1971-09-09

ROUTINE PROCEEDINGS


Hon. H. A. Olson (Minister oi Agriculture):: Mr, Speaker, in response to a number of questions respecting the making of dairy subsidy payments I wish to inform the House of the situation. There was an abnormal delay in completing the payments to Quebec and Ontario producers for the year ended last March. This was because of complications in programming the final payments for the year as a result of the change in the subsidy payment arrangement during the year when those two provinces entered into market sharing quotas last December.
The last of the final payments for the 1970-71 year went to the Post Office on July 8. There was a consequential delay in starting payments for the 1971-72 year, beginning with deliveries in the month of April.
Subsidy cheques for April manufacturing milk deliveries went to the Post Office on August 3, those for May deliveries on August 11 and for June deliveries on September 3. Those for April cream deliveries went to the Post Office on August 4, for May deliveries on August 20, and for June deliveries on September 3.
The subsidy payments for those three months, therefore, went out within a one-month period.
Starting with July, payments will be back on the regular schedule. Those for manufacturing milk should go to the Post Office by September 13 and for cream by September 17.
Some inquiries which hon. members may have received may have had to do with payments to Ontario fluid milk shippers, for a portion of their manufacturing milk shipments. The basis of calculating subsidy eligibility for this group has been changed, partly to conform with the market quota program, in a way which will simplify the arrangement for them. This, however, involved extensive calculations and reprogramming which could not be started until the final data for last year had been finished, and which delayed starting payments for this year.
However, the April subsidy cheques for these fluid milk shippers should go to the Post Office tomorrow. Barring any unforeseen problems, those for May should go to the Post Office by September 15, for June by September 18 and for July by September 24.
I should refer to one aspect in the timing of the subsidy payments. The payments are based on reports from dairy
plants to the Dairy Commission of each producer's deliveries for each month. The schedule calls for the plant reports of manufacturing milk deliveries for each month to be received by the commission not later than the twentieth of the following month, and for cream by the thirtieth. Approximately three weeks elapsed time is then required to check the plant reports, key punch some 112,000 individual producer cards, set up the computer pay tapes and print and issue the cheques. If plants are late in reporting, the payments to their shippers will be delayed one month.
There are 515 reports monthly from individual plants or organizations. For July deliveries, nine plants had not reported manufacturing milk deliveries on time and 14 had not reported cream deliveries.


Mr. R. E. McKinley (Huron):: Mr. Speaker, I should like to thank the Minister of Agriculture (Mr. Olson) for providing the answer today that should have been provided to my question of the day before yesterday. I am sure that dairy producers have been waiting for some time for clarification as to when their cheques would be sent. Like everyone else, including Members of Parliament and Ministers of Agriculture, dairy producers have bills to pay. They expected to get their cheques within three weeks or one month, as was customary. That was how it was supposed to be done when the Dairy Commission was set up. Some producers told people to whom they owed money that they would be able to pay them by a certain date. In some instances producers issued postdated cheques on the assumption they would have the money to cover them, but their subsidy payments did not arrive in time to make their cheques good.
The information that the minister has provided to the dairy producers today will certainly be helpful. It is to be hoped that the subsidy cheques will be issued more promptly and that the plants will supply the necessary information to the Dairy Commission in good time so that producers will not be subjected to a similar delay in future. I trust that the minister will see that this is done.


Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I did not have a copy of the minister's statement before me and was unable to follow the details. His explanation of the situation may be helpful. During the summer producers in my area were asking why their cheques were delayed. In fact, at one point they were asking whether the program had been discontinued.
It is important that the producers have confidence that the program will work well and will be continued. There is a great deal of uncertainty, especially among small producers in western Canada. When an individual like Mr. McLaughlin of the Ontario Association of Milk Marketing Boards says that there is a possibility of a shortage of

September 9, 1971
Alleged RCMP Informers
cheese and other dairy products in the province of Ontario, of all places, there is real cause for concern whether there is the efficiency and forward planning in that branch of the Department of Agriculture that are so essential.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, the Minister of Agriculture (Mr. Olson) just announced that subsidy payments will soon be made to industrial dairy producers, and within reasonable delays.
During the summer of 1971 as in previous years, farmers have always received delayed payments of federal government subsidies to which they were entitled. These farmers, and dairy producers particularly, are justified in wondering how it is that the government always takes three, four and even five months to pay them their due, whereas they are allowed no delay in regard to their commitments to the government.
In my district, a dairy producer applied for a new milk quota, or an increased quota and because his application was just one day late it was turned down. On the other hand, when the government has responsibilities towards farmers, it can allow itself to defer for several months, as it happened this year and last year.
I hope the proposals the minister made this afternoon will materialize and that farmers will get the subsidies to which they are entitled within a reasonable period of time.



ROYAL CANADIAN MOUNTED POLICE


Mr. Frank Howard (Skeena):: Mr. Speaker, I request leave to move a motion under Standing Order 43. I will give a brief explanation of the reasons.
The motion is predicated upon a Canadian Broadcasting Corporation program last evening on which a young gentleman by the name of Robert Wayne Eadie was interviewed. If his allegations are correct even to a small degree, they place in question the morality of the actions of the Royal Canadian Mounted Police and also the integrity and honesty of the Solicitor General (Mr. Goyer). In that interview-Mr. Robert Wayne Eadie complained that he had been paid by the RCMP to be an informer. He referred to one RCMP officer by full name and rank and named a couple of other gentlemen in the force. He related their activities in using informers, especially teenage informers, to gain information in order to lay charges subsequently against younger people for infractions of the law.
Based upon his allegations, I move, seconded by the hon. member for Broadview (Mr. Gilbert):
That the matter of the allegations by Robert Wayne Eadie that the Royal Canadian Mounted Police uses threats and intimidations to recruit informers, that it recruits teenagers as informers
and that it offers no protection to informers be referred to the Standing Committee on Justice and Legal Affairs.


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Skeena. Under Standing Order 43 it requires unanimous consent. The Chair will inquire whether there is such unanimity.


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Some hon. Members:: Shame!


Frank Howard: Did I understand the Solicitor General to say no?


Mr. Speaker:: Order, please. The hon. member should have understood the Chair to say that there was not unanimous consent.



CANADA LABOUR CODE


Mr. Rod Thomson (Battleford-Kindersley) moved: for leave to introduce Bill C-263, to amend the Canada Labour Code (Retirement Plan).


Some hon. Members:: Explain.


Roderick J. (Rod) Thomson: The purpose of this bill is to require the employer of a federal worker to provide for the employee at age 55 a paid-up pension after ten years of work commensurate with the number of years he was in his employ, whether he leaves voluntarily or is released by the employer, and to provide for the employee a guaranteed portion of the employer's contribution to the pension plan when the employee has worked over five but less than ten years.


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

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, pursuant to Standing Order 26 I ask leave to move the adjournment of the House to discuss a specific and important matter requiring urgent consideration, namely, the failure of the government to carry out its administrative responsibility to pay the Canadian Wheat Board the sum of almost $100 million as required by the Temporary Wheat Reserves Act, chapter 2 of the 1956 statutes, in

September 9, 1971

order that the Board may meet its debts for storage of wheat purchased by the Board.


Mr. Speaker:: I should bring to the attention of the House the fact that a motion in approximately similar terms has been proposed by the hon. member for Saskatoon-Biggar. It might be best to allow the hon. member to make his own motion and the Chair can then rule on both.


Alfred Pullen Gleave: Thank you, Mr. Speaker. I ask leave, seconded by the hon. member for Regina East (Mr. Burton), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely the failure of the government to carry out the explicit instructions of the Temporary Wheat Reserves Act which require the Minister of Finance to make certain payments to the Canadian Wheat Board, no such payments having been made since August 1, 1970, in defiance of the provisions of the said act.


Mr. Speaker:: The hon. members for Vegreville and Saskatoon-Biggar have given due notice of their intention to move the adjournment of the House under the terms of Standing Order 26.
It is quite obvious that the suggestion made in their motions is one of widespread concern and importance. The duty of the Chair is to consider not only whether a matter is one of national importance and concern but also whether, in practical terms, the business scheduled for consideration today by the House ought to be set aside for the purpose of a debate on another matter. The Chair must determine whether the debate proposed ought to be given priority over that which has been proposed by the government.
With respect, I suggest to both hon. members and to the House that it would be difficult to justify the granting of their motions in view of all pertinent circumstances. It seems to me that the motions are in essence in the form of a censure or a lack of confidence motion. It is suggested to hon. members that this is not the purpose of Standing Order 26. I would hope there might be an early opportunity for the House to debate the situation of which the hon. members complain but that another method can be used to achieve this purpose other than a motion under Standing Order 26.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the emphasis that President Nixon placed today in his address to Congress upon the United States entering a new era of international trading rela-
Inquiries of the Ministry
tionships and, as part of this, the apparent intention to establish special trading corporations in the United States with special taxing arrangements that will place them far beyond the competitive position of our corporations, has the government in mind specific measures to enable Canadian exporters to face the danger posed by this proposal?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the cabinet has been studying for the past several weeks and again today various ways in which we would have to react to the United States measures. We already have one reaction before the House now, and as the situation develops we will be prepared to take further measures if they are deemed necessary.


Robert Lorne Stanfield: Mr. Speaker, I am sure the Prime Minister agrees with the Minister of Industry, Trade and Commerce that the measure before the House is designed to deal only with the surtax that has been imposed. Therefore I ask the Prime Minister whether he can assure the House that a countermeasure is being developed? Can he also tell the House when this countermeasure will be indicated to the House and to the exporters of this country so they will know where they fit in and so the element of great uncertainty will be removed since of itself it might lead to further unemployment this winter?


Pierre Elliott Trudeau: Mr. Speaker, as the Leader of the Opposition realizes, the uncertainty in this case does not arise from the federal government; the uncertainty is whether the U.S. Congress is going to pass this particular measure which they failed to pass on a previous occasion. I replied to the Leader of the Opposition previously that we are studying contingency measures to deal with all kinds of possibilities. However, I cannot, of course, announce steps that the government might take to deal with some hypothetical action which the United States has not yet taken.


Robert Lorne Stanfield: May I ask the Prime Minister whether we in this country are simply expected to rely upon assurances that the government is considering various possibilities? We should like to know when we may expect the government to come forward with actual measures to meet actual threats to our economy.


Pierre Elliott Trudeau: The answer to that question, Mr. Speaker, is that when there is an actual threat, as is the case with the 10 per cent surcharge, we will come forward with an actual measure. We are asking the House to co-operate so we can pass the measure now before the House quickly enough to prevent unemployment being created. But in the case of a non-actual threat regarding something being contemplated by another country, surely it is not my role on behalf of the government to announce countermeasures to deal with a threat that is only hypothetical. I assure the House that we are studying contingency measures for various eventualities, but surely the House does not expect me to announce a countermeasure to some other measure which as yet does not even exist.

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Inquiries of the Ministry



EFFECT OF UNITED STATES ECONOMIC MEASURES- DISCUSSION WITH WASHINGTON OF OPTIONS AVAILABLE TO CANADA

Frank Howard: May I direct a supplementary question to the Prime Minister, Mr. Speaker. On either of the two missions to Washington by ministers and government officials or in any subsequent conversations dealing with the effects of United States economic measures, was there any discussion about the options that might be available to Canada and which might be taken? Was that the subject of any conversations with the government of the United States?


Pierre Elliott Trudeau: Mr. Speaker, the question is not very clear to me. I am not aware of the nature of the options which the hon. member is suggesting might have been offered to Canada. What type of options has the hon. member in mind?


Frank Howard: Let me try in a supplementary way to enlighten the Prime Minister. During either of the two missions or in communications since that time were the subject matter or contents of Bill C-262 discussed with officials of the United States to determine whether or not this would be acceptable to them inasmuch as the government likes to know what the government of the United States thinks about what it plans to do?


Pierre Elliott Trudeau: Mr. Speaker, the answer is no, not only to the question but to the innuendo.



SUGGESTED INCOME TAX CUT TO STIMULATE SALES, PRODUCTION AND JOBS

Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, as President Nixon presented in his message to Congress today a proposal for stimulating the United States economy very similar to that which the official opposition has been pressing on the government for some time-


Some hon. Members:: Oh, oh!


George Harris Hees: -specifically, a substantial cut in income tax, is the government giving consideration to introducing such a measure-


Some hon. Members:: Oh, oh!


George Harris Hees: Mr. Speaker-


Mr. Speaker:: Order, please. It is my understanding that the hon. member has asked his question.


George Harris Hees: My question, which I had already started, is whether the government is now giving consideration to introducing such a measure to stimulate sales, production and jobs in this country?


Pierre Elliott Trudeau: Mr. Speaker, the difference between us and the opposition is that we did in June what the opposition is suggesting that the United States will be doing now.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. There are a number of members who want to ask supplementary questions. At this point the Chair recognizes the hon. member for Abitibi.



DISCUSSION WITH GATT MEMBERS BEFORE PRESENTATION OF EMPLOYMENT SUPPORT BILL

Gérard Laprise: Mr. Speaker, I should like to ask a supplementary question.
Would the Minister of Industry, Trade and Commerce tell us if he had any contacts or discussions with the GATT member countries concerning non-tariff barriers before or after he introduced Bill C-262?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: No, Mr. Speaker.


Mr. Speaker:: I believe the hon. member for Prince Edward-Hastings has a supplementary question. Perhaps he should be recognized now.


George Harris Hees: My supplementary is, as unemployment today is exactly-


Mr. Speaker:: Order, please. I apologize to the hon. member but the Minister of Industry, Trade and Commerce is rising on a question of privilege.


Jean-Luc Pepin: This is a small point, Mr. Speaker, but it could be important. I want to say that I said "no" to the last question and not "yes" as was stated in the translation.


George Harris Hees: Now we will get on with it, Mr. Speaker.


Some hon. Members:: Hear, hear!


George Harris Hees: As unemployment today is at exactly the same level it was when the Minister of Finance introduced his budget three months ago, is it not obvious to the Prime Minister and the government that the measures introduced then are completely inadequate to deal with the present situation and that a substantial tax cut is needed today to get the economy on its feet?


Mr. Speaker:: Order, please. The hon. member for York South.



LABOUR CONDITIONS


Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the shutdown of the groundwood mill at Sheet Harbour, Nova Scotia, and the threatened lay-offs at the Bowater plant at Corner Brook, Newfoundland, neither of which plants is affected by the 10 per cent United States import surcharge, are any steps being taken by his department or any other department of govern-
September 9, 1971

ment to his knowledge to deal with the extremely difficult situations in these two cases?


Jean-Luc Pepin: Mr. Speaker, at the Scott mill, I understand that the difficulty has been created by a flood and as the plant is considered obsolescent the company has decided not to reopen it. Officials of the Department of Regional Expansion and my department are in touch with the local authorities and company to determine if ways can be found to help the local labour situation.
As to the Bowater plant at Corner Brook, I have already indicated that no formal representation has been received by my department or any other department as far as I know, from the company or from the Newfoundland government. However, officials of my department and possibly others are in touch with the Bowater authorities in London and with the Newfoundland government to try to find ways to help the Bowater mill at Corner Brook. Of course there is an international situation in pulp and paper which is not of our making and has to be taken into account. As everybody knows, we are going through a rather difficult time in pulp and paper internationally due to overproduction.


David Lewis: Mr. Speaker, I should like to address a supplementary to the Prime Minister. Did he receive a telegram yesterday from the vice-president of the Canadian directorate of the pulp and paper workers with regard to the shutdown of the plant at Sheet Harbour, Nova Scotia, alleging that the company's excuse for the shutdown was unjustified and that the result would cause very great hardship to the entire community? Did he receive that wire and what reply, if any, has he made to it?


Pierre Elliott Trudeau: Looking at my records I see that I have not received that wire, but it is possible it might have arrived in the last little while. I will check and if it has arrived I will be in a position-does the member over there know anything about it?


Mr. Maclnnis:: On a question of privilege-


Mr. Speaker:: Order, please. I apologize to the hon. member for York South but we have to consider a question of privilege at this time.


Donald MacInnis: Mr. Speaker, I rise on a question of privilege because of the remark made by the Prime Minister. I want to assure you, Sir, and the House that I do not read his mail.


An hon. Member:: Can you read?


Mr. Speaker:: Order, please. The question of privilege having been disposed of, we will return to the hon. member for York South for a further supplementary.


David Lewis: Mr. Speaker, the wire was sent to the Prime Minister very early yesterday morning. Perhaps the Prime Minister will ask his staff to provide him with it. I would have assumed this would have been done by now.


Mr. Speaker:: Order, please. It was my impression that the hon. member had a supplementary. He has the floor for that purpose.
Inquiries of the Ministry



UNEMPLOYMENT IN CORNWALL-ANNOUNCEMENT OF ASSISTANCE PROGRAM BY PRIME MINISTER ON FORTHCOMING VISIT

David Lewis: Mr. Speaker, may I ask the Prime Minister a question arising out of the announcement that he will be visiting the city of Cornwall at the end of this week. When he visits that city, will he be able to announce a specific program of assistance to deal with the very high rate of unemployment, 20 per cent, in that city?


Pierre Elliott Trudeau: Mr. Speaker, I am having some public meetings there. If the member wants to send any representatives they will hear what I have to say.


Mr. Speaker:: Order, please. We will soon be running out of time, but if the hon. member is rising on a question of privilege or on a point of order he is entitled to the floor. Otherwise the hon. member for Hamilton West has been waiting patiently for an opportunity to ask a question and I should like to recognize him.


David Lewis: I rise on a point of order, Mr. Speaker. I respectfully suggest to you, Sir, and to the Prime Minister that if the Prime Minister does not want to answer a question that is his privilege but to deal with a serious situation in the light way in which he did-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The hon. member for Hamilton West.


David Lewis: Mr. Speaker, on a point of order may I respectfully suggest to you that just because noise comes forth every time one says something is no reason for the person who has the floor to be seated. Just because they start making noise every time something unpleasant is said-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The Chair has recognized the hon. member for Hamilton West.


David Lewis: I am sorry-


Mr. Speaker:: Order, please. The hon. member for York South is entitled to the floor if he is rising on a point of order and I recognize him for that purpose.


David Lewis: That is what I am doing, Mr. Speaker. I do not intend to be shouted down either.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


David Lewis: Mr. Speaker, the record ought to show that when the Prime Minister is asked a question about a very serious situation in a city which he is about to visit his answer is irrelevant and as insensitive as all his behaviour in this House.


Some hon. Members:: Oh, oh!

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Inquiries of the Ministry


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Of course, that has nothing to do with a point of order. With respect, I point that out to the hon. member. I will again attempt to recognize the hon. member for Hamilton West.



UNEMPLOYMENT INSURANCE


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question may seem somewhat anticlimactic after that tirade between the hon. member and the Prime Minister. However, I should like to address a question to the Minister of Labour dealing with unemployment insurance and the result of the bill passed by the province of Quebec that will release some 200,000 provincial employees from unemployment insurance contributions under the Unemployment Insurance Act, with a possible loss of $18 million to the federal government. Is the minister going to make a statement with regard to this matter and the several implications arising from it?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, I intend to see that the bill is implemented in its entirety on January 1, 1972. The province of Quebec, like any other province, is permitted under that law to opt in for its civil servants who at the present time are exempt. I see no particular reason why I should make a statement or elaborate any further on the subject.


Lincoln MacCauley Alexander: In view of the action of the province of Quebec can the minister now assure the House-I have been endeavouring to obtain assurance on this point-that all other provinces will be involved in the act, or does the minister have any reason to believe any other province will be opting out?


Bryce Stuart Mackasey: Mr. Speaker, I can assure the House that all provinces will be treated equally. No province will be entitled to deviate from the law or to distort the law, and there will be no special status for any province. All provinces are free to include or exclude their civil servants as they see fit. That is the intent of the law. That is the way it was drafted and I am sure the hon. member is aware of that.


Lincoln MacCauley Alexander: A supplementary, Mr. Speaker.


Mr. Speaker:: The Chair will recognize the hon. member but I have to bring to the attention of hon. members that we are running rather slowly today and not quite up to the usual effective schedule.


Lincoln MacCauley Alexander: I have one short supplementary, Mr. Speaker. In view of the fact that the minister was positive with regard to the actuarial soundness of the unemployment insurance plan, would the minister in due course, and the sooner the better, make a statement with regard to the province of Quebec opting out and also whether in fact the plan is still actuarially sound?


Bryce Stuart Mackasey: I can assure the House of that fact now. The plan is actuarially sound. So far as to whether or not a particular province intends to opt in, I have no way of knowing until some time in November because the opting-in feature applies to people not presently covered and who would only be covered in January.



INCLUSION OF QUEBEC CIVIL SERVANTS- REPRESENTATIONS BY UNIONS

Mr.   Jacques-L. Trudel@Montreal-Bourassa: Mr. Speaker, I wish to direct a supplementary question to the Minister of Labour.
Can the minister inform the House whether any representations were made by civil servants in Quebec, or by unions representing such civil servants, requesting that they be covered under the new legislation?


Bryce Stuart Mackasey: Not to date, Mr. Speaker, but I know that all the major unions in the province of Quebec endorsed the concept of universality when they appeared before the committee which discussed the Unemployment Insurance Act.



ROYAL CANADIAN MOUNTED POLICE


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Solicitor General and it relates to the startling revelations made by Robert Wayne Eadie last evening. Would the Solicitor General inform the House whether he is making an immediate inquiry into these allegations, whether or not it is the policy of the RCMP to employ teenage informers with or without the consent of their parents and, if this is not the policy, what is the policy of the RCMP in this regard?
.40 p.m.)


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, I consider the charges made yesterday against the RCMP as very serious ones and I intend to give them all the attention they require. I have, therefore, asked the commissioner of the RCMP to make a comprehensive investigation of the allegations that were made, and I will take the appropriate steps as soon as I get his report. In any case, I can assure hon. members they will be informed of all the facts regarding that matter.


David Samuel Horne MacDonald: In the meantime, while this investigation is being carried out, can the minister indicate what policy directives have application, whether issued directly from his department or from the headquarters of the RCMP itself, with regard to paid youth informers?


Jean-Pierre Goyer: Mr. Speaker, I would rather wait until I have received the report to discuss the matter, but if the hon.
September 9, 1971

member insists, we could deal with policy matters and bring up the subject later.



ALLEGED USE OF TEENAGE INFORMERS-REQUEST FOR INQUIRY BY COMMITTEE OF HOUSE

Frank Howard: Mr. Speaker, I wish to direct a supplementary question to the Solicitor General. Even though there was objection to my request to move a motion for referral of this matter to the Standing Committee on Justice and Legal Affairs earlier today, may I ask him whether he will give consideration to making a motion for such a referral if the phraseology of the original request that I made was not acceptable to him? In other words, would he refer this subject matter to the Justice and Legal Affairs Committee for examination as well as conducting an examination himself?


Jean-Pierre Goyer: Mr. Speaker, as I have already indicated, I should like first of all to study the report of the commissioner after the inquiry, then I shall indicate what the best policy should be.
It may well be that the report will reveal that the facts are false or misleading. Then the members can judge for themselves, when I have put my proposal forward, what might be the best way to find out the truth of the matter.
The purpose of this exercise is surely to get at the truth. If it cannot be done through standard procedures-which are still the best way-then more extraordinary steps will be taken.



ALLEGED USE OF TEENAGE INFORMERS-POLICY DIRECTIVES

David Samuel Horne MacDonald: Mr. Speaker, is the minister not able to make clear at this point that there is no such directive with regard to this matter, or is he going to allow the uncertainty to continue to exist with regard to the use of paid youth informers under circumstances similar to those described by Mr. Eadie?


Jean-Pierre Goyer: Mr. Speaker, since the hon. member insists, I can tell him which philosophy-


Mr. Speaker:: Order, please. The minister is suggesting that he would be prepared to expose the philosophy of the department in this respect. I really think this ought to be done on motions and not during the question period, particularly when we are running short of time.



REQUEST FOR STATEMENT ON RECRUITING OF INFORMERS

Mr. Andrew Brewin (Greenwood):: On a further supplementary question, Mr. Speaker, would the minister, apart from the facts of this particular case, be willing to make a statement to the House on motions setting out the policy of the government and of the RCMP with regard to the
Inquiries of the Ministry
recruiting of informers, particularly under-age informers?


Jean-Pierre Goyer: Mr. Speaker, there is a specific policy in this respect, but I would rather deal with it when I receive the report and I do not believe this will take too long. I hope that a report can be made to the House next week and I will then be able to explain very clearly the policy we are following in this area.



NATIONAL SECURITY


Mr. Roch Lasalle (Joliette):: Mr. Speaker, I have a question for the Prime Minister.
Considering that the presence of the Armed Forces in Quebec last October gave rise to supplementary expenditures, can the Prime Minister tell us today whether Quebec will or not have to pay for those additional costs?


Right Hon.   P.E. Trudeau@Prime Minister: Yes, Mr. Speaker. The Cabinet has considered the matter this very morning and I will shortly be sending a letter to Premier Bourassa to inform him that, considering the particular circumstances in which the War Measures Act was invoked, the federal government does not intend to require payment from the province of Quebec.



WAR MEASURES ACT-PAYMENT BY QUEBEC FOR SERVICES OF ARMED FORCES-AMENDMENT OF NATIONAL DEFENCE ACT

['Order, please. The hon. member will understand that this matter lies within the purview of the House of Commons administration and that under the circumstances it should rather be directed to the Chair in the usual way.']
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I would now like to repeat the gist of the question I asked the Minister of National Defence last Tuesday at which time his answer was not recorded. Is it the intention of the government of Canada to press for amendments to the National Defence Act to fall in with the demand of the province of Quebec that the costs of the use of the armed forces in Quebec be borne by Canada?


Hon. Donald S. Macdonald (Minister of National Defence):: Mr. Speaker, my answer, which was no on Tuesday, after this morning's cabinet meeting has become yes. Not only will we deal with the situation of Quebec but also with the arrears of the five other provinces which have amounts outstanding that are owing to the government of Canada, including the province of which the Leader of the Opposition (Mr. Stanfield) was at one time the premier.


Some hon. Members:: Oh, oh!



Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, may I direct a question to the right hon. Prime Minister on

September 9, 1971
Inquiries of the Ministry
a matter of most serious concern to many thousands of Chinese in my constituency. For the protection of the good name of democracy in Canada, will the Prime Minister say whether he will accede to the request for a meeting with the representatives of the Chinese groups who, in a letter to him of August 4, alleged acts of intimidation and threats of harm to relatives in China if they acted contrary to directives from Peking?


Pierre Elliott Trudeau: Mr. Speaker,
I did receive such a letter from them making these allegations and we are trying to seek out the truth behind them. As yet we have no evidence that these allegations are well-founded, but we are still looking into the matter.


Harold Edward Winch: Mr. Speaker, may I say that I have addressed a letter to all the Chinese groups in Vancouver. If I receive the evidence asked for, will that be sufficient for the Prime Minister to have a meeting with them?


Mr. Oza Tetrault (Villeneuve):: Mr. Speaker, I would like to ask a question of the right hon. Prime Minister.
Is he aware that in summer it is quite difficult for tourists to get bilingual guides for a visit to Parliament? The same question was asked last year and we were assured that such a situation would change-


Mr. Speaker:: Order, please. The hon. member will understand that this matter lies within the purview of the House of Commons administration and that under the circumstances it should rather be directed to the Chair in the usual way.



HIGHWAYS


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Secretary for External Affairs. In view of the discussions that are now taking place regarding the completion of the Alaska highway could the government outline its participation in these conferences and inform the House of its initiatives?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I shall look into the question of the conferences to see whether or not we are participating and answer when I have the information.



NATIONAL SECURITY


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, in light of the Prime Minister's answers yesterday with

regard to the new security force in Canada or unit, as he calls it, or headless group, I would like to put this question to the Solicitor General. Who has custody and jurisdiction at this time over the files on security in Canada? Has there been any change in this regard, or is there a change planned as to custody and jurisdiction over these files?


Jean-Pierre Goyer: No, Mr. Speaker, it is still the RCMP.



IMMIGRATION


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. With respect to the Immigration Act, does the minister plan or intend to bring in an amending bill at this session or to table a white paper?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, I think the exact order of business for the remaining part of this session will be a matter for discussion with the House leaders and at this stage I cannot make any comment.


Sylvester Perry Ryan: Has the minister prepared something along either of these lines and is it ready?


Otto Emil Lang: Mr. Speaker, we have been working on possible amendments to the legislation for some significant time-


Sylvester Perry Ryan: Six years.


Otto Emil Lang: -and certainly are giving full consideration to all of these matters.



WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT

Mr. John Burton (Regina East):: I have a question for the Minister of Finance. In view of the very specific obligation imposed on the Minister of Finance in the Temporary Wheat Reserves Act to make certain payments within a specified time period, has the Minister of Finance, or possibly his colleague the minister in charge of the Canadian Wheat Board, asked the Minister of Justice for a legal opinion on the validity of the action or lack of action by the Minister of Finance and has a legal opinion been given?


Hon. E. J. Benson (Minister of Finance):: Not to me, no,


Mr.   Speaker.Mr. Burton@: I should like to ask the Minister of Finance if the Canadian Wheat Board has informed the government or the minister of the amount due to the Canadian
September 9, 1971

Wheat Board under the provisions of this act for the 1970-71 crop year by way of invoice, requisition or other means? Has the minister or the government been informed?


Edgar John Benson: Not me personally, Mr. Speaker, but I shall inquire.


Donald Frank Mazankowski: I have a supplementary question for the minister in charge of the Wheat Board. In view of the fact that Bill C-244, the proposed Stabilization Act, does not appear to be on the legislative timetable and that this will further delay the distribution of moneys promised under the provisions of that act, would the minister undertake to obtain and distribute such funds as are now due and payable under the provisions of the Temporary Wheat Reserves Act which is still a law of Canada?


Otto Emil Lang: I think the assumption of the hon. member is inaccurate, Mr. Speaker. Bill C-244 is on the timetable and we hope to be able to proceed with it.


John Stratford Burton: As a supplementary question I should like to ask the Minister of Finance if he is aware that one of the commissioners of the Canadian Wheat Board told the agricultural committee of the House of Commons on June 10 that the Canadian Wheat Board has placed a requisition for the amounts due for 1970-71 before the government? Does the minister not know his job?


Some hon. Members:: Oh, oh!


Edgar John Benson: Unfortunately-


Mr. Speaker:: Order, please.



PROPOSED TAPS TANKER ROUTE-UNITED STATES RESPONSE TO CANADIAN REPRESENTATIONS

['We have not definitely decided whether we should make further representations, Mr. Speaker, but it seems fairly clear from all we hear, including the newspaper reports to which the hon. member has referred, that the views of the Canadian government are well understood and there is no doubt that we are strongly opposed.']
Robert Lorne Stanfield: should like to ask the Secretary of State for External Affairs whether he is able to report anything positive to the House with regard to representations made to the United States authorities regarding the transportation of Alaska oil in the Puget Sound area. Can the minister report any progress toward an understanding?


Mitchell William Sharp: Mr. Speaker, at the invitation of the United States government we have made representations as to the unfortunate effects of the movement of oil in these narrow waters and have been assured that these are under study at the present time.



Mr. Barry Mather (Surrey-White Rock):: I have a question for the Secretary of State for External Affairs. Having in
Inquiries of the Ministry
mind the reports from Washington that President Nixon is nearing a decision in regard to allowing, postponing or cancelling the proposed massive underground nuclear test in the Pacific, does the government intend to make further representations to the United States government against such test?


Mitchell William Sharp: We have not definitely decided whether we should make further representations, Mr. Speaker, but it seems fairly clear from all we hear, including the newspaper reports to which the hon. member has referred, that the views of the Canadian government are well understood and there is no doubt that we are strongly opposed.



INCOME TAX


Mr. Stanley Haidasz (Parkdale):: I should like to ask the
Minister of Finance whether he could allay the fears of Canadian credit unions who consider the proposed amendments to the Income Tax Act as a danger to their existence?


Mr. Speaker:: Order, please. I believe that question was asked yesterday.


EXTERNAL AFFAIRS
Mr. H. W. Danforth (Kent-Essex):: I should like to direct a question to the Minister of Finance. In light of reports from Tokyo of possible joint discussions with Canada, can the minister state if the government is indeed developing joint plans with Japan or other nations for a coordinated effort to persuade the United States not to employ the present surcharge as a long-term policy or are our actions strictly unilateral?


Edgar John Benson: Mr. Speaker, there will be Japanese-Canadian ministerial meetings next week in Toronto on Monday and Tuesday. I shall be attending those meetings so of course there will be consultation between the Minister of Finance of Japan and myself. In addition, meetings on Wednesday and Thursday of next week of a multilateral nature will be held by the Group of Ten in London.



LABOUR CONDITIONS


Hon. Theogene Ricard (Saint-Hyacinthe):: Mr. Speaker, I should like to put a question to the Prime Minister.
Following the recent statement of the Quebec Minister of Finance that unemployment would reach this coming

September 9, 1971
Inquiries of the Ministry
winter a level of at least 13 per cent, would he say whether a special program will be developed to keep unemployment in Quebec from reaching such a disastrous level?


Pierre Elliott Trudeau: Mr. Speaker, no special program has been provided for any province in particular, but as the hon. member knows the budget of December 1970, that of June and the legislation now on the order paper will provide more advantageous measures for the province of Quebec because unemployment is higher there than in other provinces where advantages are lower because unemployment is lower.


J.-H.-Théogène Ricard: Should we understand from this, Mr. Speaker, that this government finds acceptable a 13 per cent unemployment rate in the province of Quebec-



NATIONAL DEFENCE


Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct this question to the Minister of National Defence. Will the minister tell the House the results of government studies respecting the disposal of the Mea-ford tank range?


Donald Stovel Macdonald: Mr. Speaker, the matter is still under
consideration.


EXTERNAL AFFAIRS
Mr. David Anderson (Esquimalt-Saanich):: I have a question for the Secretary of State for External Affairs. As a North Pacific nation interested in continued good relations between other North Pacific powers and in light of understandable Japanese sensitivity on the subject, has Canada informed the United States government of Canadian concern over the inevitable adverse political and diplomatic results of exploding the world's largest underground nuclear test within a week of and in the same state of the union as Emperor Hirohito of Japan will visit on the first ever visit of a head of state of Japan to North America?


Mr. Robert Simpson (Churchill):: I have a question for the right hon. Prime Minister in connection with the announced visit to Canada later this year of Mr. Kosygin of the U.S.S.R. Can the Prime Minister tell us whether Mr. Kosygin will be invited to visit Canada's most northerly
{Mr. Ricard.]
mainland seaport, Churchill, so that he will be able to observe at first hand the advantages to his country of taking grain shipments through that port?


Pierre Elliott Trudeau: I am sure Premier Kosygin will be interested in the suggestion of the hon. member. Actually the program of the visit is being worked out between the two governments at this time.



ADMINISTRATION OF JUSTICE


Mr.  R. Gordon L. Fairweather@Fundy-Royal: I have a question for the Solicitor General regarding allegations that certain basic and legal rights of those accused of the death of Pierre Laporte are being violated by Quebec prison officials. Has the minister received these allegations? If he has, because of the irreparable harm such allegations will do to the Canadian legal system will the minister appoint a commission to investigate their truthfulness?


Jean-Pierre Goyer: Mr. Speaker, if the hon. member is talking about those prisoners who were transferred from one penitentiary to another, I can assure him that all their rights are protected, although some of their privileges have been suspended. At any rate, their right to meet with their lawyers was never suspended; it is still theirs, and always will be.



ALLEGED INFILTRATION BY UNDERWORLD INTO GOVERNMENT

Mr. Steven E. Paproski (Edmonton Centre):: I have a supplementary question for the Solicitor General. In light of the report of a committee of the Canadian Association of Chiefs of Police that organized crime has infiltrated government in Canada, is the government considering calling a meeting of the Attorneys General of the provinces to deal with this serious question?


Jean-Pierre Goyer: Mr. Speaker, the Association has made some remarks of a general nature, but I would like to be given more concrete facts in order that I may consider the approach we could take.



INQUIRY OF THE MINISTRY

Mr. Edward Broadbent (Oshawa-Whitby):: Since in the next few days the Prime Minister will visit Liberal party associations in Pickering, Port Hope and Oshawa and will be travelling at public expense in a government aircraft, would he consider dropping into my place for dinner on
September 9, 1971

Saturday night as one means of reducing the cost to the public?

.00 p.m.)



NATIONAL SECURITY


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Solicitor General. Will the government permit its officials to appear before the citizens' commission of inquiry into the recent use of the War Measures Act in Quebec?


Jean-Pierre Goyer: Mr. Speaker, I do not believe in parallel courts any more than in parallel governments.



NATIONAL DEFENCE


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Minister of National Defence. In view of the white paper recommendation for increased surveillance along the Canadian coastlines, is it the government's intention to station Tracker aircraft and naval vessels at the Argentia naval base in Newfoundland?


Donald Stovel Macdonald: Not at the present time, Mr. Speaker. The Tracker aircraft squadron will be kept in operation, as the hon. member knows, at Shearwater. It can be understood that, as they have been this summer, they will be operating on occasion out of Goose Bay. We have no immediate intention to operate from Argentia.



LONG-TERM PLANS FOR SURVEILLANCE OFF EAST COAST

Mr. James A. McGrath (St. John's East):: I have a supplementary question, Mr. Speaker. Is the minister in a position to tell the House what long-term plans he is prepared to implement, following the white paper, to provide greater and more continuous air and surface surveillance to enforce our sovereignty off the east coast and protect our own nationals?


Donald Stovel Macdonald: Mr. Speaker, I would be glad to expand on that at some time but not at present.
Inquiries of the Ministry VETERANS AFFAIRS



REQUEST THAT WAR VETERANS ALLOWANCE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. Will the government take the necessary steps so that war veterans allowance recipients who are in receipt of the guaranteed income supplement will not have their allowances cut back but will get the full benefit of the increase of $2.70 a month in the pension and supplement which, as has been announced, is to come into effect in January?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, this matter is being looked into at the present time. I wish to assure the hon. member that the usual sympathetic disposition will be taken.
Mr. Knowles (Winnipeg North Centre: Mr. Speaker-


Mr. Speaker:: Order, please. We have run out of time. Perhaps the hon. member would allow the Chair to recognize the hon. member for Lisgar who has been trying for some time to ask a question.



FEED GRAINS-REQUEST FOR FREE INTERPROVINCIAL MOVEMENT

Mr. Jack Murta (Lisgar):: Mr. Speaker, I wish to direct a question to the minister responsible for the Wheat Board. In view of what now appears to be a very large crop of feed grains, especially barley, this year in western Canada, is the government giving any consideration to letting feed grains move freely on an interprovincial basis from province to province?


Otto Emil Lang: Mr. Speaker, the main role of the Canadian Wheat Board is based upon the control of grain as it passes across provincial boundaries. There certainly is no thought of destroying the Canadian Wheat Board by removing this role at this time.



BARLEY-POSSIBLE RELIEF FROM EFFECT OF UNITED STATES IMPORT SURTAX

Alfred Pullen Gleave: I have a supplementary question, Mr. Speaker. Since the surcharge imposed by the United States against Canadian barley will have the effect of reducing the price to the producer, may I ask the minister if the government has any plans to relieve the producer of this loss by stepping in and taking care of the surcharge?


Otto Emil Lang: Mr. Speaker, the Minister of Agriculture indicated the other day in the House that in the case of agricultural products these will be looked at on a commodity by commodity basis and that appropriate steps will be taken so far as possible to assure the protection of agricultural

September 9, 1971
Employment Support Bill
producers. These steps will be taken in parallel with other measures which are presently before the House.


Mr. Speaker:: Orders of the day.


Roderick J. (Rod) Thomson: On a point of order, Mr. Speaker, it has occurred to me that the sound system is not working very well yet and I wonder what will be done about it.


Some hon. Members:: Hear, hear!


Roderick J. (Rod) Thomson: I am not sure Mr. Speaker heard me.


Mr. Speaker:: Order, please. I had difficulty hearing the hon. member. I think I can only reiterate to the hon. member and to the House that there have been mechanical and technological difficulties in connection with the new system. I am assured that it will work well eventually but we must try the patience of hon. members for a few more days. It is hoped that before the weekend all the "bugs" will have been removed from the system.


Harold Edward Winch: Mr. Speaker, does the term "eventually" have the same meaning that it has when cabinet ministers use it?


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, September 8, consideration of the motion of Mr. Pepin that Bill C-262, to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment thereto of Mr. Saltsman (page 7633).
Mr. Ian Wahn (St. Paul's):: Mr. Speaker, I had just begun to speak on Bill C-262 when the House adjourned yesterday. I should like to deal now with some of the arguments made during the debate by members of the opposition.
I believe it was the former leader of the official opposition, the right hon. member for Prince Albert (Mr. Diefen-baker), who used to insist so often that it was the duty of the opposition to oppose. It is clear from the debate that in carrying out this duty the opposition has had to reach down quite far-indeed, to the very bottom of the barrel- for some of its arguments in opposition to this legislation and, indeed, on occasion to show a great deal of imagination. In the few minutes I will take this afternoon I should like to deal with a few of the more startling examples of that exercise in imagination.
All members of the House will agree that the United States surcharge could have a very serious effect on
employment in Canada. They will also agree that some legislative action is required. Taking off from this point in an impressive logical leap, opposition members then claim that by introducing this particular bill we are trying in Some way to excuse ourselves and to persuade the Canadian people that the United States surcharge is the cause of the degree of unemployment which existed in Canada before the surcharge was imposed. What an exercise in persuasion that would be! And what a high opinion members of the opposition must have of the eloquence of government members on this side of the House.


Robert Lorne Stanfield: Who needs enemies when you have friends like that?


Ian Grant Wahn: No, Mr. Speaker, in introducing this legislation we are not trying to blame the United States for the degree of unemployment which existed before the United States surcharge was imposed. We are introducing this legislation to prevent the United States surcharge from making our position any worse.
During the debate, members of the opposition also had some pretty harsh things to say because members of the government acted promptly in protesting to Washington against the imposition of the surcharge against Canada and because they asked for an exemption. By far the favourite metaphor-perhaps because it was originally used by the Leader of the Official Opposition (Mr. Stanfield)-was that our ministers went "hat in hand". Other opposition members were somewhat harsher. They said that our ministers went "begging" or "went to grovel at the feet of the Americans". I ask members of the opposition this: in view of the exceptionally serious effect of the surcharge on Canada, admitted by all parties, what would they have said if members of the government had not protested promptly, if they had not pointed out to United States officials why this surcharge should not be imposed against Canada and if they had not asked for an exemption?
Admittedly, the United States action in imposing the surcharge was radical, particularly since that action was taken without consultation with that country's principal trading partners. However, even if we resent this action deeply, does it follow that we should retaliate and risk the danger of a trade war with the United States?
Our population is a little over 20 million people; their population is well over 200 million. More important, as the Minister of Finance (Mr. Benson) pointed out, our trade with the United States is about one ninth of our gross national product. The United States trade with us is about one thousandth of their gross national product. Surely, it is clear that if we retaliate and get involved in a trade war with the United States, our country will be the loser. Clearly, then, we must suppress our indignation. We must not retaliate. Instead, we must ask ourselves this question: how can we protect Canada against the effect of the surcharge while avoiding the danger of a trade war with the United States? This bill now before us is the government's answer to that question.
This legislation provides an $80 million fund to compensate industries which will have to pay the surcharge, provided they maintain employment and carry out the conditions set out in the legislation and in the regulations made under it. The solution may not be perfect, but it
(Mr. Lang.]
September 9, 1971

makes good sense. To satisfy ourselves on that point, let us take a look at some of the objections and the alternatives put forward in the course of this debate by the opposition.
Some members of the oppositon say: "give Canadian companies greater incentives, compensate them for the surcharge by a general tax reduction-in the corporate tax, in the sales tax or in the tax on building materials." Any such tax reduction would be much too general and not selective enough to deal effectively with the problems caused in Canada by the U.S. surcharge. In the event of any such general tax reduction, corporations not hit by the surtax would receive benefits and even among exporters hit by the surtax, the amount of the benefit would not be directly related to the loss caused by the surtax.
Other members of the opposition said: "let us impose an export tax on gas and oil going to the United States". The reasoning seems to be that ordinary Canadians are going to be hurt by the surtax imposed by the United States government, so let us retaliate by hurting ordinary Americans by imposing an export surtax on the gas and oil which we sell to them and which they must have. An export tax on gas, oil or other commodities exported from this country in unprocessed form may be a good idea, but the provincial governments may have some views on that. They are particularly interested in resources. In any event, how would that help us to solve our immediate problem? It will hurt American consumers, but how will it benefit Canadian manufacturers and their employees who will be hurt by the United States surcharge? For that, a fund such as is provided in this bill is required.
Other opposition critics say the situation is so grave that this legislation is an insult, the fund is far too small- what's $80 million? I seem to recall that one politician got into a great deal of trouble by asking, "what's a million". Eighty million dollars is a very large amount, particularly when you remember that it is just for the last half of our present financial year.
The size of the fund must of course be related to the estimated amount of the surtax. The Minister of Finance (Mr. Benson) pointed out that on an annual basis probably about $2.5 billion of Canadian exports would be involved. The maximum rate of the surtax would be 10 per cent, but the effective rate might be much lower on certain exports depending upon a number of factors, including the amount of U.S. content. If the average effective rate turned out to be about 5 per cent or 6 per cent, the total surtax would amount to about $150 million a year or about $75 million for a half year period.
Moreover, it is vital that exporting firms should have an incentive to increase efficiency, cut costs and minimize the impact of the surtax. To provide this incentive they should not expect to pass the entire amount of the surtax on to the government. They should have to bear a reasonable proportion and in his remarks, the Minister of Industry, Trade and Commerce (Mr. Pepin) indicated that this should be about one-third. The $80 million fund is likely, therefore, to be adequate for the balance of the financial year.
Other opposition members are concerned about the wide discretion which the board administering the fund will have. I share this concern. It would be highly underemployment Support Bill
sirable to establish anything in the nature of a permanent board which would have such a wide discretionary power to distribute public money to private corporations. This can only be justified upon the assumption that it will be needed only for a temporary period. Even then, the discretion given to the board by the regulations should be limited as much as possible, bearing in mind the necessity for assisting our exporters and their employees without violating our international agreements or inviting retaliatory action.
I hope that the general effect of the board's actions will be to protect Canadian exporters to the extent of two-thirds of the surtax which they are forced to pay, provided they maintain employment and comply with the other regulations established under the act and that exceptional cases will be kept to an absolute minimum.
There have been some critical comments about the representation on the board. Of course there should be labour representation on the board. The main purpose of the legislation is to protect jobs. I do not think that anyone from this side has suggested there will not be labour representation on the board. The Minister of Industry, Trade and Commerce naturally was concerned that there should be business representation on the board and so there should be. But we also have a very forceful Minister of Labour (Mr. Mackasey), and I hope that he will make certain that we have effective labour representation as well. I hope also that any representative of labour will be a very practical type, not a headquarters type, but an operational type preferably from an industry directly affected.
Speaking in the House, the Minister of Industry, Trade and Commerce said the regulations will provide that to be eligible for assistance, 20 per cent of the plant's production must have been exported to the United States. In view of the wide discretion given to the board, I see no reason for this restriction and I think it should be removed. I understand the purpose, namely to restrict assistance to firms which suffer a substantial impact as a result of the United States surcharge. However, I do not believe that the impact of the surcharge is necessarily in proportion to the percentage of exports. Many other factors might be relevant. There might very well be a number of small Canadian companies which might be exporting only 10 per cent or 15 per cent of their entire production to the United States. However, their margin of profit might be so small that the additional volume created by the relatively small United States exports is essential in order to carry on. This is the very type of firm that we should be trying to help. I think eligibility in this type of case should be left to the discretion of the board, rather than being fixed by regulation. The minister pointed out in his statement that originally it had been suggested the regulations might provide that a firm would not be eligible unless a stated number of employees might be laid off as a result of the surcharge, but it was felt that this provision might be too rigid and it was better to leave it to the discretion of the board. I agree and I think the same principle should apply to the 20 per cent provision as well.
The ministers who have spoken have emphasized that this bill does not represent long-term policy; it is a stop gap measure designed to meet a specific emergency. This is true, but I would like to stress the importance of the

September 9, 1971
Employment Support Bill
government bringing forward promptly a long-term policy on the regulation of foreign investment.
The hon. member for York South (Mr. Lewis) was kind enough to refer to the report presented to the House over a year ago by the Standing Committee on External Affairs and National Defence. That report established clearly, I believe, that we have over the years drifted into a position of undue economic dependency upon the United States. It pointed out the dangers of such undue dependency and it made very specific recommendations for legislative action.
The present state of emergency caused by the United States surtax has merely underlined the problem and the importance of developing a long-term policy on foreign investment. Clearly any such policy must take into full account the vital regional differences which exist in Canada with regard to capital requirements, but obviously a long term policy is required.
Action by the United States to meet its balance of payments problem is not new. They have been trying to find solutions since at least 1963. Their problem is due in part to the increasing competition faced by United States firms as other countries have recovered from the results of the last war with a corresponding decrease in the United States favourable balance of trade on current account. It is also due in part to the drain caused by the continuance of the Viet Nam war and large military expenditures all over the world. But it is also due in large measure to the fact that large United States corporations, and particularly its multi-national corporations, have used American capital to take over on a massive scale, businesses in Canada and Western Europe.
.20 p.m.)
It has been pointed out that last year our commodity trade with the United States was favourable to us and that when invisible items are taken into account Canada now has only a small deficit in its current account with the United States. However, over a longer period, since the end of the last war, our imports from the United States have exceeded our exports to the United States by about $12.5 billion and most of that deficit has been made up by imports of U.S. capital. As a result we have now reached the point at which about 60 per cent of our manufacturing and resources industries are controlled by non-residents of Canada, mostly by residents of the United States.
Our present economic dependency is one of the results of the policy we have followed in the past. Since 1963 the Americans have taken steps to regulate and limit the export of American capital abroad. We have always asked for, and have always obtained, an exemption-on conditions. I suggest very strongly that for the future we make it very clear to the United States that we would much rather dispense with all such exemptions than be burdened by a surtax on our legitimate exports.
In recent days, certain news reports have suggested that the purpose of the United States surcharge is not only to increase production within the United States and force a reasonable revaluation of under-valued currencies, but that it is also designed to force certain countries, notably Japan, to ease their restrictions on American investment.
{Mr. Wahn.]
I trust the government will try to run down the truth of these reports because any such use of the surcharge would be an intolerable interference with the right of each country to regulate foreign investment in its national interests. If there is any suggestion that this is, in fact, one of the purposes of the U.S. surcharge, I hope the government will make the strongest possible objections and that, in any event, it will proceed with the greatest possible speed to introduce long-term and comprehensive policies to regulate foreign investment in this country. In the meantime, however, stop-gap legislation of the kind contained in the bill before us is necessary and deserves the support of all members of the House.


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I have listened with great interest to the hon. member for St. Paul's (Mr. Wahn) and others who have taken part in this debate. I share the concern felt by members in all quarters of the House over the action unilaterally taken by the President of the United States on the night of August 15.
Bill C-262 envisages a program of immediate support for industries which may be adversely affected by the imposition of a 10-per-cent surtax across the board, but to put this aspect into its complete context I should like to review briefly the total package which was presented by President Nixon to the American public. Some of these new arrangements, by virtue of the President's executive power, have already come into operation. Other aspects will be debated by Congress in due course and will presumably be passed in due course. We are all familiar with the first proposal, the freeze on prices and wages for 90 days. Then, there was the announcement that the American dollar would no longer be convertible into gold, in effect freeing the U.S. dollar and helping to correct the present imbalance of United States trade.
The 10 per cent surtax which has been the primary subject of discussion in this chamber is only one aspect of the President's package proposal. There is something called DISC-the Domestic International Sales Corporation-which is to be used as a device whereby the United States government, through tax deferral of earnings from export sales will, hopefully from the United States point of view, improve the export position of American producers in order that the deficit position of the U.S. dollar in so many trading areas may be altered. Mr. Nixon further proposed that there should be a job development credit established to defray up to 10 per cent of the cost of new machinery and equipment, a further measure to stimulate the internal economy of the United States. The President also suggested that the 7 per cent excise tax on automobiles purchased by Americans be eliminated. This would result in a reduction of about $200 in the price of cars to Americans.
The President went further. He suggested that in order to restore business confidence to the American people, certain income tax exemptions be introduced more rapidly than had been planned. As I understand it, the exemptions were to have been increased-the Canadian Minister of Finance (Mr. Benson) has put forward a somewhat similar proposal

but the difference between the situation in Canada and the situation south of the border is that we are still talking about it up here whereas in the United States it has been decided that the tax exemptions are to
September 9, 1971

be increased as from January 1, 1971. Another exemption is to be given in January, 1972. I do not intend to go into details concerning the actual levels of the exemptions. I merely point out that this is all part of a package designed to stimulate the American economy and that Mr. Nixon has proposed that the exemptions be consolidated so that the whole series should take effect on January 1, 1972 rather than on January 1, 1973 as first envisaged. This will certainly add buoyancy to the American economy.
Perhaps the most interesting of the President's announcements from a psychological point of view was the decision to reduce federal expenditure in the fiscal year 1972 by $4.7 billion through a 5 per cent cut in federal employment plus a six-months freeze on federal pay increases, further deferments in a general revenue-sharing plan and a one-year deferral of certain welfare program changes which had been advocated. Without going into detail as to the ramifications of this economic package presented to the American people by Mr. Nixon, I suggest to members of this House that it represents a point of demarcation in the post-war economic planning of the United States and that the free world is bound to react to it.
Whether we like it or not, the United States has been and will continue to be the leader of the free world in the economic sense as in most other senses. We can take steps to correct certain anomalies or deal with particular problems which may arise, but the economic facts are clear. The 10 per cent surcharge on imports is one of the lesser steps in the multi-faceted program announced so dramatically on August 15. I suggest to you, Mr. Speaker, to the Minister of Industry, Trade and Commerce (Mr. Pepin) and to his colleague, bumbling Ben, that we are faced with far more fundamental proposals, steps which are bound to have a greater impact on the Canadian economy in the long term. Again, I refer to the tax incentives, the creation of DISC, and so on. Thus far, however, our only reaction has been to the announcement of the 10 per cent surtax. No matter how knowledgeable or prophetic the Minister of Industry, Trade and Commerce may be, he will surely need a couple of weeks in which to react to a package of proposals and decisions which, evidently, was conceived and approved during a weekend at Camp David.
According to reports I have read, this program was conceived not by officials of any department in the U.S. treasury or trade and commerce; it was conceived, with some assistance from the federal reserve branch, primarily by politicians. Along with the economic impact the measure had, it was a very definite political package. I would contrast that fact with the reaction of this government, which thinks it can send officials to Washington, after the first pilgrimage of the Minister of Industry, Trade and Commerce (Mr. Pepin) and the Minister of Finance (Mr. Benson), to help explain the position of Canada in a situation that was, in effect, directed by United States politicians and which found its conception in U.S. economic problems.
This is one of the main objections I have to all the comments so far made about Bill C-262. Not that the bill is not good as far as it goes. The truth is that it provides very
Employment Support Bill
little and does not go far enough. The fact is that it does absolutely nothing, I suggest, to exert even an infinitesimal pinpoint of pressure on the United States public, and thereby on the United States administration, to relax the 10 per cent surcharge as it applies to Canada, a country jointly involved with the United States in so many areas in which we are interdependent.
I suggest there is a good case to be made for the 10 per cent surcharge not applying unilaterally to Canadian exports. Following the August 15 announcement there was, at first, confusion in Ottawa. From looking at our television screens, it appeared that some ministers thought they had been ambushed by the new Nixon approach from across the border, even though every economist worth his salt and some finance ministers worth their ledgers had been saying for months that something had to give on the United States scene, that there was pressure on the U.S. dollar and changes had to be made. The criticism of the situation on August 14, 13, 12 and all July and June was: "Mr. America, you cannot maintain the position of the U.S. dollar; something has to give".
However, what did the Minister of Finance, the Secretary of State for External Affairs (Mr. Sharp) and the Minister of Industry, Trade and Commerce do? Not one tittle of energy or activity did they expend to go to the United States, not with cap in hand or bag in hand like the proverbial mendicant, and certainly not like cattle left out to pasture with the barn door closed on them, but like forthright politicians to talk to the Secretary of the Treasury. The Prime Minister (Mr. Trudeau) is able to go to Afghanistan, Yugoslavia and other exotic places in the world, so why can he not come down in the world a little and embark upon a mundane trip to Washington to find out what his opposite number is planning to do in a matter as fundamental as the economy?
After the initial confusion in Ottawa over whether there was going to be a cavalcade to Washington or whether there was not going to be a cavalcade to Washington and whether the Prime Minister was going to take some time off from his very necessary period of recuperation required to rejuvenate himself for the coming parliamentary battles, the Secretary of State for External Affairs appeared on television and declared that the Prime Minister did need a rest. However, the next day he announced that, with great reluctance, the Prime Minister had decided to cancel his trip and return to the capital to see what could be done.


Jean-Luc Pepin: And where were you?


John Patrick (Pat) Nowlan: In my riding on parliamentary business, as I thought most members were in the summertime.


Mitchell William Sharp: The minister was here.


John Patrick (Pat) Nowlan: If I were a member of the government I would have been here, too.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: There is no argument that when the heat is on in the kitchen and the pot is boiling, the chief cook should be there to make sure it does not boil over. No matter how sincerely members of the cabinet try to con-

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duct the businesses of the nation, of which they know nothing, the fact of the matter is that these ministers can do very little until the number one man comes back to help give direction to a pretty misdirected group here in Ottawa.
The Minister of Finance and the genial Minister of Industry, Trade and Commerce proceeded to Ottawa, full of injured ignorance and with the echoes of Joe Greene and his Denver gas speech ringing in their ears, and then went on a pilgrimage to Washington minus leader, minus plan and minus policy. However, all was not lost because the empty-handed-and some people think empty-headed-Minister of Finance came back to Ottawa and stated that Mr. Connally had given him a good hearing; that that great Texan who strides well and rides the horses free understood our problems north of the parallel and was going to listen to us. "In any event", said the minister, "we have a contingency plan that we will present to Parliament when it meets on September 7". In addition to that, the Prime Minister said that he would allow himself to take the time and effort to make what in effect was a state of the union address to the Canadian nation, setting out the federal government's objectives to preserve an economic balance, when parliament reassembles.


Steve Eugene Paproski: And we are still waiting.


John Patrick (Pat) Nowlan: Yes, we are still waiting, as my hon. friend says. Because all we found on returning here was this Bill C-262, described as an employment support act and which is supposed to provide up to a maximum of $80 million to help offset the 10 per cent surcharge proposed by President Nixon. This bill leaves agriculture, and any problems it may encounter, entirely up in the air since it is outside any problems that may be faced by manufacturing industry. The Minister of Agriculture (Mr. Olson) suggested in the House the other night that as far as the processing industries are concerned it might be administratively possible to give them some help, but with regard to any other agricultural products that may be affected by the surcharge we will have to reply upon the provisions of the Stabilization Act. Anyone who has had any experience with the administration of that act knows what a problem it is to try and obtain any recompense therefrom.
So the government's contingency plan was this Bill C-262, which contains 21 clauses, some of which are very invidious as I shall illustrate in a moment. The bill makes very little provision for agriculture, if any. I would suggest that the proverbial mountain laboured mightily to produce a mouse, and it was a mite of a mouse at that.
As far as I am concerned I do not primarily fault the government for Bill C-262 and its inadequacies. But I would refer the Minister of Industry, Trade and Commerce to the provision in clause 15 of the bill. Any parliamentarian or editorial writer or premier of a province who unilaterally declares that this is a good bill just has not read the bill, because clause 15 provides that even if an applicant is unable to comply with the regulations that are set up under the act, which we have not yet seen, he is not to worry; that he is to apply to the cabinet and he will get assistance anyway.


An hon. Member:: Patronage.


John Patrick (Pat) Nowlan: If that is not the case, then I should like the Minister of Industry, Trade and Commerce to say I am wrong.


Jean-Luc Pepin: You are wrong.


John Patrick (Pat) Nowlan: Well, I am not going to digress and get into the rabbit tracks laid by the minister. Although he is a political scientist and taught something to someone at university, he is not a lawyer, and to me clause 15 suggests that where a manufacturer who makes application is unable to comply with the regulations of the board, he may go to the Governor General and a grant may be authorized. Has the minister himself read clause 15? Under clause 15, without any qualification whatsoever, manufacturers who have not complied with the regulations will be able to come to government and get assistance. This completely unqualified and arbitrary discretion on the part of the government and the cabinet, without terms of reference, flies in the face of parliamentary control. Except for the fact that this will help these companies unfortunately hurt by this surtax, this situation alone justifies criticism and complaint about this bill.
Let me now digress from the discussion of clause 15, although I hope to return to it again before concluding. The criticism of the faults in this bill goes far beyond its narrow purpose. This whole thing goes far beyond the question of the surcharge and the unemployment it might generate. To my way of thinking, the fundamental question refers basically to the economic relationships which do or should exist between Canada and the United States.


Jean-Luc Pepin: Mr. Speaker, for the sake of keeping things clear would the hon. member again read clause 15 in order that he might realize immediately he is not giving a good interpretation of it.


John Patrick (Pat) Nowlan: I always like to oblige the minister, as he usually accommodates members of this House. Hopefully, at the conclusion of my more general remarks, I might refer again to the details of the bill, but I should like to conclude those remarks as my time is running short. I may suggest to the minister that clause 15 opens Pandora's box, and this is not good in a parliamentary way.


Jean-Luc Pepin: I was only making the point that the hon. member is not giving a proper representation of the clause.


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


John Patrick (Pat) Nowlan: I suggest it is not the surtax, Bill C-262 or the inadequacy thereof, which is the fundamental issue here, but rather the basic relationships which exist or should exist between the United States and Canada. Certainly, this is true in an economic sense. We have to define our relationships in order that both nations can share the northern half of this continent.
We have been waiting for months for the Gray paper on foreign investment. I suggest it is still a blank paper and that this accurately reflects government policy on this matter. Perhaps instead of calling it a "Gray paper" on foreign investment it should be called the blank paper,
September 9, 1971

because that more accurately reflects the views of this government. Those views are blank. The government has no views on foreign investment in this country.
Bill C-262 is just camouflage in respect of this problem. It diverts attention from the larger problems regarding relationships between Canada and the United States. We have heard many speeches in this country in the last few months about our economic nationalism, yet we have been caught in a policy vacuum because Mr. Nixon has decided to declare his economic nationalism.
Our friends to the left in the NDP must feel they have had a bear by the tail. Their leader must decide whether to stay with the waffles or get off the waffle iron. Mr. Nixon has to some extent adopted the rhetoric of the waffle movement, and I do not think the NDP can have it both ways. The leader of the NDP tried to suggest many alternatives during this debate, including the levying of an across-the-board export tax on everything manufactured in or shipped from the west. He did not mention anything about the east. He has to decide whether to stay with the waffle group or get of the waffle iron because it is too hot.
I suggest the surtax is only one piece of the whole puzzle. If that piece is removed we will still be left with the realities of the proposals advanced by Mr. Nixon which, as I said, may in the long run have far more reaching and fundamental effects on Canada. Certainly, they will have a more fundamental effect on Canada than all the speeches we have had to date on this question of economic nationalism.
Yesterday the Prime Minister added a new term to the political lexicon. Several months ago he said there are political nobodies and political somebodies. He then became involved in an interesting little monologue along that vein. Yesterday he said there are in this government non-heads of non-branches. In spite of all the concern Canadians have about the United States program, at least that country has taken some action following some decisions. Notwithstanding all the task forces we have had in this country, that action and those decisions have caught us in a vacuum. Instead of using the United States move as a catalyst for action in this country, hopefully to mobilize public opinion, we are still in a vacuum. The government should have made a move to promote business. It should have granted tax incentives to stimulate the economy. We have a sluggish economy, in spite of what Mr. Benson has said. The government should advance imaginative proposals for monetary reform instead of compromising between shades of white and black.
Instead of advancing a comprehensive policy, the government is putting another patch on the quilt. It should clean that economic quilt or substitute it with a new cover. Canada needs more than another patch on an old quilt. I must ask myself and other members whether we deserve more when we allow a Prime Minister to run a government with non-heads of non-branches. I suggest this means we also have non-government. The minister can well ask us to read the measure again, but let me remind him that some of his former colleagues have
Employment Support Bill moved out of the government ranks as a result of dissatisfaction with policies or the lack of policies on these basic issues. When the Prime Minister (Mr. Trudeau) comes into the House and says facetiously and superciliously, as he did yesterday, that there are non-heads of non-branches, we must conclude there are non-policies, non-government and non-economic nationalism. This government has advanced no major proposals and has no policy in respect of the announcement by Mr. Nixon. We are supposed to hold our breath and wait for another piecemeal or patchwork piece of legislation.
Japan and Germany have already reacted, yet we are playing around with $80 million to offset a measure which is fundamental and will alter our trade patterns. I knew the Canadian mosaic had many pieces, but I did not know they were so jumbled. I thought the Canadian mosaic gave a more clear picture than we are seeing. We have all heard of the cultural crossroad and the constitutional crossroad. I suggest we have reached the economic crossroad. Instead of timidity, this government should mobilize the latent pride of Canada and aggressively approach the problems presented by the actions of the United States. We must consider them in that light instead of with empty heads, empty souls and empty policies. With that bit of rhetoric, one might ask what we can do or what should we have done. I suggest that is a most fair question to ask.
I think one of the first things we should have done was to initiate very directly with the President of the United States, and not with some of his secretaries or officials, bilateral talks with our Prime Minister (Mr. Trudeau) on this whole question of the economy. Then, the point could have been made and underlined that we in this country are concerned; that we are sympathetic with the American problem but are concerned about whether the resolution of that problem will adversely affect us. 1 suggest that Bill C-262 does nothing at all to exert any pressure on anyone south of the border to help him wake up in respect of how these measures will adversely affect us. The case is not even recognized by the United States public, let alone by the United States Congress. That is one of the fundamental objections I have to Bill C-262. It does nothing to help put pins in anybody south of the border to help redress the problem of the North American continent.
Certain things have been fundamentally upset by the unilateral move by Mr. Nixon. Up until now we in Canada, whether at war or at peace, had a tradition of dealing with economic problems in a free and independent manner. Obviously, much of our economy was interwoven in the web of world trade but nonetheless we never accepted any form of aid from any other nation, including the United States. Instead, we negotiated bilaterally and multilaterally in respect of the import and export of products, services and capital. We note that in the past few years economic conditions around the world have been subject to severe strains which have manifested themselves by spiralling inflation, unemployment, usurious interest rates, and currency problems. To avoid a
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currency problem in Canada, we floated our dollar. We took some action to help the United States dollar. We floated our dollar which increased approximately 7 per cent vis-a-vis the U.S. dollar, and in the process we severely hurt many of our exporting companies.
At the same time, the government took steps to cool the economy with the objective of eliminating inflation and increasing unemployment, but unfortunately both inflation and unemployment increased. Judging by the figures from the Dominion Bureau of Statistics, the treatment was both excessive and certainly not very effective because we still have both. While we were experiencing these problems the United States was experiencing similar problems. It should be noted that the largest volume of trade between any two nations in the world is between Canada and the United States, and that much of Canada's manufacturing and mining industry is tailored to the economic interrelationship that exists between our two nations. Much of Canada's capital and human resources is employed in projects which are only viable because of the stable, continuous trade relationship which has existed with the United States.
But as I say, on August 15, by the unilateral action of the President, all this changed. The steps he took, with the exception of the 10 per cent surtax, are ones we can approve of because in time, if they help the United States economy, they must obviously help ours. But the 10 per cent surtax which is applicable to some $2 billion to $3 billion in Canadian exports means that the United States government will collect some $300 million in tax which in our integrated continental competitive market means that this will be paid by the Canadian manufacturers because, as the Minister of Industry, Trade and Commerce has pointed out, any price increases in the United States for Canadian products will primarily result in the cancellation of orders.
It is, of course, true that when the Canadian exporter absorbs this 10 per cent surtax the Canadian taxpayer will pay over half the cost if the exporter is in a healthy tax paying position; that is, these grants are payable and I guess, if the exporter is paying the tax, very likely the tax rate of 50 per cent will be rebated and instead of talking about $80 million it might be possible to make the argument it should be only $40 million if the exporter is paying the full tax at the rate of 50 per cent. I will not pursue that.
As the Minister of Finance can readily substantiate, few exporters are in that position after the 7 per cent increase in the value of the Canadian dollar. After that increase there were perhaps not too many exporters who were paying that much corporation tax. It is interesting to note, in talking about the floating Canadian dollar- and other members mentioned the devaluation-that since the U.S. dollar was allowed to float after August 15, the U.S. dollar has been effectively devalued by approximately 5 per cent over the past two weeks. It is most interesting to note that the Canadian dollar has moved in an identical and relevant pattern, remaining constant to the U.S. dollar or at least basically constant. So in terms of world currency, because we move in relation to the

United States dollar, the Canadian dollar has been effectively devalued.
The only case I heard the Minister of Industry, Trade and Commerce make for our exclusion from the surtax was that a healthy Canada makes a healthy customer to buy more United States goods. The position of the two floating dollars since August 15 should give more weight to the Canadian argument. In terms of world trade, those outside North America look at the Canadian dollar and the United States dollar, and the Canadian economy and the United States economy, as interdependent and almost mutually dependent because the dollars have maintained a relatively constant relationship.
There is an indication to the international community that the North American economy is, in effect, one unit. For verification, they have only to look at what happened to the Canadian dollar vis-a-vis the United States dollar when the United States dollar was floated free. We all know what has happened-just another patch on the old quilt. I would have been much more confident of government action or inaction if the Minister of Industry, Trade and Commerce and the Minister of Finance had come into this House and outlined the different proposals that were considered and discarded for one reason or another. However, there has been nothing like that. The promise of the Prime Minister to make his economic address to this Parliament or to the country through television before this Parliament met has not come about. So, we have no real guidelines and as parliamentarians are again left in the dark concerning really what the alternatives were.
I want to suggest to the Minister of Industry, Trade and Commerce something which perhaps is so simple that it might be ridiculous. It is so simple, however, that it may never have been considered.


Jean-Luc Pepin: I am a simple man.


John Patrick (Pat) Nowlan: I certainly appreciate the simplicity of the Minister of Industry, Trade and Commerce. He has much to be simple about.


Jean-Luc Pepin: I invited that one.


John Patrick (Pat) Nowlan: Yes, you did, but you are very genial and very accommodating in your simplicity. I had hoped that the minister could have taken parliamentarians and Canadians generally into his confidence, through the educative process that participatory democracy is supposed to provide, and reviewed some of the alternatives that were considered and discounted. I would like to have one thing explained to me.
I suggest that the surcharge is going to be of more medium range duration than temporary range, Unless of course the Minister of Finance has had an inside tip from the White House to the contrary. But certainly with congress moving into an election year, and with Wilbur Mills, the powerful chairman of a U.S. congressional committee suggesting that temporary means a year or two years, and with the expressed opinions of other top
September 9, 1971

people in Washington that temporary in the lexicon of the U.S. government does not mean soon but may mean one or two years, and that the surcharge may be directed more toward redirecting the domestic flow of dollars than toward correcting a short term imbalance of currencies, I believe the surcharge may be of medium term duration. If that is the case, why pass Bill C-262 which I think only provides a patch?
I believe that we in the opposition have a duty to suggest alternatives to the government. I shall throw one simple alternative across to the government side now, but I have others, more detailed and complicated, which may take longer to get through to the government. I wonder why in this country there cannot be retaliation against the United States. I ask the minister this. Perhaps he, or some of the other ministers after they have been coached by him, may reply. There is a lot of hocus pocus about retaliation. Retaliation is defined in the dictionary in many ways, but it is a form of reply, of response, of reaction. And no matter how one responds, reacts or replies, if you want to interpret it as retaliation you can interpret it that way.
I am not in favour of retaliation but I am in favour of this approach which I shall outline. If we, after having lived in this country and tried to build it into a nation from sea to sea for 102 or 103 years, cannot come up with something more comprehensive and fundamental in reaction to this American package, then in effect what we are passing here in Bill C-262 is a Stamp Act. It is like an unemployment Stamp Act, providing only $80 million. My hon. friend from Calgary North called it a peanut act because it does not meet the fundamental problems. If we pretend to be a country we must meet the issues. It is not good enough for the Minister of Finance and the Prime Minister, after they rushed back from their holidays, to say that we have to be pretty careful and keep cool. No one wants retaliation, but couldn't we have a national response or reply?
I suggest there is one thing the minister should consider now, and which he may be forced to consider if the Americans are not compelled to take off the surcharge, and that is a straight trade stabilization act divided into three parts. One part would provide that Canadian exporters should be given full tax credits in Canada for any imports on which they have to pay surtax to the government of-


Mr. Deputy Speaker:: Order. There may be unanimous consent for the hon. member to continue with his remarks, but it is my duty to bring to the attention of hon. members that his time has expired. Is there unanimous consent?


Some hon. Members:: Agreed.


John Patrick (Pat) Nowlan: I thank the House for its charity. I will only review my stabilization act proposal very briefly. I would like someone on the government side to tell me why it is not feasible to have a trade stabilization act that would give full tax credits to Canadian exporters. In order to help pay for these tax credits, there should be provision for a surtax on dutiable American imports that
Employment Support Bill
come into this country. There should not be an export tax on our natural resources, but perhaps we should have a dutiable import surtax of 10 per cent on American imports into this country, with a consequential freeze of a prices and wages nature, along the lines of that in the United States, so that there could not be unnecessary and perhaps false increases in prices and wages. We are going to have an actual wage freeze in any event in many industries that are affected by the situation in the United States.
A logical sequence of these three steps-tax credits to be paid for by a surcharge on American dutiable imports, and a freeze on prices an wages-would be a bilateral agreement with the Americans to eliminate the surtaxes on imports altogether, so that the relevant picture vis-avis imports between the two countries would be the same in each instance, which is all we are asking. If we could do that with respect to the surtax we would not have too much to worry about, although the other parts of the Nixon program-and there are many other areas, tax incentives and credits, industrial in-training programs, and other plans-that will have to be considered by the government.
In closing, I suggest that unless the government moves much further and in a more fundamental way than Bill C-262 to reply in full to the fundamental shift in American economic policies proclaimed by President Nixon on August 15, then the Minister of Industry, Trade and Commerce and the Minister of Finance will have to come back time after time to this House with other piecemeal legislation. Instead of that why don't we have a full, comprehensive package to show where we are going as a country, and to show if the government really wants to lead or if it merely wants to react to what happens south of the border.


Jean-Luc Pepin: I would like to ask the hon. member just one question. He seemed to be very familiar with the dictionary. From his consultation with that book on the word retaliation" can he say if the dictionary says that retaliation can take place before the offence takes place?


John Patrick (Pat) Nowlan: In answer to the minister, Mr. Speaker, one definition that I did happen to bring with me is from the Oxford Concise Dictionary, which indicates that to retaliate is to repay in kind and, to do as one is done by.


Mitchell William Sharp: To do it in advance?


John Patrick (Pat) Nowlan: I do not know what is so invidious and evil about doing as one is done by, and about having some type of comprehensive reaction to the American surtax on imports. We have had our own surtax on imports in Canada before. I will make a prophetic statement to the Minister of Industry, Trade and Commerce that if this U.S. surtax is not temporary and is continued, as I firmly believe it will be-pressures in the American congress will insist that it be continued-he or some other minister will have to come back into this House several months from now and do what I suggest should be done now.
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Hon. Eric W. Kierans (Duvernay):: Mr. Speaker, I want to deal at some length with the over-all thrust of the recent measures undertaken by the United States, and probably less with the immediate response we have made in this bill because it is the over-all thrust that can cause the greatest harm to the Canadian economy.
I think we have forgotten in responding that the impact of the surtax will not fall mainly on exporters, because of course the over-all and very pervasive result of such a switch in policy by the United States is that it will have an impact on gross national income inside Canada. We may, by retaining some of our export markets, alleviate some of the impact on particular exporters, but this does not alleviate the more pervasive effects that fall upon retailers, wholesalers, construction people, farmers, and other people in every aspect of their livelihoods.
There is another aspect to the response. I think that we can liken the 10 per cent surtax in its effects as being somewhat of the same nature as if Canada, of its own volition and in the interests of creating a more effective manufacturing industry at home, had decided on a policy to reduce the tariff protection. This has led, as many will admit, to an inefficient industry-inefficient by the size of the market, which is no fault of anybody engaged therein, but inefficient also because it has attracted capital and new firms into the country as a result of this protection thus creating too many firms in a small market. There are, generally speaking, too many plants which, on an internationally competitive level, are inefficient as to skill, cost and wage structure.
A diminution of exports does not mean a reduction in the capacity that already exists in Canada. The capacity is still there and a great deal of it is going to turn inward. It is going to turn inward in order to grasp a greater share of the market within its own industry. While we agree that in a normal situation this would be a good policy and would feel it really has to be done, I would hesitate to think that the government of Canada is in effect subsidizing some of those firms within an industry to carry on this kind of competition and is not treating all equally. In other words, a firm with more than 20 per cent of export markets would now find itself being subsidized to a considerable extent to maintain its labour. That labour could be used to turn out goods, some of which are for export and some of which will endeavour by a variety of competitive means to capture a part of the domestic market from firms without that advantage. So it seems to me, Mr. Speaker, that we have a great many problems here in deciding that, as a government, we will take up two-thirds of the ransom, in effect, which the President of the United States is asking of the Canadian people in order to maintain entry into U.S. markets.
I think in order to assess not only this policy but all of our future policies, because this is certainly not going to be sufficient and the government does not claim that it is, we have to realize what the problem is that is facing the
[Mr. Nowlan.l
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United States. Last year they had a deficiency of $11 billion in their balance of payments. Their outflows, of course, are well known to everyone. One of these is the cost of their vast military operations not only in Viet Nam but the maintenance of forces in Europe to maintain the defence of that continent and other forces throughout the world. Another cost is their determination at whatever price to their economy-and now they are going to pass some of this on to the rest of the world-to maintain the lead in technology. Vast sums are being expended on all types of technological endeavours, whether sending astronauts to the moon, exploring Mars or proposing SST's which even they find difficult to finance in the last analysis. All this has placed a great burden on their balance of payments.
Another cost is their foreign aid program, some of which has been reduced. A cost which has benefited Canadian manufacturers, not the most efficient in the world, is the inflation within the American economy which has led to the upward evaluation of their dollar to somewhere between 6 per cent and 10 per cent beyond that of other countries. Canadians have been able to get under this and export a great deal of manufactured goods as have, most noticeably, the Japanese and the Germans.
There has been a great outflow on manufacturing account which is not normal to the American economy. There is a perennial and basic outflow for resources and money to buy resources. The Americans have a great many resources but in many areas do not favour developing them in order to keep them as the foundation of their eventual security.


Mr. Benjamin:: True!


Eric William Kierans: So, they are expanding across the world,
seeking to own, control and most of all, to import resources wherever they can be obtained.
A further cost of this outflow has been their capital outflows to buy up industries and resources in other nations. Can they reverse this, the outflow of the manufacturing account? Of all of them, I think this is the only one that they can reverse. To some extent, I think they have slowed down the export of capital for the purpose of acquiring additional firms. Basically, I do not think that they really want to do it.
So, Mr. Speaker, they will not slow down the outflows for resources. They can cut foreign aid, but only slightly because their prestige is at stake. They will not cut the funds expended on military forces across the world or for space and technology because their power is at stake. Now, we find that the most advanced nation in the world has suddenly brought down a series of directives which in effect mean that all the money they have spent on their very high technology has not yielded the kind of growth that will employ all their people. They have had to admit that according to their ratings even such lowly industries as shoes and textiles have to be protected in order to maintain employment. Most important nations usually feel that they should get out of shoes and textiles in order that the developing nations should be able to expand if we really mean to trade with them.
September 9, 1971

We are faced with a series of measures, one of which is the 10 per cent surtax. Another is an investment allowance on American capital equipment which will not be affected by this policy because there will be a double disadvantage to Canadian manufacturers of machinery for export-a 10 per cent surtax of which we can pay two-thirds but an additional 10 per cent allowance is granted by the American government for the purchase of machinery made in the United States by American companies. So, we have that both ways. We have a 20 per cent disadvantage and, as Mr. Nixon proposed today, a domestic international sales corporation-a kind of funny juxtaposition of words-which takes profit corporations and allows them to create subsidiaries responsible only to the parent company which can handle exports. All profits shall accrue to the subsidiary, and as long as it does not pass them back to the parent company there is no tax whatsoever and the parent can use the wholly owned subsidiary to expand across the world.
One wonders what kind of capitalism we are getting into when you can use this kind of corporation to avoid paying taxes on profits that are made. The special categories set up by the government are precisely for that type of thing. This is not a case of skilled lawyers skimming through laws and finding loopholes. The government has deliberately set this up. When we find these corporations that can avoid taxes, obviously avoid making any contribution in profits and, eventually, avoid dividends to the people who own the parent, we are getting further and further removed, not from the concept of capitalism, but from the concept of capitalists, from the concept that there should be capitalists within the capitalist system.
What has happened here? Why has the United States undertaken these measures? Well, since the Bretton-Woods conference, a system has developed that we might call the gold exchange standard. As this has been worked out, it means that this was a gold exchange standard linked to one key currency, and that all the currencies of the world adjusted their values to that of the American dollar. There was no other standard to be used. It was the judgment of international markets that this should be the basis of relative values. When the other currencies of the world were pursuing their own, national objectives- and Canada was one of them-as I say when the other 100 nations whose currencies were valued in terms of the American dollar were pursuing their own national objectives, the American dollar was the key currency. In other words, it was the residual currency. So it came about that every nation in the world began to emphasize exports. Germany, relieved of the responsibility of a large share in its own defence costs or bearing a very little share of its own defence burden, spent its funds in order to further its exports. Japan, relieved of or unwilling to accept a great portion of the burden of defence in the Far East and also unwilling to engage in social security measures and in measures for the improvement of its own environment, pursued a national objective of employment and exports at any cost. We in Canada, of course, were pursuing with single minded vigour the
Employment Support Bill
bogey of inflation. We were able to contain inflation better than the Americans could and we, therefore, also increased our exports into that country.
While every other country was having a very good time, the United States was the residual nation which bore the crunch and the burden of its own policies. It was unwilling to give up all the policies I have mentioned. This was compounding its problems. It was also having to accept the imports of other nations. Finally, within the last several months, nations which began to realize that the Americans could not accept the enormous burden compounded the problem by saying, "We do not want the key currency anymore; we will take gold." In other words, these countries were saying to the Americans, "You had better tighten your own economy and change your own objectives, decrease your foreign aid and decrease your expenditures for defence of the western world. You had better reduce these in order that you might be able to pay us in gold." At this point the link cracked.
I am not very optimistic that the surtax exemption will be granted. I do not think the surtax will come off for a considerable period. There is going to be a great deal of negotiation and renegotiation and wheeling and dealing before the nations of the western world come to some over-all understanding. If, for any reason, Canada should be given an exemption, after the history of 1963, 1965 and 1968, I think the people of Canada will want to know what was the price of that exemption. Did we agree that our dollar should be $1.02 U.S., or did we agree to expand oil, energy, mineral resource and metal mining exports to the United States? And, if the surtax were to come off, what would happen?
After all, the United States has not solved its basic problem, the problem that its productivity has been lagging behind that of most of the world, and particularly that of Japan and Germany. They will not know whether they have resolved this problem until after the 90 days are up or until after some sort of permanent, stable arrangements are made between the American government, the labour movement and business generally in the United States. If these arrangements are not made, it is obvious that the Germans, the Japanese and perhaps even the Canadians could continue, without the surtax, to pile up balance of payment surpluses at the expense of the American economy. Again, we should be back where we started from.
What is the United States saying to Canada in particular by imposing the 10 per cent surtax? When they impose the surtax just on manufactured goods they are saying, "We do not want your manufactured goods but we will take all your oil and gas and all the metal mine exports that you can give us. There is no tax on those commodities and we will take them." They say we will take them because as Schultz said, "Out of every dollar we give to you we get 71 cents back." What are they saying to Canada when they say that they are going to give to American corporations in the United States an investment allowance to apply to new capital equipment that they buy, on condition that that equipment is built

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Employment Support Bill
in the United States and nowhere else. They are saying to us, "We do not want any of the output of your machinery and equipment factories." What are they saying with their DISC program, the Domestic International Sales Corporation program? They are saying, "We want you to take our manufactured exports." They are also saying, on the other hand, "We will take the exports of your resources. We will take all the resources that you can give to us." And what does this add up to?
I have seen this mentioned in many newspapers recently. It adds up to the following: that you can have growth in Canada because, "If our economy expands," says the United States, "we will require more resources and you will have more growth." Well, if we have growth and an expansion in our resource industries that outweighs the decline in our manufacturing output, I suppose you could say that we will have a net increase in our gross national product. But, do we then have a net increase in employment? The answer is no. Will we get a net increase in taxes? Again, the answer is no. We tax firms in the oil and gas industry on less than 6 per cent of their profits. We tax manufacturing firms, on the average, on 63 per cent of their profits. In the metal mining industry, we tax firms, on the average, on only 13 per cent of their profits after you add up all the accelerated depreciation, depletion allowances and other privileges. So, we could have growth in the economy with a decline in employment. We could have growth with a decline in tax revenue and we could have growth, really, with a decline in the division of profits that takes place in the oil and gas industry; because, given its concentration and the way dividends go, there would be an outflow. Our dollar value, similarly, could remain exactly the same. We could substitute $1 billion worth of oil and gas exports for $1 billion worth of manufactured exports and the pressure on the dollar would remain high; but the effect within the economy could be virtually disastrous.
I remember all the debates when I came to this House in 1968. At that time we were shipping approximately
450.000	barrels of oil a day to the United States. Today we are shipping approximately 800,000 barrels. Next year, within a very few months, it will be an average of
900.000	barrels. That is growth in our gross national product, but how many more jobs are involved in that? How much more taxes are involved and how much more profits really accrue to Canadian owners? When we are pursuing growth, we have to examine very carefully the components of that growth in order to find out exactly what kind of growth we are having here in Canada. More important, if our manufacturing industries begin to weaken, that is bad enough. This year the government is attempting to reduce the loss in production, but the longer this stays on and the longer the other measures stay on, we lose something more than the accumulated production. We lose something else, the capacity to produce and the capacity to have a strong and viable manufacturing industry that can support research, technology and its own expansion. All of that deteriorates. It
withers away and when we have got rid of all our resources, the country is left high and dry.
This House has to very carefully examine what exactly are Canada's objectives. What do we want to be and what is our number one objective? I think that every citizen in the country will agree that our number one objective is employment. We must get rid of this perennial high rate of unemployment that has been with us, not just since this government, but has existed with very low bottoms and very swift upturns perennially. We have to make it clear that employment is our primary objective.
Growth is fine, but growth is secondary if it does not bring about an increase in employment. What does that mean? It means that all of our economic policies must concentrate not only on manufacturing, but on renewable resources such as pulp and paper, fish, wheat, barley and grains. All of these resources are renewable. We must take a very close look at the nonrenewable resources. When we look at our tax policy, we see that all of the tax advantages are given to the nonrenewable resources.


Some hon. Members:: Hear, hear!


Eric William Kierans: Comparatively little is being given to the renewable resources, the people who are supplying continuing demands that will guarantee employment in the future. Exporting resources is living off capital. Any fool can have a high income in any given year if in addition to his revenue and the salary he has earned he takes $10,000 out of his bank account and spends that. However, the resources that this country has that are nonrenewable are in trust with us in this House.


Some hon. Members:: Hear, hear!


Eric William Kierans: They are not ours to dispose of so that we can live the life of Riley so that future generations will then have to go back to work.


Some hon. Members:: Hear, hear!


Frank Howard: Why aren't you applauding,
Mitch?


Eric William Kierans: I am afraid that if we do not change some of these basic attitudes and decide what industries we want to further and encourage, we will end up with a weak and impoverished nation without the nonrenewable resources that we have thrown away and we will be left without the capacity to produce. The generation behind will be forced to recover the foregone technology and investment that we might have developed during all the intervening years. Our policies must embrace a monetary policy that is liberal and sufficient - to -satisfy our own capital requirements. Let the provinces borrow here in Canada and let the Bank of Canada make the funds available through the ordinary capital markets.


Some hon. Members:: Hear, hear.


Eric William Kierans: If any province or its hydro company wants to go to a New York market, something that would

September 9, 1971

be very unlikely if there were strong direction from the Department of Finance or the Bank of Canada, they would have to explain to the people in their province why they are bringing in $50 million that will enhance the value of the Canadian dollar to the detriment of the firms they themselves are supplying. We will have to consider and have full and frank consideration among all parties in this House on a resource policy that puts a ceiling on our nonrenewable resources.


Some hon. Members:: Hear, hear.


Eric William Kierans: We have to consider rationing and saving them. We have to realize that the demand for them is not going to disappear because they are the one factor that is declining in the world and on which everybody's growth depends, including the Japanese, the Americans and the Germans. Our resources improve with age and become more scarce and valuable with time. Why are we in such haste to throw them all out without any taxes and without any return in profits when we do not own them?


Some hon. Members:: Hear, hear.


Eric William Kierans: Either we do that or we demand that a greater quantity or portion of them are processed and further converted within Canada in order to provide the employment that processing and converting entails.
We have to stimulate this economy with more than just this rescue operation for the firms that are in the forefront. We have to stimulate it with tax cuts, not tax cuts as the Americans are doing and as we have given to corporations over the years, but tax cuts to those in the low income groups who will spend it today on things that are made in Canada such as food, housing, shelter of all kinds and clothing.


Some hon. Members:: Hear, hear.


Eric William Kierans: It might be worth noting that in the past 10 years the following changes have taken place almost imperceptibly. They have nothing to do with any particular government. In 1961 and 1962, 35 per cent of the tax revenues collected by the federal government came from persons. Of the taxes it now collects, 41.4 per cent come from people and most of that is taken off on the day they receive their cheque. On the other hand, 10 years ago 23.5 per cent of all money collected in taxes by the federal government came from corporations. Today that has decreased to 19.5 per cent and will decrease even lower when we put through some of the things being asked of us.


Some hon. Members:: Hear, hear.


Eric William Kierans: There is just one other matter I would like to point out. The whole theory of economics depends on the fact that young people can work their way into an economy, find the savings, establish themselves and then go on to grow. The whole tax policy has worked against young people breaking into any kind of industry for their own account and virtually the only option left open to university graduates is to work either in bureaucracies 24171-66J
Employment Support Bill
that are public or bureaucracies that are private. If we have any money left over, we can use that to stimulate the economy by increasing the standard of living for the old people. They also will spend it here. They did not have all of the advantages in raising their families that we presently have for our young people.


Some hon. Members:: Hear, hear.


Eric William Kierans: All of this will run down the value of the dollar, and this brings me to my main point, the point which I consider to be the important one. Canadians have always taken a false pride in a dollar which was set somewhere near the value of the United States dollar. I can think of no greater false pride than that. Dollar values are the relative value of two currencies measuring the productive capacities of two economies. Without casting any aspersion on management or workers in our manufacturing industry, they can in no way produce to the same extent as the Americans can. American industries and labour start off with a market of 220 million people while ours start off with a market of 22 million people. They start off with vast pools of capital and ours with much less because savings in this country came only after the income tax was introduced, not before as in the days of the Harrimans, the Rockefellers and the Carne-gies. There is no way in which we can compete with them; the differential may be something as large as 15 per cent in productive terms, not because we are 15 per cent less efficient, less productive, less enthusiastic, but simply because the cost of running a country which is bigger than theirs is much more when it is divided among 22 million people than when it is divided among 220 million people.
What I feel we need in this country is the realization that we ourselves are facing the very crisis to which Mr. Nixon was addressing himself. Its resolution will demand a meeting of minds-not just meetings between governments-at all levels, between federal and provincial authorities as well as between labour and business. The long run effects of U.S. measures will inevitably be more protectionism and we ourselves must develop an economic policy which is peculiarly Canadian. Such a policy will only be effective if all the elements in Canadian society co-operate. It must obviously be expansionary and it is evident that if we expand the economy, if the value of the Canadian dollar declines, this will run counter to the objective of the United States in imposing all these new measures. We must insist that employment is our national objective and while we are not as good at wrapping ourselves in a flag as President Nixon was when he criticized the obscure gnomes in Zurich and the speculators who were attacking the American dollar, while we cannot really appeal as other countries do to that kind of patriotism, because by nature we are suited to it, we can still have national objectives to which all of us subscribe. Let other people define this as nationalism if they wish; I find that most people who accuse nations of following the nationalistic policy are themselves just as nationalistic only they call it patriotism.

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This raises a great many problems. If this is really the feeling of Canada then I believe the Canadian government is bound to make it clear. It would be unfair to our colleagues in the International Monetary Fund or in the Group of Ten if they were allowed to believe by our silence that Canada has no policy of its own, that Canada would accept some new arrangement devised by bureaucrats in the I.M.F. I tell you they will have no support in this House from the hon. member for Duvernay if they ever come before this House with a proposal for parity at whatever level that might be assigned to us by others in Washington or in the I.M.F. no matter how many guns are held to our heads. We shall not accept any arrang-ments which are being set up on the lines "We shall not take your manufactured goods in the United States but we shall take all the raw resources which are given to us." We shall not accept such a role, the role which is assigned to us of being hewers of wood and drawers of water. We shah tell them that though we want freer trade as much as any other nation in the world, though we want a free flow of capital and people across the world, we want no new order imposed upon us under threats of protectionism or quotas or surtaxes.
We have our own national objectives. They amount almost to a single one, the resolution of the problem of unemployment in Canada. That is our objective and while we recognize and respect the right of other nations to have their objectives we demand only that they recognize ours.


Some hon. Members:: Hear, hear.


Alfred Pullen Gleave: the 10 per cent surtax. Malts go up from 30 cents per hundredweight to 40 cents per hundredweight. Since my time is limited I can only pick out a few items but a similar situation exists in regard to exports of fish products. It is significant that the measure now before the House does not deal specifically with this situation. If I follow correctly what the minister said in his statement, surely the bill could be made to apply to processors of agricultural products who export over 20 per cent of their manufactures to the United States.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order, please. I regret having to interrupt the hon. member but it being five o'clock it is my duty at this time, 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 St. John's West (Mr. Carter)-regional economic expansion-request by member of Argentia task force that chairman resign; the hon. member for Don Valley (Mr. Kaplan)-Airports-Toronto-decision on site of new facility-possible postponement of announcement; the hon. member for Halifax-East Hants (Mr. McCleave)-Royal Canadian Mounted Police-role of civilian security force respecting changes.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions (papers), private bills, public bills.



PRIVATE MEMBERS' MOTIONS FOR PAPERS


Mr. John L. Skoberg (Moose Jaw) moved:: That an Order of the House do issue for a copy of the consultant report by Operations Research Industries, a study and recommendations on the design of a management-information system supporting the departmental planning, programming and budgeting system, undertaken for the Department of Manpower and Immigration in the fiscal year 1967-68, as mentioned in answer to Question No. 1,323 of the 1st session of this Parliament.


Mr.   Chas. L. Caccia@Parliamentary Secretary to Minister of Manpower and Immigration: Mr. Speaker, we have dealt with this matter on a number of occasions and it has been transferred for debate. We are ready for that debate and we would expect to have it held forthwith. The hon. member is interested in the subject of information systems which the department has developed over the years in order to increase its effectiveness and its
Management Information Systems
ability to compile information and data, and to provide a service to the Canadian people at the lowest possible cost.
As far as our department experience goes, the approach has been that an information system in order to be of a certain usefulness would have to satisfy three specific requirements. It must meet operational needs; where applicable it must provide a facility for program evaluation, review and identification of effectiveness and efficiency. The third criterion is that it should provide a vehicle to support research and long range planning.
Systems developed in recent years have been designed to meet these three requirements. For instance, we have the immigration data system which in essence is the accumulation of data for the ready retrieval of information on recruitment and selection abroad. The data identifies many items which can be summarized and manipulated, in a wide variety of ways, to satisfy requirements of operational control and research.
In the planning stage by the department at the present time is a major revision of the landing records system. This is meant to eliminate duplication and make it possible to isolate all available information on individual cases. In fulfilling these objectives, a simplification will be achieved in the handling of all immigrants on their arrival in Canada, thus speeding up the processing, particularly at international airports.
On the manpower side of the department-


Frank Howard: I wonder if I might rise on a point of order?


Gérald Laniel: Is the hon. member rising on a point of order?


Frank Howard: Yes, Mr. Speaker. It has been well established in the rules that the scope of debate at this stage of the proceedings is limited to an argument as to whether the document referred to in the motion should be produced. I submit this does not allow a member, as the hon. gentleman is seeking to do, to engage in a rather detailed explanation of what goes on within a department, or the purpose of the papers and everything else. The debate is limited to the very narrow area of why the papers should or should not be produced. This should be drawn to the hon. gentleman's attention.


The Acting Speaker (Mr. Laniel):: The Chair agrees with the remarks of the hon. member in that any debate in this House should be relevant. The main purpose of this motion is to obtain the presentation of a report. Hon. members are aware of the fact that some latitude is given to hon. members in the hope that during their presentation they will return to the main purpose of the motion. I would request the hon. parliamentary secretary to abide as closely as possible to the rules of the House.


Mr. Caccia:: Thank you, Mr. Speaker. The purpose of transferring a motion for debate is obviously to allow a debate of a motion and the subject matter of interest to the hon. members.


John Leroy Skoberg: If you give it to us we will debate it.

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Management Information Systems


Charles L. Caccia: What I am endeavouring to do is meet, at least partially, the wishes of the hon. member in order that he might be better acquainted with the subject matter of his interest.


Frank Howard: Just table the document and we will be apprised of it.


Charles L. Caccia: Along this line, before the hon. member for Skeena (Mr. Howard) interrupted, I was trying to convey some information about the manner in which the department has seen fit to carry out this program. If the hon. member is not interested in that information he may as well say so, in which case I would submit there was no reason in the first place to submit this request.


John Leroy Skoberg: Mr. Speaker, the parliamentary secretary has indicated that I may not be interested in these papers. Let me suggest that this is the reason I tabled the notice for the production of papers. If he is prepared to give us the information verbally, possibly he is prepared to just table the papers at this time.


The Acting Speaker (Mr. Laniel):: Let me suggest to the hon. member that the point he has just made is merely a point of debate and not a point of order.


Charles L. Caccia: Mr. Speaker, we are very pleased to learn about the continuing interest of the hon. member who just spoke. I am very happy to provide this information, as I am endeavouring to do now, by establishing the areas of approach to information systems which are being adopted at the present time in our department.
The manpower department has over the years developed a management reporting system. This system has special emphasis on information required for the objective management of resources, and to provide a quantitative and qualitative basis for program forecasts and estimates. Operational performance in the some 390 field offices across the country, namely our Canada manpower centres, will be evaluated in terms of efficiency, based on staffing criteria determined for the work processes and services rendered, and in terms of effectiveness, based on the degree of success in rendering services that meet specified levels of quality. This management reporting system is being implemented on a so-called manual basis using current data. However, it will be progressively expanded and computerized as the capability for providing more data is developed.
Then, we have in the department a system called ACIS which stands for automated client information system. This is in operation on an experimental basis in Ottawa. The hon. member is most welcome anytime he wishes to see this operation in the Canada manpower centre. It is a very interesting operation to watch. This system is intended as an aid to the Canada manpower centres as well as to departmental management. For example, it will help identify the most suitable workers or job opportunities from which final selection can be made by the counsellor. It will be in essence a matching operation.
The value of the automated client information system is most obvious in large metropolitan centres, but it has a potential for introduction throughout the entire country, together with other benefits which will mean a gradual reduction in clerical activity and perhaps an increase in counselling services and identification of problem areas, provision of analytical reports and so on.
With regard to the Canada Manpower training program, an information system has been in operation since the introduction of the program away back in 1967. This system has gone through several stages of improvement and is now capable of assisting with the requirements of program operation, program management and program review. With the help of the computer, faster and more flexible reporting is possible from a comprehensive and standardized data base. This, in turn, has opened the door to a greater use of mathematical models for forecasting and long range planning. The department uses information system to retrieve data on clients under the Canada manpower mobility program in much the same way as is done with the training program.
Further there is within the department an information system which assists in management of staff resources. This, in phase one, is a semi-automated system which at present provides quantitative measurement on a strength and man-month basis and supplies management reports which facilitate decisions on departmental organization, staffing and control.
When phase two will be fully computerized, which should be by the end of 1971, it will include additional data on such items as pay and classification, education, work experience and official language proficiency. It will permit qualitative measurement and will supply management with data for decision making in such areas as staff planning, career development, training needs, staff rotation, staff relations and retirement planning.
I notice from the absorbed attitude of the hon. member opposite how interested he is in this particular matter. I wonder actually why he took the trouble to request the production of the papers.


John Leroy Skoberg: On a question of privilege, Mr. Speaker, if the parliamentary secretary would take the time to get the information he would not have to worry about the time of this House. My point of privilege is that I can well pay attention to what little he is or is not saying without worrying about looking at him directly.


Some hon. Members:: Oh, oh.


Charles L. Caccia: After all this, Mr. Speaker, and after it has been possible to capture the attention of the hon. member, I shall proceed with my explanation. I believe I had arrived at the completion of a brief expose of the departmental information system. There is one more system in which the hon. member might be interested. It is the department's financial information system which permits financial control at all levels of management. This system also assists with long and short-range financial planning and budgeting.

September 9, 1971

In conclusion, I might say that the co-ordinated and controlled development of information systems by our Department of Manpower and Immigration is made possible and ensured through the activities of a departmental information systems committee. Thank you for your attention. It identifies requirements, prevents duplication, assigns priorities and ensures that each resulting system can become an integrated and valuable part of the department's total information system.
This is all that can be said on this particular aspect of the hon. member's question. We have other information to submit to him in the course of this whole motion.


Mr. Jack Cullen (Sarnia-Lamblon):: Mr. Speaker, it is nice to realize that one has the ability to wake up even the NDP in the House. I am a little disappointed that the hon. member who moved this particular motion sees fit to talk while seated rather than stand in his place. He has asked this House to devote its time to, and undertake a vote in respect of, what I had assumed he thought was a particularly important report. He apparently asked the question in the first session in 1967 or 1968. His notice of motion has been on the order paper since November, 1970, almost a year ago. Here, the House of Commons sits waiting to find out why this particular member feels this particular subject matter should be brought to the attention of the House. I think it is an abuse of the privileges he has as a member of this House that he does not see fit to stand in his place. The motion stands in his name. Why does he want this particular report brought to the attention of the House? Why does he want to read it? We have not heard one word from him and he has been asking for this since the first session of this particular Parliament.


John Leroy Skoberg: Mr. Speaker, would the hon. member permit a question?


The Acting Speaker (Mr. Laniel):: The hon. member knows he can ask a question only if the hon. member who has the floor accepts the question.


Jack Sydney George (Bud) Cullen: I accept a question from the hon. member.


John Leroy Skoberg: Thank you. I wonder if the hon. member is aware I can only have five minutes for rebuttal after finding out why the government will not produce the papers.


Jack Sydney George (Bud) Cullen: Here again, Mr. Speaker, we have the typical, negative approach of the hon. member's party. It seems to me that if I wanted a particular document or report presented to the House I would get up and argue for my full five minutes, ten minutes, or whatever time was allotted to me, and argue in a positive way.


John Edward Broadbent: Would the hon. member permit another question?


Jack Sydney George (Bud) Cullen: Yes.


John Edward Broadbent: I thank the hon. member for his not entirely flattering comments about oui political party,
Management Information Systems
but I wonder if he is aware that the great Liberal regime which currently governs this country has turned down no less than 95 per cent of the requests coming from this side of the House for the production of papers?


The Acting Speaker (Mr. Laniel):: Order, please. The Chair has some reservation with respect to the content of the question. The hon. member seems to be making an argument rather than asking a question. The Chair would ask the hon. member to put his question as briefly as possible.


John Edward Broadbent: I will come right to the point, Mr. Speaker. Would the hon. member not agree it would be the height of folly at this stage to continue asking for the production of papers as we did during the course of the previous part of the session, with completely negative consequences, and that it would be much more sensible to listen to Liberal spokesmen giving their reasons for not providing what we consider to be public information?


Jack Sydney George (Bud) Cullen: On that statistical point, all we can conclude is that 95 per cent of the requests they make do not warrant the kind of attention they would like to see paid to them. If the hon. member had refrained from asking his question for a short period of time, and was willing to listen to the comments that I wish to make, I could tell him that I do not think it is the Liberal regime that is his problem. I think it is the fault of the opposition who, whether they are aware of it or not, are slowly and deliberately closing this avenue of securing information from the ministry.
The hon. member who has moved this notice of motion will note that there is something in excess of 293 notices of motions for the production of papers already filed, and we just do not have enough time in the House to deal with all of them. Notwithstanding that, hon. members in his party continue to place such notices of motion on the order paper. In fact, I do not know whether this particular hon. member devised this particular motion, or whether some research assistant sat down one day and compiled 293 notices of motions for the production of papers.


John Leroy Skoberg: Let's not impute motives.


Jack Sydney George (Bud) Cullen: I said that I wasn't sure. The point I am making is that there is a certain amount of time available for certain things, and all hon. members cannot always have all the time they like. For this reason alone, it seems incumbent on hon. members opposite to select the reports they want produced, place them on a list and attach some kind of priority to them, instead of coming up with 290 or 300 notices of motions for the production of papers which will have the effect of blocking this avenue for the securing of information from the ministry.
If this were done hon. members in that party might be surprised to find that there would be many hon. members on this side of the House who would welcome the arguments they presented, and would be prepared to vote in favour of particular motions for the supplying of particular documents.


Some hon. Members:: Oh, oh.

September 9, 1971
Management Information Systems


Jack Sydney George (Bud) Cullen: I have run into shallow sceptics before, and the attitude of the NDP on this particular occasion does not surprise me. This is the reason we are having difficulty breaking intp the twentieth century in our rules, and in trying to get information from the cabinet. New members of this House are surprised to note that there have been some 2,000 questions appear on the order paper and in excess of 300 notices of motions for the production of papers, without any kind of priority attached to them. They wonder what asset it is to the House when we have to go through all this kind of rigmarole. Notice of motion No. 293 might be ten times as important as the one which is placed at the head of the list on the order paper. If hon. members opposite could agree on some kind of priority, I think they would be surprised at the reception they would get, certainly from Liberal backbenchers.
But hon. members opposite seem content to play the rules of the game as they have been played here for the past 100 years. They present their motions, and a member of the government party gets up and talks them out. If hon. members opposite want to play according to the old fashioned rules, we have men on this side who can get up and speak at length on the subject involved, and much more ably than I. I would like to see something more productive come out of private members hour. If we continue to block this avenue of approach to the securing of information, we will constantly run into a brick wall. By opposing change I can certainly see hon. members of the NDP remaining in opposition for some considerable time.


John Leroy Skoberg: You had better hold your breath.


Jack Sydney George (Bud) Cullen: I was holding my breath when private members hour started, hoping that the hon. member would have something more to contribute to the debate than shouts across the aisle. I was endeavouring to make a sincere point, notwithstanding the shallow cynicism of the hon. member.
There are some reports mentioned in these notices of motions that I would like to see made public. I assume they were obtained from people who knew what they were talking about, but whether this particular motion falls in that category or not I certainly do not know, and I certainly have not been made any the wiser listening to the hon. member shout at me across the chamber.
All of us have our own particular areas of interest, whether they be senior citizens, veterans,-you name it- and we would all like to see particular papers produced. There might be support for the production of such papers from all sides of the House. I can assure the hon. member that if there were a bone fide, legitimate attempt to obtain some information, without making it the subject of a notice of motion or hoping through some little gimmick to have it produced, we would all like to know the reasons for not producing it.
I am not close to the ministry, but I am a member of the Standing Committee on Labour, Manpower and Immigration and that is why I have an interest in the particular notice of motion under discussion. I wonder

what this report said, and what it could do to improve the efficiency of the Department of Manpower and Immigration. But I have to follow other avenues in order to get this kind of information. I have to be parochial in my approach. I have to go to my local manpower centre and ask the man in charge what he thinks could be done to improve the efficiency of his office, and whether there are some pressures I can bring to bear in order to be helpful. I assume the kind of information the hon. member is soliciting might be helpful, but I have no way of knowing and the hon. member has not given any reason for wishing it produced.
I would prefer to vote for a motion that I knew something about, one which the sponsor is interested enough to explain. I repeat that in many instances I have to adopt a parochial approach. When I hear from people in my riding who may have received short shrift from an office in another area, I go to that area and try to find out about the situation. This device of notices of motions for the production of papers is being abused. The multiplicity of such motions makes it impossible for them all to be debated. They tell me that at their level every good manager must have a plan and he must determine his objectives and decide, on the basis of the best and latest information available to him, the most effective and efficient means of achieving it within the limit of the resources available to him. Through contact with his Member of Parliament he can find out that he may have unlimited resources. He should make his point to the member, who can then take it up with the department. If it falls on deaf ears there, it should be raised in this chamber in the form of an oral question, a motion or a written question. This recourse is available to every manager and employee of Manpower centres throughout Canada.
In doing a little study on this subject, because I met recently with a manager, I found that the department comprises a staff of almost 9,200 people located in all parts of Canada and other corners of the world through the immigration program. Because of this there must be some kind of organization and plan, and certainly some kind of pre-programming. I would assume that the report called for, "the consultant report by Operations Research Industries, a study and recommendations on the design of a management-information system supporting the departmental planning, programming and budgeting system, undertaken for the Department of Manpower and Immigration," is the area toward which this particular plan may have been directed. Perhaps the hon. member who moved the motion felt the same way. We heard his argument but I for one do not propose to vote in favour of this motion.
I know from the short experience I have had around here, Mr. Speaker, that when a department wishes to start an operation or open a program it must give forecasts to Treasury Board, and this is as it should be. I understand this is achieved through what is called program forecasiing, one aspect of planning, programming and budgeting systems. If Treasury Board requires this
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kind of information, the only way it can be obtained is through a plan or pre-programmed study made by a particular department.
How does a department prepare this kind of information? Is that the sort of thing contained in this report? I do not know, but it would seem to me that to prepare the material necessary for the compilation of a document stating departmental plans for the future requires development of a clearly integrated system within the department. For this reason I have suggested to the managers to whom I have spoken that they should make representation to have more than one meeting with the department. They should hold regional conferences, and conferences in Ottawa, and I think they should design and bring forth the more practical approach which they see from day to day in their jobs.
Some managers say that there are people using this program to the detriment of their fellow workers. They take a course in one area of the country and if they cannot get a job they move to another area where another course is being offered. If the plan is being abused in that way, the managers should bring it to the attention of their member and the minister concerned. It is my experience that most people operating under this plan and deriving benefit from it, applaud it and welcome the opportunity to find a job and to improve.
I had not intended speaking so long, Mr. Speaker, but interjections from the opposite side of the House took up my time. I know that other hon. members on this side have a point of view which they wish to express. Liberals have never been shy. I do not wish to take up all the time, but want my colleagues to have their say. However, if I have one message to convey I would say that great team work, using the managers of manpower centres, could operate to the benefit of the section of the Department of Manpower and Immigration concerned with manpower.


Frank Howard: Mr. Speaker, the two gentlemen who spoke from the government side had within their remarks such a tremendous amount of irrelevancy and speciousness that it is impossible to cover all the false points that they raised. Of course, that is what happens when these hon. gentlemen are not speaking their own minds but are simply reading what somebody else has written for them.
Mr. Speaker, I would point out that one of the matters involved here-


Jack Sydney George (Bud) Cullen: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member for Sarnia-Lambton (Mr. Cullen).


Jack Sydney George (Bud) Cullen: I do not need somebody else to write my speeches, Mr. Speaker. Everything I said here today came from my own head. Whether it was good, bad, specious or whatever, it was mine.


The Acting Speaker (Mr. Laniel):: The Chair does not have to rule on the point of order, but would take this opportunity to point out that it is a basic rule of the 24171-67
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House that one hon. member has to take the word of another when he speaks in this House.


Frank Howard: I never questioned the hon. member's word, Mr. Speaker. I think what is involved here is the fact that ever since this government took office we have run into a brick wall. The hon. member for Sarnia-Lambton (Mr. Cullen) made reference to some brick walls, and we have run into a brick wall of secrecy, of absolute refusal by the government to disclose what it is doing to the public and how it is spending their money. It has not disclosed the direction of its intentions and hopes, and is confining as much as it can of its internal activities to itself, refusing to provide that information to the general public. What we are up against, Mr. Speaker, is the concept of government that says: The public is not entitled to know what government is doing except to the extent that government wants to disclose that information-in other words, a closed system, a confidential structure and practice within government to keep things to itself rather than the open practice of revealing what it is doing. That is the brick wall we run up against.
As my friend the hon. member for Oshawa-Whitby (Mr. Broadbent) tried to elicit by way of a question, this government has refused information in response to notices of motion for the production of papers to a far greater extent than any other government in the history of Canada.


Horace Andrew (Bud) Olson: That is not correct.


Mr. Francis:: Not true.


Horace Andrew (Bud) Olson: The record does not reveal that.


Frank Howard: I would ask the Minister of Agriculture (Mr. Olson) to take a lead from the hon. gentleman from Sarnia-Lambton and keep his mouth shut or stand up and speak.


Horace Andrew (Bud) Olson: I would be very happy to stand up and ask a question.


Frank Howard: As soon as I sit down the Minister of Agriculture, who is voluble and verbose but many times not very relevant, will have the opportunity.


Cyril Lloyd Francis: You are not very kind.


Frank Howard: Never in the history of Canada since it was founded in 1867 has there been a government which has refused so much to the people it is supposed to be representing.


Horace Andrew (Bud) Olson: That is not a fact.


Frank Howard: The Minister of Agriculture says that is not a fact, but let him get up and disclose which government was more secretive. Also, Mr. Speaker, the self-appointed directors of rights and interpreters of the rules of this House have a pretty basic misconception of what the rules are and how things are supposed to operate around here. In a notice of motion for the production of papers it is the individual member who takes the initiative.

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Leslie Gordon Benjamin: Not if he is a Liberal.


Frank Howard: And he wants information provided.


Cyril Lloyd Francis: Often we do not know what he is asking for.


Frank Howard: Mr. Speaker, if you will protect me in this instance from the hon. member for Ottawa West (Mr. Francis) I will be able to continue my remarks. In this instance the notice of motion for the production of papers arose out of a response to a question. I am not trying to explain what the hon. member for Moose Jaw (Mr. Skoberg) wanted. The fact is that he was provided with some information in response to a question and he wanted to follow the matter up and learn more about what was taking place. So he took the initiative of filing a notice of motion for the production of papers, as is proper and correct. It was then incumbent on the government, or someone representing the government, under our rules to respond to that notice of motion for the production of papers.
In this case the Parliamentary Secretary to the Minister of Manpower and Immigration (Mr. Caccia) responded in the House on November 18 of last year and said that the report sought in the notice of motion was prepared for the department by a private firm, that the report contained matters confidential to the department and that therefore he regretted that it could not be tabled. Nobody knows exactly what the word "confidential" means in that context, that is, no one outside the government, because a person who has not looked at the report is not in a position to make any determination, so far as Parliament is concerned, regarding its confidentiality.
The matter was transferred to this hour for consideration and debate and for an eventual vote in the House in order that there might be a determination of whether or not the report should be made public on the basis of the explanation given regarding its confidentiality. Perhaps we have the rules a little backwards here; nevertheless, that is how the rules are. The rules are such that when an individual member poses a question in the first place, he finds himself in an impossible position. Not having seen the document and not knowing what is in it, he cannot argue that it should be made public. When the government has such a document and says it is confidential, members are placed in an impossible position because, as I say, they do not know what is in it.
We have run afoul of the rules, although we have tried to stand up many times and make our points. Mr. Speaker makes his rulings-I do not say this in any sense of disrespect to you, Sir-and applies the rules more strictly against the member seeking the information than against the government. We accept that. We have come to the conclusion that the best way to approach this matter is not to get up and attempt to justify the contents of the notice of motion without knowing what is in the report, but simply to let the government or the parliamentary secretary take the next step and explain to the House to the best of their ability why the matter is confidential.

In this instance the parliamentary secretary deliberately and consciously abused the rules of the House, because he did not say a single, solitary word about confidentiality. Do you know what he did, Mr. Speaker? He denied his own argument of November 18 and disclosed what he felt could be disclosed in the report. He made some explanation and suggested that other parts were confidential and could not be disclosed. I think that what probably happened is that he selected from the report those things which are politically advantageous to the party to which he belongs and kept under the rug those activities of the Department of Manpower and Immigration which are not advantageous to the party to which he belongs. That is playing politics with the public interest, and that is the sort of thing you yourself permitted when I raised the first question and you said, "Oh, yes, that is the rule, but we allow lots of leeway."


Some hon. Members:: Oh, oh.


Frank Howard: In the course of the parliamentary secretary's comments we did not hear anything about confidentiality-


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member no doubt is aware that the rules do not permit him to pass any reflection on the decision of the Chair or on any interpretation by the Chair of the rules of this House. The Chair has tried to abide by the rules and to interpret then as clearly as possible. At the same time, the Chair has the responsibility of giving, in some cases, latitude to hon. members. It is very difficult for the occupant of the chair to stand up every time hon. members bypass or try to bypass the rules. Hon. members know that the occupant of the chair, whoever he is, tries as much as possible to make a fair decision to protect hon. members and also to uphold the rules of the House. This having been done, hon. members know that they cannot contest or discuss it.


Frank Howard: If I might comment on the point you have raised, Mr. Speaker-


Charles L. Caccia: On a point of privilege, Mr. Speaker-
The Aciing Speaker (Mr. Laniel): Order, please. Is the parliamentary secretary rising on a point of privilege?


Charles L. Caccia: Mr. Speaker, I am rising on a point of privilege because the hon. member for Skeena (Mr. Howard) attributed to me a partisan approach to the debate, as if the material that we produce today was selected on grounds of a particular political nature instead of on the basis of what we within the department thought and felt could be developed for the debate this afternoon. This is-


An hon. Member:: Shameful!


Charles L. Caccia: -attributing to us an approach that we certainly do not accept. It is not our approach in the carrying out of our duties.


The Acting Speaker (Mr. Laniel):: Order, please. Hon. members are aware that it is not permitted for them to
September 9, 1971

pass reflections on other colleagues in the House. At the same time, it is difficult for the Chair, on the point of order, to let hon. members who have participated in the debate to participate again. I agree that the parliamentary secretary might question the last remark of the hon. member for Skeena; nevertheless, the Chair feels that at this time the best thing to do might be for us to leave it at that. I do not believe the reflection affected personally the hon. member or the House. Unless the parliamentary secretary proves to the Chair that the reflection bore upon himself or upon the House of Commons, we should leave it at that.


Mr, Howard (Skeena):: If I drew Your Honour inadvertently into the remarks I was trying to make, I apologize. I apologize for any imputations that might be contained in my remarks. I was trying to say that Your Honour made a ruling with respect to an original point of order and that you said the gist of my point of order was correct; in other words, that the debate should revolve around reasons as to why or why not the report should be disclosed. The parliamentary secretary chose to ignore that completely. He did not mention anything about the confidentiality or otherwise of the report. That is what I was trying to get across.


Charles L. Caccia: The matter was transferred for debate.


Frank Howard: There is some further chattering and muttering from across the way.


Charles L. Caccia: The matter was transferred for debate.


Frank Howard: I hope I may be forgiven if I obey the rules and disregard the utterances, because if I pay attention to them, obviously I would be offending the rules and I would not want to do that. I am sure that the parliamentary secretary would not want me to do that, so I ask him to please not entice me any further.
I wish to make one or two other points. It was argued that we should approach the question of notices of motions for the production of papers on a priority basis. All we would have to do is make a list of what we want, say to the government, "Here they are; tell us what you will give us," and pull the rest of them back and be contented, happy and say we would not ask for anything else. That kind of priority lets the government continue in the way it always has done, namely, keeping information secret which should be made public.


An hon. Member:: Oh, oh!


Frank Howard: If that is not the situation, the hon. member opposite who advanced the case does not know the rules. When notices of motions for the production of papers are placed on the order paper, whether they are in position No. 1, 75 or 293, the government has the right and opportunity under the rules to be selective and to choose which ones it is willing to accept. It does not matter whether they are at the bottom or at the top of the list, priorities do not mean anything in that situation.
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If it is a question of our consuming time which might be used for some other type of business, it would have been a simple matter for the parliamentary secretary, if he wanted to save the time of the House as the hon. member for Moose Jaw tried to do, to give a brief explanation as to why the material was confidential from his point of view. We could then have had a vote on the matter and proceeded to something else. However, members opposite wanted to talk, gab and consume time until six o'clock in order to deny Parliament the right to vote on this question.


An hon. Member:: Who is talking now?


Frank Howard: I want to make one other point. There seems to be a predetermination that when the government says something is confidential, it should not be disclosed. I want to make a point with regard to perseverence. If we had accepted that argument, a number of documents and studies would never have been made public and brought to the attention of the people they affect.
I wish to cite two cases on which a decision of this House was made yesterday. In each session for the past five of six years I have had on the order paper a notice of motion for the production of two particular documents. One related to fish and game laws as they pertain to Indian people and the other was the Stanbury-Fields study and report on taxation as it relates to Indian people and Indian laws in British Columbia. Until yesterday the government slated in each session that it could not table the documents because they were confidential and not in the public interest. I persisted. I do not say that this makes me a better member than anyone else, but I felt they should be made public. Lo and behold, yesterday the government completely reversed itself, said it would table them and the House passed the two motions unanimously. What may be confidential one day somehow or other is not confidential the next.
I have one final point with regard to matters that are confidential. The moment the hon. member for Moose Jaw placed this notice of motion for the production of papers on the order paper, the government concluded that it was confidential and not a solitary word was communicated by the government to the hon. member in a personal way with regard to the documents. From my experience in dealing with some ministers, it is almost standard practice for them to come to us and say that it is confidential for such and such a reason. A number of times members have acceded and said that they did not realize what was involved and agreed to withdraw. In this instance, there was complete silence.
There was silence because the government wants to hide from public view what is in the report, because they know what it contains. I say to the parliamentary secretary that it is embarrassing to the government because the operations of the Department of Manpower do not follow through and are not as effective as they might be. For this reason the government wants to cover up that embarrassment. That is why all this furore, fuss, false and specious argument is being presented.
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I would like to see this question come to a vote. I do not want to preclude anyone from speaking, but in the remaining two or three minutes we could vote and the House could make a decision. If other members want to talk this out and deny democracy, they can go ahead.


Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, I say to my colleague, the hon. member for Sarnia-Lambton (Mr. Cullen), that I am much less anxious and enthusiastic in participating in this debate now than I was at five o'clock. It is always interesting, a little amusing and sometimes even sad to participate in these parliamentary games. However, sitting in the government's loyal rump as I do, I tend to view the whole procedure somewhat more objectively than perhaps other members.
This question of wanting information arises day after day. I listen to the arguments on both sides. I have never really commented on my views, but it seems that the job of the government is to make a great many difficult and complicated decisions.


Frank Howard: I wish they would.


B. Keith Penner: In making these decisions they need a great deal of information. If these decisions are to be wise and beneficial to the country, the information must be abundant and accurate. The government must select from that information when deciding what it is going to do about a particular matter.
Opposition members want access to the same information. However, there is a difference. They do not have to make these wide ranging decisions for the whole segment of the economy or one section of the country. They really have only one decision to make; that is, what they as a party must do to get the present administration out of power and themselves in power. The information they are constantly asking of the government is not to help them make decisions for the benefit of the country but to give them some information which they can use as political propaganda. That is their role and their game, but it is not the same game as that of the government.


The Acting Speaker (Mr. Laniel):: Order, please. It being six o'clock, the hour appointed for the consideration of private members' business has now expired. I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Pepin that Bill C-262, to support employment in Canada

by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment thereto of Mr. Saltsman (page 7633).
Alfred Pullen Gleave: Mr. Speaker, earlier this evening I recited a number of instances where the United States surtax would affect farm produce in Canada. In the case of meat products the heaviest weight falls on processed meat. Sausage, for example, moves from 1.625 cents a pound to 3.25 cents a pound, which is a little more than double. Cheese valued at more than 35 cents a pound moves from 12 per cent ad valorem to 22 per cent.
I do not think I need belabour the point or describe the way in which the surcharge applies to all agricultural products. According to the latest information we have, the surcharge will affect 63.5 per cent of agricultural products exported from Canada to the United States, in other words, two-thirds of our trade.
In these circumstances, those of us on this side who are discussing the proposal before the House must consider how well it is likely to deal with a situation which affects two-thirds of our agricultural exports to the U.S.A. As I said earlier, except in the processed area it will not deal with primary agricultural products. Then there is the other factor that a particular manufacturing or processing industry must export at least 20 per cent of its total production to the United States in order to qualify under this legislation. Thus, I am convinced the measure before us would leave out of its scope a great part of our agricultural production as far as the actual producer is concerned, and in my opinion it is the actual producer we should be most concerned about. I say this despite the fact that there is within my own constituency a substantial processing plant which may or may not be affected by the terms of this bill, depending upon whether or not it exports 20 per cent of its production.
I talked to the owner of a small machinery manufacturing plant in Saskatoon which is not large by Ontario standards but it was built from scratch. As far as I know the government never gave this plant any grant. It is an industry which survives by its own efforts and over the past few years has begun to develop exports to the United States; there was established a sales agency in the tier of states which are close to Canada south of Saskatchewan. I doubt that the legislation before us will affect this plant because I do not believe 20 per cent of the operation is involved in export. But it has created an industry which serves western Canada. Some of the products even come down to the east when freight rates permit.
Will the legislation before us reach this kind of entrepreneur, the family business or the small corporation which is contributing to the community in terms of capital investment, in terms of employing people and in terms of providing services and commodities? I doubt it very much. This concerns me when you can look across western Canada, you can look at Versatile in Winnipeg,
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you can look at Morris Rodweeder in Yorkton. These organizations may not mean very much in the scheme of things to some hon. members. You do not see them very often in the Globe and Mail or in the Wall Street Journal, but they are there and I ask the government, "What are they living on?" To a large extent they are living on the farming communities of western Canada. They are providing these communities with the services and the machines they need, they are providing the towns and cities of western Canada with commodities they need and in return they are running a business and making a profit. These organizations are to be ignored.
Is it intended to offer a drawback to large corporations which would make it even more difficult for organizations of this kind to survive? After that, Mr. Speaker-or perhaps before that, because I look at the community as a whole-you start looking at the farming community, at the people who are the primary producers, the purchasers of the goods and services which companies of this kind provide. I asked the minister in charge of the Wheat Board today to tell us what is to be the policy with regard to the sale of barley and malt to the United States market. The answer I received was not clear. Certainly the answer tells us nothing. Rye, which again is a farm product, is in a much more difficult position than barley.


An hon. Member:: But it is good to drink.


Alfred Pullen Gleave: I am talking of the original product. The Minister of Agriculture (Mr. Olson) said that these situations would be looked at, as I recall his speech, on a commodity by commodity basis and that the Agricultural Prices Suppoit Act provisions would come into play. The grains to which I have referred are not covered by that legislation, nor are many other products that I could name.
The Canadian Dairy Commission is the "big wheel" now in the dairy industry. George McLaughlin had this to say prior to the compilation of the legislation that we are now discussing:
"Our basic problem is we have a milk shortage in Ontario," said McLaughlin. Ontario won't have enough butter this year, its milk supplies are down and there is even the possibility that the province will have to import Cheddar cheese if the British continue to buy it at their present rate, he said.
For any government to create a shortage of dairy products in the province of Ontario is a real achievement. It is about the equal of creating a shortage of wheat in Saskatchewan. But apparently the government has succeeded. According to those who are in a position to know, success has crowned the government's efforts.


Eldon Mattison Woolliams: That is the trouble with socialism, even in the area of agriculture.


Alfred Pullen Gleave: We have not done so badly. To keep a farm going over the years is no mean effort. I have managed to do it, but do not push me too far. As I say, this House needs a clear statement by the government as to what it intends to do about hogs and cattle under the prices support program, to keep agriculture viable and to
Employment Support Bill
assist our dairy and potato farmers. In Prince Edward Island farmers are blocking the roads to protest the agricultural policies that have been followed up to now. In Ontario farmers are picketing and persuading people not to buy certain products manufactured in plants in the province. In my opinion farmers do not lightly take this kind of action; they only do it when all else has failed.
With regard to grain and wheat, the government has planned a stabilization program, which is still before this House, under which it is proposed to deduct 2 per cent from gross sales of the six western grains. In view of the situation our farmers are now facing, I think this program should be scrapped. The farmers are already carrying all the load they can bear. The government talks of paying out $100 million to the farmers, and they should do it now. I quoted some figures to show the House how serious is the situation that exists, a situation that has been ignored to date.
We should not forget that agriculture is a primary industry. It generates dollars and spending power. One of our first concerns should be to see that agriculture remains healthy. It is an industry that employs people, not only on the farms but in industries that serve those farms. It is a renewable industry which will be here for generations to come unless we abuse it or kill it off. Yet as I say, the government has made no clear statement as to what it intends to do about this industry.
The United States has decided to impose import restrictions. Let me take the House back to 1966 and 1967 when Canada was trying to persuade the United States to renew the international wheat agreement and it would not do so. The United States would not agree to make an arrangement whereby the wheat producing nations of the world had an equal share in the market and a fair price. That was not our decision; it was the decision of the United States. As a result, we entered into an international grains arrangement which was not under the auspices of the United Nations but was formulated at what was essentially a western conference. We came out of that arrangement facing prospects that were uncertain and with a floor price for wheat that was not observed. We in Canada tried to support that agreement in face of the lack of interest shown by the United States and other countries. The present situation is simply a continuation of the lack of interest shown by the United States in reaching a world wide agreement on marketing that particular commodity. The United States wants to call the terms itself and it is calling those terms. We will have to live with those terms and reach our own decisions.
Yesterday I heard the hon. member for Burnaby-Seymour (Mr. Perrault), I believe it was, chiding the leader of our party because he dared to say something about creating an independent Canada. I have heard a similar statement made by members sitting to my right. Let me tell the House that there have been people in Canada who did believe that Canada could be independent, who did think it could be a sovereign state. One of the first of these people was Sir John A. Macdonald, and he drove a railroad across Canada to back up his belief. Don't we have the courage or guts in 1971 to believe that this is possible any longer? I would back anyone who had

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the courage to try and make this possible, but let us not back away and say it is not possible. The hon. member also chided the Conservatives because at one time they suggested we should divert 15 or 25 per cent oi our trade to the U.K. in order to become more independent. But at least that was a statement of intent, and I hear no such statement of intent coming from the other side of the House.


Mr. Perrault:: You are getting performance now, which is a big difference.


Alfred Pullen Gleave: Performance? My hon. friend does not know the difference between pedalling a bike forward and pedalling it backward.


Raymond J. Perrault: At least we have some air in the tires.


An hon. Member:: You have some air in the head too.


Alfred Pullen Gleave: Let me make up our minds what we are about. This country will not become wealthy if we abandon the dairy farms and the grain farms and go into wheat acreage reduction. The country will not become wealthy that way. One might think it will, but "X" number of years from now when our fisheries and farms have ceased to produce the country will be hard up.
What could be more vulnerable than a manufacturing industry with a 10 per cent surcharge clapped on it? This afternoon a member on the government side of the House said that as a result of this surcharge and other manoeuvres being carried on in the United States, the amount will be closer to 20 per cent. What could be more vulnerable than an industry in that situation, particularly one depending on the export market? When you talk about farms you can let them lie and not employ people, but when you are considering manufacturing industries you must realize they will be faced with a capital loss, a drop in real estate values and a general collapse.
Is it not about time there was a little realism in this country? We should begin to look at the real value and consider what we can and cannot do. I do not think the government has done that in bringing in this measure. I do not think the government has looked at the situation with sharp eyes, in view of this legislation we are being asked to approve.
I know what will happen in the farm sector. We will ask day after day in this House whether the government is going to do something under the Agricultural Prices Support Act in respect of apples, hogs and cheese. We will be asking those questions and the answers we will get will be "Tomorrow," "Soon," "Maybe," "It is under study," "It is not in the act," "We do not have the provision." The government is inclined to just let the primary producers survive, and if they cannot they are expendable. The government is foolishly convinced that no matter what happens, the primary producers will produce fish, cheese, butter, wheat, barley and rapeseed. This government is living in a dreamland and thinks that hard economic facts do not apply to the primary producers.

Let me suggest to the government that for every dollar put into these primary industries it gets at least half of it back in taxes. Under this measure the government will not be putting dollars into industries which will pay the same percentage of tax. The industries which will benefit are those which transmit their profits outside the country. They employ every dodge possible to evade taxation. As someone suggested this afternoon, it is labour, primary industries, fishermen and farmers who pay their income taxes. They have no way of avoiding it. They cannot hire high-priced help to tell them how to get out of the tax squeeze. We have been levying increasing taxes on these people while allowing large corporations to exploit our resources and avoid paying the same taxes.
We must support our schools to educate our children because these industries will not hire young Canadians who do not have grade 12 education. Even in the group with that level of education we find selection. They are told they need at least two years university or technical school education. Young labourers in the age group of 18 to 25 are today the best bargain you can find in this country. If you do not believe it, you have never talked to them. I have talked to them in Saskatchewan and this is what they told me. I phoned them, held interviews and I listened to them. They find themselves on the bargain table, and they know it. Make no mistake about this, agricultural products have also been on the bargain table for the last four years. Unless we change the situation and alter our ways we are going to pay a very high price in the future in order to deal with these two problems, the employment of our young people and the maintaining of a viable farm industry,


Mr. Maurice Foster (Algoma):: Mr. Speaker, I should like to make a few brief comments concerning Bill C-262 entitled "An act to support employment in Canada." When I say brief, I mean just that; I do not wish to prolong the debate, because there are many industries in this country urgently in need of the financial assistance this measure will provide. I trust, therefore, there will be co-operation not only from this side of the House in the form of short contributions to the debate but also cooperation on the part of opposition parties.
The urgency of assistance was brought forcibly to my attention only ten days after President Nixon's announcement on August 15 of the imposition of a 10 per cent surcharge on many exports from Canada. I should like to read a telegram I received from the management of a paper mill located in my constituency:
American 10 per cent tax move on top of freed Canadian dollar has forced lay-off of 75 employees effective end of August 1971. If no relief in sight, further shrinkage of sales in United States may well lead to shutdown of all paper machines, resulting in an additional 300 unemployed at our Eddy forest product plant in Espanola, Ontario.
On August 20 the Prime Minister (Mr. Trudeau) said that if nothing is done to remove or prevent the impact of the surcharge, and if it is given full effect, it will cause the loss of many thousands of jobs. We did not have to look very far afield in the Algoma federal riding to realize that this statement was only too true. I sent an urgent telegram to the Prime Minister requesting that
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the strongest possible action be taken by the Canadian government to obtain an exemption in respect of Canadian exports. I believe the government has applied all reasonable pressure to persuade the United States administration to exempt Canada. This included meetings of senior government ministers, the Minister of Industry, Trade and Commerce (Mr. Pepin) and the Minister of Finance (Mr. Benson), with Mr. Connally, Secretary of the Treasury, as well as meetings of senior departmental officials. In spite of all this it seems the surcharge will be applied, at least for the time being.
It seems to me that the bill before us today is the best possible solution in respect of the $2.5 billion worth of exports which will be subject to the surcharge. This solution is flexible, giving assistance only when the company or the U.S. customer cannot absorb the increased cost due to the surcharge. As I understand the measure, it will only provide grants when there is an imminent danger of manufacturing plants having to shut down and lay off workers. By proposing the legislation in this form, tied to employment in plants rather than across the board as an export subsidy, I believe we will have the least danger of the United States imposing countervailing duties. Grants will be made, on the basis of need, of up to two-thirds of the surcharge cost, so companies will have to absorb at least one-third of the surcharge.
The sum of $80 million for the rest of the fiscal year 1971-72 may be viewed as a vast amount of money and surely, if the program is extended into the 1972-73 fiscal year, it could escalate into two or three times this figure, which represents a high amount of taxpayers' hard earned dollars. However, if we consider the alternative which the Minister of Industry, Trade and Commerce suggested in his speech, of facing the prospect of lay-offs of possibly 40,000 workers in Canada in the next three months and up to 90,000 workers by the end of the year, there does not seem to be much choice.
Also, we must consider the long-term value of the trade patterns which have been established between Canada and the United States. If we look at how many of our industries in Canada have specialized in certain products and have been able to sell them to the vast North American market of some 220 million people as opposed to only 21 million people in the Canadian market, perhaps we can view this as a much smaller price to pay for retaining these markets through a difficult period.
So if we adopt this measure we can maintain the plants, the workers and the technology we have developed in this country. No one can know just how much it has cost Canadian industry to develop the markets in the United States over the past years, but surely it is a sizeable amount and is perhaps equal to the amount provided in this bill.
The bill includes certain safeguards to ensure that only those companies which provide and maintain a satisfactory level of employment and production will qualify for the grants. It ensures that manufacturers of a product are not, in effect, receiving a grant as well as lowering their
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cost of production by paying their suppliers at a lower rate. Furthermore, in respect of any company receiving the grant it takes into account the level of employment at other plants owned by the same company both in Canada or abroad. I believe that with these safeguards and the appointment of capable people to the employment support board, including someone from labour, the interest of the taxpayers of Canada will be protected. I feel it is important to have representation from labour on this board because that is what the whole bill is about; it is to provide employment and prevent unemployment.
The situation created by the United States 10 per cent surcharge has brought home forcibly to Canadians the importance of trade to our economy. Approximately 20 per cent of our gross national product is sold to other countries and of this some $10 billion worth is sold to the United States, representing well over half of our exports. From a quick glance at these figures it is obvious that our relationship with the United States is a very special one not only in terms of social and cultural ties but especially in terms of our economic relations. We must maintain the best possible working relationship with our friends and customers in the United States. But I doubt that the kind of reprisal proposals in respect of duties on natural resources proposed by the NDP would do anything but lead to a trade war in which we would be the losers because of our high dependence on the United States market for our exports. Our exports to the United States represent one-ninth of our gross national product, whereas their exports to Canada represent one-hundredth of their gross national product.
Likewise, the proposal by the Ontario government to peg the Canadian dollar at a devalued rate would be no solution in the present difficulties. Practically every international currency is at a floating rate today, and until there is international agreement concerning the appropriate levels of value I believe it would be unworkable for the Canadian government to peg our dollar below its current value.
The effects of the United States surcharge have brought to light in a forceful way some of the problems of the pulp and paper industry. Of course, fine paper and specialty paper is affected most because the surcharge does not apply to newsprint or pulp. This industry during the past three years has received several serious blows. In 1969 the Kennedy round tariff cuts were fully implemented by the Canadian government as an anti-inflationary measure two years ahead of schedule. This meant that the Canadian paper companies had to become more efficient to compete with United States producers.
In 1970 the Canadian dollar was floated, thereby increasing its value by some 6 per cent. This was a tough blow not only to the pulp and paper industry but also to many of our resource industries because for many of our companies this 5 per cent or 6 per cent was the margin between a profitable enterprise and one which was losing money. The general slowdown of economic activity in the North American continent during 1970 has meant decreased sales as well for the paper industry. If you add to this the demand of the public for improved anti-pollution programs which has resulted in large capital expen-

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ditures for new equipment, you get a picture of a sick economy in the pulp and paper industry. The Minister of Finance recognized this in his budget speech of June 18 last and made certain concessions to this industry, including duty-free entry into Canada of sawmill and logging machinery, the removal of duty on fuel oil to pulp and paper producers and the removal of the 12 per cent sales tax on anti-pollution equipment.
However, certain other things need to be done. I think that on a long-term basis we should be working toward a removal of all tariff barriers between Canada and the United States in fine and specialty papers. The capital cost of equipment in this industry is so high that only through specialization and economies of scale can our Canadian producers compete in world markets.
I believe the government must have a definite plan for this industry which has been one of the largest earners of foreign exchange. We have many pulp and paper mills which were built many years ago and which over the years have become inefficient if we compare their production costs with the production costs of new mills. However, these plants support communities which often are solely dependent on them. I believe that before we provide additional free grants for new pulp and paper mills, as was done in the past year, we should consider the establishment of assistance to modernize and expand existing mills in the communities where we already have large social investments in homes, schools, hospitals and sewer and water systems. 1 have urged previously that the government's DREE program provide this assistance rather than grants to new pulp and paper industries so that this industry can rationalize and modernize itself.
Therefore, the bill we have before us really will not solve this problem. Mainly, it is a temporary measure but a very important one to save jobs and our trade with the United States. I trust the bill will receive speedy passage this week both in the House of Commons and in the Senate, that the employment support board will be established quickly and that this assistance to employment in the country will be available as soon as possible.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in considering this bill we are in fact considering a major event. For Canada and Canadian industry it assumes great importance with respect to a problem that is world wide in nature. For the past 25 years the United States has carried the burden of world leadership.
Mr. Nixon's policies will undoubtedly have a very drastic effect on world trade patterns and international financial structures. They cannot help but produce great changes in such areas as foreign aid, defence and foreign investment both for the U.S. and Canada. Clearly, it is the most important event in an economic way since the Second World War, and almost certainly the United States will be adopting a very different approach to world affairs from that taken in recent years.
As I have said, the United States has carried the burden of world leadership in the past quarter of a century. I am sure that the average U.S. citizen would

not have considered it a very rewarding experience to have his aid taken and in return, in many cases, very little thanks given. There has been little gratitude for generous foreign aid programs. United States dollars, through the Marshall plan, went a good way toward financing the European and Asian recovery-Germany and Japan in particular-and as well the United States has supplied massive military protection for these areas. In return, American taxpayers have watched Germany and Japan grow enormously and competitively through the use of their dollars. They have watched the growth of the adverse United States balance of trade. The American dollar is under attack, and there is a growing national debt.
As well, at home in the United States there seems to be disillusionment with the war in Viet Nam. There has been marked unemployment and marked inflation. Whether these alone have provoked the social unrest or whether the relative affluence of the North American domestic economy is forcing changes in our social system, the end result is very obscure.
The North American social system seems to be turning to one of less productivity and to a change in the ideals of its people. The emerging drug culture, high welfare payments and other matters all indicate a change in the ideals and the thinking of many peoples, including our own. In any case, the American nation seems to have turned to a degree of isolationism because the Americans find themselves tired of being labelled imperialist aggressors and so will now concentrate more on their own domestic needs. This will pose a problem for Canadians, living in such close contact with their North American neighbours, and Canadians may have to face some harsh realities to which they have not been accustomed.
The most damaging event that could occur would be the development of a trade war between the three powerful trade blocs of the western world, between western Europe, the United States and the Japanese complex. With a tougher American market and a more aggressive European trading bloc which will be strengthened by the inclusion of Britain, this may place us in a very lonely trading climate. Indeed, this may well have started already in many fields.
In the matter of the grains industry of western Canada, which makes up the major food export of our country and which contributes up to 10 per cent of our foreign exports, we are in the position of having our wheat gradually pushed out of the western European and Japanese markets and must depend heavily on dealing with the state run economies of China and Russia. In such a situation these nations use wheat sales as a political instrument as well as an economic instrument.
Recognizing the new mood in Washington, it would seem that the United States will not make any major concessions to Ottawa unless there be a very far reaching understanding with the U.S. in such areas as gas and oil, a restructed automobile agreement, perhaps greater cooperation in defence and perhaps some understanding on a continental water policy. I doubt that Canadians are ready for this yet. Indeed, evidence given to the U.S. Congress by American experts would seem to indicate
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that any continental gas and oil policy may well be decades away.
There has been some indication that the present administration would like to fight an election on an antiAmerican stand, by developing what might be a new and tough economic policy for Canada, with a call to the Canadian people to force control on inflation and to face up to the economic problems ahead. The government would then attempt to say that it had done all it could for the Canadian manufacturing industry and thus would be in a position to seek a mandate from the Canadian people. I do not think the government's case would hold water. I think the government would find itself sadly disillusioned.
The great interest shown by the government in this event seems to be ironic in view of the statement repeatedly made by the Prime Minister (Mr. Trudeau) during his recent visit to the Soviet Union, when he gave the impression that he was seeking a special relationship with the U.S.S.R. in order to contain an alleged threat to our identity from a cultural, economic and perhaps even military point of view. The Prime Minister came home from his holiday in Yugoslavia to find a 10 per cent surtax placed on one quarter of our exports to the United States, about 15 per cent of our total exports. He immediately dispatched his finance minister to ask for help. One would think that after his expressed feeling of the U.S. being a military, cultural and economic threat to Canada, the Prime Minister would have welcomed this display of American isolationism from its northern neighbour.
Then there was the famous statement made in Denver by the Minister of Energy, Mines and Resources (Mr. Greene) to the effect that Canada might not mind having some barriers, and he spoke of so-called electronic barriers. Apparently he was not thinking of surtax barriers when he made that statement.
Turning now to the government's proposal to help those companies and workers affected by the surtax, this poses a difficult assessment. The general guidelines proposed by the Minister of Industry, Trade and Commerce (Mr. Pepin) with respect to which companies will receive help seem vague and liable to extreme abuse. As the minister said in his speech, when the farmer was asked how he was doing he replied, "Who is asking?" This will be the case with the various firms which will be seeking help. So much is left to the discretion of the board, and ultimately to the cabinet, that no matter who receives grants there will be charges of favouritism and unevenness. Then, again, there is the question of how much this is going to cost. If the $80 million are used up in the first two weeks the act is in force, it is obvious that further funds will have to be designated.
Will these grants be given to regions where unemployment is already high, thus aiding them, although the grants may well be going to companies that for various reasons would not be able to compete in the market? Will the grants be a sort of dole for inefficient companies to hide behind? What stimulus will there be for a company to go out and seek new markets? Tnen there is the definition that a company has to have 20 per cent
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exports. What if it has only 18 per cent or 15 per cent? Then, what about the stipulated year? Does it necessarily mean 1970 or 1969? The administration of the program seems to be left extremely open, heavily dependent on the judgment of those who will give out the money. It leaves much to be desired.
I suggest that the government take a look at one area where it could have a more effective plan. I suggest that the government could give a general export incentive, say a tax credit of 5 per cent, to any company that increases its export business throughout the world. Bolstering companies by helping them to surmount the 10 per cent surtax does not do what Mr. Nixon is trying to do, namely, improve his own domestic position. In the short run at least, I do not think we should be doing things that invite American retaliation without giving that country a reasonable chance to put its house in order.
Last year our percentage of trade with the United States increased as compared with the western world, and for the first seven months of this year Statistics Canada showed a marginal decrease in sales to western Europe and Japan. The change in the American surtax and monetary policy is not all bad for our exporters. It should increase our ability to penetrate western European markets and markets beyond continental North America.
Of course, the figure of 5 per cent as a tax credit is not one that has been worked out on any definite economic formula and I would willingly agree that it would require more definite finalization to ascertain what figure should be set to give realistic help to industry. Whether we like it or not, some industries will almost certainly be permanently affected by the American action. I think that the idea of an export tax credit would stimulate firms to seek new business in new areas and this, after all, is what we want. There is little to be gained by attempting to have firms hop over the American surtax wall in great numbers at this time.
Turning to one further point, the idea has been advanced that we could impose a tax on gas and oil exports to the United States. Why gas and oil should be singled out by the leader of the NDP seems obscure. If the idea is to conserve our natural resources, then it should be applied to all resource industries. In any case, it does not seem possible to indicate how the tax would work. Oil and gas is set in the world market in regard to price, and the Canadian content of the total American oil and gas is extremely small. The news that the South American countries are seeking to be exempted from the surtax would make it easy for the United States to replace Canadian gas and oil for the short duration with other sources. In the end the Canadian exporter would be paying the export tax, with all its attendant troubles.
The action of the United States government in imposing the surtax affecting mainly manufactured goods indicates the desire of that country to manufacture, as much as possible, the end products in their own country. It is the stated aim of Mr. Nixon to increase the productivity

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of his own industrial complex. There is much discussion in Canada about the need to manufacture all our raw materials into finished products before sending them out of the country. Every country aims for this desirable goal, but this desirable goal is not always available. Many years ago the Canadian milling industry had a large flour export market but as the economy of the importing countries developed, both those highly industrialized and those developing, they wished to grind the imported wheat into flour. That is one thing that even an underdeveloped country could do quite easily, so the Canadian export flour market diminished.
It is not always possible to export only manufactured products and to process all raw materials at home. Today we had an interesting comment from the hon. member for Duvernay (Mr. Kierans) who suggested that if we kept our raw material and non-renewable resources at home we would be much better off. But trade is a two-way street. I do not pretend to be an expert in the mining field, but it seems to me that the electrothermal generating units of Ontario and southern Quebec are fuelled with American coal and that the great aluminum plants of Canada largely obtain the raw material from outside these borders. There are many other examples.
Whether retaining non-renewable resources in all forms in Canada is advisable seems very much a matter of debate. The laborious efforts to take down the trade barriers in the last 30 years should not be lightly cast aside. I believe the government should have used more imaginative and effective ways of dealing with this immediate problem of the effect of the surtax on our exports.


Roch La Salle: Mr. Speaker, I would like to make some comments on the bill now under consideration to support employment in Canada. It was introduced this week to cope with the problems experienced in Canada and throughout the world.
In order to justify some of my comments it is also essential at the beginning to make a review of the past months. We all objectively acknowledge that from several points of view, conditions are difficult. The economy is disabled not only in Canada but everywhere else in the world.
I must say, at any rate, that the results of the policy applied over the past two or three years have certainly not been as brilliant as was anticipated. We had thought of correcting the situation but we realize that this is difficult. The recent United States government announcement has made things even more difficult for the Canadian government.
I must also recognize that the government has made some commendable efforts. For instance, the Department of Regional Economic Expansion has injected capital throughout the country in order to create new jobs, but at the same time we have been unable to prevent industries from closing down.
We also recognize that at the present time unemployment is still the major evil in our country.
It might be mean to blame the government for all
thuac _____ or uwv uj acKnowiedge that the present difficulties do not exist only in Canada but in practically all countries.
I think that to do nothing more than to criticize the endeavours of the government without suggesting valid solutions would be playing politics.
As I am well aware that such problems are not peculiar to Canada, I have to acknowledge that the uneasiness which has now spread through this country is pretty general. I feel that, as leaders, we have a responsibility to act with greater objectivity rather than be prepared only to criticize without suggesting ways of coping with the present situation.
I have heard several speeches and I know that, in the course of the debate, the opposition takes a particular delight in blaming the government for all the evils from which Canada is now suffering.
I would like to take this opportunity to urge all members to show the objectivity which all Canadians need. I feel that it is their duty to analyze the bill which is now under consideration. I am even more convinced that due to the difficulties we are experiencing at this time, we must do it with greater objectivity than we have up until now.
Is the bill we are considering of such a nature that it will correct the situation? Very few members can answer that. As far as I am concerned, I cannot do it. However, we must admit that the government is trying to correct the disruptive effects of the American decision by earmarking $80 million to that end.
It is difficult to say whether all sectors affected by this surtax of 10 per cent will have the guarantee of adequate assistance. I know that some sectors, such as agriculture, are surely not to be neglected. Nevertheless, I believe we must be honest enough to admit that Bill C-176 was, to a certain extent, likely to bring some improvements.
Those who are presently condemning the government for not having done anything may be the same who have tried to delay the passing of the bill, so that it remains at the third reading stage.
I feel that they perhaps lack objectivity. Who could boast that he has the solution to present problems? About this, I should like to say that it would be appropriate to agree on one idea, not to save this government, but to protect the Canadian people, who need legislation to ensure their well-being.
One might say that the passing of legislations against unemployment has often enough been recommended. Since the deception which has followed the passing of legislation introduced over the past three years, I was perhaps justified in asking for, some years ago, and even last year again, a summit meeting where I would have liked to see all the economists, industrialists and officials of various important Canadian agencies, in order to have discussions with the government and to attempt to find a solution.
IMr. Ritchie.]
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Obviously, the government has not found a solution, but it is equally obvious that the opposition parties that criticize the government have not come up with any miracle remedy. In view of all that and of the concern we must have for society, I believe it is advisable and urgent to agree on common objectives, not for the sake of the government but for the sake of the people of Canada.
I do not necessarily want to criticize or blame the government because I think that too many members have done that in this House. I would like to remind the government that from time to time we have asked for measures to solve unemployment. At present, there is legislation designed to support employment in Canada. I feel that this legislation which provides $80 million, is exclusively designed to support employment in this country and may not therefore fight unemployment.
I am of the opinion that this measure forces us to stand on the defensive. As I say, economic problems are the same all over the world. I suggest that we have a negative attitude in this respect.
It might have been wise, about a year ago, to consider repealing the 11 per cent sales tax on building materials in view of its effects on the construction industry. It certainly would have been interesting, considering the present unemployment.
Time and time again there has been talk of doing away with the federal sales tax of 12 per cent. In the light of the present situation, has any serious thought been given to setting retirement age at 60, which move would give the younger generation some 300,000 to 400,000 jobs? Then, of course, higher old age pensions would have to be provided for people aged 60 or more. As for those who might be tempted to ask where the money would come from, I think I can answer them: Unemployment is costing us enough. Some thought might also be given to a transfer of funds to give holidays, I say it again, to those who deserve them, and jobs to a generation which is eagerly waiting for them.
Has serious consideration been given to setting retirement at age 60? I would like the government representatives to explain why this is not done faster.
Has consideration been given also to projects which would take into account public services and which would benefit society? In any case, have we thought of carrying out certain projects, both at the federal and provincial levels, which would put materials to greater use and which would stimulate industry.
Of course, consideration will have to be given to the possibility of extending new lines of credit at more decent interest rates than those we have. It is our duty to think seriously about establishing a policy, taking into account the interest of society and the welfare we have the responsibility of giving to the Canadian people.
I say this because for a specific reason I want to make the government aware of its responsibilities. As many others, I could content myself with accusing the government of having failed, but then to be honest I would have to accuse also the governments of all the other countries
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which are faced with the same difficulties. This would be a very negative attitude.
To get a better idea of those measures, I think we should without fear rely once again on experts. The government must be honest with the people, get them acquainted with present difficulties and admit that it does not have the ultinate solution. There is no fault or crime in this. People expect honesty and they have known for a long time that the government has not found the solution that is needed.
As I said before, the proposals that came from opposition parties were not any better and we did not prove we had the miracle solution.
We should seriously consider calling the summit conference I mentioned earlier, a meeting of a great many Canadians interested in serving their country by giving wise advice to those responsible for the present situation.
I hope that outside Parliament, considering the experience of industrialists, businessmen, economists, employers, workers, union members, they should be able to meet with the ministers concerned and work together to find a solution.
The government should not hesitate to recognize its inability to deal with the economic circumstances in which we find ourselves. That would be very flattering I think for the Canadian people and would enable them to understand problems which are not easy to solve.
We should not delude ourselves. I do not think we should content ourselves with criticizing the government and I do not believe, considering present circumstances, we could even think that we ought to try to hurt the government, in a word lead it to defeat when we know quite well that all Canadians would bear the costs.
All hon. members are aware of the difficulties that we are experiencing; they are aware also of the costs that could have to be borne by the Canadian people. They wish to provide better living for all Canadians.
Through these few words, I only wish to make all hon. members conscious of those difficulties and invite the government to make unparalleled efforts to make people conscious of them also. There should be no hesitation in bringing home to them that the government itself is experiencing difficulties before such problems. There should be no hesitation in assembling around the government all available experts and all those men and women who can, through some advice, help it find a solution. Then we can say that Parliament has truly tried to solve a problem affecting the whole Canadian people. Being better informed and having the proof that the government and the parliamentarians have been truly objective and fair, Canadians will therefore be able to undertake joint action and take a potentially difficult decision.
I am aware that we should try to avoid tariff wars between countries. This is probably desirable.
Under the present situation the Canadian government will clearly have to take major decisions. As members of Parliament we need public support. It is not by politicking, by systematically criticizing the government and above all by rejoicing in the difficulties which the gov-

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eminent encounters, that we are going to be of service to society.
I venture to believe that hon. members are sensitive to these remarks and that they are moved by the desire to serve their electorate in a constructive way. To that end, I believe that we should support the present administration and above all awaken the feelings of the population which requires such solutions as would allow it to find the weii-uemg it needs and which it is incumbent upon us to provide; indeed all the members of this House have pledged themselves to this end during the last election campaign.
In respecting our undertakings, let us respect those who have elected us and let us work together to find this well-being, not in the government's interest but in the interest of the Canadian people.


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, I want to intervene this evening to refer to some of the points that have been made in this wide ranging debate, perhaps answer some of the criticisms that have been made and offer some ideas that might help to elucidate the matter somewhat. We have had some interesting offerings in the debate so far. The one a moment ago from the hon. member for Joliette (Mr. LaSalle) was a valuable contribution. I listened to it with great interest. This afternoon we heard an excellent speech by the hon. member for Duvernay (Mr. Kierans) who offered some interesting ideas and suggestions that we listened to with great interest. The Liberal party is a unified party. It allows room for many shades of opinion, many views and sometimes some arguments among us. This afternoon the hon. member for Duvernay made a very valuable contribution. It was most interesting to all of us.
The other day I read in the paper that the Leader of the Opposition (Mr. Stanfield) visited Saskatoon. When he rose to speak, his own party members applauded him. That was so unusual that it was worth a news item in the paper. I want to say that this is so common in the Liberal party that it is not an item for the newspapers. When the members of our party get together, we applaud our leader. Even though we may have violent debates on subjects, we are a unified party. We make a contribution to the topics before us.


Mr. Bell:: Explain.


Bruce Andrew Thomas Howard: This bill is
designed to tackle a particular problem. We have heard many contributions from members opposite. They complain that the bill does not do a lot of things they think it should. I want to say that this bill is not designed to eliminate inflation, change interest rates in Canada, cure warts or anything of that kind. It is designed to cure a specific problem of unemployment caused by a specific situation brought before us by the actions of the United States government. That is what the bill is designed to do and that is why it is handled in this particular way.
The bill is flexible enough to allow for a rapidly changing world situation and the possibility that we may be confronted with other situations of this kind by other governments throughout the world. For that reason the regulations that will go along with this bill are designed to allow for other eventualities.
I want to remind the hon. member for Kent-Essex (Mr. Danforth) that the trade situation that we have today is a very rapidly changing one. The rules of the game seem to be changed from hour to hour. There have been some announcements from Washington today that are of great interest to us and affect our situation considerably. There have been frequent announcements. We have to try and cope with a rapidly changing situation. The hon. member for Kent-Essex said that for once the government is not arrogant and admits that it does not have all the answers. It is true that we do not have all the answers. We have not even heard all the questions yet. As we hear those questions, perhaps we will be able to use legislation of this kind to solve the specific problems as they arise.
I want to answer some of the criticisms that were raised on the other side of the chamber during the course of this debate. The Leader of the Opposition raised a point, and I think I am quoting, that the government is going to have a good deal of discretion in connection with the regulations and the board will be left with a good deal of discretion under these regulations. Consequently, he said, we are obviously considering here a measure that is loose and open to abuse. With regard to discretion, the bill is designed to be broad enough in scope to take care of similar measures that might be taken by any other country in addition to what the United States has done with regard to a surtax on exports from Canada. That is why the bill is designed in this way.
The eligiblity of criteria and the level of assistance considered suitable to deal with the disruptive effects of the U.S. surcharge may not be appropriate in other cases, so that new situations arising from trade restricting measures of other countries that might occur will require an independent evaluation of an entirely different set of regulations. That is why that kind of other situation would be handled under regulations that would be drawn up when the situation arose.
With regard to the degree of discretion that will be given to the board, it is not possible to determine in advance the precise impact of the surcharge on employment in individual plants. For that reason the applicable of standard criteria is not always going to fit. A plant might not have been in production during the base period called for in the bill. The object of this bill is to maintain employment, not to fit some tight set of rules. The rules are drawn in such a way as to take into consideration the possibility that a new plant may have come into operation. The workers in that plant need protection and assistance, the same as workers in a plant that has been in business for many years.
The Leader of the Opposition referred to the claim that at the end of the assistance period and before the grant is paid, the board may use its discretionary power not to

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pay. That is not true unless, of course, the company concerned did not live up to the obligations when the agreement was made between it and the board. If they did not maintain the employment they said they would, the grant could of course be withheld. In all cases a firm would know at the beginning of the period that it was going to get a grant if it lived up to the agreement with the board.
The Leader of the Opposition and the leader of the New Democratic Party drew attention to the words "likely" and "significantly" in clause 11. I refer to clause 11 which provides:
Upon application therefor to the Board by a manufacturer who establishes that the work force at his plant is or is likely to be significantly reduced through lay-offs-
We do not propose that assistance should be provided only when lay-offs have actually occurred. The idea is to provide assistance so that lay-offs can be prevented. This is the reason for including the word "likely". The use of the word "significant" can easily be explained. Since the bill is designed to maintain employment, the size of the unemployment factor is important; the legislation is not designed to look after day to day problems which can be taken care of in the ordinary marketplace, the kind of thing which goes on every day in business.
I know the leader of the New Democratic Party, the hon. member for York South (Mr. Lewis) sees many demons under his bed. Especially does he see American demons under his bed. He is most concerned about multinational corporations, United States corporation<; which might possibly get some benefit from this legislation. But I want to tell the New Democratic Party and its leaner that this bill is designed to aid the employment position of Canadian workers whether they are employed by a Canadian company or a foreign company. It is the employment which is important. If they work for a company in Canada which might lay them off, the bill is designed to assist them in maintaining their employment. I make no apologies for this. It is the Canadian workers we are concerned about.
The leader of the New Democratic Party is also concerned lest some of this money go to preserve the profits of the corporations concerned. Well, that is not the purpose of the bill. The main purpose, as I have said, is to maintain employment. But profit levels in Canadian industry have been very low during the past few years. The hon. member knows this and other members of the House know it too. I think the hon. member realizes, also, that there is a direct relationship between the profits of corporations and the number of people they employ and the kind of expansion programs they undertake. We as a government make no apology for being concerned about the profits of the corporations in Canada. When corporations are healthy they are in an expansive mood and in a mood to employ more Canadians.
Several hon. members referred to clause 15 of the bill. Not least among them was the hon. member for Annapolis Valley (Mr. Nowlan). I have the impression that he did not read the wording of the clause when he expressed
Employment Support Bill
the view that too much leeway was allowed to the government in reaching decisions, and intimated that the system was open to abuse. For the benefit of the hon. member and for the information of other hon. members opposite I draw attention to the following words in clause 15:
Where a manufacturer who makes an application under this act for a grant is unable to comply with any regulations applicable in his case and the board is of the opinion that a grant to the manufacturer would not be outside the purposes of this act, as described in section 3, the board may, having regard to the purposes of this act, recommend to the Governor in Council that a grant be authorized.
Companies cannot go to the government and get special consideration under the terms of this clause. They have to apply to the board. The board is composed of seven Canadian citizens who are specially chosen for their impartiality. The reason for the wording of the clause is simple: there may be situations in which a corporation cannot fulfil the strict requirements of the regulations. It might, for example, not have been in business during the base period. Yet it could be an exporting company in danger of having to lay off employees. As the bill is now drafted, such a company can go to the board and ask for a recommendation to the Governor in Council that a grant be made. Other cases of hardship can be dealt with in the same way. I am surprised hon. members opposite should have been so worried about this. If they had read the clause carefully I am sure they would have been satisfied there is no opportunity for abuse.
Other points of interest were raised during the course of the debate, including some valuable suggestions which will be very carefully considered. I wish now to refer to a point raised by the hon. member for York South. He said that firms which receive grants under the program might sell their goods in the Canadian market at depressed prices, causing lay-offs in competing firms which were domestically oriented and unable to receive assistance under the program. With respect to production being dumped on the Canadian market, this is one possible effect of the United States surcharge which we are trying to counter. We are seeking to prevent companies from choosing the Canadian market as their alternative by trying to make it possible for them to continue to export, precisely in order to prevent what the hon. member is so worried about.
I wish to say a few words about agriculture. The bill before the House is designed specifically to deal with manufacturing industries. It is presented by the Department of Industry, Trade and Commerce. The Minister of Agriculture (Mr. Olson) gave a full explanation in the House yesterday of the programs which his department has designed to mitigate the effect of difficulties which may occur in the field of agriculture. I shall not attempt to repeat what he said because he gave an extremely lucid and detailed explanation of these measures. I am sure that if hon. members have specific problems in their own ridings concerning agricultural industries, they will get a fair hearing from the Minister of Agriculture followed by the action needed to solve those problems.

September 9, 1971
Employment Support Bill
One of the strangest criticisms I heard of this bill during the debate was the suggestion that the government should be doing more than it is to extend our trading relations around the world. The suggestion was that we had somehow been remiss in concentrating so much of our trade in the direction of the United States. It is true we conduct a great deal of trade with the United States, but I cannot understand how any hon. member could be so utterly unaware of what has been going on during the past few months. I do not understand how any member could be unaware of the trade expansion program that the Department of Industry, Trade and Commerce has undertaken, the new effort which has been made by the department to expand our trade with other countries of the world.
I remember a few years ago, when another government was in power, the leader of that government making an announcement to the effect that Canada intended to transfer 25 per cent of its trade with the United States to the United Kingdom. We all recall how the British came over with their order books ready to get the benefit of some of this expansion of trade, only to discover that it was all a pipe dream, a puff of smoke, nothing was meant by it. Hon. members opposite say that nothing has happened since then. Let me remind those who are unaware of some of the programs that the Department of Industry, Trade and Commerce has undertaken even within the last few months to spread out our trading relationships throughout the world. For example, there was the trip to the Soviet Union in January and February of this year, a ministerial mission to expand our trading relationships and improve our technical exchange with the Soviet Union.
We sent a similar mission to the Federal Republic of Germany in March of this year. Then there was another one, of which some members may possibly have heard, which visited the People's Republic of China in June and July of this year. A science and technology mission went to Belgium in June, 1970. There was a follow-up technical mission to the Soviet Union in January, and one to Germany as well. We have a mission to Japan in the planning stages at the present time. These are some of the trading expansion and diversion programs in which we have been engaged, and I may say that they have shown some very positive results. Before too long the government will be making some more announcements of specific orders and new developments in trade as a result of these programs.
Perhaps hon. members may recall announcements made in the House concerning our intervention in the British negotiations to enter the European Common Market. Perhaps hon. members will recall that because of the interventions made by the Minister of Industry, Trade and Commerce (Mr. Pepin) and the Secretary of State for External Affairs (Mr. Sharp), Canada received special treatment from the European Economic Community in regard to Canadian pulp, newsprint and plywood exports. These concessions resulted from some very hard and capable work done by Canadian ministers to

ensure that Canada's interests in the Common Market were looked after.
Let me also tell hon. members about another Department of Industry, Trade and Commerce program that is designed to improve our trading relationships around the world. We have a fairs and missions program under which trade fairs and missions are sent to various parts of the world. In the past, the emphasis of these missions has fallen largely on the United States but that pattern is now changing and I should like to give the House some figures. In 1970-71 there were 18 events held in the U.S.A. and 28 events held in the rest of the world. In 1971-72 there were 19 events in the U.S.A. and 26 events in other parts of the world.
We also bring trade missions to Canada. In the two years 1969-70 and 1970-71 there were two from the United States and 53 from the rest of the world. These missions are staffed by people who come to Canada with order books to look at Canadian products and services, and they buy a great deal when they come. We encourage them to come, make them feel at home, show them around our country and encourage them to fill our order books, and that is what they do. So that is another of our trade expansion programs.
I could go on to give the House a long list of programs because there are many other countries in the world where we have benefited from our trade expansion efforts. However, let me say just a few words about our trade commissioner service. Although we do a lot of trade with the United States, dozens and dozens of trade commissioners are sent to other countries of the world with a view to expanding our trade. We have 75 trade commissioners in various countries of the world, more than 60 of whom are in countries other than the United States. Let me tell the House of the recent changes we have made. In eastern Europe we have increased our representation; we have posted a resident trade commissioner to Warsaw and assigned ;.n additional officer to Moscow and one to Belgrade. We have arranged our first government-sponsored participation in a trade fair in Moscow and have mounted two trade shows in Budapest.
As far as western Europe is concerned, we have stepped up our activities, including the reaching of a science and technology agreement with the Federal Republic of Germany. On the continent of Africa we have opened a new office in Abidjan, reopened our Cairo office and are presently opening a new office in Algiers. We have also been doing things in the Far East. For example, we have opened a new office in Djakarta. We have opened a new office in China, of course, following our mission there.
We are doing things in Latin America too. Hon. members may be tired of hearing about our trade expansion activities, but I merely wish to point out that the suggestion that Canada has been concentrating its efforts in this regard upon the United States is entirely false. We have been expanding our trade promotion all around the world and our efforts are showing tremendous results.
Since my time is nearly up I will deal with but one other matter, the $80 million. Hon. members on the other
September 9, 1971

side of the House have commented that $80 is not sufficient to do the job. I think if hon. members understand how this $80 million is going to be spent they will realize that it can do the job. This money is going to be put into the economy because it is necessary to restore the balance or margin between cost and return. Although it is not necessary to pay the whole of the cost of any jobs that might be lost, it is essential to pay part of the cost. This is why with $80 million it is possible to produce a great deal more in terms of wealth and employment as a result of our proposed program.
Let me give the House an example of what I mean. A company employing 500 workers has exports to the United States worth $14 million, which comprises four-fifths of its total output. The surcharge raises the tariff on those exports to the United States from 11 per cent to 21 per cent. This company is in a highly competitive business so the surcharge cannot be passed on. Neither can it take a profit squeeze because, as hon. members know, most Canadian companies have already had a profit squeeze and they are unable to borrow any more money. As a result, this company might have to lay off its 500 workers. All 500 employees would lose their jobs, not to mention other jobs lost among this company's suppliers.
Under the terms of this bill, if this company fulfilled the requirements it would be entitled to a grant amounting to two-thirds of the surcharge on its United States exports, which over a six-month period would cost approximately $500,000. So in this particular instance the government would have to pay the company $500,000 to maintain 500 jobs, which works out to $1,000 per job over that same period. So hon. members see the relationship there.
While this may not be an example that could be followed through in all instances, it does illustrate how the $80 million can be spread out and made to apply to a great many jobs in Canada. We think it will make a difference so far as the number of jobs that might be lost in Canada is concerned. It is reasonable to assume that the proposed amount of $80 million will save a major proportion of the estimated jobs which would otherwise be lost. As I have pointed out, this is a specific program designed to do a specific job. If you try to read into it that it is a bill to cure all kinds of other ills in Canada, you are mistaken. I commend it to you only as a bill which will do this job well.


Thomas Miller Bell: Would the hon. member permit a question?


The Acting Speaker (Mr. Laniel):: As the hon. member knows, he can only ask a question if the hon. parliamentary secretary is willing to answer it.


Bruce Andrew Thomas Howard: Yes, I accept it, Mr. Speaker.


Thomas Miller Bell: Since the hon. member endorsed and praised the speech of the hon. member for Duvernay (Mr. Kier-ans), and since three cabinet ministers thumped their
Employment Support Bill
desks and appeared to approve what he said, can we now expect the hon. member and other members of the cabinet to bring forward changes in the tax proposals to create the situation about which the hon. member for Duvernay spoke? Is the government now ready to make the changes he advocates and as a result of which the hon. member for Duvernay resigned from the cabinet?


Bruce Andrew Thomas Howard: Mr. Speaker, I was under the impression we were discussing Bill C-262. The hon. member has asked a question concerning the tax bill. I would suggest his question is out of order. As I mentioned before, the points raised by the hon. member for Duvernay were very interesting. We have many diverse opinions on this side and I am sure the government will study his views very carefully, as will all members on this side.


Mr. Henry Lalulippe (Compion):: Mr. Speaker, I take great pleasure in speaking on Bill C-262.
A lot has been written and said in the past few days about this bill but I have yet to see tonight government members or cabinet ministers come up with adequate solutions to this serious problem we are having with the Americans.
Mr. Speaker, that is definitely a problem, and that situation, intended by the Americans, is putting Canadians in a predicament. In view of those facts, we must react, express our opinions, and particularly try to find true solutions.
The present problem is actually an economic problem and not a political one. It is a problem resulting from the circumstances of the economic evolution. But every problem has a solution.
That goes to prove more and more that we are dependent on foreign countries, particularly the United States. A country dependent on other countries does not really look after its own affairs, does not solve its problems, and leaves it to others to control its economy, when it should do it itself.
Since we depend upon the Americans, there has been some carelessness. I do not want to blame anybody, but surely there must be someone who is responsible. The people responsible are not only the members of this government, but also members of previous governments who never did assume their real responsibilities in order to bring about economic independence.
This is where the problem lies. Since the resumption of the session, we have heard members of the four political parties. The party in power has introduced a bill containing provisions which to a certain extent have merit, but they are not likely to solve the problem once and for all.
Now we are asked to provide $80 million to Canadians or an independent board which will be established to deal with this problem. All opposition members are saying that this amount is inadequate, that it is just a drop in the bucket and that it will not solve anything.
I do not feel that these $80 million will solve the problem. Even a billion would not do it either. These $80

September 9, 1971
Employment Support Bill
million which will be provided to citizens will be taken from the taxpayer's pocket.
If we use the taxpayers' money to improve the lot of a few, we will be placing some other Canadian citizens in a difficult situation. If we take from some to give to the others, we will be depriving some of the purchasing power that could help the economic expansion of our country. If we do that, we will help a few, but we will displease a large number of other citizens who do not have the purchasing power required to meet their needs. If we take that money to solve such a problem, we will not have found a solution but increased the taxes and the cost of living.
On the other hand, the Progressive Conservatives made some suggestions, professing to have found solutions. In fact, they only criticize and claim they could do better without, however, saying what they would do. The progressive Conservatives do not have any solution to the problem. They would like to take the helm of the state, but how would they do it, they do not know! They do not say so either.
The New Democratic Party offers something else. They would like to levy a retaliatory tax against the Americans in order to increase the price of our primary products, thus offsetting the effects of the American surtax. I do not believe that it would be either a practical solution to the economic problem which we would like to solve.
In addition, the New Democratic Party is demanding the reduction of interest rates and this in my opinion is a little more logical, because it would somewhat decrease the cost of living and slightly relieve the Canadian taxpayers, without nevertheless solving the present problem.
These are the suggestions which have been made to this government to help it solve the problem.
As for the party which I represent, I firmly believe that it has some genuine solutions to offer. We could remedy in an efficient, fast and common sense way the situation which we have to face. We suggest the removal of the 12 per cent tax so as to alleviate the tax burden for all Canadians. This measure would in effect decrease the cost of living and compensate for the 10 per cent tax imposed by the Americans. We would achieve this by granting a compensated discount covered by new lines of credit extended by our central bank, without depriving anyone from one cent of purchasing power.
I feel that this logical solution should be considered, even if it is not likely to please important investors and financiers. I also know that the servants of finance-and they are many in this chamber-are not thoroughly knowledgeable in economics and are in favour of the present system and of all kinds of charges and taxes.
When it is a matter of reducing the cost of living in order to allow Canadians to remain masters in their own house, no solution can be found. We are told that we are mistaken, but the economic depression persists and we remain faced with poverty, anarchy and revolt. To get back to our senses rules of justice and fair social standards must be established since only socially-minded people will solve our economic problem.
Everyone wants balance but not equality. Revolutionary experiments launched under the banner of equality have all failed. In a national administration, increased production becomes the objective and such production is divided into consumption, capitalization. It is the same administrative formula which corresponds to the words used in all personal, family, social, co-operative, municipal and even federal administrations. Incomes are divided into expenses and benefits, hence incomes, expenses and benefits. That is where we must stop and that is what we must consider and put into practice.
May I call it ten o'clock, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: Order. I would like to point out to the hon. member for Compton that it is not quite ten o'clock, and unless the House wishes to call it ten o'clock, I will have to recognize another member.

Does the House agree to call it ten o'clock?


Stanley Howard Knowles: D'accord.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Walter C. Carter: Mr. Speaker, the story of the phase-down of the United States naval base at Argentia, Newfoundland, and the social and economic chaos that has resulted therefrom has been related in this House many times. During the past couple of years hon. members have heard me in this chamber and in the committee plead with the government for action and for a solution to the problem. During this short debate time will not permit me to again outline in detail the magnitude of the problems facing the people who live in and who have been affected by the rapid deterioration of the economy in this area, but certain aspects of the situation must be repeated. My plea for assistance for the people of the area must be renewed because to a large extent my pleas in the past have fallen on deaf ears.
Shortly after the phase-down of the naval base commenced, a federal task force was appointed under the chairmanship of a senior official of the Department of Regional Economic Expansion. That gentleman found early in the game that it can become terribly frustrating when one tries to run with the hares and hunt with the hounds or wear two tight-fitting hats. The gentleman in question was chairman of that task force in name only because it stands to reason that being a senior, career civil servant with the usual concern for self-preservation he could not allow the task force to get out of hand and make demands which would embarrass his minister or the government.
[Mr. Latulippe.l
September 9, 1971

For example, the task force members were unanimous in their recommendation that the entire area be designated as a special area under the Department of Regional Economic Expansion. The chairman, sensing that this would embarrass his minister refused to go along with the recommendation. The task force is a farce. It is nothing more than political window-dressing. Promises were made to people and their hopes were raised only to be let down with a bang. Some short term jobs were provided, but from a long range point of view nothing has been done. In other words, the entire thing has flopped.
I urge the government and this House to designate the Argentia-Placentia area as a special area under DREE. I urge the minister to stop trying to bluff and insult the people with a task force that has no budget, which has no deadline at which to report and, what is worse, has a biased chairman. I urge the government to undertake immediately a comprehensive study of the economic prospects of the area and then set about to have them developed.
Apart from the great human resources of the area, Placentia Bay is rich in natural resources. For example, the fishery potential of the bay is staggering, and it must be developed. The economic feasibility of harvesting and processing the various marine resources must be ascertained with a view to establishing a multi-purpose fish processing plant in the area. The presence of minerals in the area warrants a survey to determine their extent and economic possibilities. A survey to determine the forest product potential of the area would produce some interesting and exciting prospects. Tourism, if properly developed, would add to the future prospects of the entire area. In that regard, Mr. Speaker, I would like to impress upon the minister the necessity of continuing with the restoration of the Castle Hill historic site.
The Placentia area must not be allowed to wither and die. It has contributed greatly to the economy and to the social and economic life of our country and therefore must not be allowed to wither and die. The social blight that has set in since the phase-down of the U.S. naval station must not be allowed to continue. A government that allows it to continue is not worthy of the trust and confidence reposed in it by the Canadian people.
Historic Placentia and the surrounding area, often referred to by historians as the land of saints and scholars, is begging for survival. Almost 10,000 hardy, independent people boasting of a past that goes back over 400 years are looking to the government for a chance to regain that which they have almost lost, their sense of pride and independence.
Is there a more appropriate place or a more opportune time for the Prime Minister (Mr. Trudeau) to make good his promise of a just society? If the Prime Minister and his colleagues are sincere, if their promise of a just society has any real meaning, then the Placentia area is the place, and now is the time.


Mr. Eymard Corbin (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, in the unavoidable
Proceedings on Adjournment Motion
absence of the Minister of Regional Economic Expansion (Mr. Marchand)-


James Aloysius McGrath: He just came into the House.


Eymard G. Corbin: -I shall attempt to allay some of the fears expressed tonight by the hon. member. Perhaps it would be wise to recall the circumstances which brought this particular question before the House. I refer to Hansard of May 26, page 6133, where the hon. member is reported as asking this question:
My question is directed to the Minister of Regional Economic Expansion, Mr. Speaker. Can the minister tell the House what action he has taken in response to representations made to his department and the Minister of Transport that the chairman of the Argentia task force be asked to resign on the basis that he misled the committee and that he has failed to function?
In the absence of the Minister of Regional Economic Expansion, I am informed that the letter which was referred to was brought before the meeting of the Argentia task force on May 26, 1971, and the chairman received a unanimous vote of confidence at that meeting.
We are quite familiar with the problems which the hon. member for St. John's West (Mr. Carter) exposed to the House tonight, and on behalf of the minister and the government I would like to assure him that they are being seriously examined. Time is of the essence, but the report of the task force must be given serious study before we embark on blind action to solve these important problems.



AIRPORTS-TORONTO-DECISION ON SITE OF NEW FACILITY-POSSIBLE POSTPONEMENT OF ANNOUNCEMENT

Mr. Robert P. Kaplan (Don Valley):: Mr. Speaker, this adjournment debate is used by members who are not satisfied with a minister's answer to questions in the question period. I am on my feet because I am not satisfied with the progress report which the Minister of Transport (Mr. Jamieson) gave yesterday on the status of Toronto airport development. I believe he has been led down the garden path by the government of Ontario. Here is the background.


An hon. Member:: Oh, oh!


An hon. Member:: Cut that out.


Robert Phillip Kaplan: It is accepted that airport planning is the ultimate responsibility of the federal government but that it is desirable for consultation to take place with other levels of government and for public discussion to take place. After all, a major airport has an important impact on the responsibilities of other governments, and on the citizens. It affects the life and the growth of our city. But the long drawn-out and so far secret negotiations between the Minister of Transport and his Ontario counterpart illustrate the pitfalls of the consultation process.
In the fall of 1968 the federal government was prepared to proceed in Toronto with a substantial Malton airport expansion which it was said would provide for

September 9, 1971
Proceedings on Adjournment Motion
our current and future needs. But citizen protest about noise and pollution resulted in reconsideration of the decision. In the process of reconsideration the rumour is that an expensive and careful report was prepared which was ready in September, 1970, one year ago, and which is still secret. This report is said to identify four sites in the Toronto area as being acceptable alternatives to Malton expansion, the choice depending on the relative weight given to environmental, social and financial criteria.
The Minister of Transport undertook to consult with Ontario, which was a good thing. But the effect of this consultation has been to implicate the Ontario government politically in the decision, for better or worse. The Ontario Conservatives have nothing to gain by publicizing a decision prior to the election-that is, the provincial election. Why should they rock the boat with a decision which, however defensible, is bound to be controversial? Presumably, if the Ontario Conservatives had felt strong enough politically to call their election months ago, the airport decision would already be announced.
But why should Toronto development suffer and remain uncertain because of local political considerations? I submit that the minister would accept the responsibility, which is his in the final analysis, to announce a decision and to defend it.
I sympathize with the difficulty the minister faces in making this important decision. But perhaps he should be reminded that sometimes decisions are hard to make because there is little ultimate difference among the alternatives. Shall I send her roses or carnations? If this is the minister's dilemma, perhaps he should flip a coin, but let him do it soon.


Mr. Gerard Duquei (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I have listened with considerable interest to the hon. member from Don Valley (Mr. Kaplan) and I can appreciate fully the curiosity or perhaps the anxiety of those people who have a direct interest in the location of the new international airport for the city of Toronto and the surrounding area.
I wish to impress upon the House, Mr. Speaker, that the minister's reply during Wednesday's question period represents the latest information on this subject. Hon. members will recall that the minister referred to the meeting of July 26 with his counterpart the Minister of Transport for Ontario. I believe he was very encouraged by the progress achieved at that meeting and he is presently awaiting a response from the province of Ontario on the proposals. He has indicated that he would like to see that reply come as quickly as possible.
I noted a number of interesting points put forward by the hon. member. I will be pleased to bring these to the minister's attention.



ROYAL CANADIAN MOUNTED POLICE-ROLE OF CIVILIAN SECURITY FORCE RESPECTING CHANGES

Robert Jardine McCleave: Mr. Speaker, Canadians are justifiably proud of the world's finest police force, the Royal Canadian Mounted Police. Anything that touches upon that force or that seems to affect it in any way is a natural cause for alarm, hence my appearance this evening with the Solicitor General (Mr. Goyer) who will perhaps provide some of the basic answers to questions that are being asked by Canadians about the security planning and research group set up in the hon. gentleman's department in July, a group which was first brought to light in the CTV program "Question Period'' approximately one month ago. Are we faced with "Goyer's gum shoes," as one question put it, or "Trudeau's non-police" or a Canadian version of the Central Intelligence Agency? Liberal MLA George Sprin-gate of the Quebec National Assembly was reported as saying in the Globe and Mail recently:
There is a damn distinct possibility increased government snooping will muzzle political opponents.
My colleague from Dartmouth-Halifax East (Mr. Forres-tall) calls it the "super creeper" force. The Globe and Mail in its editorial says, "Shades of the Gestapo, NKVD and CIA". Somebody asked me what I was doing on the "late show" tonight, and my idea is that we might apply to the force the irreverent title of the Canadian OGPU.
No matter how we may feel about the Royal Canadian Mounted Police, the Solicitor General seems to have some doubts about its operations, as he said when pressed to explain this new force within his department. He said:
I don't think the police are well prepared always to analyse the social context.
It is one thing to gather information. It is something else to analyse it.
When the report of the Royal Commission on Security came out, the Prime Minister (Mr. Trudeau) made a statement about government policy pertaining thereto. He said then that the government would not follow the recommendations of that security commission. Now the Solicitor General has come along and thrown the Prime Minister's statement right out the window. In other words, he is refuting the assurances that the Prime Minister gave us when the royal commission report was tabled.
Douglas Fisher, a political opponent but a good, objective fellow in the press gallery, wrote in a column recently:
I understood that the new departmental group was to have a permanent advisory function but that its first assignment was to recommend changes in the composition and operations of the RCMP.
That will be one of two questions that I will ask the Solicitor General in a few minutes. It is interesting, Sir, to examine the Royal Canadian Mounted Police Act and to see what powers are possessed under it already. Under section 18(d) of the act we find that the force is "to perform such other duties and functions as are prescribed by the Governor in Council or the commissioner." If the minister wanted for some reason to change the course of the Royal Canadian Mounted Police, for example, he could make that recommendation directly to the Governor in Council.

September 9, 1971

Section 5 also says that the commissioner, under the direction of the minister, has the control and management of the force. These, again, are powers that the minister could have exercised without creating a body that some in the Mounted Police, I think, feel constitutes an infringement upon themselves. Also, and this is a point that nobody has raised, the Royal Canadian Mounted Police Act provides for an oath of office. This little new group, I am sure, is not obligated by any oath whatsoever. I think that is important when dealing with the security of Canada.
In short, the group has no statutory basis and no accountability. It comes in the middle of the night, and suddenly we are faced with it and some pretty dread suspicions about it. I read from an editorial in the September 2 edition of the Globe and Mail:
-if a secretariat is needed it should be responsible to the Privy Council which is to all intents and purposes the cabinet. Its advice should be to the cabinet, not to Mr. Goyer. Then the cabinet could still be assured of hearing the opinions of both the RCMP and the agency. If Mr. Goyer were responsible for both the secretariat and the RCMP, the cabinet would receive only one version: the one worked out in the Solicitor General's department.
Before this new agency is created, Mr. Goyer should give the country a full explanation of how it would operate and why he is proceeding with an idea already rejected by Mr. Trudeau. And the proper place for such an explanation is Parliament.
My two questions to the minister are as follows, Mr. Speaker: First, will the group in fact advise the minister on the operations of the RCMP and possible changes to that world famous force? Second, will this new group be given a formal legislative structure so that all in Parliament will have an appropriate opportunity of dealing with its creation?


Some hon. Members:: Hear, hear!


Jean-Pierre Goyer: Mr. Speaker, most of the remarks made about the planning and research group I have established in my department were made following an indiscretion by a person still unknown. I am surprised that serious editors and members could comment a rumour, an indiscretion before I have had time to explain the role of this working unit. However, I think it might be worth while once more to
Proceedings on Adjournment Motion
define what will be the responsibilities of this working group.
On June 26, 1969, the right hon. Prime Minister (Mr. Trudeau) made the following comments about the report of the Royal Commission on Security:
The security service, under the Commissioner of the R.C.M.P., will be increasingly separate in structure and civilian in nature.
That principle remains. It is respected, and the fact that a research and planning group has been put in action does not change anything to the basic principle expressed by the Prime Minister.
I would add that there is no question of this group directing police operations as such. As a matter of fact, as is indicated by its name, it is a research group, a planning group that will be mainly concerned with analysis.
In fact, what are the true responsibilities of this working group? First of all, to compile information and not to go and find it or to set up some police services. The information will be provided mainly by the RCMP, of course, as well as by the armed forces, other departments that have information relating to the security of the country as well as by provincial government and other sources accessible to the public.
It should then assess this information and call for additional information should the data obtained be inadequate. Finally, it should analyse the information as a whole, not merely from a strict police point of view, but in a much wider spirit, that is taking into consideration social, economic and political factors.
I feel it is wrong to expect such an agency to operate in isolation, that is, to transmit only police information to the government. What matters is that it should be situated in relation to a global objective of the government, taking government policies into account, supplying the government with better information as to the policy to be followed for internal security.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to have to interrupt the minister but, as he knows, the time granted to him has expired.
Motion agreed to and the House adjourned at 10.22 p.m.

Friday. September 10, 1971