1971-10-28

BUSINESS OF THE HOUSE


Mr. Speaker:: Yesterday when the hon. member for Battle River proposed a motion under the provisions of Standing Order 43 the Chair declined to put the motion as proposed and undertook to study the circumstances and make a ruling. After careful consideration it seems to me that very little can be added to my comments as recorded at pages 9073 and 9074 of yesterday's debates.
I suggest to the House that the purpose of Standing Order 43 was never intended to permit an hon. member to launch a unilateral debate. It is my view that it is not in accord with the practices and proprieties of this House to use the Standing Order for such purposes when in effect it is intended only to suspend the notice requirement for a motion. It is my judgment that a member, when proposing a motion under Standing Order 43, should restrict his comments to the necessity or desirability of suspending the notice provision for a motion. It seems to me that any enlargement of that prior condition would end inevitably in great difficulty as the same Standing Order could be used from both sides of the House for the purpose of questioning the conduct of any or every member of the House.
As hon. members know, the House has developed well established and recognized procedures for the purpose of discussing the conduct of ministers and of members of the House. It is a prime duty of the Chair to safeguard the interests of all hon. members. Under the circumstances I cannot ask the House whether the hon. member for Battle River has the unanimous consent of the House to propose the motion to which he alluded yesterday.



ROUTINE PROCEEDINGS


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, under the provisions of Standing Order 41(2) I would like to table further proposed amendments to Bill C-259, and I would ask that these be printed, with the consent of the House-


Mr. Woolliams:: How many amendments this time?


Edgar John Benson: A few. I would ask that these be printed in Votes and Proceedings.


Mr. Speaker:: Is this agreed?


Mr. Knowles (Winnipeg North Centre):: On a point of order, Mr. Speaker, may I raise a question? Yes, we get these amendments one way or another, but in view of the fact that we are, in right of the House, dealing with Bill C-259 in committee where amendments are moved, would it not be better for the minister to present those amendments when we are in committee? It seems to me this is a bit of an abuse of Standing Order 41(2).


Edgar John Benson: Mr. Speaker, really what I am trying to do under Standing Order 41(2) is to inform the House of amendments that may be made as we move through the subsequent sections. I thought it best to present them to the House so members will know what we are going to do.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


An hon. Member:: It does not follow that we will know what you are going to do.


EXTERNAL AFFAIRS
Mr. Frank Howard (Skeena):: Mr. Speaker, I seek, pursuant to the terms of Standing Order 43, to obtain the unanimous consent of the House to propose a motion for the purpose of discussing a matter of urgent and pressing necessity, namely, the decision by the President of the United States to proceed with the Amchitka blast. As a result of the announcement yesterday and the insensitive and offensive disregard by the United States of appeals to stop the irrelevant and unnecessary Amchitka Nuclear test, I move, seconded by the hon. member for Fraser Valley West (Mr. Rose):
That the government of Canada immediately initiate steps, with the co-operation of its allies in the United Nations, to have the matter of the Amchitka nuclear test raised in the Security Council.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Skeena which requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
24372-17J

October 28, 1971
Agriculture


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



AGRICULTURE


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, because of the questions that have been raised on this matter in the House, I am pleased to announce that the Agricultural Products Board has invited tenders for a total of 3,600,000 pounds of eviscerated turkey. The purchase price ranges between 33 cents and 40 cents per pound. Since these birds must be of current kill it is anticipated that the purchase will have a favourable impact on producer returns immediately.


Mr. R. E. McKinley (Huron):: Mr. Speaker, I thank the minister for the announcement he has made about the government's purchase of turkeys. I hope it will bring about a slight rise in price to the producers. There may be some difficulty because the Agricultural Products Board has stipulated that the turkeys have to be fresh killed rather than frozen even though there is an abundance of frozen turkeys in storage. A good deal of the product has gone to market and those who kill fresh turkeys have regular customers for whom they have to keep turkeys available. This may make it difficult for the program to be of as much help as it would have been if it had been announced sooner and if frozen turkeys had been included. However, for what has been done we are thankful and we hope it will be helpful.


Mr. Speaker:: The hon. member for Fraser Valley West.


An hon. Member:: Here is a real turkey.


Mr. Mark Rose (Fraser Valley West):: Thank you, Mr. Speaker. I heard a heckler suggest that I was a real turkey. I would like to point out that I am also tender.


Some hon. Members:: Oh, oh!


An hon. Member:: The member for Gander.


Mark Willson Rose: In responding to the Minister of Agriculture's announcement about turkey tenders, Mr. Speaker, I am reminded of the broiler tender about three or four months ago. In that case it was felt that a number of provinces did not have a fair opportunity to bid because of the nature of the tender and the lack of adequate notice and information on the ultimate destination to the producer provinces concerned. I understand that this tender is to be applied to support the price of the product. Ultimately, whether it is exported by the government is another matter. I am certain this announcement will be welcome news to those provinces with surpluses. I am confident that the government will see fit to look at all the provinces that may have surpluses and give them each a fair and equal opportunity to bid on this tender call. I say that because I sincerely do not feel that this happened in the previous situation regarding broilers.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, for once I wish to congratulate the Minister of Agriculture (Mr. Olson). Once is not too much. He just announced really good news for turkey producers. I am sure this contract will also have favourable effects on other categories of farmers.
The announcement of a sale of 3,600,000 pounds of turkey is indeed good news and I am convinced that the producers will greatly benefit from it and their income will increase substantially; I am very happy for all producers whether they are in the west or in the east.
In conclusion, I hope that similar transactions will be announced in the near future concerning the sale of pork meat, because hog producers are running into difficulties-


Mr. Speaker:: Order. I take the liberty of interrupting the hon. member to remind him that comments following a statement by a minister should be restricted to the subject referred to by the minister. I am under the impression that we are discussing turkeys instead of hogs and I trust the hon. member will restrict his remarks to that major subject.


Joseph Adrien Henri Lambert: I stand corrected, but in view of our concern for all producers I express the hope in closing, that the same policy applies to other groups of producers.
Once more I congratulate the Minister of Agriculture.



ORAL QUESTION PERIOD


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister-


Some hon. Members:: Oh, oh!


An hon. Member:: The new leader.


An hon. Member:: Where is your leader today?


Lincoln MacCauley Alexander: Mr. Speaker, let the record show that we on this side of the House are quite happy with and enthusiastic about our present leader.


Some hon. Members:: Hear, hear!


Edgar John Benson: Who is he?


Mr. MacEachen:: Where is he?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Hamilton West has the floor.
October 28, 1971

Inquiries of the Ministry MANPOWER


Lincoln MacCauley Alexander: Mr. Speaker, I should like to direct a question to the Minister of Finance regarding the government's pursuit of a policy with respect to restraints in terms of a contingency plan for wage and price controls. Although the Prime Minister said on Tuesday that the government has made no approaches for the application of a plan of wage and price controls, has the government decided to present a specific contingency plan to labour and management as well as to the provinces for their consideration?


Edgar John Benson: Mr. Speaker, the answer is no, and I should like to welcome the new leader of the opposition.


Some hon. Members:: Oh, oh!


Mr. Monteith:: That's pretty weak, Ben.


Mr. Muir:: That is as big a joke as your bill, Ben.



WAGE AND PRICE CONTROLS-ACCEPTANCE OF CRITERIA ADVANCED BY UNION RESEARCH DIRECTOR-PRESENTATION OF PLAN TO LABOUR BY MINISTER

Lincoln MacCauley Alexander: Mr. Speaker, since the Minister of Labour has apparently been holding discussions with the CLC and CNTU which seem to want to co-operate if five conditions are met, does the government accept the five criteria for a fair incomes policy that were stated recently by the research director of the Canadian Brotherhood of Railway, Transport and General Workers?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, in answer to the industrial relations critic of the official opposition, let me say that I have been holding meetings with the labour movement, as I ought to as Minister of Labour, on a periodic basis over the last four months. The subjects of such discussions are confidential with respect to the trade union movement. As the Minister of Finance indicated, at no time has the basic subject matter of any of these meetings been the implementation of a specific plan of price and wage controls.


Lincoln MacCauley Alexander: I thank the Minister of Labour for his answer. I am not talking about an approach with respect to the application. In these discussions with labour, has the minister brought up the question of a contingency plan for wage and price controls and, if so, what has been the answer of labour, particularly when it is now noted that they are prepared to co-operate if certain conditions are met?


Bryce Stuart Mackasey: Mr. Speaker, I think the hon. member is quite unintentionally attributing to one particular person who is attached to the labour movement a role that is properly fulfilled by the Canadian Labour Congress. If he feels that he can interpret the Canadian Labour Congress' approach in the whole matter of wage and price control, then he knows more than the Minister of Labour. We have never discussed specific wage and price controls in our meetings. I am not at liberty to divulge precisely what we do discuss at these meetings.



LOCAL INITIATIVES PROGRAM-CRITERIA TO BE USED IN ESTABLISHING PRIORITIES FOR PROJECT APPROVAL-FUND DISTRIBUTION-APPLICATION EVALUATION

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: wish to direct a question to the Minister of Manpower and Immigration arising out of the data he filed yesterday respecting the LIP program. As there is a real possibility that the number of applications under the LIP program may exceed the financial resources available, what criteria are being set out to establish priorities for approving these programs? Is it to be on a first come, first served basis or are there other criteria? What are the criteria which the department will use?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, many of the criteria were set out yesterday. The objective will be to attempt to approve those applications which produce the best possible project results and also are most directed to putting people into jobs who are presently unemployed and seeking work. This will be a guideline. Applications will be considered and approved progressively so there will be approvals before all the applications are in. Therefore time is a matter of importance. In the initial stages, the most clearly desirable projects will be approved most quickly, and as the competition for the money becomes more apparent the more difficult decisions will be taken.


Thomas Clement (Tommy) Douglas: As I am sure the minister desires, and certainly the House desires, to see that the $100 million is distributed fairly so that all areas in Canada get their fair share of the amount of money available, has the minister made any breakdown as to the amounts that will be distributed on the basis of provinces or on the basis of regions so there will be no suspicion that any area is being treated unfairly or any area is being given special consideration?


Otto Emil Lang: Mr. Speaker, the general guidelines were indicated at the time of the announcement of the over-all program by the government. The allocations with regard to the Local Initiatives Program are not completely rigid by any means, particularly because these can be used to balance some of the imbalances that develop in the other programs. Therefore decisions will be made from time to time. The over-all objective, of course, is to relate the programs as far as possible to the actual people unemployed and seeking work.


Thomas Clement (Tommy) Douglas: Since applications by community organizations will be made directly to the local or regional Manpower offices and applications by municipalities will be made to the provincial governments, may I ask the minister whether the provincial governments will evaluate and pass on these applications or will they merely be postmen and pass them on to the Department of Manpower which will make the final decision whether or not the projects are acceptable?


Otto Emil Lang: Mr. Speaker, the final decision on projects to be approved is to be made by the Department of Manpower. Procedures have been set up for that purpose. The provinces, however, will certainly be able to indicate

October 28, 1971
Inquiries of the Ministry
which programs are inconsistent with their own notions of proper development from a municipal point of view, so they will have an important role to play.



INCOME TAX


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I have a question for the Minister of Finance.
When he appeared before the Committee on Finance, Trade and Economic Affairs yesterday, the president of the Noranda Mines Company said that owing to an erroneous interpretation of the legislation, his company could have trouble investing $120 million in Quebec.
Is the minister aware of the situation and are the department or high officials in a position to clear it up so that the Noranda Mines Company may invest the $120 million?

Hon. E. }. Benson (Minister of Finance): Mr. Speaker, I do not think there is any question about their continuing with the investment. A matter of interpretation was raised by the company and I am having it looked into.


David Réal Caouette: I should like to put a supplementary question, Mr. Speaker.
Has the minister undertaken negotiations with the president of the company? Is the entire matter settled? Can we rely on the investments of Noranda Mines?


Edgar John Benson: I think the investment will go on. I would like to be in contact with them.



INQUIRY AS TO INTRODUCTION OF LEGISLATION TO ESTABLISH TWO-PRICE SYSTEM

[Stage Direction]
Right Hon. ]. G. Diefenbaker (Prince Albert): Mr. Speaker, my question is directed to the hon. member for Sas-katoon-Humboldt and minister of several departments. Would he say now, having regard to all the circumstances in western Canada, that the government is close to bringing in legislation to provide-here I shall consult my notes because I want to be sure of the precise wording-for the two-price grain system?
['Order, please. The hon. member for Oshawa-Whitby.']
Otto Emil Lang: Any decision of the government in that regard, as in any other regard, will, of course, be made known when it is taken.


Mr. Diefenbaker:: That is the reason I asked the question. The hon. member spoke in Assiniboia, an area in which an election is taking place, and he said on that
fMr. Lang.]
occasion that we are very close to the two-price system. Was that fiction?


An hon. Member:: No reply.


Some hon. Members:: Stand up.


Jay Waldo Monteith: Caught red-handed.



Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to put to the Secretary of State for External Affairs a question concerning a subject which has been discussed yesterday and on which I have not had time to put a question.
Since the Soviet Union last month carried out a nuclear test similar to that soon to be made by the United States, would the minister say whether, during the visit of the Soviet Premier, he has voiced emphatic protests against nuclear tests in the USSR, as he has done for the nuclear test soon to be carried out by the United States.


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Yes, Mr. Speaker.


Martial Asselin: Mr. Speaker, a supplementary. Can the minister tell us what the Soviet Premier replied?


Mitchell William Sharp: Yes, Mr. Speaker. Premier Kosygin said that the matter of the adoption of a test ban was under discussion with the United States and that the Soviet Union was in favour of a test ban, like the United States. Of course, they differ among themselves, and with us, as to the modalities.


Mr. David MacDonald (Egmont):: I have a supplementary question, Mr. Speaker, related to the announcement yesterday concerning the nuclear test at Amchitka. It is unfortunate the Prime Minister is not present today. I wonder whether the Secretary of State for External Affairs would like to correct the record with regard to what was said concerning the impracticability of making any further protest against these tests in light of the announcement by the chairman of the Atomic Energy Commission in the United States indicating that the device could be made harmless at any time before the actual detonation some time next week. Further, is the minister in receipt of a telegram from the General Council of the United Church asking that a final appeal be made to the United States government by the Canadian government?
October 28, 1971


Mitchell William Sharp: Yes, Mr. Speaker, I think the record should be altered. The information as to what had been said by the chairman of the AEC was incomplete at the time the Prime Minister spoke. The information that the hon. member referred to came in subsequently, so that to that extent I think the Prime Minister would want his answer altered. I do understand that there is an appeal from the United Church of Canada.


David Samuel Horne MacDonald: Mr. Speaker, I wonder whether the minister could indicate what response will be made to this appeal and to the other appeals from the Anglican, Presbyterian and Roman Catholic Churches. In addition, in view of the proximity of this explosion to the borders of both Japan and the Soviet Union, as well as our own, is any consideration being given to some form of joint initiative that might be taken in order to avert this explosion?


Mitchell William Sharp: Mr. Speaker, the response that would be given to the appeals now being made would be the same as the answer given yesterday in the House, namely, that the government feels that the action of the House of Commons in expressing its opposition to these tests is the best and strongest representation that could be made of the views of this parliament and that the Prime Minister would simply be reiterating what the House has already expressed to the United States administration.


David Samuel Horne MacDonald: A further supplementary, Mr. Speaker.


Mr. Speaker:: The hon. member may ask a last supplementary and then we will move on.


David Samuel Horne MacDonald: Mr. Speaker, since the minister has expressed an unwillingness on the part of the government to take any further action, is the government considering providing any form of escort for the Greenpeace, the civilian gesture being launched again from Vancouver, which will guarantee reasonable safety in its exercise of the right of innocent passage when it attempts to take its own action in regard to this test?


Mitchell William Sharp: Mr. Speaker, perhaps I ought to say that I do not agree with the first part of the answer that the hon. member gave to his own question. He asked me whether the Prime Minister was intending to make further representations and the answer to that question is no. However, in the United Nations today the hon. member for Coast Chilcotin, who is my parliamentary secretary, will be making a speech in the first committee-


Eldon Mattison Woolliams: He has already made it.


Mitchell William Sharp: Perhaps he has already made it-and will be bringing before the United Nations the views of the members of this House.


Some hon. Members:: Hear, hear!


David Samuel Horne MacDonald: A question of privilege, Mr. Speaker.


Mr. Speaker:: Order. The hon. member for Egmont is seeking the floor on a question of privilege.
Inquiries of the Ministry


David Samuel Horne MacDonald: Is it the idea of this government to send a boy to do a man's job?


Some hon. Members:: Shame!


Mr. Speaker:: Order, please. The hon. member for Oshawa-Whitby.



MANPOWER


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. In his announcement yesterday he said nothing about relating the on the job training program to actual availability of jobs for men after they have taken such courses. Are steps being taken to ensure that the grants made to cover the cost of on the job training will be related to occupations for which there is clearly an anticipated market demand?


Otto Emil Lang: Mr. Speaker, that is the constant objective of manpower training programs of all sorts, and it will also be the objective of the on the job training program as far as that is possible.


John Edward Broadbent: If that is the case, then why was this not stated as being part of the general criteria on the basis of which grants would be made?


Mr. Speaker:: Order, please. I suggest to the hon. member that that is argument.



UNITED NATIONS


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. He may wish to take it as notice since I understand he was not, so to speak, on the spot. Was the Canadian delegation at the General Assembly in New York included among those delegations that were described by the United States administration as jumping with joy and undisguised glee at the diplomatic defeat suffered by the United States?


Mitchell William Sharp: Mr. Speaker, the Canadian government was not, of course, engaged in any such activities through its delegation in New York. Our representative expressed the views of Canada. Our delegation did not lobby, did not proselytize; it expressed what I believe is the overwhelming view of the Canadian people, that the P.R.C. should be represented as the government of China at the United Nations.


Some hon. Members:: Hear, hear!

October 28, 1971
Inquiries of the Ministry


Mitchell William Sharp: It made its point and then cast its vote with the others.



AGRICULTURE


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, I should like to direct my question to the Minister of Agriculture since it deals with the livelihood of many citizens. In view of the fact that the market value of the Canadian commercial corn crop has continued to drop by $1 million to $2 million per week, can the minister state whether he has invited the Ministers of Agriculture of the provinces involved or representatives of the industry to meet with him to submit a solution, and if any proposals have been made have they met with government approval?


Horace Andrew (Bud) Olson: Mr. Speaker, I have had a number of meetings with representatives or people from the corn producing area. There are a number of proposals that we think are valid, and they relate in particular to programs to build more storage and elevator facilities. However, one other suggestion is that we impose a value for duty or surtax on corn, and the fact of the matter is that the Canadian price at the moment is some eight or nine cents per bushel lower than competitive United States corn in Montreal.



STUDY OF FEASIBILITY OF ESTABLISHMENT OF GRAIN HANDLING FACILITY ON LAKE ERIE

Mr. Mac T. McCutcheon (Lambton-Kent):: A supplementary question, Mr. Speaker. Has the government agreed to launch a study as to the feasibility of establishing a grain handling facility in southern Ontario on Lake Erie in order to take advantage of water transportation from that area?


Horace Andrew (Bud) Olson: We have not agreed to launch a new study but some studies have been made in regard to a grain handling facility at Erieau, and the results of those studies, of course, are well known to the hon. member.



EXCHANGE OF CORRESPONDENCE WITH PROVINCIAL MINISTER RESPECTING DIFFICULTIES OF QUEBEC POTATO GROWERS

Mr. Roch La Salle (Joliette):: Mr. Speaker, I should like to put a supplementary question.
May I ask the Minister of Agriculture whether his Quebec counterpart wrote to him with regard to the present problems of the potato producers?


Mr. Speaker:: I doubt that the question is in order as a supplementary. I feel that it is not strictly supplementary; but the question having been put, perhaps the minister might be allowed to answer it immediately.


Horace Andrew (Bud) Olson: No, Mr. Speaker, not that I can remember, but I will check to see whether we have had such a letter.



SHORTAGE OF DOCTORS AND FACILITIES FOR TRAINING-GOVERNMENT ACTION

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare having to do with the national health conference held last Friday. Dr. Evans, dean of medicine at McMaster University, has called for the immediate training of more Canadian doctors and the building of more medical schools so that Canada will not continue to deny her qualified young people the opportunity of becoming doctors, and has stated that we should stop trying to plug the gap by relying on foreign trained doctors. In view of this statement, is the minister now prepared to act on this evidence presented by Dr. Evans and other experts, and earlier by the Canadian Medical Association, by building more medical schools in Canada and operating them on a year-round basis instead of only nine months in the year?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, we are spending several millions of dollars on building new medical schools. With regard to some of the other recommendations referred to by the hon. member, such as keeping our established medical schools and the very expensive facilities in the new ones that we are building open year round, and enlarging classes in terms of the number of people taught, these are all matters that should be looked into very closely by the medical schools and the provinces. Dean Evans would be an appropriate person to implement policies of that kind.


Philip Bernard Rynard: Mr. Speaker, I should like to know whether the minister believes or does not believe there is a shortage of doctors?


Mr. Speaker:: Order, please.


Philip Bernard Rynard: I want an answer.


Mr. Speaker:: Order, please. The hon. member is inviting the minister to indicate whether in his opinion he believes there is a shortage of doctors, and I do not think that question is in order.


Mr. McCleave:: Mr. Speaker, I rise on a question of privilege. The hon. member, who is one of the most respected members of the House, has tried for five days to be recognized in order to ask this question. He has asked the government whether it recognizes that there is a crisis in respect of a shortage of medically trained people in this country and he is entitled to an answer.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I appreciate that the hon. member, like every hon. member, is a very respected member of this chamber.
October 28, 1971


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member has asked a question and the minister has given a reply. The Chair has to exercise judgment, and when an hon. member asks a minister to indicate whether he believes such and such, obviously he is asking for an expression of opinion. I do not want to prevent the minister from replying. Taking all the circumstances into account, it might perhaps be easier to allow the minister to make a brief reply to the hon. member for Simcoe North.


John Carr Munro: Mr. Speaker, it is precisely because we do believe there is a shortage of medical and health manpower that we formed the federal-provincial task force on health costs. That task force recommended the establishment of all sorts of new categories of para-medical personnel to relieve members of the medical profession of a tremendous amount of routine work which does not require that sophisticated type of education.


Philip Bernard Rynard: Mr. Speaker, I rise on a question of privilege. I suggest that the minister is just pussyfooting around and is not answering the question. This is the same type of answer the House has been getting for the last three years instead of action.



THE CANADIAN ECONOMY


Mr. David Lewis (York South):: Mr. Speaker, I should like to refer again to the program designed to create jobs this winter in order to obtain certain information from the Minister of Finance or the Minister of Regional Economic Expansion. When we were given information regarding the $160 million forgiveable loan program to create work this winter we were given a breakdown as to provinces and amounts, and a statement was made to the effect that it was based on over 4 per cent unemployment. I should like to ask whichever minister has the information on what date the over 4 per cent unemployment figure was taken, and perhaps the minister could also table the precise method by which these allocations were calculated?


Edgar John Benson: I would be very pleased to do that, Mr. Speaker. The figure was based on regional unemployment last winter, adjusted on the basis of what has happened since that time. I would be very pleased to table the information my hon. friend has requested.



ENFORCEMENT OF LIMITS ON TRAINING PERIODS IN ON THE JOB PROGRAM

David Lewis: I should like to direct a supplementary question to the Minister of Manpower and Immigration. I note that in respect of the on the job training program there is a limit for training, if I remember correctly, between a minimum of three months and a maximum of 12 months. Will these limits be rigidly
Inquiries of the Ministry
enforced or will it be possible for people who may not require as much as three months' training in a given area of upgrading, or those who may require 13 months or 15 months instead of 12 months-


Mr. Speaker:: Order, please. It seems to me the hon. member is asking a rather extended supplementary question. As I have said from day to day, we are running short of time. Supplementary questions should be limited as much as possible.


David Lewis: Now that the minister has my meaning perhaps I might briefly, rephrase the question. Will the time limit for training be rigidly enforced, or will training be completed with assistance from this fund once a trainee has started on the job?


Otto Emil Lang: Mr. Speaker, I should not want to rule out the possibility of exceptional cases being dealt with in exceptional ways, but the ordinary pattern is expected to fall well within these limits. From an administrative point of view it is desirable to make the available money apply to training programs which lie within certain limits, and these are the limits which have been chosen at this point in time.



CRIMINAL CODE


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I have a question for the Minister of Justice.
Is he now drafting a bill for the legalization of abortion?


Hon. John N. Turner (Minister of justice):: Mr. Speaker, I believe, as the Prime Minister has said on many occasions, that there will be a debate in the House on this sensitive subject.


EXTERNAL AFFAIRS
[Stage Direction]
CANADIAN-SOVIET	COMMUNIQUE-EFFECT	OF


Mr. J. M. Forrestail (Dartmouth-Halifax East):: Mr. Speaker, in the absence of the Prime Minister perhaps I should direct my question to the Minister of National Defence. It relates to the Canadian-Soviet communique released the other day in which there are at least six different references to an increase in the level of the exchange of scientific and technological information. Is the minister satisfied that such an extended level of exchange of this type of information will not impair our capacity to remain within the defence-sharing arrangement with the United States?
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October 28, 1971
Inquiries of the Ministry


Hon. Donald S. Macdonald (Minister of National Defence):: Yes, Mr. Speaker, I am satisfied that it has not been impaired in any way.


J. Michael Forrestall: I welcome the minister's assurance. Can he also give the same assurance in respect of the level of the exchange of such scientific and technological information with the United States, pertaining particularly to defence and strategic planning?


Donald Stovel Macdonald: Mr. Speaker, it is a little difficult to measure that exactly, although the level of exchange at the moment is very high.



AGRICULTURE


Mr. Len Marchand (Kamloops-Cariboo):: I have a question for the Minister of Agriculture. Is he now in a position to adivse the House what interest rate will be charged on loans under the $10 million program for multipurpose agricultural exhibition expansion and, if not, when will he announce this?


Horace Andrew (Bud) Olson: Mr. Speaker, I cannot give the exact figure because it will change from time to time in accordance with the amount the government is paying for meidum-term money, but I can assure the hon. member it will be very favourable in comparison with any other money that may be available for a 30-year term.



NATIONAL DEFENCE


Mr. William Skoreyko (Edmonton East):: Mr. Speaker, is the Minister of National Defence in a position to say when the Vernon air base will be declared surplus and announced as being for sale if that is the government's position, and when does his department intend to advertise the sale of that base?


Donald Stovel Macdonald: Mr. Speaker, I take it the hon. member is referring to the Vernon military base and the site of the cadet camp. Let me indicate that there is no present intention to phase this base out of its present activity as a cadet camp in western Canada. We expect to continue these cadet operations there for some years. Arrangements are being made with educational authorities in British Columbia to make some part of the site available for community college facilities when it is not being used as a cadet camp, but in terms of being declared surplus and being disposed of there is no present intention to do so.



AGRICULTURE


Mr. H. A. Moore (Wetaskiwin):: Mr. Speaker, keeping in mind the lower cost of feed grains it is now obvious that dairy production is falling below domestic demands in this country. Is the government now considering a policy based on the expansion of this industry rather than the too restrictive policy which is in force at the present time?


Horace Andrew (Bud) Olson: That is a pretty broad question, Mr. Speaker, but in order that the hon. member can advise his constituents I should indicate that we have taken action three times this year to increase returns to dairy producers.



UNITED NATIONS


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I should like to ask the Secretary of State for External Affairs whether Canada proposes at this time to take any initiative at the United Nations to obtain representation for the people of Taiwan? I ask this because I understand that universality of membership is a fundamental principle of the United Nations.


Mitchell William Sharp: So far as I know, Mr. Speaker, there has been no application or any consideration of the question of representation for the people of Taiwan. The government on that island claims to be the government of China as a whole.


EXTERNAL AFFAIRS
Eldon Mattison Woolliams: Yesterday I asked the Prime Minister a question regarding the security of foreign visitors such as Premier Kosygin. He said he would refer the matter to the Solicitor General. Is the Solicitor General prepared to make a report now or at some later date regarding the alleged brutality that took place in Toronto and, second, whether the federal government intends to share the cost of security for foreign visitors in cities such as Vancouver, Edmonton, Toronto and Montreal?


Hon. Jean-Pierre Goyer (Solicitor General):: On the first part of the question, Mr. Speaker, this matter is obviously falls under the jurisdiction of the Attorney General of Ontario and if the hon. member so wishes, I could inform the House of the results of this inquiry when the Attorney General is kind enough to send me a report.
October 28, 1971

On the second part of the question, no one raised the issue of costs incurred for the safety of visitors in various Canadian cities.



MANPOWER


Mr. S. Perry Ryan (Spadina):: My question is for the
Minister of Manpower and Immigration with respect to LIP. Will the minister undertake to ensure that the funds to improve substandard housing will not be used by slum landlords to improve their housing units and then substantially raise the rents to their tenants?


Otto Emil Lang: Needless to say, in the case of any application under the Local Initiatives Program the whole nature of the proposal and its impact on the community will be examined.


Sylvester Perry Ryan: Has rent control in this situation been discussed with the provinces or will it be?


Otto Emil Lang: Not in connection with this isolated situation by any means, Mr. Speaker.



STATUS OF WOMEN


Mr. Andrew Brewin (Greenwood):: My question is addressed to the Minister of State for Urban Affairs. I should like to ask him whether he is now in a position to make a statement to the House on the government's plans to implement the recommendations of the Royal Commission on the Status of Women, and will he do so soon?


Hon. Robert K. Andras (Minister of State for Urban Affairs):: I expect that there will be some announcements in this regard before too long.



DISCUSSION WITH PROVINCES AND MUNICIPALITIES OF PROVISION OF DAY-CARE PROGRAM

Mrs. Grace Maclnnis (Vancouver-Kingsway):: May I ask
the same minister whether he has plans in view for a conference with the provinces and municipalities to discuss the provision of a day-care program across Canada?


Robert Knight Andras: Not precisely for that purpose but there are heralded plans for discussion of many items with the provinces and municipalities and I have no doubt that this subject could be one of those discussed.
Inquiries of the Ministry



INDUSTRY


Hon. Theogene Ricard (Saint-Hyacinthe):: Mr. Speaker, in the absence of the Prime Minister, I will direct my question to the Minister of Finance.
According to Statistics Canada, at least 229 plants in Quebec were closed these last two years while others have substantially reduced their working hours.
Could the minister indicate whether the government intends to take special steps to stop this tragedy which plagues our production?


Edgar John Benson: Without agreeing with the statistics, not having looked at them, I believe that my colleague in the Department of Regional Economic Expansion has done great things in opening up new job opportunities.


Some hon. Members:: Oh, oh!


J.-H.-Théogène Ricard: Such as closing factories.


Mr. Speaker:: Order, please. I must bring to the attention of hon. members that there are some 20 or 25 members who are seeking the floor and there are only four minutes left before the end of the question period. I am afraid that many hon. members will be disappointed. We will try, if there are not too many supplementary questions, to get a number of questions asked.



REQUEST FOR REMOVAL OF RESTRICTIONS ON INTERPROVINCIAL MOVEMENT OF FEED GRAINS IN FOUR WESTERN PROVINCES

Mr. Don Mazankowski (Vegreville):: I should like to address my question to the minister in charge of the Wheat Board. It arises out of representations made to him by the Palliser Wheat Growers Association requesting the removal of restrictions prohibiting the interprovincial movement of feed grains between the four western provinces. Are any initiatives now being taken in this regard by the government?


Otto Emil Lang: This question is constantly alive, but particularly so when prices for feed grains are at depressed levels within any section of the designated area. The very vast sales of barley should put an end to those depressed prices and therefore avoid a great part of the problem for the time being.



EXTENSION TO EASTERN FARMERS OF BENEFITS ACCORDED TO WESTERN PRODUCERS

['Yes, Mr. Speaker. It is precisely for that reason that we do not want to get political matters mixed up with humanitarianism.']
Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I have a supplementary for the Minister in charge of the Wheat Board.
24372-18J

October 28, 1971
Inquiries of the Ministry
Would the minister tell us whether, when he complies with that request from western farmers, he will also extend the same possibility to eastern farmers, so that they can enjoy the same advantages?



Hon. W. G. Dinsdale (Brandon-Souris):: My question is for the Secretary of State for External Affairs. In light of continuing reports of military mobilization in India and Pakistan and evidence of increasing tension between these two countries, is Canada going to initiate or support an emergency debate in the Security Council of the United Nations on the situation in the same terms as it is initiating the Amchitka issue in the General Assembly?


Mitchell William Sharp: The answer is no. The government does not feel that a debate, either in the Security Council or in the General Assembly, on the unfortunate conflict between India and Pakistan would do anything to promote a settlement.


Walter Gilbert Dinsdale: Does the government then intend to support United Nations action and debate on the refugee situation in east Pakistan?


Mitchell William Sharp: Yes, Mr. Speaker. It is precisely for that reason that we do not want to get political matters mixed up with humanitarianism.



REGIONAL ECONOMIC EXPANSION


Mr. A. D. Hales (Wellington):: I should like to direct my question to the Minister of Regional Economic Expansion. It deals with the questipn I asked him yesterday, in reply to which he said he would give a more detailed answer today.


Hon. Jean Marchand (Minister of Regional Economic Expansion):: As a matter of fact, we did not give any money to the company to which the hon. member referred yesterday. The department has made a conditional offer of a grant to Step Lite Manufacturing Limited for a project at Renfrew, Ontario. Before the offer was made there was a careful analysis of the viability of the project, including the financial and managerial resources available for its establishment. The conditions attached to the offer are designed to ensure that these resources will be applied efficiently.


Lincoln MacCauley Alexander: What does that mean?


Alfred Dryden Hales: I rise on a question of privilege, Mr. Speaker. My question of privilege is that the minister has misled 
the House and the Canadian people. It is based on the fact that on October 25 he issued a news release or communique stating that Step Lite Manufacturing Limited would receive an incentive grant of approximately $216,000 and that this would create 99 jobs. My point of privilege is that the minister should not have issued this communique stating that the grant would be made and jobs created until such time as all facts were taken into consideration, as he said today. It is misleading the country and the public to issue such a communique before the grant is made.


Some hon. Members:: Hear, hear!


Jean Marchand: Mr. Speaker, several times I have explained how we proceed in that field, and that is the only way we can proceed when a company applies for a grant. We discuss the matter with the managers of that company, we make the necessary studies and we tell the representatives of that company that they will have a right to the stated amount as soon as the conditions are met. But a grant cannot be made before the jobs are created and the plant is in operation.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I doubt that the matter should be pursued by way of a question of privilege. The hon. member might like to ask a supplementary question. It might be easier to advance if we proceed on that basis.


Alfred Dryden Hales: Thank you, Mr. Speaker. My point of privilege is this-


Mr. Speaker:: Order.


Alfred Dryden Hales: I ask the minister directly: Why was there publication of these facts in advance?


Jean Marchand: Because there is an
agreement.


Mr. Speaker:: Order, please. I apologize to the hon. member for Surrey-White Rock. I will recognize him before the end of the question period, but the hon. member for Hamilton West rises on a point of order.


Lincoln MacCauley Alexander: On a point of order, Mr. Speaker, in view of the interest that has now been created in this project, I hope the minister will table the conditions that have to be met by this company so that we can all be made aware of the type of conditions set.


Mr. Speaker:: The hon. member for Surrey-White Rock.



NATIONAL ARTS CENTRE


Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I had a question I wanted to ask the Secretary of State but in his absence perhaps his parliamentary secretary could
October 28, 1971

take note of it. Having in mind the announcement of a further $2 million loss by the National Arts Centre, would the minister say whether he is satisfied with that situation or whether he intends to look into the operation of the theatre?


Mr. lames Hugh Faulkner (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I will take the question as notice, but I would think this would be an obvious subject for the standing committe when the estimates of the National Arts Centre are before it.



CRIMINAL CODE


Gilbert F. Rondeau: Mr. Speaker, my question is directed to the Minister of Justice. I had great difficulty in understanding his answer when I queried him a moment ago. Since he stated that a bill on abortion will be tabled eventually-


John Napier Turner: I did not say
that.


Gilbert F. Rondeau: Can the minister tell the House whether this new bill to kill innocent human beings will be presented before the legislation maintaining the abolition of the death penalty?


John Napier Turner: Mr. Speaker, I do not accept the basic assumption of the member's question, and I repeat that the government will take no step in that direction before hon. members have had a chance to make their views known in the House.


Mr. Speaker:: Order, please. The Chair will allow the hon. member a supplementary question, and although we have reached the end of the question period, perhaps the House would then allow the hon. member for Dauphin to ask a question. Then we will call orders of the day.


Gilbert F. Rondeau: Mr. Speaker, is the Department of Justice presently drafting a bill to legalize abortion in Canada? The minister is aware of that.


John Napier Turner: Mr. Speaker, I have already stated three times that we will give hon. members full opportunity to have their say before any legislation on abortion is introduced.



THE CANADIAN ECONOMY


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of Finance. As the Canadian
Inquiries of the Ministry
dollar is now 7 per cent to 8 per cent above its former pegged level and Canadian imports from the United States are rising, so that Canada would seem to have fulfilled U.S. requirements for the lifting of the surcharge, is there any indication that this may occur?


Edgar John Benson: Not at this point, Mr. Speaker.


Mr. Speaker:: Order, please. I have to indicate to hon. members that the question period expired five minutes ago. I have again tried to take a note of hon. members who did not have a chance today to ask questions. They will be given priority tomorrow, just as I tried to do today for those who did not get a chance to ask questions yesterday. Orders of the day.


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: The hon. member for Sainte-Marie on a question of privilege.


Georges-J. Valade: Mr. Speaker, this is my question of privilege. For nearly 45 minutes now, I have been trying to attract your attention in order to ask the ministers concerned and the government questions on topics now in the limelight and related to over 350 unemployed in Montreal. Because of our rules, we cannot ask questions to ministers and get answers on urgent matters concerning rather important groups of people. I think that as members of this House we should be able in this place and without any restriction to discuss problems of general interest. That is why I am raising the question of privilege. I ask that the Standing Orders be amended to allow all members to raise important issues. If our questions continue to be treated as they are at the present time, our rights are being encroached upon to the extent that a member of Parliament is unable to raise in this House and before the people of this country, problems that are very important to us.


Mr. Speaker:: The hon. member for Edmonton Centre has a question of privilege.


Mr. Paproski:: It is a point of order, Mr. Speaker. I have been trying for the last week and a half, to ask a question of the Postmaster General and I would just like to know whether he will be in the House tomorrow or if someone will appear for him. Further, the Minister of Industry, Trade and Commerce was to be in the House today but he is not here. It makes it rather difficult for us on this side to ask questions if these ministers are not in the House.


Mr. Gillespie:: Mr. Speaker, we have a roster system on this side of the House and, as acting minister, I am quite prepared to answer any questions for the Minister of Industry, Trade and Commerce.


Mr. Skoberg:: On a question of privilege, Mr. Speaker, some weeks ago my colleague from Battleford-Kindersley directed Your Honour's attention to the utter impossibility of hearing in this chamber. We are still confronted with the same situation. All we are hearing is part of what is

October 28, 1971
Inquiries of the Ministry
said and the rest is garbled. We could hear much better before this new sound system was installed.


Some hon. Members:: Hear, hear!


John Leroy Skoberg: I wonder if anything further is being done.


An hon. Member:: Who put it in, anyway?


Mr. Speaker:: I appreciate that the hon. member and some other hon. members raised this point some time ago. I believe that efforts are being made from day to day, and particularly over the weekends when members are not in the chamber, to improve the system. It is a new system, and as hon. members realize it may be a while before it is entirely satisfactory. Certainly I can assure hon. members that there is an awareness of this difficulty and an attempt by officials of the House to try to improve the situation. The hon. member for Fraser Valley West.


Mark Willson Rose: Mr. Speaker, my intervention is really on the same point of privilege, but it involves another side of the question dealing with the sound system. On those occasions when an answer is given in the official language other than that spoken by the particular member who asked the question, the matter is further complicated by the fact that, with the normal translation time lag, by the time the translated reply comes through there is little time for the member to form a supplementary question in light of the information given in the reply. I realize, Sir, that you have many problems with hundreds of eager interrogators every day, but when the reply is given in another language I am wondering if a little greater time lag could be allowed between the original response and the time in which to ask a supplementary?


Mr. Speaker:: That suggestion will also be taken into account. I will try to follow the debates through the interpretation from now on.


Robert Muir: On the same question of privilege, Mr. Speaker, and with reference to what has been said by the previous speaker, frankly, Sir, I do not think any blame whatsoever should be placed on the translators because they are excellent people and do an extremely good job.


Some hon. Members:: Hear, hear!


Robert Muir: However, it is most difficult for a translator, no matter how qualified or experienced he is, to translate some of the replies given in French by certain ministers.


Some hon. Members:: Oh, oh!


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, on the same question of privilege, I should like to raise a particular point of which you are well aware.
We agree indeed with previous speakers. The system is unsatisfactory. We have recently complained about it, especially in the committee of the whole. Such is not the object of my question of privilege.
For some time now, Mr. Speaker, you must have noticed that we, Creditistes, have been putting very few questions during the question period. But we do make up for it during other periods. The reason for this is very simple

and we understand the problems that the Chair is facing, given the number of members who wish to put questions.
But the system of supplementary questions has become so abusive that backbenchers or Creditistes members are seldom able to slip in, as an average, more than two or three questions a week.
Once our leader or a representative of our party has managed to put a question, it gives rise to a lot of supple-mentaries and the right of other members to ask questions is encroached upon.
I do not rise on a question of privilege to blame the Chair. I am convinced that the Speaker understands my point of view, but I would like to appeal to my colleagues, especially those who sit on this side, so that they may understand the problem and that we may reach an agreement in order to establish a fairer distribution for all members.
The question period is an important period during which the government reports on various current events. This means that if western Canada is interested in some problems, eastern Canada is interested in others. However, if the members persist in asking supplementaries, one or two could be asked but not ten or fifteen, as it too often happens.
Mr. Speaker, on the one hand you cannot hurt the members, and on the other hand we cannot participate in the debate.
I therefore appeal, not so much to the Chair, as to my colleagues on this extremely important point, that every member might be allowed to fulfil his duty, not only during the debates, as we do, but also during the question period.


Georges-J. Valade: Mr. Speaker, I intended to raise a point of order for the following reason: twice, during the week, I was able to ask questions, one of which was directed to the Prime Minister (Mr. Trudeau) and the other to the Minister of Manpower and Immigration (Mr. Lang), having regard to a critical problem in Quebec, that is unemployment; the Prime Minister refused to answer my question because the Minister of Manpower and Immigration was not in the House.
Yesterday, the minister was in the House and I tried to get an answer from him. Today, he was again in the House, and, even if ministers are sometimes unavoidably absent, and we understand this, we do not accept this system. Ministers, upon their return to the House, should answer the questions, this would reduce the number of questions and of supplementaries and would speed up the business of the House.


Sylvester Perry Ryan: Mr. Speaker, on the same point, it appears to me that the problem is more acute on Tuesday and Thursday. I think by this time the government should be in a position where they might want to compromise the roster scheme somewhat. I suggest that on Tuesday and Thursday thfe question period be 60 minutes and the full panoply of ministers be present, or as many of them as possible. I think this would solve the problem.
October 28, 1971


Mr. Speaker:: Order, please. I have noted the suggestions made by hon. members and I can assure them that I agree with nearly everything that has been said these last few minutes.

I am in full agreement with many of these points, some of which have been made before. However, hon. members will appreciate that if the question period is to be lengthened or shortened, it is not for the Speaker to decide; that should be done by agreement between hon. members following discussion before the relevant and responsible committee.
The hon. member for Lotbiniere referred to a very serious problem which came up today, that is the number of supplementaries on the first questions. If hon. members insist on asking four, five, six or more supplementary questions on the first or second matter brought up, and very often these are by members of the front bench, it is just about impossible for hon. members behind them to be given an opportunity to ask questions.


Robert Jardine McCleave: Cut them off.


Mr. Speaker:: The suggestion is made that they be cut off, and I have sometimes tried to do that but it is difficult without the co-operation of hon. members themselves. I would hope that co-operation will be extended, and I can assure hon. members that from day to day I shall continue to try to permit as many of them as I can to ask their questions. What I have tried to do for some time is to ensure that hon. members who are not recognized on one day be given priority the next. That is what I tried to do today, although I may not have been entirely successful. I did attempt it, however, and I shall continue to do so.



BUSINESS OF THE HOUSE

Allan Joseph MacEachen: Mr. Speaker, I rise on a point of order in connection with the Business of the House to advise hon. members that we will continue with the committee discussion of the present bill tomorrow and next week until Wednesday or Thursday, when I intend to call opposition days.


Robert Jardine McCleave: Mr. Speaker, I should like to ask a question of the hon. House leader. Since the members of my party have drawn straws and I picked the one that calls upon me to open the debate on the next group of clauses of Bill C-259, could the minister indicate what sections we will deal with after section 4 to 8.
Perhaps the President of the Privy Council would not mind if I state, on behalf of all members who want to take part in the debate when we are in committee, what I think is a legitimate grievance. It is felt that there should be some method or perhaps a better method of communication with reference to the specific point to be discussed. If we could have some listing, even five or six categories ahead, that would make it much easier for those who, like myself, are stuck with the rather awful responsibility. I
Business of the House
know my friend from Winnipeg North Centre and others would agree with me.


Allan Joseph MacEachen: Mr. Speaker, I agree with my hon. friend, and I think his point is well taken, that in view of the procedure we are following in committee of the whole, members should have some advance warning as to the various items to be discussed. We are attempting to do this but we are really just getting this particular system under way.
In reply, and with your indulgence, Mr. Speaker, I should like to advise my hon. friend that committee of the whole is to deal with proposed sections 4 to 8 on the question of computation of income. It was proposed and agreed that following this we would deal with other subjects under the general head of personal income, and call the appropriate sections that would permit a discussion of these other items. This would include, for example, averaging, rate schedules, child care, moving expenses, fellowships, training allowances, research grants and generally any other item that would fall under the heading of personal income. The subjects I have mentioned are those singled out by the House leaders as those upon which hon. members might want to comment in a particular way. That is what we would do in committee today and tomorrow.


Robert Jardine McCleave: When we are through with sections 4 to 8, then, which sections do we deal with in the next three categories? Let me put it on a very specified basis.


Allan Joseph MacEachen: After sections 4 to 8, in order to deal, for example, with income averaging we would call perhaps section 28 upon which to hinge the discussion. But there are other proposed sections which deal with the same subject.


Robert Jardine McCleave: My friend is saying section 58 plus allied sections dealing with averaging?


Allan Joseph MacEachen: Under income averaging, proposed section 28 with associated sections. The rate schedule is proposed section 117 and associated proposed sections. I could give my hon. friend-


Robert Jardine McCleave: Child care is section 63?


Allan Joseph MacEachen: Section 56, for example, would permit us to discuss fellowships, scholarships, bursaries, training allowances and research grants. We would call proposed section 56 and hinge the discussion around that section and carry all allied sections under the same system.
Having given my hon. friend that kind of information, I hope to be able to do it on a more systematic basis and have in the hands of all hon. members sheets which will indicate the subject matters that the House leaders have highlighted, presumably to carry forward the wishes of the various parties and the allied sections that would be carried in connection with that subject head.


Robert Jardine McCleave: Mr. Speaker, at the risk of being a bore, may I ask another question? I think my hon. friend indicated that after the averaging provisions, found in section 28 and further on, and the rate schedules, which involve eight schedules to be found at section 117 and

October 28, 1971
Business of the House
associated sections, we should consider the child care provisions, as included in section 63 and then the fellowship provisions, which are found in section 56. Am I correct in assuming that child care will be the third item in our consideration and that fellowships will be considered next, as the fourth item?


Allan Joseph MacEachen: Mr. Speaker, that would be agreeable.


Stanley Howard Knowles: Mr. Speaker, was it not the understanding that all those things my hon. friend mentioned are in the same category?


Mr. Speaker:: The hon. member for Winnipeg North Centre.


Stanley Howard Knowles: Mr. Speaker, 1 was making the point that all the subjects that the hon. member for Halifax-East Hants has alluded to are in the same category and that we will take that whole group after we have finished the sections we are now considering. If I may anticipate what we are to take after that, the next group of subsections will deal with capital gains.


André-Gilles Fortin: Mr. Speaker, I think that this matter is settled. I come now to the question of privilege of a short while ago.
Since the President of the Privy Council (Mr. MacEachen) is anxious to speed up the business of the House and in order not to let that heavy task fall on your shoulders, I wonder whether the President of the Privy Council could not this very day enter into negotiations with the House leaders of the other parties in an effort to find some way to improve the procedure during the question period. Let us not just remain at the discussion level, but let us go into action and find a better system. Could not the President of the Privy Council say whether he agrees with that system or if he would not prefer to have a consensus in view of improving the present system and assist the Chair?


Allan Joseph MacEachen: Mr. Speaker, if it is the wish of the House leaders, I would be glad to discuss the question of the question period and see whether we can introduce some new procedures to make it more satisfactory to all hon. members of the House. I would be happy to do that at an early meeting of House leaders.


André-Gilles Fortin: Mr. Speaker, would the hon. President of the Privy Council also agree that the Speaker in his capacity as a member of the House, may take part in these discussions with parliamentary leaders.


Mr. Speaker:: Order. The question is obviously not in order. I suggest to the hon. member that he cannot involve the Chair in discussions he may have with the government representative.


Mr. Aiken:: Mr. Speaker, I am merely rising to indicate that we would certainly be agreeable to entering into such discussions with the House leader of the government.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, October 27, consideration in committee of Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act-Mr. Benson-Mr. Honey in the chair.
On clause 1-section 4: Income or loss from a source or from sources in a place.
The Chairman:: Order, please. When the committee rose last evening, section 4 was before the committee. It had been agreed to include sections 5, 6, 7 and 8 with section 4 for the purposes of discussion. Shall section 4 carry?


Mr. Barnett:: Mr. Chairman, I should like to make some brief comments, particularly upon subsection (6) of section 6, which is related to subsections 7 and 8 immediately following. This matter was raised yesterday by the hon. member for Winnipeg North Centre. As hon. members of the committee will note if they look at this part, this provision is a modification of paragraph 5(2) of the present act.
My initial comment on this matter must be that it is better to do something late than never. I rise to support this particular proposal in the bill because it is something I have been seeking to have included in the Income Tax Act for over 15 years. In 1956, the Liberal minister of finance, Hon. Walter Harris, indicated to me after I had been raising this matter for two or three sessions that, in his view, there was a discrimination in this regard in the Income Tax Act as it then stood and as it still stands after having been modified. The act discriminated against those who maintain a domestic establishment in one place and, as a result of their employment, have to leave home, pay room and board elsewhere as well as travelling expenses in order to undertake their particular kind of work. Our attempts to convince the government that the law in this regard discriminated against a group of workers have been long and arduous.
The particular groups of workers in my area, and in British Columbia generally, who have been most affected by this discrimination are the loggers. Over a period, three of their organizations have made many submissions on this subject to the government. Those submissions were well reasoned and well documented. I am sure that those organizations welcome the change that is being brought forward because, at long last, they will be treated with the same degree of equity as other segments in the work force of our society have been treated in connection with expense allowances. I am thinking in particular of those who may have been working in a managerial capacity.
Recently I had the opportunity to speak to a union convention in Vancouver. A large number of loggers were there as delegates. I told them that this proposal was in the Income Tax Act after 15 years of argument on this subject, that I had read the section rather carefully and that, so far as I could see, the wording of the law covered
October 28, 1971

the point adequately. I reminded them, and I should like to remind hon. members of the committee and the ministers concerned, in particular the Minister of National Revenue, that from time to time that minister's department issue what we refer to as information bulletins. These bulletins often indicate what the law means for practical purposes. I told them, as I now say to members of the committee, that I hope the information bulletins put out by the Department of National Revenue will place a proper and reasonable interpretation upon the application of this proposed section of the Income Tax Act so that it will provide the kind of situation which, from my reading of the proposed clause, it is intended to provide for these taxpayers.
I hope there will be no battles as the result of an interpretation being placed on that section which is so narrow and restrictive as to make the section practically worthless. That is something that those of us who are concerned about the matter will be watching, and if the subsection is not construed to mean what its language in my opinion clearly intends, there will, of course, be some battles in and out of the chamber on that subject.
I think I have made it clear that when the government does take a step which I consider to be right and proper, as one who sits on the opposition side of the House, I am quite happy to commend the government for its action. Perhaps my appreciation may be all the more heartfelt because of the fact it has taken 15 years for me to get to the point where I can stand in this chamber and say the words I am saying today. I hope the minister will recognize the fact that we are trying to take a fair look at his bill. We will praise it when praise is merited. However, we will differ from it where we feel it is not working in the best interests of the Canadian people.


Mr. Otto:: Mr. Chairman, I am going to deal with section 7. This is the section that treats shares that are given to employees during the year as income. In view of the situation in which we in Canada are going to find ourselves, I am not so sure I fully support this view. A little while ago I might have, but it seems that in the next few months, year or two years, we are going to be looking for Canadian shareholders. We will be trying to entice them to hold shares, preferably in the plants and concerns in which they are employed. Some incentive has to be given to them. If these shares are treated as income during the current year, that is not exactly an incentive.
I say to the Minister of Finance that we are also going to be faced with the problem of productivity. I have stated on many occasions that it is always very bad when we have labour-management problems and when we have low productivity on the part of Canadian workmen. The question always arises, how can we induce Canadians to produce more? I suggest that one of the best ways is to give them a piece of the action. In other words, we should make it enticing and advantageous for workmen, employees, junior executives and senior executives to own shares in the plants and concerns in which they are employed. I hope that over a period of time labour-management negotiations will not be based on a wage differential or, for example, the desire for an extra two or three days. I hope that over a period of time negotiations will be
Income Tax Act
based on organized labour requiring more shares of the company.
One of the great problems of our economy is that we do not have enough shareholders. I dare say if we investigated the members in this House, a handful might be owners of shares in Canadian corporations. Of that handful, the chances are that most of them have acquired shares in penny stocks and mining shares. If some elevator operator says it is a good idea to buy Moose Pasture No. 1, Canadians will immediately go out and buy it. However, as far as holding investments from a long range point of view, Canadians do not hold shares. The share holdings are restricted to very small groups.
One of our problems of distribution of dividends is that there are not enough people to whom we can distribute them. In other words, there is not a broad spectrum of shareholders. Instead of taxing shares in companies in which the taxpayers are employed on a full-time basis, it would be preferable to tax them on a 50 per cent basis. An inducement such as that would be more likely to have the effect that the employees would own a big chunk of the business in which they are employed. In order to get more dividends and also the capital gains, which are also included in the latter part of this bill, there would be an inducement to be productive.
If the minister investigates the companies in Canada which now have or have had a share distribution plan, he will find that these are the companies which are more productive. They have less problems with management because everyone is in on the action. To start out immediately under this new bill and say that if you happen to get shares in your company, they will be treated as income for the current year will be no inducement to employees to hold shares. I seriously recommend that the minister review his thoughts on this section. Instead of the full value of the shares presumed to be income, that provision should be amended to read 50 per cent of the value of the shares.


Mr. Lambert (Edmonton West):: I wonder if I might direct a question to the parliamentary secretary, since there are going to be further observations about the matter as we go along. Under sections 109 and 110, I raised the point of the rationale for establishing age 21 as the age of majority. Certain provinces have now made 18 the legal age of majority. We understand that the province of Quebec proposes to introduce legislation in the very near future to the same effect. Nearly 80 per cent of young Canadians will be subject to a legal age of majority of 18, yet this income tax bill treats the division as age 21. I would like a clear understanding from the Department of Finance on this whole question.


Mr. Mahoney:: Mr. Chairman, for clarification, may I reply? I think the hon. member will appreciate that there was some confusion when he was starting his remarks. Is the member referring to the same item he raised the other day in connection with the exemption being extended to a child resident in his parents' home until age 21?


Marcel Joseph Aimé Lambert: Yes, Mr. Chairman, that is so. That is one of them. I did not hear any explanation or answer to my question. I know this is going to arise in relation to paragraph 63, child care expenses, where the

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Income Tax Act
relative who is disqualified is under the age of 21. We are getting this continued use of the age 21 throughout the piece. I am giving the parliamentary secretary due notice.
I raised this matter the other day and I am again raising it. I am sure some of my colleagues and possibly some of the members opposite will raise the point again in the future. I think this matter should be looked at. There may be a valid reason why the present status should be left as is, but I fail to see it at the present time.
I now wish to turn to section 4 (4) which appears at the foot of page 4.1 am wondering whether this is one of those sections which have been thrown in to grant extraordinary discretionary powers of judgment to the minister. When I was discussing this matter at an earlier stage I indicated that, somehow, it always appears that the advantage shall lie with the Crown. Never is there equity on behalf of the taxpayer or never is the situation even as between the two, even though the law is patently unfair. It was always interpreted in such a way that the Crown cannot lose. I am wondering whether this is one of those sections. In any event I invite the parliamentary secretary or the minister to give us in reasonable terms, in clear language, an explanation of what is meant by this subsection. I read:
p.tn.)
Unless a contrary intention is evident, no provision of this Part shall be read or construed to require the inclusion or to permit the deduction, in computing the income of a taxpayer for a taxation year or his income or loss for a taxation year from a particular source or from sources in a particular place, of any amount to the extent that that amount has been included or deducted, as the case may be, in computing such income or loss under, in accordance with or by virtue of any other provision of this Part.
I am sorry, but my legal training and experience to date have not enabled me to translate into straightforward language what the drafters of the legislation meant by this particular paragraph. It is a new paragraph, and therefore it has not been the subject of any previous departmental rulings or of interpretation by tax consultants. Sub-paragraph (2) is also a new provision but it does not appear to give us much difficulty. We have seen many instances of tax authorities saying that this bill, using new terms, has unfortunately led to an entirely new family of language which is thoroughly unfamiliar to the profession and even less familiar to a taxpayer. There is no way of arriving at a ruling.
I want to go back to a point I made on second reading. The efficacy of a tax statute and the justice of a tax statute depend upon the ability of the person who has to pay the tax to understand it. We are now being led into an even greater maze of uncertainty all the way along. I cannot understand how government members, particularly, can claim in this House that they are engaging in tax reform when they are asking us to inflict upon the country an income tax act even less comprehensible than the existing one. This does not make sense. The charge of obscurity has been a common charge, even taking into account the fact that lack of familiarity with new sections leads to difficulty and that some people throw up their hands and say the changes must be bad because they cannot be understood. But even those whose experience has given them considerable practice in the interpretation
(Mr. Lambert (Edmonton West).]
of these subsections cannot say how this legislation will work out.
This is illustrated by the point I am trying to make in connection with section (4) subsection (iv): there are many businesses today whose business operations in 1971 will be subject to law in 1972. That law will be retroactive. They cannot understand it now, and as a matter of fact the transactions into which they enter in 1971 will be subject to a law which they did not even know existed, because the bill had not been published. This is an example of what I call the latent injustice which appears in the bill. Hon. members may be puzzled as to what I am saying, but in actual fact this is so. In due course we shall come to some sections which will show that there are retroactive features in this bill, in particular dealing with business, covering transactions which occurred maybe six months before this bill had even been published. This is an example of the injustice which occurs as a result of imprecise language or muddled language and sections whic|j are very difficult to interpret.
I should like to turn to section 6, because there we are dealing with certain items which must be included in the income of an individual. A lot of the wording is carried forward from the existing act. I do not think we have any problems with 6(l)(a) or with 6(l)(b) which, again, is a carry-forward. Then, we come to something which is new, namely, 6(l)(e) dealing with the stand-by charge for automobiles. This will certainly lead to litigation. There are no two ways about it. The results are likely to be most unfair. The automobile referred to is to be made available for personal use or otherwise. Now, if the main purpose of the automobile is for business, does the section apply? Or is it caught by, maybe, a 5 per cent or 10 per cent segment that is for personal use? The phrase in parenthesis appearing at line 25 does not assist us-
"Exclusive" may be read as meaning for the benefit of that one employee as opposed to several employees rather than referring to an exclusive type of use.
These are the difficulties which arise when we say "for his exclusive personal use or otherwise". Does it mean it is exclusive personal use or does it cover other circumstances? If an employee has to share an automobile with others, why should he be hit for a charge? This is the nature of the imprecise language which is used.
Then, we come to Section 6(2). The leasing formula and the capital formula could result in different contributions to an employee depending on the type of arrangement the employer makes. The employee's benefit is constant. But why would it not have been better to use a percentage based on the cost of the car? Whether the car is leased or owned, what is the difference? The question is, what is it that we are taxing? It is the value to an employee of an automobile that has been given to him for his personal use, not for his business use but his personal use. Therefore, why go into a whole rigmarole as to whether the car is leased by the firm or owned by the firm? What effect has that on the nature of the tax? Why does the tax department concern itself with that consideration? All that is being done is the allocation to the employee for his personal use of a car worth so many dollars. That an employee can understand, and that I can understand; indeed, I think just about anybody can understand it. Instead of that, we are taken down the garden path by a
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long formula. I do not think that this provision helps this statute.
Section 6(l)(f) deals with employment insurance benefits, and here again I think an injustice is done. The employee is charged with the benefits if the employer makes a contribution. In such case the benefit received is taxed as a deduction for the dollar value of the premiums paid by the employee. If the employee pays all of the contributions then the benefits are not taxable; but should his employer pay just $1, then all of the benefits less the employee's portion of the premiums are chargeable. I cannot see the logic of this. Would it not be more consistent to base the benefit of the employee on that portion that is paid? If his employer pays half the premiums, then why not charge half of the benefits to the employee? If the employer pays 10 per cent, then the employee should only be charged with 10 per cent of the benefits. I think that is the only way.
I should like to pass on now to section 6(8). Here again I should like to reiterate the arguments made by a number of my colleagues. Frankly, I cannot see in this day and age why we are establishing that in business terms a wife is to be regarded separately from her husband, particularly in cases where a husband and wife are working together. Why cannot a distinction be made between them?
I would say this provision is an unnecessary exercise. It is a shame to force the husband to incorporate his business. He owns all the shares, though his solicitor can hold one qualifying share in order to make it a private company. His wife can work as a secretary or clerk and receive pay, but her income is treated separately and the parties are taxed as two individuals. In many cases in order to do this work the wife has to hire assistance to take care of her children, which would qualify her for child care benefits. However, under the act we consistently deny this distinction between husband and wife. Not only is the salary paid to the wife not considered as an expense of the business, but she will not be able to qualify under the child care benefit provision of the act.
Even further than that, suppose the husband is in partnership with one or more individuals. Let us take the case of two or three doctors and a dentist who are in partnership in a small country town. In order to operate their office efficiently the wife of one of them, who may be a trained nurse, acts as a nursing assistant or as nurse-receptionist at their clinic. In order to do so, however, she has to hire someone to look after her children. At the present time, because her husband is a member of a partnership her salary is not deductible as an expense of the partnership. Even though this is a legitimate expenditure that is normal for such a business, just because she happens to be the wife of one of the partners her salary is not regarded as a business expense. In addition to that, section 63 denies this wife who is acting as a receptionist to the doctors and dentist, child care allowance.
If the parliamentary secretary would rather I got away from the professions, take the case of the trucking firm, the plastering firm or two or three plumbers who work together. They do not incorporate their business and have good reason not to do so. As my colleague from Lambton-Kent pointed out, because of credit restrictions or other
Income Tax Act
conditions banks may prefer them not to incorporate. Nevertheless, someone has to keep the books and answer the telephone on a half day basis.


Russell Clayton Honey: Order, please. I regret to interrupt the hon. member, and I do so only to advise him and the committee that his time has expired.


Robert Jardine McCleave: Continue.


Russell Clayton Honey: Does the committee give unanimous consent?


Marcel Joseph Aimé Lambert: Mr. Chairman, if the parliamentary secretary wishes to speak, let him do so.


Patrick Morgan Mahoney: We seem to be building up a good sized inventory of inquiries and comments, so probably I should take an opportunity to deal with at least some of these.
The question which the hon. member for Edmonton West just raised was brought to us in terms of the "Momma and Poppa corner store" by the hon. member for Halifax-East Hants and a number of other speakers during consideration of sections 4 to 8 of the bill. The provision they are actually complaining about is contained in section 74(4).


Robert Jardine McCleave: Section 6(8).


Patrick Morgan Mahoney: No, to be perfectly clear, section 6(8) contains the saving provision which makes certain that people who receive that kind of income, which is not deductible by the husband, do not have to include it in their income. To make it very clear, they are not taxed on the payments their spouse would not be able to deduct from his income. Strictly speaking, the problem complained about arises in section 74, and with respect I would suggest that is the place to deal with the point. The point has been noted and we certainly will deal with it at that time.
The question of exclusive use of an automobile in section 6(l)(e) has been raised by a number of speakers. The word "exclusive" there is designed to make sure that the benefit is taxable in the hands of the taxpayer, whether the vehicle is for his exclusive personal use or for mixed business and personal use, and it goes back to the root definition of income being the sum total of benefits which the taxpayer obtains from his employment.
The matter of salary continuation insurance or income maintenance plans referred to in section 6(l)(f) has also been raised on numerous occasions. Some members have suggested that an employee should be able to deduct his premiums, or a portion of the benefits attributable to that part of the premium paid by the employee should not be taxable. The bill before the House does provide that an employee may not deduct his premiums paid to a plan each year, but when a benefit is received the employee will be able to deduct from the benefit all premiums paid since 1967, not previously deducted. In other words, he will be allowed his own contributions free of tax before any amount is added to his income. Again, we get back to the root concept of a man's income being the sum total of benefits he receives from employment.

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The matter of strike pay was raised in an inquiry by the hon. member for Halifax-East Hants. The bill does not provide for taxation on strike pay in the hands of the recipient. The question of employee stock options has been raised by the hon. member as well as by the Parliamentary Secretary to the Minister of Supply and Services and one or two others. Here again, there is no significant change in this bill from the law as it exists. Members, raising this point, have taken exception to a change in the present Income Tax Act which was made a couple of years ago, which did remove some exceptionally favourable treatment that was accorded taxpayers in a position to receive stock option plans. This is a valid point and it is an important point but there is no change proposed in this bill from the existing law.
The matter of expenses of workmen employed away from home was welcomed by the hon. member for Winnipeg North Centre as the result of long effort by the hon. member for Comox-Alberni, which has finally been rewarded. I am happy to note that welcome and the congratulations from that side in respect of this action. Certainly I must say I regard it as a very significant step forward.
The question of union dues was also raised by the hon. member for Winnipeg North Centre, with reference to section 8(l)(i). The hon. member expressed the assumption that special assessments might be included for deduction of union dues. This section is not changed at all from the previous law. There is no particular reason to think at this point that the Department of National Revenue will interpret this section of the bill any differently from the way in which it interprets the identical section in the existing Income Tax Act. Officials of the Department of National Revenue have advised me that annual membership dues to a union are deductible even though part of the dues may be earmarked for a strike fund, but a special levy that is imposed because of a particular event, which represents more of a one shot thing rather than a year after year or annual payment, is not deductible. Section 8(5)(c) is relevant to this and I should call it to the hon. member's attention. This paragraph provides that annual dues are not deductible under section 8 when they are paid for any purpose not directly related to the operating expenses of the trade union to which they were paid. An example has been cited in which a portion of the annual dues have been earmarked to build up a fund to help finance housing for members of the union, or something like that, and that might not be deductible. As I said before, this particular section is unchanged from the existing Income Tax Act.
The matter of employment expenses and allowances has been noted by a number of members, and this is under section 8(1) (a) (i). This debate has been going on since the white paper was tabled with its proposals which are essentially carried forward in this bill unchanged, and no doubt was carried on well before that when many people saw a measure of inequity in that a salary or wage earner is not allowed to deduct many of the expenses incurred in earning income whereas the proprietor frequently can, and whereas an executive often has those expenses paid for him by his employer, which in turn are deductible by the employees. It has been suggested that the $150 ceiling be changed to a tax credit or that it be

increased in some way. The law permits a deduction for a substantial number of specific expenses such as the union dues I have just mentioned, and other expenses of employees which are described in section 8 and various subsections, including expenses for meals and lodging incurred by employees who have to travel in the course of their employment, legal expenses incurred in collecting salaries and wages, and so on. This bill does introduce in the 3 per cent or $150 ceiling an employee expense allowance which is an important new deduction. The bill also introduces a new deduction in terms of unemployment insurance premiums. It also makes an important change in section 6(6), extending to all employees the right to exclude benefits in cash for kind received from an employer to cover the cost of travelling to or living at a distant work site. This was also the cause of the hon. member for Comox-Alberni.
The new general deduction is an attempt to provide a deduction for other expenses. The requests for deductions of a more general nature have been studied for many years by governments, but this is a very difficult problem. One of the main difficulties is finding a reasonable and fair stopping place, if a start were made to allow new deductions for amounts spent by an employee in connection with his employment.
In addition to tools used by garage mechanics there are tools used by other trades such as carpenters, painters, plumbers and radio repair men. Expenses for getting to and from work are regarded by many as expenses necessarily incurred to earn salaries or wages. In some cases special clothing is required. Some employees, such as teachers and clergymen, find they have to buy books, tape recorders and typewriters to perform their work. A case can be made that amounts spent on all these items and numerous other items should be deducted in computing income. But if such a list of deductions were allowed, there would be a very real problem in checking and controlling all the receipts involved, and the substantial loss of revenue that would result would have to be recovered eslewhere in higher rates of tax on the remaining taxable income or perhaps through other forms of taxation than income tax.
As I said, this 3 per cent deduction is an important step. Combined with the other deductions permitted to employees, such as moving expenses and so on that are new under this bill, the estimate of the revenue loss in this area is $285 million, the first year that the new system is in effect based on the 1970 income tax payments. This is the largest single income reduction item in the package, taking into account that the rate schedules plus the exemptions should be treated as a package. So, I suggest that it is a great step forward. It is one that I am sure the government will watch with interest to see how it works. I hope we will find some way of creating more equity, but I commend it to hon. members as a very important new approach in the Canadian tax law.
The question of meals claimed away from home under section 8 (g) was raised by the hon. member for Portneuf and also the hon. member for Parry Sound-Muskoka. The problem that they seem to be raising is not related to any provision in the bill itself, but to the manner in which that
October 28, 1971

item is administered at present by the Department of National Revenue. I do not note any significant change in the bill on that particular item. I can only say I am confident that the Minister of National Revenue will receive reasonable representations in this regard from taxpayers who feel aggrieved. He may, indeed, be able to point out to the hon. members who questioned the matter the fact that perhaps there is more than one side to some of the representations that are being made.


John Leroy Skoberg: Different sizes of stomachs.


Patrick Morgan Mahoney: The expenses of an employee working away from home and going home on weekends was raised by the hon. member for Parry Sound-Muskoka. He suggested that it might be covered under the provisions of section 8 (h) of the bill. I suggest that probably he is stretching 8 (h) if he thinks that it will go that far.
The hon. member for Regina East raised the question of transportation of handicapped persons to and from work. This, again, is a difficult subject. I think it was dealt with in essence in our debate on section 110, and I would refer the hon. member to the various improvements that are made in this bill in section 110 as opposed to the existing act when it comes to deductions for medical expenses and the other very well deserved concessions to handicapped persons.
The hon. member for Dauphin raised the matter of the carry forward of losses from employment under section 5(2). I would suggest with respect that the hon. member is in error in suggesting that a loss from employment could not be carried forward or back in the same way as a business loss. I think he misunderstands the section, and I would refer him to section 111(b) at page 292 of the bill which contains the definition of non-capital loss and includes in that definition a loss from employment. A non-capital loss may be carried forward five years and back one year.
The hon. member for Edmonton West again raised the matter of ages under the bill. I must say that I am inclined to agree that he has a point in the allusion that he made to the age in section 63(a)(iii)(B), the baby sitting section. I did respond to his questions regarding section 109(l)(d) the other day. Evidently he did not hear me. I would refer him to my remarks rather than repeat them. When he studies them he might conclude that a change in that section would impose a heavier burden on taxpayers rather than be a relief. He might feel that a parent claiming an exemption for a child should not have to prove that a child between the age of 18 and 21 is either in an educational institution or handicapped in order to get that exemption.


Marcel Joseph Aimé Lambert: You do now for those over 21.


Patrick Morgan Mahoney: That is correct, but the change from 21 to 18 would mean that you would have to do it for those over 18 rather than 21, so perhaps it is not an improvement.
I would also draw the hon. member's attention to the change in section 75 dealing with the income from property, gifts to minors, and note that one of the government amendments presently before the House proposes to change the traditional age in that regard from 19 down to
Income Tax Act
18. There may be other sections but, as I said, I am inclined to think that the hon. member has a pretty good point on section 63.1 will call it to the minister's attention.
So far as section 4(4) is concerned, the hon. member requested an explanation of that. Again, on reflection I would think that he should appreciate that this is a clarifying section which is desirable from the taxpayers point of view. It makes clear that an amount does not have to be included in income more than once, and also of course that a deduction cannot be taken more than once in the computation of income or loss. The reason for this is the considerable amount of emphasis throughout the bill, and particularly in this subdivision of the bill, on the sources of income. It is important to make sure that an item of income that is included from one source does not, by some technicality or other, have to be included again, and likewise that a deduction taken from one source of income cannot also be claimed against another source of income. It may be overly fastidious to have included this but it is a clarifying rather than a substantive section. I will check the inventory again. I hope I have caught up all the loose ends. If I have not, I will certainly try to do so.


Robert Jardine McCleave: May I raise a point of order at this time? My point of order arises out of something which the parliamentary secretary said with regard to the representation that I made and which the hon. member for Lamb-ton-Kent and others made about the mamma and papa provision which is contained in section 6(8). I think the parliamentary secretary made a reasonable representation and it would be agreeable I think that we deal with that later on. I hope we will always have the wisdom, if it turns out that section 6(8) is all that essential, to give ourselves leeway to come back and make any changes there. I should like to be heard later on about other matters arising out of the statement, but I realize that I am up on a point of order and I will not indulge myself now.


Russell Clayton Honey: I would normally see the hon. member who is on his feet, but I think members of the committee will agree that because of the very useful line that the hon. member for Edmonton West took and which was responded to by the parliamentary secretary it would facilitate the work of the committee if I were now to see the hon. member for Edmonton West.


Marcel Joseph Aimé Lambert: Thank you, Mr. Chairman. I will not abuse this privilege. Actually, I do not think I will use all of the time allotted to me.
I should like to return to section 6(l)(a). This provision includes in an employee's income an employer's contribution to public health schemes, but only on the basis that the benefit under the scheme depends on the employer making the contribution. In other words, in the provinces of Ontario, British Columbia and Alberta under the medicare schemes presently in force, because the employer has to participate by way of an agreement in a contribution to the scheme, the employee receives a taxable benefit to the extent of the employer's contribution. But strangely enough in the province of Quebec there is no question of agreement or otherwise. The employer's contribution to medicare is by way of a separate tax under a provincial

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Income Tax Act
statute. Therefore we find there is a distinction, between one part of the country and another, for employees receiving the same sort of benefit. In Quebec, the employer must contribute to the medicare scheme. In Ontario, as a result of collective bargaining, the employer has to contribute to the medicare scheme. In the province of Alberta and in the province of British Columbia the employee has to pay for it, by reason of an addition to his income at the margin on which he will pay marginal rates.
I just cannot see that as equity between taxpayers, and after all the government did say that one of the things it was striving for was equity between taxpayers. I do not disagree that you can handle taxpayers differently, but do not tell us you are going to handle them the same way. It seems to me that to determine the tax consequences to an employee on the wording of a provincial statute is absolutely the wrong way to proceed in a federal statute. And let us not hear any nonsense that the provinces should change their medicare schemes, to make the premiums under medicare a complete charge to the consolidated revenue fund of the provinces, in order to do away with this. There was never a condition precedent under any medicare scheme that such should be the case. To try to force this through the Income Tax Act is totally wrong and is, in effect, saying it is up to the provincial administration to change the set up.
Why not tax the employee in Quebec for the value of the tax paid by the employer towards the medicare scheme? It is a payment for the benefit of the employee. But because it is a tax, apparently the department doesn't want to do it, or are they scared to do it?


Mr. Peters:: Maybe both.


Marcel Joseph Aimé Lambert: If it is fair to tax an Ontario employee for the benefit of his employer's contribution to a medicare premium under a provincial statute, or in Alberta or British Columbia, then it is equally fair to tax the one in Quebec. If you are not going to do it for the Quebec employee, then you should not do it for the others. But for goodness sake, treat that category of employees who are receiving part of their premiums under a medicare scheme from an employer equally and not as proposed in this bill.
I would like now to turn to the employment expense deduction. Here, I find some real anomalies. I am not going to say anything about the amount of $150, whether it is right or wrong. I am not going to say anything about whether it should be provided or should not be provided. Frankly, I do not particularly care that it should be provided. I have never been a great devotee of this particular feature because it seems to me that it discriminates, and it confers on certain employees a benefit to which they are not entitled.
When the hon. member for Winnipeg North Centre was speaking yesterday I gave him examples of what I considered to be anomalies. You may say that a $150 employment expense deduction for the office boy and junior stenographers in a large concern would be most welcome. I am sure they will welcome it, but if you take the case of a $75,000 a year president of a company, he too will be entitled to the $150. The president of the Canadian National, the president of the CBC and the Governor of the Bank of Canada will all be entitled to this $150. Every deputy

minister is an employee entitled to it, unless such individual has an otherwise tax free allowance, such as a Member of Parliament, a city alderman, or member of a provincial legislature. Those individuals do not qualify, but all others who are employees qualify. The $150 for the man whose marginal rate is 40 per cent or 50 per cent is pretty nice, but for the man or woman whose marginal rate is 15 per cent or 17 per cent the deduction from total income really means a saving of very little, because this $150 is not deductible from your tax. This $150 is deductible from gross income.
I find these flat rate deductions to be wrong in principle, the same way that I find a flat rate exemption allowance creates some great disparities. Why do you do this? Let me give an example of it in my own profession, that of a lawyer. We will take a large law firm with a great number of staff lawyers. They will all be entitled to the working allowance. But just down the corridor are a couple of struggling young lawyers who will not be entitled to any of these travelling or employment expenses because they are self-employed.


Mr. Leblanc:: They deduct their own expenses.


Marcel Joseph Aimé Lambert: They cannot. This allowance will go toward the cost of travelling back and forth to the job for a stenographer or an office boy or the worker in a factory, because it is known as an employment expense deduction. In the same bus or subway car will be the self-employed lawyer or accountant-the hon. member for Laurier should know and should stand up for his profession-but they cannot qualify.


An hon. Member:: He can charge his expenses.


Marcel Joseph Aimé Lambert: He cannot charge those expenses travelling from his home to his place of business. Certainly, no lawyer can.


Fernand-E. Leblanc: He has the compensation there.


Marcel Joseph Aimé Lambert: There is this discrimination between the two. The hon. member for Laurier should know better. I am speaking from personal experience, in my profession as a staff lawyer in a large law firm, of what is allowed and what is not allowed as an employment expense. I can also speak about the nonsense of a self-employed lawyer attending a bar convention or the Canadian Tax Foundation. When a lawyer who is a Member of Parliament attends these seminars in order to keep up to date, he cannot deduct his expenses because his profession is not his principal source of income.


Fernand-E. Leblanc: I agree with that.


Marcel Joseph Aimé Lambert: I think the hon. member for Laurier will see that there is this discrimination between the lawyer who is working for a large law firm and the one who is on his own. He cannot deduct his travelling expenses from his home to his place of business, that is for sure. I have said enough on this occasion, Mr. Chairman. I thank hon. members for allowing me this extra time and you, Mr. Chairman, for recognizing me so quickly. It may be that I will come back with further points on this section.
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Mr. Saltsman:: Mr. Chairman, a pattern seems to be emerging on the employment expense allowance, particularly after listening to the hon. parliamentary secretary. Interestingly enough, and I think honestly enough, he pointed out that there has always been inequity in our tax system regarding the deduction of employment expenses as far as the employee is concerned as against the deduction of employment expenses for the self-employed person and the proprietor, and that the government has been grappling with this problem for a long time but has not been able to sort it out. The argument presented against equity as between the employee and the proprietor is that there are fewer proprietors and more employees, therefore trying to treat them on an equal basis poses an insurmountable problem. The parliamentary secretary says that the government has moved to put a little more equity into the situation by allowing a ceiling of $150 for employment expenses.
Frankly, Mr. Chairman, that looks like the worst kind of tax gerrymandering. Whichever way you look at what the government has done, it means that virtually all adults in our society will be able to make this $150 deduction and those who cannot, those outside the labour force because of age, are taken care of because $100 has been added to the $500 previously allowed as a deduction at age 70, now reduced to age 65. The government has not moved to correct the basic inequity in the system. Instead of increasing the amount that each individual could use as a base for deduction, instead of raising the ceiling of the single exemption to $2,000 and the married exemption to $4,000 for income tax purposes, they have taken $150 out of that and applied it to this section. If you were to calculate what it would have cost if the amount of the basic exemptions had been raised as against what it is going to cost this way, I think there would have been very little difference.
They have gerrymandered the thing around. There is a certain amount of money for disbursal and they have decided that, rather than use it to grant increased exemptions, they would use it to grant an employment allowance. I am not impressed with that approach because we are still faced with the basic inequity and all the apologies from the parliamentary secretary, all the hand wringing about how difficult it is to accomplish anything in that area, leaves me cold. I think it will leave the vast majority of people the same way.
As a rule, it is the little things that are very annoying. There is one subsection in section 6 which allows employees the right to deduct the cost of selling their product or advancing the interest of their company. Now that has always been deductible. But what is not taken into account is that almost all working men in this country at one time or another have to seek new employment or seek to improve their position. In this sense, they are not different from the person who is looking for business, who is selling a product. But the cost of finding a job cannot be deducted. If a man has been phased out of one industry and has to travel all over the city or buy three newspapers to look for a job-and under present conditions of high unemployment he may spend a fair amount of time and money trying to relocate-these expenses are not deductible. In a sense, he is in the business of providing his own labour; that is all he has to sell. He does not
Income Tax Act
have a product or a service to sell, just himself. Yet there is no provision for him to deduct the cost of finding employment. This is simply an indication of how callous our tax system is, Mr. Chairman, how indifferent to the needs of the majority of taxpayers and how solicitous it is of those who are self-employed or the proprietors of businesses.
The government acknowledges that the system of employment expenses is inequitable, but even if it is so difficult to bring equity into the tax system is it necessary to carry on this injustice against the larger group of our population. Something more should be done than to offer apologies. The government has one or two choices open to it. Most people will not claim beyond the $150. They ought to set up the necessary administration, as they have done with respect to business concerns and self employed people, in order to process those extraordinary expenses that some workers incur in finding and holding employment. Those expenses ought to be processed on the same basis as other, similar expenses are processed.
On the other hand, if the administrative problems that this would create are too great, then the government should move in the other direction and disallow all such expenses. In other words, there ought to be no allowances for expenses incurred in business; neither the salesman's nor the steel worker's expenses ought to be deductible. I am sure that vast sums of money are lost from our national revenues through the ability of business concerns to deduct from taxes the cost of doing business. If all such expenses were disallowed, we would introduce some form of equity. The money that is saved could be applied to everybody's marginal rate of tax. All taxes could be reduced and there would be a return to equity. I find it impossible to accept the government's explanation, namely, that although the present practice is inequitable we have no choice except to proceed as we always have.
Since the parliamentary secretary has been so good about answering questions that have been raised in this debate, could he say whether the government has calculated how much revenue is lost as a result of allowing business expenses to be tax deductible? If those amounts were not allowed, what amount of revenue would be available for lowering everyone's marginal rate of tax?


Stanley Howard Knowles: The hon.
member had better ask the question again. The parliamentary secretary did not hear him. Pay attention, Pat.


Max Saltsman: Is the parliamentary secretary ready? I should like to know whether the government has calculated how much revenue is lost as a result of allowing these expenses to be tax deductible. In other words, what revenue would be saved if there were no deductions for business expenses, travelling expenses as well as the expenses of employment? What amount of revenue would be available to the government if those deductions were disallowed and what kinds of tax changes could be made in the marginal rates of taxpayers if that amount were applied equally to all people for that purpose?


Patrick Morgan Mahoney: Mr. Chairman, did I understand the hon. member to include business expenses in his list?

October 28, 1971
Income Tax Act


Max Saltsman: Yes, Mr. Chairman.


Patrick Morgan Mahoney: Mr. Chairman, if business expenses are to be included in that particular litany, I think the figure the hon. member seeks would be impossible to calculate.


Max Saltsman: In which case, is there any kind of calculation that the parliamentary secretary could make in this regard? I think he sees what I am getting at and what kind of information I should like. If he cannot make the calculation on the basis of all business expenses, could he deal with expenses connected with the cost of employment or the costs of doing business that may be compared to the costs that the workman must meet for holding down his job?


Patrick Morgan Mahoney: Mr. Chairman, I am afraid that I do not know of any such calculation having been made. I have grave doubts as to whether it has been made. I will look at the hon. member's question in Hansard and see if we can get any information for the hon. member. I am not aware of that calculation having been made and, as I say, I have grave doubts as to whether it has been made.


William Arnold Peters: That shows what is wrong with the system.


Mr. Orlikow:: Mr. Chairman, I am somewhat puzzled by the reply of the parliamentary secretary. We are asked to approve a clause in this comprehensive bill which would permit workers, as well as other citizens, to deduct the magnificent amount of $150 a year for expenses connected with their work. This is not a new subject. Members of my party as well as of other parties have raised this question over many years, namely, that many ordinary workers working for wages and many people who work for salaries pay substantially more than $150 a year directly in expenses relating to their work.
The hon. member for Waterloo talked about costs incurred by the worker who has been laid off and must drive hundreds of miles to a prospective employer in order to find another job. Yet there are tens of thousands of workers who drive between 25 and 100 miles every day to and from work. Until now, they have not been able to deduct five cents of those expenses from taxable income. Thousands of construction workers must buy their own tools. Until now, they have not been able to deduct the cost of those tools from taxable income when calculating income tax. Thousands of miners cannot go into mines unless they wear hard hats and safety boots, which they must buy themselves. Those items cost something, and the cost has not been deductible.


Patrick Morgan Mahoney: That is precisely why we are allowing the $150.


David Orlikow: The parliamentary secretary has always understood clearly the position of the salaried person who travels as a salesman or of the self-employed person, with whom I shall be dealing in a moment. The parliamentary secretary interjected just now to suggest that the government is allowing $150 to cover such expenses as I have mentioned. I say to the parliamentary secretary that $150 sometimes may be too much and sometimes it may not be enough. I say to him that I believe in equity. I think the worker is entitled to nothing more and to nothing less than the kind of consideration which, for many years,

Canadian governments have extended to businessmen and self-employed persons. The businessman who thinks he will get more business if he takes a prospective customer out to dinner never has to prove that he got the business from that prospective customer. If he decides to take the customer to lunch or dinner at the Chateau Laurier, the Skyline Hotel, the Queen Elizabeth Hotel in Montreal, the Royal York Hotel in Toronto or the Palliser Hotel in the parliamentary secretary's home city of Calgary, nobody asks questions. The businessman charges the expense as a business expense, and the lunch or dinner does not cost him anything. If he decides to go to another city because he can get some business there and he flies first class, stays at the best hotel and eats the best meals available, he can charge the cost of the trip as a business expense.


William Arnold Peters: Towards which the worker pays his share.


David Orlikow: I ought to say that 50 per cent of the cost is paid for by the people of Canada. Let us take the case of the doctor who decides to attend a convention that is being held in the field in which he specializes. The convention may be held on a cruise ship cruising the Caribbean. Of course, there are meetings, the doctor listens to lectures and acquires more information in the field in which he specializes.


Lincoln MacCauley Alexander: Union executives do that, too.


David Orlikow: My hon. friend says that union executives do that, too. However, that sort of thing is not part of their duties. Unions, to my knowledge, are not in the business of making profits and taxpayers do not pay for such things. The members of the union may pay, or they may object. The taxpayer does not pay. If the union member does not like it, he can do something about it. The taxpayer can only do something about that sort of practice if we, in this chamber, do something about it. That is what I am trying to impress on the parliamentary secretary. We are trying to persuade him in this matter but I must admit I do not think we have much hope of succeeding. The point I am trying to make is that for years we have permitted business, self-employed and professional people to escape payment of very substantial taxes because of these loopholes. I am not talking about tax evasion. I am talking about provisions in the income tax laws. This is a very small group, certainly less than 10 per cent of the people of Canada.
I suggest to the parliamentary secretary that it is time the ordinary workingman was given the same kind of advantage. I find it hard to understand why it should be so difficult to accomplish that objective. In fact, the government says it is impossible to set up a system of accounting or bookkeeping which will permit the ordinary workingman to do this. It has never been difficult for the doctor, lawyer or businessman to do that. A lawyer may travel in his car from the west end of Ottawa to a new office building downtown, then to the court house, which is not very far, back to his office and then home. He can charge a substantial part of his automobile expenses in the year when calculating his income tax.
October 28, 1971

I admit that I am ignorant about financial matters. I would like the parliamentary secretary to tell me why the government has been able to arrive at a decision that it is right, proper and equitable for that type of person to charge these expenses against his income tax, while it is not possible to do anything more for the workingman than to allow him a flat rate of $150. In thousands of cases, this is not adequate. The parliamentary secretary has some high priced help sitting with him at the table. Why can they not spend some time devising a system which will give the same treatment to the ordinary workingman who earns $5,000 or $6,000 a year? For years there has been such a system for business and professional men in the $25,000 to $50,000 a year bracket. When the parliamentary secretary explains that to my satisfaction, he will not hear another word about that from me and this section will carry very quickly.


William Arnold Peters: My remarks will probably be redundant, Mr. Chairman, but I think what I have to say must be said. I was surprised at the statement made by the parliamentary secretary in answer, to the question he was asked by the hon. member for Waterloo. The hon. member asked the parliamentary secretary to calculate what would happen if we cut off the dishonest and supernumerary allowances which are now classified as expenses. He referred to the free automobile, free meals and all other such expenditures. He asked what amount of revenue would be available for the reduction of the tax if those expenses were not allowed.
I am curious, Mr. Chairman. I am probably stupid about finances. I am in the same position as many other members who set up a company. I have a small operation and I also have a farm. It is not difficult for me to write off $3,000 or $4,000 when calculating my income tax. I spend a little money and increase my capital value. I could write that off. I maintain a truck, tractor and considerable other equipment. There would be no problem writing off those items. However, I consider that to be morally wrong. I could hire an accountant just to cheat the government, but that would be morally wrong. Just because I have the machinery and know how to do it, I can get a deduction off my taxes.


Patrick Morgan Mahoney: But you do it.


William Arnold Peters: No, I do not. My deductions at the present time are $1,000 for my wife, the $100 exemption everyone is allowed and the deduction for pension. These are the only exemptions I take. I could write off $4,000 or $5,000 if I wished, but I consider that dishonest. When I attend a large restaurant in Ottawa, I see that everyone there except myself and maybe one or two others are on expense accounts. That is more than dishonest, it is downright disgusting. I have to pay at least twice what the meal is worth because the freeloaders are riding on me and all other taxpayers.


Patrick Morgan Mahoney: Will the hon. member permit a question? In what category does the hon. member regard his tax free allowance as a member of Parliament in relation to all these freeloaders in the Skyline Hotel?


William Arnold Peters: That is a simple question. If the hon. member did not have such a large income from other
Income Tax Act
sources, he would be aware of the answer. That exemption covers exactly what it was intended to cover, namely moneys normally expended by any member on behalf of his constituents that would not be expended in any other occupation. It is granted in lieu of increasing our salaries, and I do not think it is dishonest. Parliament passed it. It is a fair amount. You can argue one way or another about the $2,000. Some members are cheap about spending the $8,000, but I think it is safe to say that all members who a few years ago were able to live on their salary had to dig into that expense allowance to maintain themselves. In the main, those businessmen who are allowed to write off expenses such as meals are dishonest. Everyone in this country knows that 50 per cent of them are dishonest because the expenses are not justified. If the department wishes, it could curtail those expenses by at least 50 per cent and gain on revenue.


The Deputy Chairman:: Order.


William Arnold Peters: They might then be able to help the little guy in this country who carries more than his share of the tax burden.


Russell Clayton Honey: Order.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Meadow Lake (Mr. Cadieu)-Grain-Lift program-Requests to farmers for repayments-Possibility of Prosecutions; the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas)-Oil-Proposed take-over of Supertest by British Petroleum-Possible government action-Acquisition by Panarctic Oils; the hon. member for Egmont (Mr. MacDonald)-Regional Economic Expansion-Response to criticisms of departmental programs.
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 private bills, notices of motions, (papers), and public bills.


Frank Howard: Mr. Speaker, I wonder whether I might have the indulgence of the Chair for a few moments in which to put to the House a proposition which has been discussed among representatives of the various parties in connection with private members' bills? It is a somewhat complicated matter so perhaps Your Honour will give me a moment or two in which to see that I do it correctly.


Stanley Howard Knowles: After the finance bill?

October 28, 1971
Private Bills


Frank Howard: This is a procedural matter, that is why it is complicated. It will require the unanimous consent of the House to accomplish what is proposed, namely that the House proceed to consider order No. 1, the report stage, and subsequently third reading of a bill respecting the Royal Victoria Hospital. We would then proceed to item No. 5, resuming the report stage of Bill S-12 respecting Central-Del Rio Oils Limited, and a report stage amendment thereto. On the conclusion of that item, if it happens before six o'clock, we would then adjourn.
The suggestion is that the House should also give consent to the hon. member for Moose Jaw (Mr. Skoberg) to withdraw a report stage amendment which he has moved and which appears on today's order paper at page 8, and allow him to move another amendment, one which has been agreed to by the sponsor of the bill and by the company affected. If this expresses the understanding reached during the conversations which have been held, I would seek unanimous consent for this to be made an order of the House as a package agreement.


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: That is precisely the understanding we reached during the discussions which were carried on this afternoon. We certainly hope the House will give unanimous consent to the proposal as it would expedite considerably the passage of these measures.


The Acting Speaker (Mr. Laniel):: As the hon. member has said, there is need for unanimous consent. There seems to be agreement between the parties to follow the procedure suggested. Of course, as to the question of withdrawing an amendment, that would be done when the House resumed debate on that item. Since there seems to be agreement, the Chair will abide by it as being an order of the House.



PRIVATE BILLS


Mr. Warren Allmand (Notre-Dame-de-Grace) moved: that Bill S-19, respecting the Royal Victoria Hospital as reported (without amendment) from the Standing Committee on Miscellaneous Private Bills and Standing Orders be concurred in.


[Stage Direction]
Motion agreed to.
William Warren Allmand: that the bill be read the third time and do pass.


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

[Stage Direction]
The House resumed, from Thursday, October 14, consideration of Bill S-12, respecting Central-Del Rio Oils Limited as reported (without amendment) from the Standing Committee on Transport and Communications, and the amendment of Mr. Skoberg (page 6588).
The Acting Speaker (Mr. Laniel):: Order. This would be the point at which the hon. member would ask permission of the House to withdraw his amendment.


Frank Howard: Perhaps we could combine the two operations, Mr. Speaker, namely, the request to withdraw the report stage amendment which is on the order paper and consent by the House for my hon. friend from Moose Jaw to move a new amendment. Perhaps that could be put in one item. I might say the amendment has been agreed to by the sponsor of the bill and by the company affected.


The Acting Speaker (Mr. Laniel):: The House has already given consent to that. The Chair was only inviting the hon. member to ask leave to withdraw his amendment and then to present his new amendment.


John Leroy Skoberg: Mr. Speaker, I ask unanimous consent to withdraw the amendment which appears in my name in connection with Bill S-12, and which reads:
on the condition that Sections 52 to 56 of the Bank Act apply to the company mutatis mutandis notwithstanding the provisions of Part I of the Canada Corporations Act.


The Acting Speaker (Mr. Laniel):: Does the House give unanimous consent?


Stanley Howard Knowles: Agreed.


John Leroy Skoberg: I should like now, if I may, to introduce an amendment to Bill S-12 as follows:
That a new clause be added after line 42 on page 2:
A majority of the directors of the company or its successor shall at all times be Canadian citizens ordinarily resident in Canada.
Briefly, I should like to say that even though this may be just a token concession by the company concerned-a company which will, no doubt, change its name-this is the avenue we have to take until the Gray report on foreign ownership is tabled in the House. I might add that many of these amendments would not be necessary if the Gray report on foreign ownership were made public so that a full discussion could be held on the subject. I am sure all Canadians are waiting for the day when a debate can take place on the basis of the government's precise intentions in the field of foreign ownership.


Mr. Tom H. Goode (Burnaby-Richmond-Delta):: Since the object expressed in the amendment has always been the intention of the company, the company accepts the new amendment and we should like to thank the hon. member for Moose Jaw (Mr. Skoberg) for his co-operation.


Frank Howard: It's the other way around, Tom.
Amendment (Mr. Skoberg) agreed to.


Thomas Henry Goode: that the bill be concurred in.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Laniel):: When shall the bill be read the third time? By leave, now?


Some hon. Members:: Now.


Thomas Henry Goode: that the bill be read the third time and do pass.
October 28, 1971


William Arnold Peters: Mr. Speaker, I am pleased that the Canadian Pacific Oil and Gas Company, which really owns this particular company, is accepting these changes. Central-Del Rio is now going out of business and will hereafter be called the Pan-Canadian Oil Company. I anticipate this will be a consortium of companies taking in many of the other subsidiaries which have been mentioned as being under the control of this company.
Therefore, I think that this company should be congratulated for having taken the stand it has, one in which I am sure all members of the House are interested, namely that its directors will be resident in Canada. Hopefully it follows that this company will have a Canadian interest in its deliberations and in its day to day operations, particularly since the Gray report has not yet been released. It is to be hoped that that report will come before Parliament in the very near future, since it is vitally important that the government state its position on Canadian control of companies.
We may be naive enough to think that control rests with the board of directors and shareholders of a company. However, if the government gives leadership and shows what it wants accomplished in Canada, then a company like Central-Del Rio will not itself have to show the leadership that is required in this regard. There are other bills of a similar nature on the order paper, and if these companies wish to follow Central-Del Rio and make the same kind of concession to Canadian nationalism, then I think they will find much less difficulty getting their bills through this place.
I therefore express the hope that the government will introduce a policy establishing Canadian control of corporations, rather than asking individual companies to make this decision which, from a legal point of view, I am sure must have been difficult to make. Nevertheless, this company should be congratulated for having made that decision. As I say, I think there is now an obligation on the government not to place companies in the position of having to come before Parliament to get Canadian control. If the government shows leadership it will accomplish what the Gray report would accomplish by giving that direction which hitherto has been lacking.


Gordon Harvey Aiken: Mr. Speaker, I do not like to be the sceptic here and I am not familiar with the original bill or the amendments made to it. I also kept my silence when they were explained to the House. However, I cannot see that there is any real victory for Canadian ownership in having a company declare that its directors shall be Canadians. In fact, I think this has been the case with most foreign-controlled companies for a good many years. The directors of these companies are straw men in some cases and real directors in others. Just in which cases they are straw men and in which cases they are effective directors is hard for an outside observer to tell.
Therefore, while I accept that there has been a concession in this case to Canadian direction of this company, I am not caught up in the euphoria of thinking there has been any real accomplishment here beyond the simple
Income Tax Act
fact that this company must have Canadian directors. I think this is an acknowledgment of the need for legislation in this respect, and when it does come before the House I hope it will be a good deal more effective than legislation that merely provides that the directors of companies shall be Canadians.
I do not want to detract from the effort that has been made in this case because it is one step along the road. But as already pointed out by the hon. member for Timiskaming (Mr. Peters), something a good deal more than this will have to come from any legislation to ensure that there is in fact real Canadian control.
Motion agreed to and bill read the third time and passed.


The Acting Speaker (Mr. Laniel):: Pursuant to the order made earlier by the House, the work on which agreement had been reached having now been completed the House will revert to the business which was interrupted at five o'clock.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act-Mr. Benson-Mr. Laniel in the chair.
On clause 1-section 4: Income or loss from a source or from sources in a place.
Gérald Laniel: Order, please. Pursuant to the order made by the House earlier this day, the committee will call it six o'clock and will resume examination of Bill C-259 at eight o'clock this evening.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
William Arnold Peters: Mr. Chairman, just before we proceeded to private members' hour I was pointing out to the parliamentary secretary that workers at the lower end of the income scale have to pay the maximum amount of tax and are allowed only the stereotype deductions. That situation can in no way be related to the situation faced by people in other income categories. The parliamentary secretary suggested that if we allowed these deductions in all categories $280 million would be involved. It would be of tremendous advantage to the country if we could use that money in allowing the average worker to write off some of his expenses. If this cannot be done, then we should at least reduce some of the deduction items at the other end of the income scale.
Every time a businessman takes someone out for a meal we pay 50 per cent of the cost. If we have a meal in a

October 28, 1971
Income Tax Act
restaurant we are charged 50 per cent more than we should be because most people eating in restaurants are subsidized or are on expense accounts. I have never been convinced that anyone can increase his business by wining and dining potential customers. It seems to me that what is involved is the old theory of, you scratch my back and I'll scratch yours; I will take you out on my expense account and you can take me out on yours. All that is gained is a social evening. I fail to see the legitimacy of allowing this type of exemption when we will not allow such basic exemptions as the cost of travel from place to place in the course of employment.
It is very difficult to ascertain how much an individual should be allowed for expenses. I am sure that this situation has changed radically in the last few years, mainly as a result of government action. In many areas, mines are situated some distance from where miners live. It was decided some time ago that in the province of Ontario townsites should not be developed on mining property. This has been the case for the last 15 or 25 years. It was felt that the capital cost necessary to develop townsites might be better used if the miners lived in an existing centre and travelled from there to the mine. Capital has already been laid out to establish such towns and villages. This was not the case 20 years ago.
I lived in a mine townsite which was about a quarter of a mile from the mine. The mine was easy to reach on foot. Miners in my area today drive 100 miles to and from work. It seems to me very strange that people who have to drive to their jobs are not granted at least an expense allowance to cover their travelling costs.
A farmer would be allowed capital depreciation and all the cash necessary. Probably 5 per cent or 10 per cent would be allowed for personal expenses other than for the operation of the business. But so far as workers are concerned there is no allowance for capital expenditure on an automobile. No allowance is made for gasoline or other expenditures. As my colleague says, only the rich benefit from our tax laws. Is it not time we started to be fair with the working people of this country?
I have been impressed when the minister has said on a number of occasions that the basic exemption cannot be changed, that it cannot be raised because it would cost too much. I am aware that this would help the guy at the bottom, but it helps the guy in the high categories considerably more. Is it not an indication that the tax department has not done its job when we are not able to reclaim moneys in a fair manner under our tax structure? It has been said that we cannot pay more money to old age pensioners; our tax structure is so badly out of line that we cannot equitably recover the costs from the various income categories.
The government has been very generous and I am sure that government after government will say that $150 is only a foot in the door, that next time it will be $200 and then $250. They will play with the workers as though they were a political football; they will offer them a little here and a little there toward the cost of their tools. But I know of no group of workers in this country that is not willing to document the expenditures incurred in its trade. As a miner I would have been very happy to document the fact

that I paid $11 or $12 for a pair of boots necessary in my occupation, to pay the $9 or $10 for the hat necessary in my work, the $4 or $5 for a belt to carry the lamp which is necessary in my work, the $15, $18 or $20 for oilers and the $4 or $5 for neoprene gloves.
I would have been happy to document these expenses if I could have written them off as business expenditures- and in my opinion those were business expenditures. I could not work without this equipment and therefore it was necessary for my work. I think a government is pretty decadent, and so is the tax department, if they cannot see the justification in allowing workers to provide receipts for certain items which are necessary in carrying out their jobs. Yet we allow businessmen to spend all kinds of money on booze, food and women, on hotel rooms and vacations around the world. We allow this and each of us has to pay for it. It seems to me that a government that cannot make this distinction has not looked at the tax structure in the light of reform. I agree that the tax structure is incomprehensible to anyone and I think it is time there was some fairness in the exemptions that we allow.
With regard to the 3 per cent of income provision, I know of people who pay almost 10 per cent of their income in transportation costs alone and they have all the other disadvantages that go with carrying lunch-pails, eating a poor lunch and working overtime and eating a warmed-up TV dinner. I do not blame people who look at the balance-sheet and say it is costing them money to work and that they would be better off receiving welfare, and perhaps that is the alternative.
The only way in which this country will get ahead is for the working people to feel they are getting a fair break under the taxation structure. If workers know that the boss is cheating, that he has all kinds of ways of getting exemptions to which they are not entitled, they lose respect for the system and doubt the justice which everybody agrees should prevail.
I should like the parliamentary secretary to indicate that the government will consider allowing exemptions for travelling expenses if receipts are submitted. If necessary, these receipts or vouchers could be co-signed by the employer. If a person is travelling in somebody else's car, obviously they are entitled to only a share of the exemption. Most companies would be able to supervise this and there would be no need for a number of inspectors.
So far as the $150 is concerned, I say thank you very much but this is only a drop in the bucket for the people involved. The government does not ask a doctor whether he needs a new scalpel. They do not ask how much it cost; the doctor tells them how much it cost. The government does not check whether he needs three or six scalpels a year, and he does not have to provide receipts for them. He gives them a complicated breakdown of his office expenses and sometimes lets the inspector come in to look over the books. Every time, to my knowledge, they collect about three times the tax which the doctor estimated, so I expect that the receipts system in these cases is not very good.
Perhaps the parliamentary secretary doubts this, but I know of cases where inspectors have come in and taken out what I would consider to be considerably more than
October 28, 1971

the fellow was supposed to be making that year, without much squawking from the person concerned. If it is good for one person, why is it not good for another? Why do we always have to ask the little guy to pay the largest share? He does not necessarily pay the most money, but in terms of the income he receives he pays the major share. He will not be allowed to collect for his wife and for his children. He will now have an exemption of $100 for dues. The fact that he may have a strike assessment will not be taken into consideration. Now we are to make it a maximum of 3 per cent of his income or up to $150 to be deducted for tools.
The workers of this country are not getting a fair break.
I urge that they be given a fair break. We do not want to continue the inequitable system which favours the very rich who have cushy jobs. If we give them a concession, at least let us give the working people of this country an opportunity to get some benefits from their expenditures. They do not want these benefits so as to have a good time, to go out on Saturday night and drink beer at the Legion; they only want to cover their expenses in travelling from home to job and buying equipment which is necessary and which is becoming exceedingly costly. I think these are two provisions which could easily be amended. In the amended form they would receive the support of all sectors of our community.


Mr. Laprise:: Mr. Chairman, once more I would like to take a matter up strongly with the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney). I do not know if he understood the intervention I made yesterday, but anyway several other members, among which the previous speaker, expressed the same opinion that clause 8 provides for something new, that is a tax deduction for employment expenses of not more than $150 that everyone can claim, even workers, loggers, miners and those who travel between their residence and their place of work.
I repeat what I said yesterday: the amount is minimal. It represents only 2 to 4 cents a mile. I think it is less than what it costs a worker to get to his work.
The buyer of an automobile pays the federal government a tax on car manufacturing and often, according to the province, a sales tax such as 8 per cent in Quebec and if he uses his car he must also pay substantial tax on the gas and oil he buys and on spare parts for the car he must maintain in good shape.
I think that the Department of Finance should in all justice for all Canadian workers revise that clause of the bill and allow a fair deduction for actual expenses claimed by the Canadian worker.


Stanley Howard Knowles: Mr. Chairman, during the discussion on section 4 we have also, of course, been considering sections 5, 6, 7 and 8. One of the points that has come in for a good deal of discussion has been the proposal to add an exemption of 3 per cent of income, or a limit of $150, which is said to be for employment expenses. I find it rather interesting to read the section in question, section 8. It starts at the bottom of page 15 of the
Income Tax Act
bill and goes over to page 16. You discover that in the text of the section it does not say what the expenses are for. However, the marginal note helps us out in this respect and I suppose in that sense it is part of the bill. The marginal note reads "Employment expense deduction."
We have been back and forth over this ground so it is hardly necessary to do it again in any kind of detail. But I had hoped that by now the government would have realized that it really is a little unfair for it not to relent at all on the basic system, namely, that of employing a tax exemption schedule rather than a tax credit system, and to add to the insult by providing this further exemption on that inequitable basis. After all, it is simply a case of an extra $150 exemption for all taxpayers in this country who get their income from employment. There is a slight qualification; persons who have some other tax-free allowance of $150 or more do not get it. We are glad to note that that includes Members of Parliament. But apart from those few exceptions which do not alter the picture greatly, all we have in this proposal is an additional $150 exemption for taxpayers who get their income from employment.
Whenever you do that sort of thing instead of putting it on a tax credit basis or without adjusting the rates, you are compounding the inequalities that already exist in our outdated tax law. As has been pointed out so many times, this $150 provision will mean a few dollars, $20 or $30 at most, to many of the workers of Canada when they fill out their income tax forms after next year is over. But the Governor of the Bank of Canada, the president of the Royal Bank of Canada and a few other big-shots will probably get 50 per cent or 60 per cent of the $150 exemption, which is $75 or more to them. It is a lot more than the little fellow gets-and these big-shots need an extra $75 a year just like a car needs a fifth wheel! Why can't we once in a while do this type of thing on the basis of fairness? We have not been able to persuade the government to change the basic system, but here a new element is being added. Why couldn't this be done on the basis of equity?
When I was speaking about this matter yesterday I referred to a situation that is at least slightly comparable, that of the allowance for charitable donations. I pointed out that in that case, as in at least one other, the government allows a $100 exemption to a taxpayer whether or not he has receipts for the charitable donations he has made. But the same taxpayer, if he has receipts, may claim more than $100. In that case there is another ceiling somewhere up the line. I suggested that that might be a pattern to follow in this case. I put it forward as reasonably as I could, hoping the government would reconsider it overnight and come back with such a proposal today. But whether it was considered overnight or not, it is not before us at this time-and I think it should be. As I said yesterday, let us accept the $150 for everyone, without any receipts, but why not provide that the worker who can furnish receipts for employment expenses be granted up to a total of $500?
Therefore, Mr. Chairman, since the government has not proposed this as an amendment to the bill-I confess I have not had time today to look at the further batch of amendments that we received at two o'clock this afternoon, but I am sure if one of those amendments had dealt with this matter word would have reached us by this

October 28, 1971
Income Tax Act
time-I would like to move an amendment along the lines which I suggested yesterday and to which I have just referred. I can see that Your Honour is wondering what is coming. Probably you can guess. I have already told you. I do not have another treatise on procedure. The other day I spent a great deal of time on a treatise on procedure and lost my amendment, but a colleague of mine rose later, offered an amendment, did not mention procedure and his amendment was accepted. So I think I should not argue; I should just present my amendment, listen to Your Honour say question, and get a vote on it.
However, I suppose Your Honour will look at my amendment and ask, "Doesn't that do something to the balance of ways and means?" Mr. Chairman, if you had been listening today to the parliamentary secretary you would have realized that those on the other side of the House are all at sea in this business of deductions for expenses: they don't quite know what it amounts to or how much you gain or lose. I suggest that if we gave the workers this extra allowance for expenses that they can document by receipts, it might result in the purchase of more tools and equipment. Then the people who sell the tools and equipment would make more profit, would pay more taxes and the government would probably be better off.
Since my argument in the direct field of procedure did not work the other day, I am trying this one on for size. Just because I am going to propose that workers be granted up to $500 rather than $150 by way of an expense allowance I do not think the Chair should just jump on it and say that it upsets the balance of ways and means. That is not necessarily so. It may in the end put money in the government's pocket. In any event, I think the committee should have the amendment before it. I have several copies and I can send one over to the parliamentary secretary and he can get one of the ministers sitting behind him to move it, if Your Honour finds it procedurally difficult. I am sure that by now they are feeling a bit sheepish about the inequity and unfairness of this $150 proposal. Therefore, I move:
That Bill C-259 be amended at page 16, in line 3, by changing the semicolon at the end of the said line 3 to a comma, and by adding immediately thereafter the following words:
"provided however that the amount deductible under this paragraph may be an amount up to but not greater than $500, if payment of employment expenses for the total amount claimed is proven by filing receipts with the minister;".
I point out that if these words were added at the end of line 3 on page 16, then section 8(l)(a)(ii) would provide for a deduction which, abbreviated, would read: a single amount in respect of all offices and employments of the taxpayer, equal to the lesser of $150 and 3 per cent-
Then there are a number of lines simply referring to income. My words would be added at that point and would say that despite that limit of $150 and 3 per cent, the amount deductible under this paragraph may be an amount up to but not greater than $500, if payment of employment expenses for the total amount claimed is proven by filing receipts with the minister. One other comment I wish to make is that the language I have chosen at the end of the amendment is that which appears

in this bill in several places, namely, that where receipts are required it is proposed that they be receipts filed with the minister which prove the expense.
Also, in this bill in various places are provisions for the making of regulations, sometimes by the Minister of Finance and sometimes by the Minister of National Revenue. As I see it, there would have to be regulations, just as there are now regulations, about the receipts that one can file for charitable donations, the required numbers and all the rest of it. The general authority to deal with certain matters by regulation would cover the right of the government through one department or another to indicate what kind of expense could be claimed and the nature of the receipts to be submitted.
However, apart from the two questions I have raised about the regularity which I contend for this motion, and apart from the attempt I have made to show how it is put together, I plead basic fairness. There is no reference in the text itself to employment expense; that is found only in the marginal note. All that tells us is that the text itself has nothing to say about employment expenses, it is just a $150 deduction. But if the government is going to call it by its marginal note, that is, an employment expense deduction, let us have a section on it and make reference, as I do in my amendment, to employment expenses. Let us also do the fair thing and make the same amount available, if he spends the money, up to $500 for the worker in the mine, the worker who has to travel or anyone else regardless of the total income of that person.
Therefore, Mr. Chairman, in the name of equity for at least this part of the tax bill I propose the amendment which I have already read.


William Arnold Peters: Question.


Russell Clayton Honey: The Chair is not prepared to put the question at this time. The hon. member for Winnipeg North Centre referred to the amendment moved by his colleague, the hon. member for Regina East. I would not want the hon. member for Winnipeg North Centre to think that because he moves an amendment the Chair is automatically on guard. This may be a logical conclusion to draw; however, the Chair can find a distinction. I accepted the amendment of the hon. member for Regina East the other evening on the basis of Beauchesne's citation which says that it is open to members to reduce taxes.
I would accept such an amendment if it were, shall I say, to reduce taxes across the board.
The difficulty I have with the amendment now before the committee is that if I permitted it and it were carried, it would shift the incidence of taxation. I am speaking now only on the procedural aspect and not on the fairness or moral aspect, as the hon. member urged on me-I make no decision on that. It seems to me, on the procedural aspect, that if this amendment were adopted there would be a shift in the incidence of taxation. There would in fact be an infringement on the financial initiative of the Crown. That is my preliminary thought on the matter. If the amendment were carried, of course, the situation would be that some taxpayers would pay less taxes and others would pay more.
I make this preliminary observation. If hon. members wish to try to convince me otherwise, I will listen to their
October 28, 1971

arguments, otherwise I would regretfully have to rule the amendment out of order.


Stanley Howard Knowles: Mr. Chairman, perhaps I should say that you have not taken me by surprise but I do not see how you can put much weight on the argument that my amendment shifts the incidence of taxation. In order to contend that, of course, I may have to contend that it simply reduces the total amount of taxes that has to be paid in.
The argument that a proposition shifts the incidence from one group to the other perhaps applied to the motion I made the other day when I tried to raise the exemption levels and thus take taxation off those on the lower end of the scale and put the tax on those at the higher end. This amendment simply takes the taxation off the workers who can submit vouchers for up to $500. As for the question of whether or not it is across the board, I think it is: it would apply to the worker at the lower end of the scale and to the governor of the Bank of Canada if he could submit vouchers for expenses up to $500.
On the other question, all I can say is I think there is no proof at all that this kind of amendment would result in any loss of income to the treasury and it would be much fairer to the workers of this country.


William Arnold Peters: Question.


Russell Clayton Honey: The concern that the Chair has, of course, is not really cleared by the hon. member's remarks, because if his amendment were adopted I think we would be in the position that those taxpayers who are employees would have the benefit of the amendment. The situation is that there are other Canadians who are not employees, they are self-employed, so that the benefit that could accrue under this amendment to Canadians who are not self-employed but are employees would be borne by Canadians who are self-employed.
As I said, the argument of the hon. member may be morally or reasonably correct-although I make no comment on that-but I suggest it is not procedurally correct and a private member cannot, as the hon. member seeks to do, interfere with the financial initiative of the Crown by shifting the incidence of taxation. For example, if all Canadians were employed, then I think I could agree with the hon. member's argument. Some Canadians, however, are not employees; they are self-employed and thus would not have the benefit of the amendment moved by the hon. member for Winnipeg North Centre. Therefore, those who are self-employed would, it seems to me, be carrying an additional burden.
I think, with respect, that the hon. member is doing something that can only be done under the financial initiative of the Crown. Accordingly, and regretfully, I must rule that the hon. member's motion is out of order.


Stanley Howard Knowles: Mr. Chairman, could I ask the Minister of National Revenue, who represents that great, industrial city of Windsor, if he would not like to adopt this amendment and move it on behalf of the workers of that city as well as on behalf of all the workers of Canada?
Income Tax Act


Mr. Gray:: Mr. Chairman, the proposal is a step forward, and the best way to help the workers in this regard is to pass this proposal of the government which is before the committee as quickly as possible.


Some hon. Members:: Hear, hear!


Robert Jardine McCleave: Mr. Chairman, could I ask the minister if what he said has become government policy?


Some hon. Members:: Repeat that.


Robert Jardine McCleave: Has what the minister said become government policy?


Herbert Eser (Herb) Gray: I was talking about the measure that the government has proposed to the House and that is before the committee, Mr. Chairman.


John Leroy Skoberg: Mr. Chairman, I want to go on a voyage of discovery for a few moments and refer to some matters which have been raised in the House a number of times. Perhaps the parliamentary secretary could advise me whether some of these questions have been dealt with, because that may save some debating time.
Some time ago a representation was made to the government involving the Saskatchewan Wheat Pool Employees Association. It came to the attention of many members of the House and had to do with the different ways in which people who work on different types of construction jobs are treated. For instance, we are told that expenses incurred by people who work on a new construction site can be included as tax deductible, whereas if workers do repair work on the same type of installation, or on annexes, elevators and the like, their expenses are not deductible.
Could the parliamentary secretary advise us whether there have been changes in the way this law has been interpreted? Perhaps the Minister of National Revenue could say whether there have been changes in the regulations under the pertinent sections. Those who are concerned would appreciate this information.
It appears that the government is completely insensitive to the whole area of expenses incurred by people working away from home. We have tried to suggest that certain matters could be included within the law and the government has suggested that if you open the door at all there will be no end to what will be asked. In this situation employees who are discriminated against are those who undertake repair work on certain annexes and elevators across the country. It appears that the criteria for determining their eligibility to deduct expenses are based solely upon the definition of work performed.
Perhaps the Minister of National Revenue or the parliamentary secretary could indicate whether change is to be expected in this area. I do not think consideration is being given to it. Members of this committee want the government to explain why such expenses should not be deductible for tax purposes. It seems to me that we are discriminating against people whose work is exactly the same as that of others whose expenses are tax deductible and who are employed on new construction.
I am sure the parliamentary secretary, who comes from western Canada, well knows that people who are repairing elevators are doing the same work as those who are

October 28, 1971
Income Tax Act
building new elevators and that they are entitled to the same type of treatment. After all, they are doing the same type of work. Why cannot both groups of people be treated equally? I ask the parliamentary secretary to tell us why employees doing similar jobs cannot be treated the same way.
Another area that has been debated at length-some of our arguments go back to the 1960's; one letter on the subject was written in 1967-is that of travelling expenses of those employed in construction, transportion or other, allied trades. This afternoon the parliamentary secretary suggested that this involves a personal situation, that it is the obligation of workers to move from their homes to their places of work. Those engaged in the various trades in this country are faced with a high degree of mobility, I agree; yet we can cite instances-I will use Canadian Pacific Railway and Canadian Pacific Express as examples-to show that because workers lack the necessary seniority in their respective terminals they must travel many miles in order to obtain employment.
The Minister of Manpower and Immigration has told us how important manpower training and retraining is for Canadians. Representations in this area have been made to the Minister of National Revenue. There is a letter from the Minister of Finance saying that the subject of expenses incurred in earning salary and wages is receiving careful study during the current review of the income tax law. Surely when people cannot gain employment in their trades within their own terminals, places of origin or domicile and must travel "X" miles to obtain employment, consideration ought to be given to the deduction from taxable income of their travelling expenses.
I agree that if it appears that such people will become permanently employed at the new location, they ought to move to that location. In the long run this is what they will do and thus they will no longer pay travelling expenses. Yet somewhere along the line consideration ought to be given to allowing such travelling expenses for a certain length of time, especially in cases where people cannot get jobs in their own terminals or places of domicile. Consideration ought to be given to allowing some type of mileage charge in computing travelling expenses in cases where people must travel to another terminal or location for work. After all, they have to obtain food and shelter and keep up their homes. No consideration has been given to such people. Even now, one group can obtain concessions so far as expenses are concerned yet others who work under similar circumstances are denied these concessions. Consideration ought to be given to those so affected.
May I refer briefly of situations existing in the railway industry. I am sure that the parliamentary secretary, who comes from the city of Calgary, knows many railroaders in that city. We know that with the type of seniority prevailing on the railroads some people are forced to go away from home to obtain employment. If they want to work they must travel many miles to another location. At one time the railway companies themselves provided accommodation for their employees. Today those who are forced away from home for work invariably must obtain their own accommodation and pay their living costs at the work terminals.
I am glad that in the bill there is provision for an exemption in so far as telegraphers' and station agents' expenses are concerned. I would like to know why the government cannot include in those exemptions the expenses of employees working away from home terminals because they have exercised their seniority. The parliamentary secretary is well aware that people from Calgary go to Red Deer to work. They have to pay their own expenses. No consideration is given to that type of expense. If the parliamentary secretary would answer this question right now it would be appreciated by all those affected.
We witness the disappearance of passenger trains throughout the country. It used to be that running trade employees could go to away-from-home terminals by train, but now that is practically impossible. They have to use their own automobiles to travel to away-from-home terminal for employment. They receive no consideration for expenses incurred in this way. Again we are faced with the situation where you have two sets of conditions. There are people with ability and seniority who work within their own territory. Others have the same ability but not the seniority and are forced to go away from home in order to obtain employment. Surely there could be some amendment or a few words added to the clause at the top of page 17 to include the running trades to which I am referring.
The same applies to the non-operating trades. They have what they call roving gangs. These people no longer have a domicile to call their own and are used throughout the territory. They are in the same situation of having to drive from one location to the other but receive no consideration so far as tax exemption is concerned. Possibly the government would agree to add a few words to this clause to look after the situation with which these people are faced. I do not see any object in trying to move an amendment to include this group of people unless it includes construction workers, railway workers and other trades and craftsmen.
If these people were included, their legitimate expenses could no doubt be documented to the extent that the government would know how much money was spent. As far as blanket coverage is concerned, I agree that this is not in the interest of the Income Tax Act. If legitimate expenses were documented I see no reason why these people would not be entitled to consideration under the proposed changes.
Over the past few years the Minister of Finance has suggested that these areas were being considered. I think he was sincere when he said that at the time the Income Tax Act was to be revised and revamped. When I look through it I see that the three areas to which I have referred are not included. No consideration given to these situations. With regard to people in the construction industry and railway industry, I think some words should be added to the legislation to cover the situation. I leave it at that. Possibly the parliamentary secretary, who is well versed in the Calgary situation where there are very many railroad people, has received representations. I am sure he is aware of the problems I have recited.

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Patrick Morgan Mahoney: I am indeed, Mr. Chairman. The hon. member has asked a couple of very specific questions that might as well be answered now as later. On the matter of employee expenses, the hon. member cited the problem experienced by contractors' employees who are away from home building grain elevators and employees of grain companies out on maintenance and repair work.
If the hon. member examines section 6(6) of the bill I think he will be satisfied that that particular anomaly has been removed. Workers who are employed away from home on repairs will now be in a position where the payments made to them by their employer for living expenses away from home will not have to be included in income. There is a distinction that is important. The employee is not entitled to deduct from his income his personal expenses. It is a matter of an employer making him an allowance to cover those expenses while he is away from his home base. In those circumstances that allowance is no longer an income item.
With regard to travelling expenses, Mr. Chairman, I am sorry the response to the hon. member cannot be as favourable, at least from his point of view. The government has not yet satisfied itself as to an equitable means of permitting people to deduct the expenses of travelling to and from work. This applies as much to travelling to and from work ten miles across the city, 20 miles down the road on a daily basis or, indeed, as do some of our top executives-for whom I am sure the hon. member is not speaking-flying across the country two or three times a week while locating in a new job and trying to find a house in a new location. No satisfactory answer to this, at least from the hon. member's point of view, has been found. However, I should point out that under section 62 the transfer costs of the employee moving from one location to another are covered when he actually moves his home to the site of his new employment. Was there another point?


Robert Jardine McCleave: Yes, there was, Mr. Chairman. Can the parliamentary secretary elaborate on his statement that the government is not really satisfied with the answer of the travel allowance? Where is it going and when are we to have an answer?


Patrick Morgan Mahoney: I am sorry, Mr. Chairman; I am not quite clear on the purport of the question.


Robert Jardine McCleave: I think the parliamentary secretary said that the government is not really satisfied with the answer it has with regard to travel allowances. Are special studies being carried on, or is this where the matter rests? He sounded very frank. I wonder where this frankness will lead us.


Patrick Morgan Mahoney: Mr. Chairman, the government is and will continue to review the matter. The dissatisfaction to which I alluded was the fact that I was afraid I could not provide the hon. member for Moose Jaw with an answer that would satisfy him.


John Leroy Skoberg: Mr. Chairman, the real question, as the parliamentary secretary suggested, is that section 62 takes into account the transfer cost from one home to another. He is missing the point that their seniority is established in a particular terminal. If these people transfer every
Income Tax Act
time they have to move 140 miles to another terminal in order to gain employment, they will be transferring back and forth all the time. It is this situation about which the railway brotherhood is concerned, as well as employees who are involved in this type of transfer.
If an employee who did not possess sufficient seniority had to travel 150 miles to work in his seniority district, how many times could he be allowed the transfer of his home effects back and forth? It could be a number of times. This is the problem the railway people are facing.


Patrick Morgan Mahoney: Again, I do not think I can give the hon. member a very satisfactory answer. I must say I question very much the thesis that a particular group of taxpayers who because of collective bargaining arrangements have a certain problem, should have preference over other taxpayers. There are many taxpayers who travel to and from work daily. It costs money to travel across Toronto. It costs money to travel from Burlington to Toronto or, as the hon. member said, from Moose Jaw to Regina. For various reasons many people do not choose to live near their work. I do not think the fact that this problem may be enshrined in a collective agreement is a good reason for the government to make an exception in the income tax provisions.


Mr. Gilbert:: Mr. Chairman, the other night I tried without success to arouse the social and moral conscience of government members with regard to the level of personal exemptions, to be raised from $1,000 to $1,500 for individuals and from $2,000 to $2,850 for married couples. I suggested that the minimum exemption for an individual should be $2,000 and for married couples $4,000.
Tonight I shall attempt to persuade the committee with cogent, clear and convincing arguments that the members on the government side should take the initiative concerning employment expenses. I have been disappointed by government members' participation in the debate. On some of the main items dealt with in this clause by clause discussion their contribution has been very small and ineffective. I would hope that the hon. member for York East and the hon. member for Parkdale-


Mr. Haidasz:: On a question of privilege, Mr. Chairman, I should like to draw to the attention of the hon. member for Broadview the fact that I took an active part in the discussion of an important part of this tax bill yesterday, as he will see if he consults Hansard at page 9093.


Some hon. Members:: Hear, hear!


Steven Otto: And I did today.


John Gilbert: I appreciate the part the hon. member for Parkdale played yesterday. I understand it related to medical expenses. What I am saying in substance is that Liberal participation in the discussion of key sections of this bill has amounted to more tokenism. They may have received specific instructions from the Minister of Finance and the parliamentary secretary not to participate in this debate.


Steven Otto: Oh, come on!
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John Gilbert: I am reminded of the time the Public Order (Temporary Measures) Act was debated in this House. It was only the Minister of Justice on that side who took an effective part in that debate. The situation appears is very similar in this clause by clause discussion.
The clause before us indicates the government's meanness to workers and its magnanimous attitude toward businessmen. I ask myself why the government would be so mean to the workers and so magnanimous to businessmen. The clear conclusion to me is that members on the government side know where their political funds come from.


An hon. Member:: Explain.


John Gilbert: They know they have to protect the people who contribute to their political party fund. They do it either by not participating in debate or by fighting proposed changes. They appear to be adamant against any changes in substance. The reason I want hon. members opposite to participate in this debate is that many of them, more especially the members from Toronto, know that many industries are located-


Steven Otto: Mr. Chairman, I rise on a question of privilege. I do not mind having to put up with a great deal of the stuff which is coming from the other side, but the hon. member is way off the subject notwithstanding that agreement was reached among party leaders that speeches should be relevant. On the question of privilege, he mentioned that two hon. members did not take part. The fact is that the hon. member for Parkdale took part, and I took part. But the hon. member has not been in the House long enough to listen, or he has not read Hansard.


An hon. Member:: Resign.


Gérald Laniel: Order, please. I have heard the point of order and I think we should get back to the bill, particularly to section 4. I hope that order can be maintained in the committee because sometimes I have a hard time hearing the speaker.


John Gilbert: His reaction to my remarks indicates how sensitive the hon. member for York East is with regard to the truth. He finds it difficult, because he does not participate in debate on many of the subjects before this House. With regard to the substance of the legislation before us- I will repeat this for the benefit of the hon. member from York East-I say the attitude of the government with regard to workers' expenses is mean, callous and despicable. The attitude of the government toward business and other expenses is one of magnanimity.


An hon. Member:: We do not have the lush fund of the unions.


John Gilbert: I repeat, they know they get much of their funds from these institutions.


An hon. Member:: What about the unions?


Gérald Laniel: Order. The Chair asks the cooperation of hon. members, especially those who take the floor, to be as relevant as possible. I do not think the committee can make progress if we proceed as we have in the last few minutes. I am issuing an invitation; the Chair

cannot force hon. members to follow the rules of the House. At the same time, it is to the benefit not only of the House but of hon. members that as far as possible hon. members stay within the confines of the rules and observe the rule of relevancy.


John Gilbert: Mr. Chairman, may I clearly express the position of the New Democratic Party on employment expenses. We have said that all legitimate expenses that can be documented by receipts or standard deductions be allowed as a deductible item, and I think that is a fair position to take. The hon. member for Winnipeg North Centre attempted to reach a compromise position this evening by moving an amendment to the effect that we change the existing clause to provide that where receipts are supplied by a worker, the deductions should be to a maximum of $500. That amendment was rejected.


Gérald Laniel: Order. The rules of the House clearly prohibit hon. members from referring to a decision made by the House or even commenting on a decision of the House. The motion was put to the committee but was not accepted by the Chair; therefore, I do not think the hon. member should refer to it in the way he has. I would not want to prevent his putting forward any suggestion as to possible amendments to the section now under discussion, but I hope that he will not pass judgment either upon a decision of the House or of the Chair on the motion that was put to the committee.


Robert Jardine McCleave: Mr. Chairman, could I speak on the point of order for a moment? I have known you-


Gérald Laniel: Order. I do not think the Chair can allow the hon. member to do so. The Chair rose simply to bring to the attention of the hon. member the danger of his engaging in the kind of argument he is making; the Chair did not invite hon. members to comment on the decision.


John Gilbert: I am sure you will agree with me, Mr. Chairman, that my references were not to the ruling of the Chair on the amendment but to the substance of the amendment itself. I expressed no criticism of the ruling. What I expressed was disappointment about the nonacceptance by the government of the amendment moved by the hon. member for Winnipeg North Centre, and I am sure it is within the rules of the House to do so.
The reason we in the New Democratic Party believe that all legitimate employment expenses should be deducted is that in urban centres we find that many major industries have moved from the core of the city to its suburbs. Many of the workers have bought homes in the core of the city, and having established themselves and their families in the downtown area now find themselves in the position where if they wish to retain their employment they must travel to the plant out in the suburbs. They thereby incur additional employment expenses.
It can easily be argued that perhaps these workers should move from the centre of the city to an area closer to the plant in the suburbs. Many of them cannot do this because of their age. They have worked hard to save sufficient money to purchase a home. Having purchased
October 28, 1971

the home they have paid off their mortgage over a long period of years.


Lincoln MacCauley Alexander: By blood, sweat and tears.


John Gilbert: As the hon. member for Hamilton West says, by blood, sweat and tears. That is true, but what is even more true is that by moving from the centre of the city closer to the plant in the suburbs they have to buy a new home at a highly inflated price and assume a mortgage at an interest rate that ranges from 9 per cent up. I realize that the Secretary of state who is in charge of urban affairs is not happy about the high interest rates in the housing field, but the position of these employees has to be brought home to the government, and brought home forcefully. This is why I want members from the urban centres to speak to this matter.
Many of these workers are being penalized for living in the centre of a city. Is it unreasonable to ask the parliamentary secretary or the government to take these representations into account and to permit these workers to deduct their reasonable travelling expenses occasioned by going from their homes to their place of work in the suburbs? This is why we in the New Democratic Party contend that all legitimate expenses that are substantiated by receipts should be deducted.
Mr. Chairman, I have always found you a man of fairness. I have found some members of the Liberal party men of fairness. Yet in some debates I find these men sitting idly by when crucial matters which affect their constituents are discussed in the House. Through you, Mr. Chairman, I would ask members from urban centres in Quebec and Ontario, areas that are highly industrialized and in which there is a high degree of mobility of employment, to rise and tell the government in no uncertain terms that the deduction of 3 per cent or a maximum of $150 is a mean, despicable, niggardly, unfair and inequitable provision. The least these hon. members can do is persuade the government that the minimum deductible amount, backed up by receipts, should be $500.
I am a man of reason, Mr. Chairman. I am a man who tries to be fair, a man of Irish background, a man of passion.


Mr. Reid:: Now we understand you.


John Gilbert: I am sure I have convinced you. I hope that the hon. member for Kenora-Rainy River, a man who the other night said he represented Liberal-Labour-whatever that means-will express his views regarding this despicable provision that the government is attempting to present to the committee.


Max Saltsman: Mr. Chairman, I wonder how the government arrived at this ceiling of $150 for deductible employment expenses. They must have pulled it out of the air because it bears no relationship to the real expenses incurred by working men in the course of their employment.
I should like to deal with the question of the automobile. Anyone who has operated a car knows it is almost impossible to keep it running for less than $500 a year. It may be argued that workers are running cars for their own convenience, that they run them for pleasure rather than to get to work. In my experience this is not the case. Virtual-
Income Tax Act
ly every working man I know has been forced to buy a car to keep his employment. Even in an area like Waterloo, where work and residence are closely related, it is almost impossible for a man to hold a job unless he has a car.
Very often workers can arrange car pools and can be picked up by fellow workers, but just as often that is not possible. Many people have called me because they have been disqualified for unemployment insurance after the breakdown of a car pool or because a fellow employee could no longer pick them up. The ruling was based on the fact that lack of transportation is no excuse. The Unemployment Insurance Commission recognizes the responsibility of a worker to provide his own transportation to the job site, yet the government does not recognize this responsibility under the Income Tax Act.
No one can provide transportation for $150 per year. When I suggested $500 I had that figure in mind as an absolute minimum. If you calculate the cost of insurance, licence plates, depreciation and the cost of gas and oil it would amount to at least $500. If you do not include depreciation, then the other costs plus the cost of repairs would amount to $500 per year. I suggest the ceiling should be $500 rather than $150 as proposed in this bill.
There was a time when the steel mills and the houses in which the workers lived were close together. An employee could run across the back yard, across the street or four of five blocks to get to work. People could manage in those days without a car, but now there is hardly anywhere in Canada which has zoning by-laws where this is the case. Residences and plants are separated by a considerable distance and municipal by-laws virtually ensure this, yet the income tax system does not make any allowance for this situation.
The purchase of a car is one of the things that faces young people starting out in marriage and working careers. I do not think there is a member of this House who has not received a telephone call from someone who is having difficulty meeting car payments. This is one of the main things which upsets the budgets of young people. I am sure other members have taken a look at these budgets and suggested to the individuals that they could not afford a car. I am sure hon. members have advised them to make other arrangements for transportation. These people invariably say they must have a car to get to work, that if it was only for pleasure they would give it up but they cannot find employment without a car.
I am sure many hon. members have received calls from time to time from constituents who have had their operator's licence taken away and have wound up on relief because they could not get to the job. If you cannot drive in modern society you virtually cannot work in most areas of this country. There are exceptions, but generally speaking a car has become a vital necessity for the workingman.
I am not one of those who is hung up on the idea that every person should have a car, and I am sure other hon. members share that view. There is a great need for public transportation. We must have a close look at zoning bylaws and the artificial, antiseptic transportation systems we now have. We must consider carefully the development of industrial and residential areas. We do not have
24372-19*

October 28, 1971
Income Tax Act
good public transportation at this time. Many workers in this country find public transportation inadequate. Perhaps this is because we do not have proper zoning bylaws. In any event, it is a fact of life that most workers must have automobiles, yet they are not allowed to deduct what is a necessary cost of employment. It is beyond my understanding why the government has not taken this fact into consideration. I am only referring to the cost of operating a car; I am not dealing with the cost of tools a workman requires or the cost of books required by a university professor in the course of his employment, although these are important items of expense.
I am not dealing with the safety equipment required by law and the many other expenses workingmen encounter in the continuation of employment. I am dealing with only this item to demonstrate how unrealistic is the $150 ceiling. The very least the government could do is make the allocation of car expenses as between pleasure and business, now available to self-employed persons or proprietors, available to the workingman. The workingman would be willing to prove the extent to which he needs his car for business as compared with pleasure. That is the kind of proof required of the self-employed and proprietors. The workingman is quite willing to provide the same kind of proof and accept the same kind of allocation of cost as between business and pleasure. But he is not given this opportunity. He is being fobbed off with this $150 which really should have been part of the original exemption. It has been put into this bill because the government knows the present tax system is inequitable but is not prepared to make significant changes.
The government is hoping that this little carrot or piece of camouflage will offset the discontent which exists in respect of the unfairness of the system. I cannot understand why a better system was not formulated. The parliamentary secretary has been helpful in answering our questions but I should like him to explain the basis upon which the government decided on the $150 ceiling. Is that all the government felt it could afford? Why has the government not been as arbitrary with the self-employed? Does the government feel $150 represents a realistic cost of finding and maintaining employment? I should like to hear about that and I ask the parliamentary secretary to try to justify the $150 in relation to the cost of operating an automobile.


Mr. Burton:: Mr. Speaker, I should like to speak for a few minutes on a matter raised by the hon. member for Moose Jaw, namely, the problem faced by employees working on construction sites away from home. This matter was drawn to the attention of the government and members of the House of Commons by members and officials of the Saskatchewan Wheat Pool Employees Association.
The hon. member for Moose Jaw expressed the case very well when he pointed out the problem that exists in respect of discrimination between workers of the same construction crew, based solely on the particular type of project, whether it was classified as new construction or as repair work. I was very pleased to hear what the parliamentary secretary said in response to the hon. member's point in this regard and I am glad this provision is included in the bill. There is only one matter that requires clarification and I put it to the parliamentary secretary.
[Mr. Saltsman.J
In his response the parliamentary secretary made reference to the problem faced by contractors and employees of contractors. I recognize that this would be the case with contractors and their employees working at a site some distance from home, but I inquire about the situation in respect of the specific example raised by the hon. member for Moose Jaw, that is, involving the Saskatchewan Wheat Pool Employees Association. This is not a case involving a contractor; it involves employees working directly for the Wheat Pool on construction and repair work. I want to obtain the assurance of the parliamentary secretary that the new provisions will apply to employees faced with that sort of situation just as they will apply to employees of a contractor.


Patrick Morgan Mahoney: My reference to contractors was not meant to mislead; it was merely an example. It is an employer-employee relationship that counts here, not the particular function that the employer or employee happens to be performing.
While I am on my feet, in response to the hon. member for Waterloo I would say that the $150 figure that was chosen as the ceiling was not designed to cover travelling expenses to and from work. Presidents of banks do not get their travelling expenses to and from work. This is not one of the expenses that is allowed any employee, any executive or anyone else. This is something that is simply not allowed. The $150 was not designed to cover that type of expense. It was designed to cover the special tools, the special clothing, and so on, that taxpayers need to earn their living. I can think of examples where $150 is not adequate and I can think of other examples where $150 will be more than adequate for the type of expenses which it was designed to cover.
It is simply not the purpose of this provision to cover all the expenses that a taxpayer incurs from the time he leaves his door after breakfast until he returns at supper time. In this context I submit that on a gross basis, on an average basis, the $150 is not a niggardly figure as has been suggested by hon. members opposite.


John Gilbert: May I ask the parliamentary secretary a question? What does he think about travel expenses that are involved by a worker travelling from home to his place of work, especially when it is a considerable distance away, say 20 or 25 miles? Does he think that these expenses should be allowed, and what would the exemption be-because the hon. member for Waterloo said that the amount of $500 is a bare minimum in so far as expenses that a worker incurs in travelling from his home to his place of work are concerned. Would the parliamentary secretary please enlighten me with regard to his attitude concerning exemptions for expenses that workers incur in such instances?


Patrick Morgan Mahoney: I do think that there are some expenses that are personal. The government makes no attempt to dictate to people where they should live in relation to their place of work. Personally, I see nothing intellectually or logically wrong with the idea that a taxpayer has the responsibility of delivering himself to work in the morning. This applies as well to the manager of an insurance company who is driving 20 miles in from the suburbs or
October 28, 1971

country estate to his office in downtown Toronto as it does to a worker in a steel plant in Hamilton who may be driving across town.
Perhaps we are fortunate that the economic system under which Canada has lived has permitted workers to move out from under the shadow of the steel mills and the smokestacks under which they lived. This is one of the benefits that Canadians have experienced as a result of our social and economic system. In making the decision to move away from the mill or the factory they have obviously decided to incur some expense and some inconvenience in getting to work, but obviously the price is worth paying because that is the decision they have made.


Some hon. Members:: Hear, hear!


Gérald Laniel: The hon. member for
Lambton-Kent.


Max Saltsman: I am glad to have received some of the comments from the-


James Hugh Faulkner: Let someone else speak.


Gérald Laniel: Order, please. The Chair recognized the hon. member for Lambton-Kent.


Maclyn (Mac) Thomas McCutcheon: I was interested in the remarks of the parliamentary secretary and I agree with what he had to say, namely, that this item with which we are dealing is not designed to cover automobile expenses as such. But I am still of the opinion that, taking into account today's prices, the amount is less than adequate. I am thinking of a particular group of people, namely, automobile mechanics who work in large establishments. I know of some who will probably break, wear out and lose more tools than this $150 allowance will cover. When you stop to think of the cost of replacing even some of the tools which these people have to use, you run into extremely large sums of money. I feel that expenses in that regard should be covered. Workers are perfectly willing to submit vouchers.
With reference to the matter raised by the hon. member for Waterloo, transportation allowances, I think that this does have some bearing. Many people in southern Ontario, where I live, are forced, due to lack of housing in our urban centres, to live in substandard housing and on abandoned farm lots. I know of many instances where workers on hourly rates drive 25 or 30 miles in broken-down automobiles in order to get to their work because the cost of housing in urban centres is so high that there is no way in which they can afford to live there.
After all is said and done, when you drive a round trip of 50 miles per day 300 days in the year, you put 15,000 miles on your automobile. This is done not out of choice but out of necessity. If those people were treated anything like the civil servants and allowed 16 cents a mile, they would probably be able to drive much better cars than they do at present. Although I do not normally agree with members of the party to my left, in this instance I feel that there should be some provision for the workers in this country who through no choice of their own are forced to live a long way from their work.
Income Tax Act


Some hon. Members:: Hear, hear!


Mr. Dionne:: Mr. Chairman, although I have scrutinized the voluminous bill before us, I have found no provision likely to help Canadian workers employed in U.S. territory.
Earlier, I heard the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) seemingly boasting about the economic situation in Canada, claiming that people were able to travel wherever they wanted. I should however like to point out to him that the Canadian workers who have to cross the border in order to find jobs they cannot find in Canada, whose economic conditions have just been flaunted, must drive 40, 50 or 60 miles twice a week to reach logging camps. They cannot remain there during the weekend because the camps then close down for two days. Nevertheless, they are allowed no deduction for travel expenses. In fact, the famous bill containing over 700 pages completely ignores them. Yet, those workers have to file three income tax reports to satisfy the taxing authorities and the country in which they live. The first one is for the Canadian government, the second for the province of Quebec and the third for the American taxing authorities. And we are told that economic conditions are normal and satisfactory. Those who have drafted this bill, with the help of numerous civil servants who have been dealing with taxes for 20 or 25 years, have forgotten this category of workers.
I draw this fact to the attention of the parliamentary secretary and I would like to hear his views on this problem.


David Orlikow: Mr. Chairman, I want to pursue the argument which the parliamentary secretary used to try to explain why the government feels the $150 expense allowance for workers is sufficient. If I understood him correctly, he said that the economic situation is such that the miner can afford to move more than a quarter of a mile away from the mine shaft, that he can afford to move 10, 15 or 20 miles away from his place of work and that the state does not and should not subsidize his expenses in travelling to and from work. But the parliamentary secretary did not address himself to the question that we have been asking. Why does the government have two standards? Why does the government apply that particular standard to the workingman, the factory worker, the man working in a mine or a mill?
To the doctor who lives in Rockcliffe and has an office in downtown Ottawa, who uses his car to go from his home to his office and from his office downtown to the Civic Hospital to see his patients, the government does not say, "You want to live in Rockcliffe and if you have to see your patients at the hospital you will have to pay expenses you incur." On the contrary, the government says to him, "You can charge off a very substantial part of the cost of your car, not just the gas and oil but depreciation and everything else."
The government says to the lawyer who wants to live in Kanata, uses his car to come to his office on Sparks Street or on Metcalfe Street and then uses it to go to the court

October 28, 1971
Income Tax Act
house, "You can travel from your home in Kanata 20 miles to downtown Ottawa, from there to the court house and back to Kanata at night, and you can charge off 70 per cent of the expense of your car in the form of a deduction from your income tax." I suppose, Mr. Chairman, I am pretty stupid-


An hon. Member:: We won't disagree on that.


David Orlikow: I would like the hon. member who sits there to stand up and speak sometimes, but I suppose the reason he is not the stupidest member of the House is that he has just enough brains not to get up and speak.
Before this item passes I would like the parliamentary secretary to explain to me, in language which I can understand so that I can show it to my constituents, why working people are not treated in the same way.


Patrick Morgan Mahoney: Mr. Chairman, the hon. member who has just spoken is under a rather grave misapprehension as to the law regarding travelling expenses for doctors travelling from Rockcliffe to their offices in downtown Ottawa. That expense is not allowed to doctors and there is ample case law to substantiate this.


William Arnold Peters: Of course it is allowed.


Patrick Morgan Mahoney: It is rather futile debating this point. If hon. members opposite wish to continue to perpetuate the fiction that somehow or other wage and salary earners are discriminated against in that they cannot deduct the cost of travelling to a mill or factory, while professional people are favoured in that they can deduct the cost of going from their homes to their offices, there is nothing I can do to stop them. But it simply is not true.
The hon. member for Kamouraska raised a rather specialized matter and I must apologize for not jumping up immediately to answer his question regarding Canadian taxpayers who are employed outside Canada. So far as travelling expenses are concerned, so far as the cost of commuting home for the weekends is concerned they are in exactly the same position as if they were employed in Canada. That is not an expense which the income tax department allows. However, for those particular people there is a provision in the bill which I would draw to the attention of the hon. member. It is section 8(9). This, for the first time, will permit these employees to credit against their tax in Canada, to deduct from their tax payable in Canada the taxes they have to pay to the state in the United States in which they are employed.


Some hon. Members:: Hear, hear!


Patrick Morgan Mahoney: Heretofore they have been able to deduct the federal tax, but now they can deduct the state tax as well. I am sorry; it is a deduction from income but not a deduction from tax. This is something new and should be of benefit to the particular taxpayers about whom the hon. member for Kamouraska was concerned.


Robert Jardine McCleave: Mr. Chairman, we are sitting around here this evening waiting for some decisive results from the eastern part of Canada. Apparently at the moment the election has become rather a stalemate, but anyway it is a little better than it has been. I was going to ask the parliamentary secretary-


Stanley Howard Knowles: On a point of order, Mr. Chairman, the hon. member should not leave us in the lurch; he should tell us what the figures are. You, Mr. Chairman, are restricted to the chair and I am sure you, too, would like to know the results from Newfoundland.


Gérald Laniel: Order, please. I would advise the hon. member that the Chair would not rule out anything he might like to add.


Robert Jardine McCleave: I am getting some conflicting figures, but I understand there is one seat difference between Mr. Smallwood's party and the challenging party, and that the Labrador party has also got one seat. I don't know what that means at all, but while we are waiting for it to be resolved may I raise this matter with the parliamentary secretary. This afternoon, in answer to a question that I raised yesterday, he simply said that it was government policy with regard to the Income Tax Act that strike pay would not be included as a taxable benefit. I think at least we should hear a statement of government policy on this so that some of us can decide whether to debate it further or not.


Patrick Morgan Mahoney: The hon. member, as a member of the Standing Committee on Finance during the study of the white paper, will be aware that this issue was faced and the recommendation by the committee was that strike pay be included in taxable income at least when it came from sources funded by tax deductible contributions. The government considered that matter and made the decision that that would not be a desirable thing.
I am afraid that I am not in a position to give the background reasons for that decision, but the matter was distinctly faced up to and considered. As a matter of fact, I am sure we are all aware of the typographical error that crept into schedule A in the ways and means motion where the marginal note referred to this matter but the provision was not there. I am afraid I cannot give the reasons but I can simply say that the matter was faced up to and the decision was deliberately made.


Robert Jardine McCleave: I would like to make what is probably a very legitimate point for all members of the committee including those on the government side. We are frequently faced with the representations of organizations and associations from different parts of Canada some of which have fought a continuing battle on tax reform over the last ten years. It is a pretty legitimate matter for any one of us to say that at least we should have on the record of the House of Commons, before we dispose of this bill, the reasons why we take certain courses. This is why I posed the question to the parliamentary secretary. I know we dealt with it in the committee as we did many other things, but I think it is a matter of compressing within a short period of time the reasons why the government is or is not adopting certain suggestions.
I make no apology for raising the matter. I think that to let people know what we are trying to do here is a very important element in persuading them why tax reform should be carried out. I make no apology for that, sir.
October 28, 1971


William Arnold Peters: Mr. Chairman, I should like some clarification on the point that the parliamentary secretary raised a minute or two ago. I agree that if the parliamentary secretary takes his car and drives to the office or goes home, he is covered by other allowances. I think it is safe to say that unless he has an interest in the oil business or has another job, he is not going to get any money for his automobile. However, I think he would be hard pressed to pass on that example to professional people.
It may be true, and I think it is, that the doctor would not say that he had three patients in the Civic Hospital and was driving there from Rockcliffe, but I am sure that everyone here knows that the doctor can claim a percentage of the capital cost of his car, that he can claim a certain percentage of the operating expenses and as long as he does not claim 100 per cent the income tax department will not be very strict. This applied in the horse and buggy days as well. I presume when I was born the doctor had to drive 11 or 12 miles with the horse and buggy, but there was an allowance for it.


An hon. Member:: You are not that old.


William Arnold Peters: I think the parliamentary secretary is not being fair to members of this House when he says he will not accept that there is a difference between the worker who takes his automobile to work, whether it be ten or 50 miles and where there is no other means of transportation, and the doctor who is driving his car in the course of his duties. In one case the worker can get no consideration for his car expenses against the income he earns, and in the other the doctor gets a percentage of the cost. I have operated on an expense account where I was supplied with a car. As long as I did not claim 100 per cent there was no difficulty. I owned two cars, so I said that I was using the company car for business and I allowed 5 per cent for casual driving. I used the other car for other purposes, so I was not entitled to that consideration.
I think the parliamentary secretary is being unfair to members who believe that the same type of concession should be given to the worker as is given to the professional man and self-employed citizens in respect of the operation of an automobile.


Patrick Morgan Mahoney: Mr. Chairman, since it is so close to ten o'clock I must apologize to the other hon. member who sought the floor. However, in view of the allegations which have been made I felt I should respond immediately rather than tomorrow. The fact is that the doctor in Rockcliffe does not have the right to claim the cost of motoring from home to the office against his income. The Department of National Revenue applies percentages of expenses and this varies with the experience of individuals. A doctor in a small rural community might very well be allowed over 75 per cent of the cost of his motor vehicle because it is regarded as a proper business expense.


An hon. Member:: What about the worker?


Patrick Morgan Mahoney: The doctor in the large community may be allowed as little as 50 per cent. I would not go so far as to say that each individual case is individually assessed, but certainly all are looked at in typical areas and if any professional man feels that he is using his vehicles for business purposes to an extent greater than the norm in
Proceedings on Adjournment Motion
the community, he could justify this to the Department of National Revenue.
What about the worker driving to work? He is not going to get his expenses for operating that motor vehicle to and from work and he is not going to get any allowance while it is sitting in the parking lot outside the factory, either. The doctor drives the car in the course of earning his income. That is the criteria; the car is operated while the man is earning income-it is part of his necessary operations in earning his taxable income. It is not necessary for anybody to park a car next to his office building all day long.


William Arnold Peters: The doctor does not take the car into the surgery, either.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. A. C. Cadieu (Meadow Lake):: Mr. Speaker, on October 14 1 asked the minister in charge of the Wheat Board (Mr. Lang) a question to which he did not give a satisfactory answer. My question was:
Is it the intention of the hon. gentleman's department to proceed with prosecutions in cases where aerial photographs have proved that a farmer's application in connection with the LIFT program was incorrect?
The minister gave an unsatisfactory answer to my question, more or less saying he would need more information. My supplementary question, which went unanswered, was:
Is it true that the PFRA Regina office is making demands with regard to these repayments?
I think that this has gone a little too far and it is time the farmer had some idea where he stands. Regarding the Lift program, the government was advised by all agriculturalists and members of parliament who were involved in farming that the Lift program was unsatisfactory. Farmers were forced into the Lift program against their will because if they did not participate they would no longer have a permit book, which is necessary if they are to sell grain.
Now very misleading figures have come out. The government anticipated that approximately $140 million would be paid into the lagging western economy in connection with agriculture but wound up paying less than $80 million, with approximately $2 million going into administration and aerial surveillance. This figure would have been increased greatly had it not been for the fact that the administration people took over the PFAA office that had been established and set up with personnel. If it

October 28, 1971
Proceedings on Adjournment Motion
had not been for this, the cost of administration would have greatly exceeded $2 million.
The farmers were forced into the plan. I have heard of much dissatisfaction from people who did not receive any payment at all but had planned their crop year so as to receive some benefit from the program as well as from people who received the interim payment and later had a demand to pay it back. I cannot for the life of me see how the government hopes in any manner, shape or form to demand a repayment of those funds which were, in effect, a grant. One would not look for this kind of action from a former dean of law. It is ridiculous for the government to be asking for money back, because they have no legal right to it. In a number of cases that I took up with the department it was found that their figures were wrong and they made a further payment.
I should like to put on record the contents of one of several letters I have received. I received one letter from a young farmer. Part of it says that one year ago he applied for a payment under Operation Lift and in good faith accepted a payment of $135. This was accompanied by a letter saying that this was an initial payment and that the balance would be forwarded later. Upon receiving this initial payment he spent the money, later paid income tax on it and now they are requesting that he pay it back. That is one of several letters I have received.
May I also draw the minister's attention to the Western Producer, a farm paper, dated October 7, 1971. The heading over one letter reads, "Another Lift victim". Another letter to the editor is headed, "Lift cheque received, return demanded". That is the kind of thing you see in the press.
I am just wondering what this government thinks it can do. The farmers were forced into the program. I have heard many complaints from farmers who seeded land to forage. They were promised $4 per acre if they left it in grass and they were to receive $4 the following year if the inspector found that the land had been left as grassland. Now farmers are finding that these payments are being denied them. They have not received any payment on their forage. I am wondering what kind of deal the government is giving the farmers of western Canada when it engages in monkey business such as this. It is paying out money and then demanding it back. The government has displayed a great mistrust of the farmers by spending a great deal of money on aerial surveys, money which would have been much better paid to the producer who is in great need.
Is it morally or legally right for the government to make a payment with one hand and then demand it back with the other? I am sorry the minister is not in his place. I would like him to straighten out this mess in western Canada. Many farmers have received no payment whatsoever. In fact, their applications have not even been acknowledged. Many did not feel it was necessary to apply because they were not concerned with it. They later found they had to apply or they would not receive a permit book to sell grain. It is time the farmers of western Canada knew where the minister is going with his cockeyed Lift program.


Marcel Lessard: Mr. Speaker, on behalf of the minister
[Mr. Cadieu.J
responsible for the Wheat Board and the application of the Lift program I am pleased to give the answer to the question asked by the hon. member. It is as follows. The Lift office at Regina-PFAA-has written to a number of farmers who for various reasons had received an overpayment under the Lift program. As the hon. member knows, in order to give farmers money quickly interim payments were made upon receipt of applications, with final balancing and a final payment made later. Aerial photographs were one of the means used for checking applications. Whether or not prosecutions will be undertaken in individual cases if repayments are not made voluntarily will be determined at a later time and will depend upon the circumstances of the particular case.



OIL-PROPOSED TAKE-OVER OF SUPERTEST BY BRITISH PETROLEUM-POSSIBLE GOVERNMENT ACTION-ACQUISITION BY PANARCTIC OILS

Thomas Clement (Tommy) Douglas: Mr. Speaker, on Tuesday, October 26, as recorded at page 9032 of Hansard, I asked the Minister of Industry, Trade and Commerce (Mr. Pepin), who is also Acting Minister of Energy, Mines and Resources, the following question:
-is the government planning any measures to deal with the proposed take-over of the last major Canadian-owned distributor of petroleum products, Supertest, by British Petroleum Limited?
The minister's answer, to my way of thinking, was entirely unsatisfactory. He said:
Mr. Speaker, this situation has been under study and an announcement will be made in due course by the minister or somebody speaking for him.
I do not think the House should be asked to wait for this unidentified minister or person who is going to make a statement. The meeting of the shareholders is scheduled for November 2. The government ought to make a clear-cut statement as to what it intends to do about this proposed take-over. The point I want to make is that the oil industry is by far one of the wealthiest industries in Canada. In the Canadian Petroleum magazine issue of May, 1970, Mr. Carl O. Nickle, a former member of this House and the publisher of the Daily Oil Bulletin in Calgary, said that the value of reserves at present prices for oil, gas and sulphur is $1,118 billion. That is based on present oil, gas and sulphur prices. It is the equivalent of $50,000 for every man, woman and child in Canada.
This vast reservoir of wealth has been steadily slipping out of control of Canadians with the result that today over 80 per cent of oil and gas production is in the hands of foreign corporations. The major portion of the oil distribution facilities is in the hands of foreign corporations and 99 per cent of refining of petroleum products is in the hands of foreign investment.
There was some hope raised in people's minds when a few months ago the Minister of Energy, Mines and Resources (Mr. Greene) intervened to prevent the takeover of Home Oil Company, the last Canadian-owned company which had any hope of becoming a major oil producer. I give the Minister of Energy, Mines and Resources full marks for the courage and vision he showed on that occasion. But, Mr. Speaker, oil production
October 28, 1971

must be accompanied by facilities for oil distribution, and Supertest is the last of the Canadian petroleum distributors, with 1,200 outlets. It will now be purchased, if the shareholders agree, on November 2, by British Petroleum Limited which, by the way, is 51 per cent owned by the government of Great Britain. If that happens we shall have virtually lost control, as far as Canadian companies are concerned, over the distribution of petroleum products in Canada.
The bright spot in the picture is that the Minister of Indian Affairs and Northern Development (Mr. Chretien) and his predecessor showed considerable vision by investing public funds in Panarctic Oil, largely because many of the foreign investors who were quite willing to put money into Canada were not prepared to take the risk in the Arctic. The investment has paid off. Panarctic has discovered one of the largest deposits of natural gas in the world. The government's investment of between $30 million and $40 million is now worth $150 million to $200 million. Mr. Heatherington, president of Panarctic, has envisaged his company becoming a wholly integrated oil and gas concern. If this is so, it will need petroleum outlets.
This is why it is important that Supertest should not be allowed to pass into the hands of a foreign company. If Panarctic is not ready to act now, there is no reason why the Canada Development Corporation, providing the shareholders are intent on selling it, should not acquire Supertest and operate it until such time as Panarctic is in a position to need a distributor of petroleum products.
This is Canada's last chance to get a piece of the action. It is our last chance to prevent control of the wealthiest industry in our nation slipping entirely out of our hands. It is not enough for the minister to tell me that somebody is going to make an announcement. In the course of the next few days a decision will be made, a British company will take over an oil distributing firm and we shall find ourselves in the position of having lost almost the entire oil distribution network of this country to foreign companies.
I say to the government that if they want to retain the confidence of the Canadian public they must act now, otherwise the action they took with respect to Home Oil and Dennison Mines will have lost its effectiveness and we shall have allowed a valuable part of our economy to slip out of the hands of the Canadian people.


Mr. Allen B. Sulatycky (Parliamentary Secretary to Minister of Energy. Mines and Resources):: Mr. Speaker, perhaps in the next couple of minutes I shall be able to relieve the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) of some of his anxiety about this matter.
Following a joint statement by BP Canada Limited and Supertest Petroleum Corporation Limited on July 29, 1971, relative to a planned merger of interests between these two companies the Minister of Energy, Mines and Resources (Mr. Greene) wrote to confirm the prior notice given to the government of Canada by these two companies and to advise of the desire of the government to review the transaction in terms of the national interest, in accordance with the government's policy of understanding important economic activity taking place within
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Canada or affecting Canada. Subsequently, both meetings with senior officials of BP Canada and Supertest and the study of relevant material on the proposed takeover merger were undertaken but a final report to the government of Canada by officials was not made until Supertest issued its information circular dated October 7, 1971.
The government of Canada today has advised BP Canada Limited and Supertest Petroleum Corporation Limited that it does not intend to intervene. However, both BP Canada Limited and Supertest Petroleum Corporation Limited have been advised of the importance attached to maintaining a fully competitive market and their assurance that the merger is likely to enhance this fair competition in the interest of the consumer is relied upon.
Also taken into account is the assurance from these companies that western Canada produced oil will continue to be utilized in the Supertest marketing system, and that the merger of the BP and Supertest marketing interests will lead to the early consideration of expanded refinery capacity for the Ontario market, in accordance with the national oil policy.



REGIONAL ECONOMIC EXPANSION-RESPONSE TO CRITICISMS OF DEPARTMENTAL PROGRAMS

David Samuel Horne MacDonald: Mr. Speaker, I rise this evening to deal with a matter that has been of some interest in this House for the past few weeks. I make no apology for raising it again this evening, though I am somewhat disappointed that neither the minister nor his parliamentary secretary has thought it sufficiently important to be here to deal with this question directly.
A good deal has been said about regional economic expansion over the last few months and much of the criticism has been fair and honest. Some, we will have to admit, has perhaps been a distortion. But of all the criticism one thing can be said-that essentially this criticism has gone unanswered by the minister and his government. For a government to make a major commitment, as this government has at least over the last few years, to regional development and then to refuse to deal openly and honestly with well developed criticism, even when it comes from its own agencies, is surely showing not only a great lack of responsibility but is a dereliction of duty. Quite frankly, I wonder how long the people of Canada are going to tolerate this kind of irresponsible attitude on the part of the minister.
Criticisms and suggestions have come from such recognized agencies as the Canadian Council on Rural Development, the Atlantic Provinces Economic Council and the minister's own agency, the Atlantic Development Council. To continue to ignore these criticisms and suggestions as if they were unworthy of reply is certainly unworthy of all the programs that the minister has said repeatedly are designed to deal with regions of economic disparity in this country.
The chief criticism that has been enunciated again and again is that having to do with the various goals and targets that are supposedly part of the strategy of the Department of Regional Economic Expansion. When the hon. member for Nanaimo-Cowichan-The Islands (Mr. 9146

October 28, 1971
Proceedings on Adjournment Motion
Douglas) raised a somewhat similar question on October 26 he received an answer from the Parliamentary Secretary to the Secretary of State which provided little information. Indeed, it contained a very disturbing comment in the final sentence when the parliamentary secretary said that "no such changes, however, are contemplated at the moment".
This is an incredible position to be in, with the material that has been on the minister's desk, some of it for months. To be willing to suggest to a third person or intermediary that there were no changes contemplated is completely and totally shocking. For the life of me I cannot understand how this minister believes he can continue to ignore public and responsible criticism from the three bodies I have just mentioned. We need answers because some basic questions have been raised. These are basic questions about a chief and major program of this department, that of designating areas for special incentive grants. This is a program that has grown like Topsy.
Originally we were told that parts of the country would be designated as special areas where there was a chronic situation of under-employment or unemployment of a long-term nature which could be described as regional disparity. Yet as the department has carried on-and it has not had a long life,-we have learned from time to time that new districts have been added, the latest and most major of which was a good deal of the city of Montreal. It is interesting to note that since Montreal has been designated some independent studies have indicated a drop in the proportionate grants to other designated regions across the country.
Some things have been admitted recently by the minister, I suppose by way of some kind of self-serving statements and not by way of clarification. We know, for instance, that in the two years the grants program has been operating, some 5,500 jobs have been created in the Atlantic region. But there are many things we have not been told. We have never really been told what kind of guidelines are in operation for the allocation of these grants. In fact, when we debated the establishment of this department and the program we were continually told that in order for the program to function effectively there had to be the widest possible latitude given the minister and the new department.
Members of this House on all sides, even though they were well aware of the pressures which would exist in respect of the multimillion dollar program, were willing to give the minister some leeway, with the somewhat naive belief that the minister would eventually describe to this House and to the people of this country what guidelines were in fact operating. It has been in operation for two years and we have not yet heard what those guidelines are, what industrial structures have been favoured in the Atlantic provinces, Quebec, Ontario and western Canada what firms are succeeding and why, and what funds are helping and why.
Except for the occasional question put in the House in respect of a specific industry that involves an obvious and flagrant misuse of government funds, we are never really told what the situation is in respect of the firms that qualify for assistance or how these funds are used in the

way of industrial development. We know there has been no public evaluation but we know that some 5,500 jobs have been created in the Atlantic region. We know, as well, that during the same period the unemployment figure has been sometimes more and sometimes less than 65,000, so if we measure success against those who are unemployed in the Atlantic region we are talking about 3 per cent or 4 per cent, and one cannot get very enthusiastic about that kind of result.
Many suggestions have been made, too numerous to mention this evening in the brief time available, about over-centralization and the lack of consultation not only with provincial authorities but with municipal authorities, about the need for more information and a review of the spending program in relation to job creating industries, the spending on infrastructure and the need for monitor industries to see that the jobs that were supposed to be created are still there at a specific time period, and to see what happens to the public money given to those industries. We have had no response, or the only response we have had is what I would call corridor blackmail. Outside the chamber the minister has said if we do not like his program the government will simply stop it. That is the meanest form of response to provinces and areas which are greatly in need of finding the answer to their chronic problems of unemployment and under-employment.
The time has come to end that kind of corridor blackmail and non-response by this minister and this government. One hopes that in the immediate future we will have some public evaluation, some public response to the legitimate and responsible suggestions and criticisms that have been put forward, and in particular some response to the minister's own body, the Atlantic Development Council, which some months ago placed before the minister a strategy for the Atlantic region from which we have had no definite response and which we must have if we are to be informed on what this department plans to do with regard to economic expansion in the Atlantic region.


James Hugh Faulkner: I am pleased to reply on behalf of the minister. I will deal specifically with the report of the Atlantic Provinces Economic Council and not the rather exaggerated and political remarks made by the hon. member for Egmont (Mr. MacDonald).
As I pointed out on Tuesday last to the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), the report has been received and is being given careful study. We pointed out on Tuesday that it contains a number of useful suggestions, information and analysis, and in so far as that material is there it will be studied carefully. I also pointed out that in the view of the department the report contained a number of criticisms of the departmental program, some of which criticism is constructive but some of which seems to be based on misconceptions. Because of this I would like to make one or two comments about the report.
APEC suggests that for a variety of political and shortterm reasons the department watered down the objectives and the criteria for the expenditure of scarce funds, to the disadvantage of the Atlantic provinces. I reject this suggestion. The departmental budget increased from $120 million in 1968-69 to $333 million in 1971-72, excluding
October 28, 1971

Devco and the loan funds. Approximately 50 per cent of the total has been and is being spent in the Atlantic provinces. In fact, in the fiscal year 1970-71 and 1971-72 the department spent or will spend more money in the Atlantic provinces than was spent in those provinces by comparable programs such as ARDA, FRED, ADB and ADA in the fiscal years from 1965-66 to 1969-70.
I see no evidence to support the view that the objectives of the programs have been watered down. APEC suggests that the department is spending relatively too much money on infrastructure and relatively too little money on what it refers to as economic development. In my view the conclusion is based on an artificial distinction that fails to recognize the contribution to economic development made by residential and industrial land assembly, water and sewer systems, arterial and municipal roads, vocational schools and other projects commonly included in the infrastructure category.
APEC suggests that the department has done little integrative planning within a firm set of objectives and strategies. Hon. members know that many of the programs are based on a joint planning process that is dependent on a close working relationship with provincial governments. We still have a long way to go in developing this process but frankly we are quite proud of the progress that has been made. We are engaged day in and day out in a planning exercise with our provincial counterparts that is now generating, in each of the areas in which we function, a large number of action-oriented studies of long neglected problems and the beginnings of a comprehensive development strategy.
APEC suggests that our industrial promotion and development activities have been too passive. I am not sure that
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when directed at a department little more than two years old this can be regarded as fair criticism. Grants made under the Regional Development Incentives Act have to date helped to create direct employment for over 6,000 Canadians in the Atlantic provinces. The department has shown a willingness to experiment with brand new techniques, such as those represented by the New Brunswick Multiplex Corporation and the proposed Newfoundland Development Council, the department is now considering support for a new Maritime Provinces Industrial Services Council which will be concerned at the regional level with industrial intelligence, industrial research and the provision of management services. I doubt that a program with components of this kind can be regarded as passive.
APEC suggests that the departmental organization is unduly centralized and should be dramatically changed. In the course of doing so it manages to imply that we have
2,000	employees located almost entirely in Ottawa. On the latter point I should state the facts. The department employs a total of 1,600 people. About 700 work in the west for PFRA. Another 250 are employed in our provincial field offices. There are about 625 employees in Ottawa, most of them involved in general administration, in central planning and in the incentives program. I do not intend to get drawn into a debate on questions of departmental organization. There is good reason to believe that the department is one of the most decentralized of all federal departments. There is reason to believe that-


The Acting Speaker (Mr. Boulanger):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 11 a.m.
Motion agreed to and the House adjourned at 10.31 p.m.
24372-20}

Friday. October 29, 1971