there would be undoubted advantages. I wonder whether the minister gave any thought to means whereby this proposal could be restricted to facilities and equipment made in Canada so as to ensure that the greatest benefit from this proposal, to the extent that there may be any benefit, would accrue to Canada and Canadians.


Edgar John Benson: Certainly the government is interested in having as much of the equipment manufactured in Canada as possible. However, we did not think this particular provision in the Income Tax Act should be limited in the way suggested. After all, we are trying to encourage investment of all kinds. As far as the encouragement of the manufacture of machinery in Canada is concerned, tariff barriers are set so as to discourage the entry of foreign equipment. Only in cases where people can prove, through the machinery adjustment board, that the machinery they require is not manufactured in Canada may they import machinery at favourable rates. The object
[Mr. Latulippe.l
the hon. member seeks is handled through other means than the measures we are introducing here.


John Stratford Burton: Has the minister any estimate as to the proportion of machinery and equipment which is likely to be Canadian in origin, or principally Canadian in origin, as a result of expansion carried out in consequence of these arrangements?


Edgar John Benson: That is a difficult question to answer because the proportion varies so widely as between industries. Other programs approved by the House tend to encourage the manufacture of machinery in Canada as far as possible. I recently had dealings with spokesmen for a particular industry who wished to take advantage of this program, and I emphasized the importance we place upon having machinery manufactured in Canada if at all possible. In connection with several major projects now under way, the people concerned have tried very hard to have the machinery manufactured in Canada as far as possible, and the Department of Industry, Trade and Commerce, together with my own department, have given every encouragement to work in this area.


Mr. Skoberg:: The legislation now before us deals with the subject of assistance to industry generally. It would be interesting to know whether the minister has given any consideration to the situation of those who have to travel to their places of employment and pay for the tools they use. I realize this may not be relevant to the bill before us but having regard to the assistance this measure is designed to bring to those engaged in industry, surely action could be taken amending the Income Tax Act so as to make the necessary provision in the two areas to which I have referred.


Edgar John Benson: I can assure the hon. member that in the government's consideration of taxation generally, great consideration is being given to both the points he has raised. They are not involved, of course, in the bill before us, but I can assure him that serious consideration is being given to both those points.


Russell Clayton Honey: Shall clause one carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
On clause 2-
Eldon Mattison Woolliams: We are dealing here with surtax. Surtax is imposed on an individual at the rate of 3 per cent of his basic tax in excess of $200 and is to be extended to the 1971 taxation year. Is there a ceiling on the amount which can be paid?


Edgar John Benson: No, Mr. Chairman. As hon. members may recall, the ceiling was taken off in 1968.


Robert Lorne Stanfield: There is no ceiling on taxation under this government.


Edgar John Benson: Really! You and I have had enough discussion for one night. With the encouragement of the


opposition, the ceiilng was taken off. There is a bottom level, though.


Eldon Mattison Woolliams: We remember the famous surtax which at that time was 5 per cent instead of 3 per cent. The government was brought to defeat on that issue, though it would not resign. I understand that because of the shakiness of the dollar at the time there was some question whether the constitutional issue should be pressed. The story has been partly told. Our memories are not so short that we do not recall that occasion.
It seems to me, from what the leading economists both in Canada and the United States are saying, that the only way in which to get the economy rolling, to use the minister's words, is to cut taxes. The minister leaves the impression that this budget does not increase taxes. Nevertheless, the government is reinstating the 3 per cent surtax, thus adding to the incidence of taxation on an individual or on a corporation. So really we are running contrary to everything recommended by economists both here and in the United States. The United States has recommended and has cut taxes. I did not speak on the first clause because enough was probably said, both relevant and irrelevant. But there is nothing in the budget to suggest any stimulation as far as the economy is concerned.
I agree with my leader that this Minister of Finance is unique in his predictions. Every prediction that he has ever made in any budget speech since he has been Minister of Finance, and I have been here all the time he has been Minister of Finance, has been millions and millions of dollars out, so it is difficult to take anything he says seriously. He seems to talk without reference to any authority, economic or otherwise, and as far as I am concerned we cannot take seriously any predictions that he makes tonight or on any other occasion.


Edgar John Benson: Mr. Chairman, may I say we have a mutual admiration society. I believe the same thing of my hon. friend.


Eldon Mattison Woolliams: Well, I know my words have gone very deep, because he has been very hurt since I attacked him on his white paper. He was a professor at university, and on that occasion I called him a small town bookkeeper. My diagnosis at that time has not really changed as far as his ability as Minister of Finance is concerned. The minister talks of getting the economy rolling. One of the reasons taxes should have been cut is that at the end of this month 300,000 students come out of universities and colleges and enter the market seeking employment.


Robert Lorne Stanfield: And there is no plan.


Eldon Mattison Woolliams: No plan whatever. We have continually asked questions about this and been told that there is a plan up the government's sleeve. Two or three days after the questions were put to the minister and to the Prime Minister we read in the paper that so many million dollars would be provided to enable students to travel either in Canada or overseas. This is a good time, when
Income Tax Act
considering this amendment, to hear from the minister. The minister talks of doing something to get the economy rolling, to provide more jobs so unemployment will drop, so I suggest we should have some definite proposal now, not only for university students but for college students.
I would have thought the minister would have reduced taxes instead of increasing them. I suggest he come forward with an incentive plan for individual business people and corporations whereby if they hire a student they will get a tax benefit as an incentive. Perhaps the government might go in on a 50-50 basis. We do not want to go through another season like last year when thousands of students wandered aimlessly across Canada. Even the students themselves were not impressed with the armouries and other federal buildings that were used as hostels for Canadian youth. The minister said we are doing more for our youth than any other western country, but we are doing less, because there are more university graduates with degrees out of work at the present time than ever before.
I am glad the hon. member for Calgary South is here, because he is a lawyer and knows about this. Indeed, he and the Minister of Finance applauded the government when they had a capital cost deal to kill off the economies of Calgary, Edmonton and Vancouver. Let me inform hon. gentlemen that out of 61 young lawyers graduating in Alberta, 32 students do not have a place to article this year. That is an example of what is going on across this country as far as our youth are concerned.


Patrick Morgan Mahoney: Mr. Chairman, on a point of order, I think if the hon. member re-reads the letter he will find that the figure is 81 rather than 61.


Eldon Mattison Woolliams: Then if that is right, it makes it worse. If my memory serves me right it is 61, but if the hon. member is correct and it is 81, that means there are still 31 or 32 students looking for jobs. Whether it be this field or any other field, what have you got? You have no opportunity, no incentive for youth. This clause should be opposed vigorously because it does absolutely the opposite to creating incentives for business to hire young people and students. The government talks about seasonally adjusted figures, but unemployment is nevertheless on the climb at the present time. I should like the Minister of Finance to prove that the proposition that the only way to increase employment at the present time is to cut taxes is economically unsound. Yet he is increasing taxes and therefore aggravating the situation.
The Minister of Finance attacked our leader and other members of this party. Let me say before the Dress tonight-


Some hon. Members:: What press?


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: Well, the fact there is no member of the press present does not disturb me at all. If the friends of the Minister of Finance agree that the proposed increase in taxes will provide opportunity and jobs for the young people of Canada, they are in the same camp


Income Tax Act
as the Minister of Finance. I should like to hear the minister say now that the fact he is increasing taxes in the budget will get the economy rolling and give opportunity and jobs to Canadians, the young and others. I need not say any more.


Some hon. Members:: Hurrah!


Mr, Woolliams:: My hon. friends over there, particularly my friend from the Northwest Territories, seem to have got somewhat exuberant over the supper hour, though I do not know why. Perhaps they are more impressed with their supper than with the budget, which is why they are applauding at the present time.


Mr. Reid:: We would not have the nerve to disgrace ourselves like this in the House.


Eldon Mattison Woolliams: Well, I leave it to the Chairman and to
others to decide who are disgracing themselves now. I see the minister moving back from his squad, the group that has been yelling and shouting all night, which shows that even he is ashamed. I hope the minister will answer my question before others speak. Does he take the position that he is going to give opportunity and jobs to Canadians by increasing the taxes of Canadians? Or, putting it the opposite, more positive way, does he admit that the only real solution, one put forward by people who have knowledge of economics, is to cut taxes and get the economy rolling?


Edgar John Benson: Mr. Chairman, the question asked by my hon. friend I answered in some detail a few minutes ago-


Eldon Mattison Woolliams: Say yes or no.


Edgar John Benson: -when replying to the question raised by the hon. member for Compton. If my hon. friend reads what I said, he will find I answered this question in some detail.


John Stratford Burton: Mr. Chairman, taking a look at the wording of this clause, it becomes more interesting each year. It, provides:
This section is applicable to taxation years commencing or ending in or coinciding with 1968, 1969, 1970-
And now the government is adding "or 1971". How many more years is this tax going to continue? Our only hope is that we are likely to have an election in 1972 and quite possibly the government might not want to see this tax continued into what presumably will be an election year. I hear some hon. members suggesting it may possibly be 1971, so I guess we are getting to the season for election rumours.
There are some important points to be made in respect of clause 2. I noted statements made by the Minister of Finance when he presented his budget on December 3, and later when he and his parliamentary secretary put forward the reason for continuing this surtax into 1971. At that time they said it was for the purpose of obtaining revenue in view of the government's cash requirements.
Let us compare that with the statement made in 1969 when the minister presented his budget. At that time he said he wanted to make it clear that he was not proposing an extension of this tax from 1969 to 1970 for revenue or cash purposes but for purposes of economic stabilization.
At one time the government extends this tax for purposes of economic stabilization, and by the time it gets around to putting legislation before the House there is a downward trend in the Canadian economy or we find there is a low ebb and the government then suggests it needs more revenue. Consequently, it is going to impose this tax on the Canadian people in 1971. I think we have to go back to the situation which existed on budget night. At that time the Canadian people expected a tax cut or some benefit. The psychological impact of the budget that night was akin to a wet dishcloth in the face. The budget of December 3 last served no good purpose as far as the Canadian people are concerned; in fact, it did a disservice to the Canadian people.
I should like to make it clear that we in this party have suggested on many occasions that there should be an increase in exemptions or, better still, a changeover in respect of the tax credit system. I believe Canadians had a right to expect a tax cut last December. It would have been an effective stimulus to the Canadian economy. It would have had an immediate effect. It would have been beneficial. Instead, we have had a repetition of a tenuous struggle as manifested in the provision contained in clause 1 of this bill.
I suggest the government did not follow the course of tax reduction when it presented the most recent budget because it had an election timetable in mind. The government had taken into account the fact that if it stimulated the economy too soon, this would have an important effect on the economy and a resulting effect on the impending election. As a result, the government decided to take protective measures in respect of the economy, keeping in mind an election in 1972.
The government would never consider anything that involved a reduction in taxes or, for that matter, a tax increase until the time was ripe. I suggest this is the very callous reasoning of the government which led it to bring forward this type of proposal. The government has in mind a time period in respect of tax benefits. Anything that is of benefit to the Canadian economy should be a matter of importance to the government. The Minister of Finance and the parliamentary secretary have made no attempt to come forward with any point to indicate that clause 1 will be of assistance in stimulating the Canadian economy. On the other hand, we have in clause 2 a measure which will dampen the Canadian economy and hold back economic growth.
I suggest this measure will lead to a continuation of high unemployment. I suggest the government will maintain and continue this situation until the time is ripe to stimulate the Canadian economy in preparation for the next federal election.


Russell Clayton Honey: Order, please. Is the committee ready for the question?


Some hon. Members:: Question.


Russell Clayton Honey: All those in favour of clause 2 will please rise.


Some hon. Members:: Order, order.


Russell Clayton Honey: Order, please.


Some hon. Members:: Get out.


Russell Clayton Honey: Order, please. A vote has been called. If there are hon. members who entered the chamber after the calling of the vote, they will refrain from voting or leave the chamber.
Clause 2 agreed to: Yeas, 27; nays, 19.


Russell Clayton Honey: Shall the title carry?


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read a third time? By leave, now?


Stanley Howard Knowles: At the next sitting of the House.


Some hon. Members:: Now.


Mr. Deputy Speaker:: I understand there is not unanimous consent that the bill be given third reading now.


John James Greene: Mr. Speaker, I wonder if I might have the consent of the House to revert to motions.


Mr. Deputy Speaker:: Does the minister have the consent of the House to revert to motions?


Some hon. Members:: Agreed.



THE CANADIAN ECONOMY


John James Greene: Mr. Speaker, I should like to advise the House that following previous exploratory conversations, government officials and R. A. Brown, Jr. commenced negotiations after the close of the stock market today for the purpose of considering the possibility of acquiring Mr. Brown's controlling position in Cygnus Corporation Limited. I will give a further report in the event such negotiations reach a stage of firm understanding.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Mr. Speaker, I would just like to say that in the circumstances there may be no alternative to what the minister is proposing to maintain control of this company in Canada. But I must say that if this is so, then this country has reached a sorry state indeed if the only
Proceedings on Adjournment Motion possibility is for the government to move in and there is not enough incentive in this country for private industry to maintain control of private industry in Canada.


Stanley Howard Knowles: Mr. Speaker, in the shortest and clearest way I can put it, may I say that we welcome this announcement.


Mr. Deputy Speaker:: Is there unanimous consent that we call it ten o'clock.
Some hon Members: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Wallace Bickford (Wally) Nesbitt: Mr. Speaker, the inquiry I wish to make concerns the matter of trafficking in industrial milk quotas. I think perhaps I should make clear exactly what I mean. Mr. A has a herd of cows and wishes to sell them to Mr. B, who happens to have a sales arena. As a rule, Mr. A also transfers his industrial milk quota to Mr. B. Incidentally, there would seem to be quite a few Mr. B's in the province of Ontario, and no doubt elsewhere. Then Mr. B, who has a sales arena, sells off the herd cow by cow to individuals throughout the country.
Mr. B. then has a quota and he sells the quota to a person in another part of the country, which in most cases seems to be in province of Quebec. The quota is sold to someone who has a herd and not a large enough quota on which to make money. I have received a great deal of information in this regard. I have the names and addresses of a good many vendors, a good many Mr. B's, the intermediary who sells off the herd cow by cow and transfers the quota to somebody else. I do not intend to put the names and addresses on the record because I do not think it would be fair. It is not the fault of the individual but, rather, of the Dairy Commission and ultimately the government for allowing this kind of thing to go on.
One farmer who had a 9,000 pound butterfat quota sold it for $4600 in another province. This kind of trafficking goes on all the time. While apparently this is within the letter of the law, the government and the Dairy Commission have the power to stop it because, as I understand it, the Dairy Commission can prohibit the transfer of quotas either in whole or in part. This, however, is not done. I have more information in front of me, but again I do not wish to place the names and addresses on the record. However, I have substantial information and am prepared to show it to the minister privately.
These traffickers, as I choose to call them, go around to farmers' meetings and tell them they have so many quotas for sale and ask how much they will pay. The fact


Proceedings on Adjournment Motion is the vendor does not do very well. The purchaser of the herd, because the herd is usually bought cow by cow, does not do very well. But the middleman, as in most cases in our country, does very well; he just needs two or three of these transactions in a year in order to do pretty well.
When one has private information in respect of individual cases, one then would like to know the extent to which this kind of trafficking is going on. Therefore I placed a question on the Order Paper-I shall not go into all the details-asking in effect for the number of transactions that took place in Ontario only between April 1 and December 1 of last year. There could not have been too many transactions.


Horace Andrew (Bud) Olson: Three thousand and fifty.


Wallace Bickford (Wally) Nesbitt: I asked for the names and addresses of persons who sold herds and to whom they were sold. I asked for this information in the hope that it could be made clear who is doing these things. The answer from the Dairy Commission is that it would take 700 hours to do this. I do not believe it would take that long. The minister who reports to the House for the Dairy Commission wrote me a letter in which he said he had brought my question to the attention of the Dairy Commission who replied that it would take too much time to furnish the information. I indicated I had some doubt it would take so long to produce the information. The minister then indicated it was not government policy to give out this information.


Horace Andrew (Bud) Olson: You said yourself it was not proper to make the information public.


Wallace Bickford (Wally) Nesbitt: The minister will have his three minutes in a moment. I said I did not like to give the names of individuals because I do not blame them. I blame the government for allowing this to go on. The government said it was not policy to reveal these transfers between individuals, and so on. The minister may be right, but I still think he should not resist these questions as he has a habit of doing, as he did last year when he said there was no powdered milk coming in from Ireland, until the farmers broke into the plant and dumped it on the floor.
The Minister of Industry, Trade and Commerce (Mr. Pepin) did not take that position. We have this situation, and what annoys members on this side of the House is that when something is brought to the minister's attention, instead of looking into it and trying to co-operate he digs in his heels and says no, it is not so. The minister has been in this House for a long time. When he was a member of the Social Credit Party he was critical of government policy, and yet he will not look into these things.


Horace Andrew (Bud) Olson: Mr. Speaker, I shall be very happy to answer as much of this garbage as I can. The hon. member indicated that it was not proper to place on the record the names and addresses of the people involved in these transactions. His question in part 5 asks for the names and addresses
of the transferees in part 2. He is doing here exactly what he considers to be an impropriety.


Wallace Bickford (Wally) Nesbitt: On a question of privilege-


Mr. Deputy Speaker:: Order, please.


Wallace Bickford (Wally) Nesbitt: If all the names were given, that would be one thing, but giving one or two names is another thing.


Horace Andrew (Bud) Olson: If you examine the answer given to the question which the hon. member placed on the Order Paper, as recorded at page 2261 of Hansard of January 11, 1971, you will find that I gave the hon. member all the information to the eight parts of the question that he himself regards as proper. I told him there were 3,050 parties who had transferred quotas during that period: that is what he asked for. I told him no milk quotas were retained by the Canadian Dairy Commission: that is what he asked for. I told him there were 8,758,290 pounds of butterfat transferred in the quotas. The only thing I have not told him is the personal business of individual farmers, including their names and addresses.
It is true that it would take 700 hours or 800 hours to go through the electronic files to find all that information, but even if we disregard the cost, which I am not willing to do, the hon. member has said it would be an impropriety to reveal in public documents the personal, private business of each of these farmers. I have told him I am not willing to do that, and he has said it should not be done. He is talking out of both sides of his mouth at the same time.


Some hon. Members:: Hear, hear!



UNEMPLOYMENT INSURANCE-MONTREAL,-REPAIR OF ALLEGEDLY DEFECTIVE COMPUTER

Mr. Roland Godin (Portneuf):: Mr. Speaker, on March 1, I asked the Minister of Labour (Mr. Mackasey) the following question:
Whereas some unemployed workers who have been entitled to withdraw unemployment insurance benefits for the past two months have not been paid such benefits and whereas the Commission's staff in Quebec City and Trois-Rivieres are doing a great job, is the minister thinking about having the Montreal computer repaired since it appears to be responsible for all the errors that occur?
Mr. Speaker, if I asked the Minister of Labour that question, it is because I was convinced that it was a very good way of pointing out to him that there was something wrong at an Unemployment Insurance office.
As some citizens have been unemployed for two or three months and have not yet received a penny from the Commission, even though they are eligible for benefits, I believe questions should be asked.
Some unemployed resorted to the services of their parish priest, the mayor of their municipality, their member of Parliament and even sometimes to lawyers in


Albert Béchard: Mr. Speaker, I have been informed by the Minister of Labour that the unemployment Insurance Commission has been reorganized and now has five computers throughout the country.
During the last two weeks of February 1971, none of these machines were out of order. During the first two months of 1971, all break-downs of the machines were dealt with within a few hours, the companies who rent the equipment to the government having supplied the Commission with their own computers.
No problem of the kind referred to by the hon. member for Portneuf has been referred during this period in the Trois-Rivieres region. Shoud the hon. member, as he stated earlier, have specific complaints to submit for the minister's attention, he should give more details to the minister himself, who will gladly take them into consideration and scrutinize them closely.



YOUTH-CANCELLATION OF CONFERENCE SPONSORED BY CANADIAN COUNCIL ON SOCIAL DEVELOPMENT

Mr. Lome Nyslrom (Yorkion-Melville):: Mr. Speaker, on March 5, I put a question to the Acting Prime Minister regarding the announcement that a conference concerning transient youth and student summer employment had been cancelled. This conference was scheduled for March 14, 15 and 16. I asked the minister why at such a late date the unexpected announcement of cancellation was made. The reply that I received was that the government had been consulting the provinces about a program for student employment and it seemed to them the conference that was to be held might have been useful, but according to the Acting Prime Minister the taxpayers' money could be spent in a more useful way.
What prompted me to ask this question was a communique issued by the Canadian Council on Social Development. I think the best thing to do would be to read the pertinent part of that press release as follows:
The Canadian Council on Social Development announces the cancellation of its conference on Services to Transient Youth and Student Summer Employment scheduled for Ottawa on March 14, 15 and 16. In light of the crisis situation, the council reached this conclusion with deep regret but felt there was no alternative when it was informed by the Department of the Secretary of State that the federal government would neither assist financially nor actively participate. The dates had already been postponed from February 21 to 23 to accommodate federal planning.


Proceedings on Adjournment Motion
The Canadian Council on Social Development which was organizing this conference did not know why the conference had been cancelled. As I have already said, the conference was already scheduled for a period of time in February and because of the federal government it was postponed until March. This suggests to me that someone in the Department of the Secretary of State, one of the officials or perhaps the minister himself, must have given the green light to the organizers of this conference and someone in the department or in the government must have asked the Canadian Council on Social Development to postpone the conference from February until March.
My understanding is that after all the planning had gone into the organizing of this conference, and after many people had become really enthused about the prospects of such a conference which would bring together young people from all across the country-from perhaps 50 or 60 universities-as well as representatives of different community organizations, it was cancelled without explanation a few days before the conference was supposed to take place.
That is why I elected to raise the matter in the "late show" tonight. Hopefully, the congenial parliamentary secretary will shed some light on why that action was taken. The conference, in my opinion, would have been most valuable. It would have brought young people together to discuss what they want to do and means and methods of solving the problems that they have in common. I understand that the federal government would have had to pay only a very small sum in helping to cover the travelling costs of some young people and students who could not afford to bear the expense of coming to Ottawa, the location of the conference.
This conference would have dealt with problems facing transient youth in Canada and suggested suitable programs for them. It would have dealt with the problem of student unemployment and with unemployment among youth in general. In Canada about 45 per cent of our unemployed, I believe, are under the age of 25. This is a very serious problem and we ought to do something about it.
I think that a conference of this sort would have been a small step to providing some of the participatory democracy that our Prime Minister (Mr. Trudeau) talked so much about two and a half or three years ago. This input by young people would have been valuable because it would have given them more faith in our parliamentary system and government. When you cancel such a conference you are not restoring their faith. You are not restoring hope in the minds of young people about the kind of society we live in or about our government. I am afraid that when things like this keep happening young people will say: You do not look on us as people. You consider us as mere bodies, numbers, small slots in a machine. You do not think we are really here. That is the type of thinking we may find among our young people.
Perhaps the federal government or the department were afraid of any criticism that might have emerged from a conference of young people. I hope the parliamentary secretary can clarify this situation. I suspect that one reason the conference was cancelled was that the government was afraid that young people would be critical of the Prime Minister or of the type of society that this government appears to want. I ask: Why was the conference cancelled at such a late date after the green light had been given? Why suddenly, after all the plans had been made, was the conference cancelled? Perhaps the parliamentary secretary, in the short time allotted to him, will tell us if there are any alternatives open to the young people at this time.


Mr. James Hugh Faulkner (Parliamentary Secretary to Secretary of State):: Mr. Speaker, the main goal of the Conference on Services to Transient Youth and Student Summer Employment was to urge the government to implement their program in a particular way, and it is at present in the process of achieving that goal. The federal government will be able to make a general announcement on the matter of services to transient youth and summer employment when all consultations with the provinces are completed, which should be some time next week.
As has been said before, the federal government did not feel it would be helpful to participate in a conference prior to the completion of the consultations with provincial ministers and officials, or prior to the formulation of firm proposals for student summer employment. As well, the federal government did not regard such a conference as an urgent need since up to now it has supported a number of similar meetings with public funds. The information accumulated through earlier conferences, in addition to the experience of last summer's programs, was sufficient for the establishment of its new policy, and the consultation process now begun will offer a basis for achieving the main objectives sought by this proposal.
Motion agreed to and the House adjourned at 10.17 p.m.

Friday, March 12, 1971