1971-01-12

PURPOSE OF ISSUANCE OF IDENTITY CARDS TO MEMBERS

Mr. Speaker:: May I seek the indulgence of hon. members to clarify a misunderstanding which appears to have arisen in connection with the issuance of indentity cards to hon. members. It should be pointed out that this initiative was taken at the request of a number of members of the House and that the cards are intended exclusively for the convenience of hon. members who might consider them useful from time to time.
The point I would like to stress is that the issuance of the cards is not related in any way to security measures in the Parliament Buildings. Identification cards for security purposes continue as before to be required only in the case of employees of the House.



PRIVILEGE


Mr. Speaker:: At the opening of yesterday's sitting of the House, the hon. member for Peace River rose on a question of privilege relating to proceedings before the Standing Committee on Health, Welfare and Social Affairs. The hon. member took exception to instructions issued under the authority of the chairman of that committee to the effect that only certain persons would be invited to give evidence before the committee when it considered Bill C-180. Those instructions were transmitted by letter over the signature of the clerk of the committee.
It should be noted at the outset that the conduct of the clerk has not been questioned by the hon. member since the clerk was obviously acting under instructions received from the chairman. The question to be determined is whether the chairman's action constitutes a prima facie case of privilege.
As hon. members know full well, a committee proceeding is the responsibility of the members of a committee. Indeed, citation 324 (1) of Beauchesne's Fourth Edition states that it is irregular to refer to the proceedings or to the evidence taken in a committee; such discussions can take place in the House only when a committee report has been received and is before the House for consideration.
The hon. member for Peace River suggested that the chairman of the committee had no right to decide on his
own which witnesses should be called by the committee of which he is the presiding officer. In that respect, the hon. member is on sound ground. Only the committee, by a majority, can make such a decision. The hon. member for York East, speaking to the question of privilege, claimed he had acted according to instructions received from the steering committee. That statement was questioned by the hon. member for Vancouver-Kingsway. Obviously, the issue should be resolved by the committee rather than by the House or by referral to another standing committee.
The Standing Committee on Health, Welfare and Social Affairs will meet in due course and will be free to adopt whatever procedure it may deem to be appropriate in the circumstances for the calling of witnesses including, if it so wishes, a procedure different from that suggested in the committee clerk's letter. All that is required is an appropriate motion carried by a majority of its members.
I would suggest, therefore, that this matter is essentially one for the consideration of the committee. The hon. member for Peace River could have had a grievance but I suggest, with respect, that the matter does not constitute a prima facie case of breach of parliamentary privilege and that it ought not to be considered further by the House at this time.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Solicitor General, but first of all I want to congratulate him on his recent appointment and to wish him every success.
Has the minister ordered an investigation on recent violence in Kingston Penitentiary and if so, when will a public report be available?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, first I want to thank the Leader of the official Opposition for the very kind remarks addressed to me. I hope this courteous attitude will continue for many weeks and months in our day-to-day contacts.
To reply more directly to his question, I will say that an investigation has been ordered in the normal course
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of department operation. It is an internal investigation, and as soon as its findings are in our possession I will study the recommendations with the Commissioner of Penitentiaries and determine what action is to be taken. I shall certainly inform the House at that time.



INQUIRY AS TO REPORT ON SUICIDES

Robert Lorne Stanfield: Mr. Speaker, to exercise my rights in both languages, I should like to ask the minister whether, in view of another disturbing problem regarding penitentiaries, namely, the suicide rate, especially at St. Vincent de Paul, we can expect the government to report the findings of the committee of investigation at that penitentiary?

Hon. Jean-Pierre Goyer (Solicitor General) Mr. Speaker, I will certainly take into consideration the question of suicides in penitentiaries, and I will also give it priority.
I was stunned by the number of suicides in such institutions last year. The situation is becoming alarming and undoubtedly, we must take action. At this stage, I cannot suggest to the House any other course than that followed up to now.



SUGGESTED PUBLIC INQUIRY

Mr. Frank Howard (Skeena):: Mr. Speaker, I add my wishes to those of the Leader of the Opposition to the newly appointed minister. I hope he accomplishes much more than his predecessors. In light of not only the situation referred to by the Leader of the Opposition but the escapes and riot at Prince Albert penitentiary, the disturbance at the British Columbia penitentiary and the whole concept surrounding our approach to penitentiaries, would the minister not be led to conclude that we need a public inquiry into the structure, organization and administration of penitentiaries?


Jean-Pierre Goyer: Mr. Speaker, due to the initiative of my predecessor who was very active and efficient in the administration of this department, a great number of investigations into the penitentiary system have been held, as I realized when I took over the responsibilities of Solicitor General.


Some hon. Members:: Hear, hear.


Jean-Pierre Goyer: I must say that the situation is not alarming, far from it. In fact, certain things which take place in the penitentiaries are perhaps normal, perhaps not, but I am inclined to believe that the administration of penitentiaries is good and the people responsible for the penitentiary system will have my full confidence until I am proved wrong.
[Mr. Goyer.)



REQUEST FOR ESTABLISHMENT OF HOUSE COMMITTEE

Mr. David MacDonald (Egmonl):: Mr. Speaker, I have a supplementary question for the Government House Leader. In view of the important issues raised by the Leader of the Opposition and the hon. member for Skeena, and also the concern of many people regarding the present operation of our penitentiaries, would he indicate to the House whether the parliamentary committee on penitentiaries, which has operated from time to time but has not been convened to my knowledge in the last year or so, might be established early this year so that it might work effectively on these and other problems?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I propose to place a reference on this subject on the Order Paper soon.



THE CANADIAN ECONOMY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of National Revenue who has been charged with the responsibility of looking into the question of foreign ownership of Canadian companies. My question arises from the fact that steps are now being taken by foreign companies to acquire the Seaway Hotels and the Aimco Company of Toronto. What steps does the government propose to take to stop the growing takeover of Canadian companies which has brought us to the position where 8,500 Canadian firms are now foreign-owned and controlled?


Mr. Speaker:: Order. The hon. member's question is asked in very general terms. He has invited the minister or someone else on behalf of the government to indicate what steps will be taken to remedy a situation. It seems to me that the question is too general to be accepted in those terms. The hon. member might like to rephrase his question.


Thomas Clement (Tommy) Douglas: Mr. Speaker, perhaps I might make my question more specific. I should like to ask the minister whether the report which he is preparing for the cabinet has been submitted to the cabinet and whether or not that report will be made public? How soon can we expect legislation to be introduced arising out of the report which he has been preparing?


Hon. Herb Gray (Minister of National Revenue):: Mr. Speaker, in respect of the first part of the hon. member's question, I do not think it would be appropriate for me to comment on what is essentially a matter of cabinet busi-
January 12, 1971

ness. In relation to my work, it is essentially work within the government for the purpose of enabling the cabinet to make a decision on policy in this important area. In respect of the third and final part of the question, the matter of legislation and the timing of its introduction is something for decision by cabinet, and it will obviously be dealt with by the government in due course and in the usual way.


An hon. Member:: Where have we heard that before?


Thomas Clement (Tommy) Douglas: Mr. Speaker, after that enlightening reply, may I direct a question to the Acting Prime Minister.


Mr. Baldwin:: Do you expect anything different?


Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to ask the Acting Prime Minister whether the report, which has either been submitted or is about to be submitted by the minister charged with the responsibility regarding foreign ownership, will be made public and whether the government will be introducing legislation at this session to deal with this matter?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, there is very little I can add to the very enlightening reply of the Minister of National Revenue.


An hon. Member:: That's true.


Mr. Knowles (Winnipeg North Centre):: The blind following the blind.


Mitchell William Sharp: In respect of the final part of the hon. member's question, this depends, of course, on how one interprets legislation that affects the question of foreign ownership. It may be, for example, that the taxation proposals which are being brought forward would have an effect in this area. The introduction of the legislation on the Canada Development Corporation is coming forward. So all these matters do have an effect. Other than that I cannot say.


Gerald William Baldwin: It was coming forward ten years ago.


Thomas Clement (Tommy) Douglas: In view of the fact that my question was prompted by two specific instances of takeovers that are likely to be effected in the next few weeks, may I ask the Minister of Consumer and Corporate Affairs whether he intends to bring down legislation to amend the Combines Investigation Act in order to deal with the increasing number of takeovers?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I would have hoped the hon. member would have read the Speech from the Throne and the list of legislation appended to it which indicated that a revised Combines Investigation Act would be introduced this session by me.


Mr. J. M. Forrestall (Darlmoulh-Halifax East):: Mr. Speaker, I have a supplementary which perhaps I might
Inquiries of the Ministry
put in a more specific context. In light of the remarks of the premier of Nova Scotia last night on national television, could the Minister of Energy, Mines and Resources comment on the position in which one province of Canada finds itself in having to go to the United States to find the wherewithal to develop Bay of Fundy tidal power? That is a classic example of what the hon. member was talking about.


Mr. Speaker:: Order. The hon. member is inviting the minister to comment and in those terms the proposed question is not strictly in order.



AIR CANADA


Mr. Real Caouetle (Temiscamingue):: Mr. Speaker, I want to put a question to the Minister of Transport.
We hear that Air Canada has just borrowed 30.5 million in Great Britain, from a consortium of six banks. Was the government informed of this transaction between Air Canada and the British consortium?


Hon. Donald C. Jamieson (Minister of Transport):: Yes, Mr. Speaker, we were advised of it. It is a normal commercial transaction which the corporation was perfectly entitled to undertake on its own, but they did advise me of their intentions.


David Réal Caouette: I have a supplementary question, Mr. Speaker. In these circumstances, has Air Canada tried to obtain this loan from Canadian financial institutions, and more specifically from the Bank of Canada?


Donald Campbell Jamieson: Mr. Speaker, I can only answer the question in a rather general way at the moment. The loan, as the hon. member called it, was arranged in relation to the purchase of Rolls Royce engines in the United Kingdom. It was part of the over-all purchase that was made, and in order to acquire the engines the moneys were raised in England.



FINANCE


Hon. George Hees (Prince Edward-Haslings):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister. In view of President Nixon's announcement yesterday of his plan to reduce business taxes in the United States by $2.6 billion this year as a means
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January 12, 1971
Inquiries of the Ministry
of stimulating the economy and counteracting rising unemployment in that country, is the government giving consideration to the possibility of adopting a similar plan in this country to accomplish the same end?


Mitchell William Sharp: Mr. Speaker, I am sure my hon. friend would agree that our policies ought to be our own and that we should not attempt to imitate any other country.


George Harris Hees: Does the Acting Prime Minister believe that what the government has put forward as a plan to counteract rising unemployment will have any better success than the calamitous failures it has put forward in the last few years which allowed unemployment to rise?


Mr. Speaker:: Order, please.
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ADMINISTRATION OF JUSTICE


Gerald William Baldwin: Mr. Speaker, speaking of calamitous failures, may I refer one to the Acting Prime Minister. I had intended to ask a question of the Minister of Justice yesterday but because of his absence then and today I shall direct it to the Acting Prime Minister. Having in mind the statement by the Chief Justice of Ontario concerning the grave shortage of judges and the alarming increase in criminal offences, is the government giving consideration to discussing with representatives of the province of Ontario and the other provinces the matter of increasing the judiciary and taking steps to meet this particularly difficult problem?


Mitchell William Sharp: I will take the representations of the hon. gentleman into account.


Gerald William Baldwin: Would the Acting Prime Minister also consider the very alarming and serious increase in crime which is taking place and, together with his colleagues, give consideration to the appointment of either a parliamentary committee or the reference of the matter to a commission in concert with the provinces? I ask this question having in mind the responsibility of the government for social unrest arising out of the increasing unemployment.


Mr. Speaker:: Order, please. The hon. member is entitled to ask a question but he is not entitled to indicate why he is asking it.


EXTERNAL AFFAIRS
Mr. Gordon Ritchie (Dauphin):: I have a question for the Acting Prime Minister. In view of the visit of the
present Prime Minister to India, does the government support the thesis of the Indian government that Soviet naval vessels are preferable to a western presence in the Indian Ocean?


Mr. Speaker:: Order, please. I doubt that the question as asked is in order.



AIR CANADA


Mr. David Lewis (York South):: I have a question for the Minister of Transport. On Friday, December 18, I asked him whether he would be prepared to undertake to make a statement on motions to the House after the recess informing hon. members why Air Canada has decided to move customer reservations telephone services from Ottawa to Montreal, whether he was consulted, and all other details that may be useful.


Donald Campbell Jamieson: thank the hon. member for recalling this matter to me. This is my first day in the House since the recess. I will re-examine the matter and try to get the answer as quickly as possible.


David Lewis: I imagine that the minister will have to take my next question as notice as well, but when he does inquire into the matter would he find out whether this move by Air Canada is an isolated one affecting only Ottawa or is part of a planned intention to phase out these customer reservation services in a number of locations in Canada?


Donald Campbell Jamieson: Yes, I will be glad to do that.


George Harris Hees: When the minister is looking into this matter, will he also request Air Canada to allow the Air Transport Employees Association to see the feasibility study on which Air Canada is basing the justification for this move?



AIR TRANSPORT


Mr. J. H. Horner (Crowfoot):: My question is directed to the Minister of Transport. Can we expect a statement from him with regard to the unsettled situation of charter air services, particularly in the case of the Edmonton based firm, Wardair, which has had its wrists slapped by the Canadian Transport Commission with regard to moneys invested by customers for charter services?


Donald Campbell Jamieson: will be more than pleased to enlighten the House to the maximum extent that I can. As the hon. member is aware, the ruling by the CTC is subject to appeal either

January 12, 1971

to the Minister of Transport or to the Governor in Council, and for those reasons I do not want to prejudge the case. I can say, however, that I think hon. members will all agree that in the first instance this is a good Canadian company and that it has been providing a worth-while service but that at the same time of course it is vitally important-again I am sure hon. members will agree- that passengers' investments be protected. I am sure this is the basic aim of the CTC and I hope they will be able to achieve it.


Hon. Marcel Lambert (Edmonton West):: In considering this matter would the minister bear in mind the fact that as a result of the action of the CTC many hundreds of Canadian passengers will be driven to board charter planes just across the border in the United States-


Mr. Speaker:: Order, please.



ST. LAWRENCE SEAWAY REPAYMENT OF DEBT-CARR REPORT

Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I have a question for the Minister of Transport.
I would like to ask him whether the Carr report has been submitted to the cabinet, whether the cabinet has examined it and whether a decision has been reached concerning the repayment or the refinancing of the debt?
[English}


Donald Campbell Jamieson: No,
Mr. Speaker. As I advised the House just prior to the Christmas recess, the Carr report has been submitted to me. It is now in the process of being examined. It is a very comprehensive document and as quickly as our assessment has been completed I will then try to get it before the House, or in some other way make the pertinent details of its contents known publicly.
* * #



CORPORATE AFFAIRS


Mr. Robert P. Kaplan (Don Valley):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. Considering the recent reports of sharply declining profits and of losses by the major food chains as a result of the food price war, is the minister considering directing that an investigation be made to determine whether these price wars amount to cut-throat competition designed to eliminate small, independent businesses which compete with the chains?


Stanley Ronald Basford: Mr. Speaker, the Director of Investigation and Research under the Combines Investigation Act is of course aware of the price war situation, and if there
Inquiries of the Ministry
should appear to be a breach of that Act he can be expected to take appropriate action.


George Harris Hees: Mr. Speaker, would the minister tell the House whether he will direct the director to look into this matter and not just leave it up to him to decide whether or not he would like to do so? Would he ask him directly to do it?


Stanley Ronald Basford: Mr. Speaker, the director has a statutory duty to enforce the provisions of the Combines Investigation Act and I have every confidence that he will carry out that duty.


George Harris Hees: So have you.



AIRPORTS


Mr. W. M. Howe (Wellinglon-Grey-Dufferin-Waierloo):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Today seems to be his big day in the House. It has to do with the new airport that is going to be built north and west of Toronto. Before Christmas the minister intimated that three or four sites would be chosen and indicated shortly after Christmas. Is that decision available today?


Donald Campbell Jamieson: No,
Mr. Speaker. The study by the federal and provincial officials has been completed. It was put into my hands yesterday. I am in the process of reading it now. I understand that a few of the Ontario ministers are a bit busier than usual these days but I will try to get together with them as soon as possible.


William Marvin Howe: In view of the fact that many small municipalities that could be involved are now making their plans for 1971, would the minister do his utmost to see that a decision is handed down as soon as possible?


Mr. Speaker:: The hon. member's question is in the form of a representation.
# * *


EXTERNAL AFFAIRS
Mr. S. Perry Ryan (Spadina):: Mr. Speaker, I have a question for the Acting Prime Minister. In view of the unsettled conditions in Turkey and Greece and the disturbing news from Cyprus, is the government taking any initiative to continue the United Nations peacekeeping mandate in Cyprus beyond June 15 of this year?


Mitchell William Sharp: Mr. Speaker, we have had no request yet for a continuation of this peacekeeping force beyond next June. It would be a matter for the United Nations to take the initiative. If

January 12, 1971
Inquiries of the Ministry
they came to the conclusion it was essential to the maintenance of the peace that the peacekeeping force should be maintained, I am sure we would give sympathetic consideration to such a request.


Sylvester Perry Ryan: Will our troop commitment continue if the mandate is renewed?


Mr. Speaker:: Order. The supplementary question is hypothetical.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In light of the condemnation by the United Nations Security Council of the invasion of Guinea by Portuguese forces, has the government taken any action in support of the Security Council resolution, or does it contemplate taking any action in support of that resolution?


Mitchell William Sharp: Mr. Speaker, this is an important question. I would like to give a full answer, so perhaps I might be permitted to take the question as notice.



NAVIGATION


Mr. Roch La Salle (Joliette):: Mr. Speaker, I should like to put a question to the Minister of Transport.
Since at this period of the year, the channel between Berthier and Sorel is clogged with ice, considerably holding up the transport of some workers, and following a certain number of representations made by the Chambers of Commerce of my area, I should like to ask the minister whether he can assure us that special steps will be taken to have the channel patrolled by an icebreaker and to make the ferry service available at all times, day or night?


Donald Campbell Jamieson: Mr. Speaker, I will be very pleased to see what more we can do and advise the hon. member.


EXTERNAL AFFAIRS
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Acting Prime Minister in his capacity as Secretary of State for External Affairs. Is it government policy that extensive Russian naval penetration

of the Indian Ocean has no practical effect on the political and military balance in the world?


Mr. Speaker:: The hon. member knows he cannot ask a question in those terms. The hon. member may wish to rephrase the question.
# * *



INDIAN AFFAIRS


Frank Howard: Mr. Speaker, I would have directed this question to the Minister of Indian Affairs and Northern Development but perhaps I could direct it to the Minister of Fisheries because it relates to both departments. Is the minister aware that a number of fishing companies on the coast of British Columbia are now taking steps to curtail their salmon fishing fleets in particular for the coming year, affecting in the Prince Rupert area upward of 100 native fishermen? If he is aware of this, has his department any plans to preserve the position of the fishermen in the fishing industry?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Yes, Mr. Speaker, the department is aware of this problem, and alternative means of financing these fishermen have been investigated jointly with the Department of Indian Affairs and Northern Development.


Frank Howard: Inasmuch as this matter has been explored, can the minister provide the details to us so that the Indian people will know what is taking place?


John (Jack) Davis: Very briefly, Mr. Speaker, this plan is to be administered by the Indian Fishermen's Assistance Board which is already in existence in British Columbia, and the funds will be made available by the Department of Indian Affairs.
sjs $	*



INQUIRY OF THE MINISTRY

Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I wish to put a question to the Acting Prime Minister.
In view of the statement the right hon. Prime Minister made during the Christmas recess that inflation no longer existed in Canada, although it had seemed the excuse for and the cause of all our economic ills for two years, could the Acting Prime Minister tell us on what street comer the right hon. Prime Minister met inflation and made it disappear-


Mr. Speaker:: Older! I am sure the hon. member will admit that the question as asked is not in order.
January 12, 1971



HARBOURS


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Minister of Transport. May I ask the hon. gentleman by what date is it hoped to achieve the appointment of local Harbours Board authorities, and will there be labour representation on these authorities?


Donald Campbell Jamieson: Mr. Speaker, it would be my hope that the legislation which will be necessary to establish the new boards' policy can be introduced during the current session. It would be my hope also that all interested groups in a harbour region would be represented, but not necessarily in a subjective way.



POLLUTION


Mr. Gerald Richard Cobbe (Portage):: Mr. Speaker, my question is for the Minister of Fisheries and Forestry. Because of the recent controversy regarding Churchill Forest Industries in Manitoba, is the minister's department, following investigation, now convinced that proper pollution controls have been included in this project?


John (Jack) Davis: We have been investigating this development, Mr. Speaker, and find unfortunately that inadequate treatment facilities have been provided. They are elementary, and additional investments will be required to ensure proper effluent treatment at that site.



SPRINGHILL, N.S.-INVESTIGATION OF SLAG DUMP FIRE

Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Is the minister in a position to inform the House when the investigation carried out by his department into the slag dump fire that has been polluting the town of Springhill will be made public?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: Mr. Speaker, I will be very pleased to take notice of that question.



POST OFFICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I would like to direct a question to the Minister in charge
Inquiries of the Ministry
of the Post Office. In light of today's statement by the Letter Carriers Union of Canada that the Post Office is in the worst mix-up yet, with every Tom, Dick and Harry giving orders to people who will not obey them, would the minister advise when he will meet the union so that he can explain the new order of things to them?


Mr. Speaker:: The hon. member will recognize that the question is not asked in the usual and accepted terms. Perhaps he might like to rephrase the question so that it would be acceptable from the point of view of the Chair.


Heath Nelson Macquarrie: I would rather say ten o'clock, Mr. Speaker.



AGRICULTURE


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. Can he say whether the government has now formulated a policy on provincial marketing boards which have the result of restricting interprovincial trade and fixing prices? I am thinking now of the most recent action of the Newfoundland government in setting up an egg marketing board in that province.


Stanley Ronald Basford: Mr. Speaker, of course if this action is taken pursuant to valid provincial powers there is very little the federal government can do about it.


James Aloysius McGrath: Has this whole matter been examined in light of the minister's responsibility under the Combines Investigation Act?


Stanley Ronald Basford: Mr. Speaker, there are a number of inquiries being conducted along that line. However, the general policy is being dealt with by my colleague, the Minister of Agriculture and, as the hon. member knows, the whole situation of provincial marketing boards was discussed at the last federal-provincial conference of first ministers.



POST OFFICE


Mr. John Gilbert (Broadview):: My question is directed to the Acting Prime Minister. Is the government still negotiating with the Lapalme workers? If so, has the minister any good news to report with regard to this matter?


Hon. Jean-Pierre Cote (Minister without Portfolio):: think I can answer that question, Mr. Speaker. An offer was made by the government and it was rejected by the Lapalme workers. No more offers will be made by the government.

January 12, 1971
Inquiries of the Ministry


Roch La Salle: Mr. Speaker, I should like to put a supplementary question to the Postmaster General.
The proposal of the government having been turned down, does the government still intend to continue negotiations or have they decided to close the matter?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I have said there would be no more offers made by the government.
He *	*



WATER RESOURCES


Gerald William Baldwin: I have a question for the Minister of Fisheries and Forestry. Has the government of British Columbia decided to join the governmental groups, including the federal government, in examining the problems caused by the construction of the Bennett dam and its detrimental downstream effect on the people and the ecology of the Peace and Athabasca Deltas?


John (Jack) Davis: The government of British Columbia has been approached in this connection. It has personally assured me that any factual information that is necessary to carry out this study will be made available. However, I doubt if there will be a formal attendance by British Columbia in view of the fact that certain interests are taking the province of British Columbia to court in this matter.



BENNETT DAM-SECURING OF PERMIT BY BRITISH COLUMBIA UNDER NAVIGABLE WATERS PROTECTION ACT

Gerald William Baldwin: I have a supplementary question for the Minister of Transport. Has the minister made a recent examination of this problem and can he inform the House whether the Bennett dam was constructed without the government of British Columbia having secured the appropriate permission under the Navigable Waters protection Act?


Donald Campbell Jamieson: have asked for some additional information on this subject, Mr. Speaker. I will take the question as notice and provide an answer as quickly as possible.


Gerald William Baldwin: A further supplementary. Will the Minister bear in mind and advise the province of British Columbia that under the provisions of that Act-


Mr. Speaker:: Order, please.



FISHERIES


Mr. John Lundrigan (Gander-Twillingate):: I have a question for the Minister of Fisheries and Forestry. Will the delegation now in the Soviet Union be having any discussions with regard to the east coast fisheries? If so, does the minister foresee any agreement or settlement with regard to the problem of overfishing by that country on our east coast?


John (Jack) Davis: Mr. Speaker, the principal purpose of the Canadian delegation to the U.S.S.R. is to sign the west coast agreement. However, while its members are in Moscow they will discuss possibilities for understandings on the east coast with the Russians.


John Howard Lundrigan: In view of the fact the delegation is having preliminary discussions, will there at some future date be a formal sit-down with the Soviet Union on a similar basis to that with regard to the west coast last summer?


John (Jack) Davis: I doubt whether we can reach an understanding with Russia on a similar basis to that on the west coast. As the hon. member will remember, the closure of the west coast ports led to that settlement. I am sure the hon. member is not advocating the closure of east coast ports to U.S.S.R. fishing vessels.


John Howard Lundrigan: The minister is misrepresenting my question and he knows it. He is playing politics as well.


Mr. Speaker:: Order, please. The hon. member has the floor for the purpose of asking a supplementary question.


John Howard Lundrigan: I am simply asking the minister whether in fact we are going to have sit-down talks with the Soviet Union with regard to the east coast fishery. It is very simple.


John (Jack) Davis: We must have continuing talks with the U.S.S.R. The problem on the east coast is serious and we recognize it as such.



AGRICULTURE


Mr. John L. Skoberg (Moose Jaw):: I wish to direct a question to the Minister of Supply and Services. In view of the fact that the PFRA administration has turned over 45 parcels of land to Crown Assets Disposal Corporation for sale and as the appraisers are now asking 345 per
January 12, 1971

cent more than what the farmers originally paid, will the minister indicate whether he will make a statement in the House concerning this situation?


Hon. James Richardson (Minister of Supply and Services):: I will be pleased to check with Crown Assets Disposal Corporation to find out what the situation is and will then decide whether or not to make a statement.



INDUSTRY


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I wish to direct a question to the hon. Minister of Industry, Trade and Commerce.
In view of the overwhelming importance taken by imports in the textile industry and in view of the recent announcement by the minister about a new textile commission, I wish to ask the minister whether he went into consultations with executives of Canadian textile industries or if this action stems merely from a unilateral initiative on the part of the government?


Hon. Jean-Luc Pepin (Minisier of Industry, Trade and Commerce):: Mr. Speaker, the new textile policy is the result of an inquiry which has been underway for 18 months. During this period, consultations were held with all interested parties, including management, labour and provincial authorities. I believe there is no question about it; everybody agrees that a maximum of consultations were held.


André-Gilles Fortin: Mr. Speaker, I have a supplementary question for the hon. Minister of Industry, Trade and Commerce.
Could he tell us whether those consultations have taken place during the 18 months in order to inform the members on the attitude of the leaders of the industries concerned towards the textile problems?


Jean-Luc Pepin: Mr. Speaker, a statement on the textile policy was made in this House in May last. Certain administrative measures have already been taken and announced, including the establishment of a commission. Yesterday, the President of the Privy Council tabled a bill on textiles. This policy is therefore in the process of being completed.
In so far as the attitude of business leaders and unions towards the policy is concerned, I believe they have complete freedom to express their views. A majority of those who have done so up to now said that they felt the policy had much merit, but that before making a definite assessment they would wait until the results are known.
Inquiries of the Ministry



AGRICULTURE


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, in reply to the question raised yesterday by the hon. member for Kent-Essex, I am advised that the representations received by the department had to do with bacterial diseases of fruit trees, field crops, vegetable crops, and greenhouse crops. Five plant pathologists are presently on staff at the research station at Harrow to help meet these and other problems. The department is in the process of assigning another plant pathologist to the Harrow staff to work on bacterial problems of vegetables and fruits.



NATIONAL SECURITY


Mr. P. V. Noble (Grey-Simcoe):: I wish to direct a question to the Solicitor General. Has the government been able to locate any of the guerilla training camps supposedly in the Quebec interior and, if so, what action has been taken? Were any arrests made in this connection?


Jean-Pierre Goyer: I will be pleased to see what we may be able to discover in this regard, Mr. Speaker.



CONSUMER AFFAIRS


Mr. Don Mazankowski (Vegreville):: I wish to direct a question to the Minister of Consumer and Corporate Affairs. Is the Prices and Incomes Commission planning to investigate a pending 13 per cent increase in gas rates for southern Alberta customers of Canadian Western Natural Gas Company Limited, which is admittedly beyond any cost justification?


Stanley Ronald Basford: Mr. Speaker, I am not aware of that particular announcement. The Prices and Incomes Commission is examining a number of gasoline and oil price increases. I will have to inquire whether the commission is studying that particular increase.



INQUIRY OF THE MINISTRY

Mr. Frank Moores (Bonavisia-Triniiy-Concepiion):: My question is for the Acting Prime Minister. Was the
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January 12, 1971
Export Development Act
Minister of Transport stating government policy at a press conference a short time ago when he said that it may be that a country that has 10 per cent unemployed is a thoroughly healthy country?


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


Allan Joseph MacEachen: that Bill C-184, to amend the Export Development Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


Mr. Bruce Howard (Parliamentary Secretary to the Minister of Industry, Trade and Commerce):: Despite the obvious desire of all parties in this House that the bill before us should pass quickly, I think it is important to outline briefly some of the changes proposed to the legislation and some of the advantages attached to these proposed changes. I should like to draw attention to the outstanding performance which has taken place in the field of Canada's export business during the past year and to remind hon. members that an important part in this outstanding performance has been played by the Export Development Corporation through the machinery at its disposal.
The performance of Canadian exports has been exceptional during the whole decade. They rose by 300 per cent from $5.2 billion in 1960 to an estimated $16.5 billion in 1970. The latest figures even indicate that we have approached $17 billion. This performance was not only remarkable by Canadian standards, it was remarkable by world standards. In fact, Canada's share in world trade rose from 3.76 per cent in 1960 to 5.02 per cent in 1968. Hon. members will see from this that our performance is not only outstanding in our own terms but that it is outstanding in world terms as well.
It reflects both special and general factors. The large wheat sales in the mid-sixties and the effects of the automotive agreement played an important role. However, the most important and persistent stimulant to the growth of exports was the improvement in Canadian industrial capability, the maintenance of relative price stability and promotional efforts to encourage exports by both the government and industry. A highlight of this performance was the emergence of Canada as a major exporter of technically sophisticated capital goods. The increase in this decade of such exports compared with the last decade was higher than that of any other industrialized country.
One of the features of the government's efforts to promote exports has been and will continue to be the Export Development Corporation. I should like to deal specifically with the provisions of this bill as they affect the corporation. As hon. members will recall, the Export Development Corporation was established during the first session of this Parliament and the relevant legislation was proclaimed on October 1, 1969.
Bill C-184, which had its first reading on November 9, contains amendments based on a year's experience of that legislation. No change in principle is contemplated, simply an extension of those provisions and an enlargement of the powers contained therein. It will be recalled that the act established the corporation as a successor to the Export Credits Insurance Corporation. The new corporation assumed all the property rights, obligations and liabilities of the former corporation. The purpose of the old and the new institutions is generally similar. The new corporation was given considerably greater power than was the former body. Among the changes introduced were those according greater autonomy, providing for a board of directors of 12, eight of whom were to be public servants, four of them persons not employed in the government service; increased ceilings for export credits insurance, increased ceilings for foreign lending, and an entirely new feature, namely, insurance to cover certain risks of investment by Canadians in foreign countries.
The new institution has been operating with such success that it is straining the limits of the ceilings and the capital resources which have been granted. That is why it is necessary to further amend the act, to further increase the ceiling levels and to make other minor changes. The purpose is to ensure that the facilities available to Canadian exporters are equal to those offered the exporters of any other country with whom they have to compete. Every major exporting country has made some provision to do the sort of work the Export Development Corporation is doing. There is provision to insure credit risks and support long term lending and to provide guarantees to protect foreign investments. In most countries these facilities are provided by separate and distinct institutions. In Canada, however, a businessman can go to one institution, one office, and get all these services through the same department.
The exercise of EDC's operation is intimately connected with the operations of the Canadian banking community. In addition to protecting the Canadian exporter, credit insurance facilities have greatly improved the ability of exporters to arrange financing with the banks in the case of sales involving short term credit, that is, credit for less than 180 days. Where longer term credit is needed, arrangements are made for repayment over a five-year period. In the case of long term lending, the corporation normally operates when the period of credit is beyond the normal range of the commercial banks. It is increasingly the case, however, that EDC guarantees the banks against loss, enabling the banks to provide the long term money. Long term financing is intended for capital goods and services which according to internationally accepted practice justify this kind of credit. The basic premise of the corporation's operations is that the

January 12, 1971

insurance is for commercially sound transactions where the sale is to a credit-worthy country and the terms are appropriate to the commodity concerned. The same considerations apply to long term financing. The object is to support export sales for which a buyer will pay.
The growth in the operations of the corporation is really remarkable. The average long term lending annually prior to the establishment of EDC was $50 million. In the previous calendar year the volume will likely amount to $100 million. In 1970, the volume of exports insured by EDC at its own risk rose by about 30 per cent compared with 1969. Insurance at the government risk went up by $50 million in 1970, representing growth of about 15 per cent compared with the previous year. Interest in the corporation's foreign investment program by businessmen is such that if all the applications now before the corporation were accepted the existing ceiling of $50 million would be exceeded very quickly.
In addition to operating in the long term lending field on its own account, the corporation also operates in the lending field on the account of the government when the Minister of Industry, Trade and Commerce makes a recommendation that it should do so. A similar situation exists in the insurance field. For example, when sales are made to developing countries, because of the size of the sales, the terms of the contract, often covering a long period of time, and, on occasions, because of the credit risk, these amounts are insured on behalf of the government itself. Similarly, in the field of long term foreign lending, very large loans such as those to finance sales of nuclear power projects-as one example involving upwards of $100 million-will be made by the corporation on behalf of the government rather than for their own account.
It is against this background of information that I want to deal with the specific amendments that are proposed by the bill before the House. First, with regard to share capital, the proposal is to increase share capital from $25 million to $75 million; the capital surplus maximum of $25 million will remain the same. This means there will be a total authorized capital of $100 million.
With regard to long term loans made by EDC on the authority of its board of directors, the proposed new ceiling is $850 million, an increase of $250 million. Under the category of long term loans made by EDC for capital account, the proposed new ceiling is $450 million, which is also an increase of $250 million. For foreign investment insurance purposes the proposed new ceiling is $150 million, an increase of $100 million.
There are some consequential amendments in regard to export credit insurance at EDC's own risk. A consequential amendment is required for the substitution of the figure of $500 million for a formula which gave the same result. No increase is required for insurance since this was increased a year ago by 150 per cent.
I want to say something about the borrowing authority. The corporation borrows from the government in order
Export Development Act
to make loans on its own account. If these loans are to reach the aggregate of $850 million as proposed, the corporation must logically be empowered to borrow up to that level. In addition, the corporation must have enough borrowing power to back up the $500 million of insurance that it may write at its own risk. On the basis of the experience so far, $150 million is considered an adequate backing against such an aggregate liability. Therefore, it is proposed to increase the borrowing power to $1 billion from its present maximum of $750 million.
One other item I want to deal with has to do with foreign investment insurance. The present act requires that certain assurances be given the Canadian government on safeguarding foreign investment. This provision has proved to be rather difficult to administer. A number of foreign governments have objected to it and Canada has not yet obtained such assurances. Accordingly, it is proposed to substitute for those requirements by authorizing contracts of insurance where the Minister of Industry, Trade and Commerce is satisfied that EDC's interest in the foreign investment is protected and the government of the host country has signified its approval of the investment. This is really only a minor, technical change.
I have outlined the changes in the bill this afternoon, Mr. Speaker, and as hon. members will see they are largely of a technical nature, designed to enlarge the scope and ability of the Export Development Corporation to deal with the growing volume of export business that Canadian businessmen have been able to procure. I commend the bill to the members of the House and I look forward to having the benefit of their views on this very important subject.


Mr. Burton:: Might I just ask the Parliamentary Secretary a question, Mr. Speaker. Are his remarks correctly interpreted by suggesting that in fact no bilateral agreements have as yet been signed with any foreign countries under the foreign investment insurance section of this act?


Bruce Andrew Thomas Howard: Mr. Speaker, the insurance section has not been put into effect yet, but it is anticipated that there is business lined up ready to take advantage of that section. It is expected that it will be used very shortly.


George Harris Hees: Mr. Speaker, I am sure all members of the House agree with the principle embodied in the bill before us-certainly all members of the official opposition do-because the bill is enlarging the scope of an act that has proved to be very useful over the years in enabling exporters to increase the amount of export business they do around the world. As exports increase, increased credit is, of course, needed to help finance those exports, and this is the reason the bill is before the House today.
During the past year, as in previous years, Canadians exports have increased very satisfactorily to the extent of about 15 per cent. This morning, in order to find out just how our various types of exports have been faring, I
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Export Development Act
obtained a breakdown from Dominion Bureau of Statistics of exports during the first 11 months of 1970, the latest figures that were available. I have compared these figures with the comparable first 11 months of 1969. DBS breaks down our exports into three categories. The first category is crude and consists of exports of raw materials. The second is fabricated, namely exports that have received some degree of treatment past the raw stage. Third, we have end product exports, which of course are fully manufactured articles.
Crude exports have increased from $2,998 million in 1969 to $3,961 million in 1970, for an increase of 31.1 per cent. Fabricated exports, which are slightly processed materials, have increased from $4,836 million in 1969 to $5,591 million in 1970, for an increase of 15.6 per cent. End product exports, finished goods, have increased from $5,276 million in 1969 to $5,553 million in 1970, for an increase of only 4.8 per cent.
It is obvious to all hon. members from the figures I have just recited that as our products become more processed the increase in exports during the past year has declined regularly and sharply. The increase in exports of raw materials has been very satisfactory; the increase in exports of finished products has been very unsatisfactory. It is obvious to all members that we have one of the important storehouses of raw materials in the world and that it takes little or no selling to dispose of them. Every industrial country needs these raw materials to feed its manufacturing processes. What does require considerable selling is our finished products. We must do a great deal of selling to increase our sales in this area because we are up against considerable competition.
Therefore, I should like to make a suggestion to the Minister of Industry, Trade and Commerce (Mr. Pepin), who has not seen fit to remain in the House during the debate on this important matter. Perhaps I should remind him, through his Parliamentary Secretary (Mr. Howard) who I hope will draw these views to his attention, that in future the government should pay more attention to an increased effort to sell these finished products which, after all, are labour intensive products which provide jobs. When there are increases in sales in this area the government can rightly take credit.
The minister should stop spraining his wrist by patting himself on the back everytime he refers to a figure which shows an increase in our total exports, because these increases are constituted mainly of increases in sales of raw materials which every country wants and which require no selling whatsoever. These increased sales provide very little in the way of increased employment. It is obvious from the figures I have mentioned that this government must get out and do a great deal more to increase our exports of finished products, particularly at this time when we are experiencing extraordinary and growing unemployment.
It is the sale of our fimshed products that provides jobs and successfully combats unemployment. We must concentrate on this area in the future. We must consider our
two largest markets, the United States and Great Britain, and I mention them in the order of their importance. We must determine what the opportunities are for increasing our exports of finished products to these markets. I feel sure that those who have followed the trade scene in recent months have been struck by the very strong and increasingly restrictive attitude that is developing in the United States regarding trade. All one needs to consider is the trade bill which is at the present time moving through congress. This bill is aimed at greatly restricting imports into that country, particularly from the textile and footwear industries. These restrictions will be extended more and more into other areas as unemployment continues to increase in the United States. It is clear to all of us that we can expect an increase in this restrictive attitude prevalent in the United States today. We are going to find it increasingly difficult to sell manufactured products in that market. Certainly, we will be able to sell all the raw materials we have because those markets need them to keep their factories operating. They do not want our manufactured goods. We must fight for the sale of these manufactured goods in order to increase employment.
I am convinced that there are two certain things in respect of the British market. Great Britain is surely going into the European Common market. When that happens the British preference will end for all time. I speak with some knowledge on this matter because I faced the same situation exactly seven years ago. At that time Britain was making the same move to get into the European Common Market. That move was terminated exactly seven years ago this month by President DeGaulle when he suddenly decided that Britain should not be allowed entry. At that time Prime Minister Heath, then the minister in charge of shepherding Britain into the common market, visited Canada to talk over with the then Prime Minister, the Minister of Finance, and myself, the question of Britain entering the common market and the difficulties which would result to this country. We pointed out how important it was to this country to maintain the British preference and how severely our exports to the British market would be hit if that preference were removed.
Mr. Heath explained to us at that time that Great Britain would like to maintain the British preference but that it was completely out of British hands because a condition of entry into the common market was that Britain should set aside British preference for all time. Mr. Heath let us know that our hopes for maintaining even part of the British preference should be set aside and forgotten. This was a great shock to us. As I said, President DeGaulle stopped Britain's entry into the market at that time and the British preference was continued. What is taking place today is exactly the same thing. As I said earlier, and say again, there is no doubt that Britain is on its way into the common market. As soon as it enters that market, the British preference will be as dead as the Dodo for all time.
After Britain's entry into the common market, we will have tremendous difficulties in increasing our sales of manufactured goods to that market. We will have great
[Mr. Hees.l
January 12, 1971

trouble in maintaining our large volume of sales to that market. All of these factors point to a great need for extensive effort by the government to increase our exports of labour intensive products, namely our finished manufactured products. Anyone can sell raw materials. In fact, we practically have to put up barriers to stop the flow of them out of the country at a faster rate than we desire. Selling our manufactured products will be a very difficult job in the future. We must do whatever we can to increase these sales to our two biggest markets, the United States and Great Britain. We must do whatever we can to increase our sales to our third biggest market, Japan and the European Common Market. We must find our markets wherever we can, and we need increased markets very badly.
Some ten years ago the government, of which I was a member, was faced with exactly the same problem the government is faced with today. We had serious unemployment in 1960. Something had to be done and we decided to make a tremendous effort to increase the exports of those products which in turn would result in an increase in employment. We put on an export drive which was successful. We did a number of things. I will not bore hon. members by going into them all now, but I should like to mention three things because I feel they would be equally effective today.
e (3:20 p.m.)
First of all, we greatly increased our participation in trade fairs throughout the world in an effort to show Canadian goods to people on the ground where the market was and to show them what we could produce. We made a tremendous increase in the number of sales and in the number of exporters who participated. This paid off enormously. Second, we increased by not less than six times the number of trade missions we had sent abroad previously. We sent trade missions abroad composed of Canadian producers so that they could see what the conditions for sales were in the countries in which they wanted to sell their goods. In this manner, they could determine what styles were needed, what kind of pricing was needed and so on in order to make sales. They came back and changed their methods of production, their styles and pricing and made goods to suit those markets. This increased sales very materially.
The third thing we did-these are three of the many things we did but are the three I wish to mention to the House today-was fly in large numbers of buyers, first of all from the four main United States markets, Philadelphia, New York, Chicago and Los Angeles. These buyers were brought to trade fairs in Toronto, Montreal, Winnipeg and Vancouver where they were shown our manufactured goods. We showed those potential buyers what we could produce in Canada. They were very interested and many orders resulted.
Finally, we put on a tremendous exhibition to which we brought people from all over the world. We brought some 600 buyers here to see what Canada could produce in the way of finished goods and heavy machinery, another great potential sale item for Canada. This pro-
Export Development Act
duced great results, but there was nothing clever about it. We simply applied ordinary, business common sense to government operations. In order to sell things, you must show them to the people to whom you wish to sell them and make them available at a price and in a quality and style which will produce orders. If you do not do this, the buyer will not buy and if you do there is a good chance he will.
These are the kinds of things business does when it is faced with the type of problem facing the government today which is an urgent need for greatly increased sales of manufactured products. I offer these suggestions to this government in all sincerity. I do not suggest we were in any way clever or smart in producing these ideas. They were the ideas of business and business helped make them work. The important thing is they did work. In one year these ideas turned 10 years of continuous trade deficits into a surplus, and from then on the country never looked back. This scheme reversed rising unemployment, which is a matter of tremendous importance to the country today, and laid the foundation for the prosperity of the sixties. So, I simply urge this government to seriously consider this matter and consider adopting some of the methods that were useful at that time in order to do what the government must do for the country today. It must increase sales of manufactured goods because they are the labour intensive products we turn out. The government must reverse the rising tide of unemployment and put the economy of the country back on its feet.


John Stratford Burton: Mr. Speaker, the program embodied in the Export Development Act is very important to many Canadians. To give one example, it is very important to many farmers in western Canada. They watch the performance of the export credit insurance program very carefully. They regard it as being one of the important instruments whereby export sales can be facilitated. I should say this, of course, applies in many other regions of Canada and in respect of many other products. Certainly, with regard to wood and wood products, minerals and processed mineral products as well as many other manufactured products, the program is of considerable importance in promoting exports. However, one would not realize the importance of this program on the basis of the minister's attentiveness to this particular bill which is before us today. I say this with the greatest respect to the Parliamentary Secretary who introduced the bill for second reading. I noticed the minister was present for the question period. Then, he spent some time behind the curtains discussing something with some hon. members, but at no time was he paying any attention to the comments being made in respect of the bill now before us.
I think the importance of the instrument established by this act is illustrated by the fact that the act was passed first of all in May of 1969. It was introduced for first reading in March, 1969. I refer to the Export Development Corporation Act. Only one and one-half years later, in November 1970, the government introduced another

January 12, 1971
Export Development Act
measure asking for a major extension of the financial limits set in this legislation. I want to say that we in the New Democratic Party feel that the provisions for export insurance, export loans and guarantees are important and useful within the context of our over-all trade policy. To the extent that this assists in filling the objectives of our trade policy we certainly do give our support to it. However, within the framework of the program as presented, and as it has developed, two concerns were expressed at the time this legislation was first passed almost two years ago. I feel these concerns must be expressed again today.
The first concern is in respect of the export of raw materials and semi-finished materials by Canada to foreign nations. As I mentioned this matter was raised during the debate on second reading of the original export development bill. With regard to the operations of the act which is before us, I note that the 1969 annual report classifies exports for which insurance was provided in the year 1969. The 1969 annual report is the most recent report available. The annual report indicates that considerable emphasis is being placed on programs or policies to ensure the export of fabricated materials and their products. This, of course, is rather difficult to judge because of the fact that in the area of fabricated materials, which constitute something like two-thirds of the total amount of exports which were insured, there is a considerable amount of what would appear to be semi-processed materials such as wood pulp, for instance, which by itself constitutes almost 20 per cent of the total amount of exports insured under this program in 1969.
I also examined the loans and guarantees provided under section 29 of this act and the performance in that regard. In my analysis of those loans and guarantees as listed, there would seem to be an indication that some emphasis has been placed on the export of finished products.
The second major concern which has been referred to in discussion of this bill has to do with the percentage and proportion of our trade carried on with the United States.
I wish to make it quite clear that so far as we are concerned we are in favour of trade with the United States, our large neighbour to the south, when this makes good economic sense in terms of promoting the wellbeing of the people of this country. However, I think it must be said that a question does exist in the minds of many Canadians concerning the extent of our trade which is carried on, not because it makes good economic sense, but in fact because it is promoted by the corporate links that exist between companies in Canada and the United States. This, of course, does involve another issue which is of great importance to Canadians and with which I shall deal a little later.
I think the seriousness of this problem was noted by the Minister of Industry, Trade and Commerce (Mr. Pepin) in his year end review where he attempted-and I suppose I cannot blame him for doing this-to show that in fact some better balance was achieved in Canada's
trade performance in 1970 than in some previous years. He pointed out, as indicated on page 4 of his statement, that there was a marked slowdown in Canadian exports to the United States in 1970, and in elaboration he stated that the gain in Canadian exports to the U.S. may account for less than one fifth of the total increase in Canadian exports. By contrast, the U.S. accounted for seven eighths of the advance in the total value of Canadian merchandise exports in the period 1965 to 1969 inclusive. Then, the minister went on to give some of the reasons why he felt this change in pattern had come about in the year 1970. He indicated that it was due, firstly, to general economic conditions in the U.S. and, secondly, to a slowdown in the automotive sales in the U.S. and the finally upward change in the value of the Canadian dollar.
The minister went on to summarize by stating that the much sharper rise in Canadian exports to overseas markets than to the U.S. has increased the share of Canada's exports going to overseas countries from 29 per cent in 1969 to 35 per cent in 1970, while the share going to the United States has declined correspondingly from 71 per cent to 65 per cent. I suppose I cannot blame the minister for bragging a little about the improvement that did take place in 1970 as compared to 1969, but I think that the basic point that must be noted is that a very bad state of affairs does exist in respect of our over-all pattern of trade. At the same time, we should also take note of the prospects for 1971. This, of course, is of relevance in terms of dealing with the direction which the export credit program should take in the future. The minister noted that there were grounds for optimism with respect to Canadian exports in 1971, and several items that he mentioned referred to U.S. conditions.
I might note, without going into details, that the implications, as I read them, are that in fact we will once again see an increase in the percentage of our trade with the U.S. in 1971. I note as well in the report of the Export Development Corporation for 1969 that the direction of the insurance programs, as they have been carried out, has been such as to at least encourage some shift in our trade because I note, looking at the 1969 annual report which sets out an analysis by countries of actual risks undertaken during 1969, that 11 per cent of those risks were underwritten for trade with North American countries; 13 per cent with central American and Caribbean countries; 17 per cent with South American countries; 2 per cent with the Middle East; 4 per cent with Africa; 9 per cent with Oceania; 8 per cent with the Far East, and 36 per cent with Europe. Certainly, this is the type of trend that I would hope to see continued in future years by the corporation. I feel that, indeed, it can play a useful role in diversifying Canada's trade pattern.
There is one other area of conern with regard to this bill. It relates to the amendments to section 34 of the act which deals with foreign investment insurance. These, I consider to be of great concern to the Canadian people. This concern was first expressed by the hon. member for Waterloo (Mr. Saltsman) when the original act was debated in the House of Commons in April of 1969. He

January 12, 1971

pointed out a number of concerns in that regard. I would like to place on the record one of them, as expressed by the hon. member for Waterloo, which is recorded on page 7481 of Hansard of April 14, 1969. The hon. member stated:
I very much fear that what we are seeing here is an attempt to enter into the 20th century scramble for investment, just as the nations in the 19th century scrambled for colonies, and it seems to me that Canada is now joining the new investment imperialism.
Later on the hon. member for Waterloo also stated:
Canadians do not wish to be imperialists. We do not want to join in the scramble for financial colonies. We do not need them. We have no interest in playing that kind of role in international affairs.
It seems to me that those remarks should be kept in mind as we deal with the amendments to the act which are now before us. I suggest that, first of all, we can question the morality of such action and such an approach in our international relationships, and second, from a different plane but a practical one nevertheless, I think we can question whether Canada in fact can compete in this league if it is given the opportunity to do so.
I think a second area of concern is to ask what benefits accrue to Canada by taking such action, that is, encouraging private foreign investment in other countries and, in fact, helping to underwrite any risks that are involved. Possibly there may be short term benefits, but I think they are by no means certain in many cases. From a longer term point of view, I think it can be said quite safely that often there are no net long term benefits when the total picture is examined. Just to give one example, there have been recent indications of resentment toward Canada in some Caribbean countries as a result of private foreign investment by Canadians in some of those areas. I think we have very important concerns about foreign investment as such which need to be kept before us. We are in a difficult position in our own country in respect of the extent that our resources and industries have been alienated from Canadian control. Now, we are promoting Canadian action of the same nature, only on a reverse basis. In fact, we are trying to get the same gains by shipping some of our private capital to foreign countries and thus achieving a similar effect on those countries as some foreign investment programs have had on Canada.
This is a debatable point, but if it is so then I would think there is all the more reasons for concern about such a program. It seems to me to be folly to encourage the export of Canadian capital and Canadian savings, while at the same time continuing to allow the import of large amounts of capital into this country which of course has some very obvious effects on the welfare of the Canadian economy.
A further question that can be asked is whether this is the best way to assist developing countries. We must be concerned with the development of new nations. I feel we have a moral obligation to do so. But in carrying out our programs, we must respect the sovereignty of those nations, both political and economic, and we must allo-
Export Development Act
cate funds to help those countries develop their own resources. But this bill encourages private investment as part of our contribution. I suggest that a very important question is: should this be encouraged as part of government policies and programs? I feel we would be much better off to provide our assistance in the form of official aid under public auspices.
There is further cause for concern with regard to the position of the Export Development Corporation when we take note of a reference in its 1969 annual report which sets out what the corporation had done to the end of 1969 in carrying out the provisions of this particular portion of the act. I feel it is important to draw this particular matter to the attention of hon. members. I quote from the report as follows:
Foreign investment insurance is available for the first time in Canada under the Export Development Act. Insurance against loss due to political risks such as war or revolution, confiscation or expropriation, or the inability to repatriate capital or transfer earnings is available to Canadians wishing to invest abroad. Such insurance is restricted to new investments made in developing countries.
A bilateral agreement must be signed with the government of the host country as a pre-requisite to operating the programme in that country. Negotiations have been initiated with a number of countries but by the end of the year none had reached the signing stage.
To enable investors to proceed with their investment EDC has adopted the technique of issuing a waiver letter. The investor, upon receipt of such a letter, should he elect to go ahead with his investment, will not have his case prejudiced at a later date on the ground that he no longer has a new investment.
It is very interesting to note the use of the term "political risk." We need to take a look at this particular part of the program in terms of what we would think if the position were reversed. What would we think if such laws were passed in other countries applying to Canada? Possibly there are some such laws in some countries, but I am not aware of them. We would have some objection to such a law if it might apply to Canada.
Now, we are confronted with an amendment which will remove the pre-requisite of a bilateral agreement. This provision is contained in clause 8 of the bill. If the amendment is passed, that provision will read:
"(d) that would insure an investor against the risk of loss of or in respect of an investment in a foreign country unless
(i)	the Minister is satisfied that the interests of the Corporation in investments in that country will be protected, and
(ii)	the government of that country has signified its approval of the investment by that investor."
It seems to me that this is a much more loose wording than we had in the original act. Within the framework of policy as it is presently set out, it certainly becomes very tenuous and questionable. The government's action in bringing this amendment before us demonstrates the original concerns expressed regarding the policy itself. I feel it must be examined very closely. I certainly feel that the remarks of the Parliamentary Secretary today, together with the answer he gave to my question, indicate that there have been objections by governments of

January 12, 1971
Export Development Act
foreign countries, and so we must look at this particular clause very closely.
There are two further points I would like to examine briefly this afternoon in relation to the bill before us. I think it must be kept in mind that credit programs and credit insurance programs are an instrument of policy. They can be effective only if there is adequate policy direction. There is a very real need for policy direction. This concern was expressed in the 1969 debate, that adequate policy direction and development were essential for effective operation of the legislation. At this stage I do not pass judgment on this particular matter. I just wish to draw it again to the attention of hon. members.
We must also keep in mind that trade policy is a crucial and critical area of Canada's economic policy. I have taken note of some of the speeches delivered over the past year by the Minister of Industry, Trade and Commerce, in which he makes reference to the new challenges and the new trends in trade. He finally ends up by suggesting in effect, "I am all right, Jack," or "We will handle it somehow." Now, there has been something of a change in tone. This was certainly evidenced by the statement which the minister made to the House of Commons on motions on December 1, which in fact indicated a very drastic change of attitude. There is now something in the nature of panic in the approach of the government and the minister. This very clearly indicates that the happy salesman, the smiling salesman approach, simply is not good enough in dealing with trade matters.
We do have new developments in trade, Mr. Speaker. The dangers of an increase in protectionism are with us. We must take note of them and try to counter some of the possible developments. We also note the development of regional blocs in world trading patterns. We have also to take account of developments with respect to the European Economic Community. GATT has, of course, developed into a much broader and different organization from what it was when first established. We have special deals in international trade today. All of these things must be taken into account in developing our over-all approach and policy with respect to trade.
Some of these developments must be related to other phenomena such as the growth of international corporations. Some people predict that by the end of this century nation states will not be the important unit in world affairs, and that the important unit will be the multinational corporation. This has very profound implications. We must take note of the fact that probably one of the reasons for the growth of the European Economic Community was the desire of European countries to develop institutions which could compete with international corporations undertaking activities in Europe.
In our own country we have a problem in respect of the large degree of foreign ownership and control of our economy. All this has produced distortions in our trade and trading patterns. And to obtain further information from the minister I ask, what is the policy of the Export Development Corporation in that regard? Does it have any policy with regard to the manner in which its programs will encourage trade on the part of foreign owned

and foreign controlled corporations? Is consideration being given in its programs to the development of the government's long anticipated policy on foreign ownership?
We must also keep in mind the need for restructuring and rationalizing Canadian industry. We have heard various comments from the Minister of Industry, Trade and Commerce suggesting that Canadian industry cannot be restructured and re-organized adequately within a national framework. I suggest that this reflects something of the attitude of the government, and that it is not looking towards a policy that will develop a viable Canadian economy. Certainly, we want trade where it is in the interests of the Canadian people but it must be related to the over-all welfare of Canadians.
For some time Canada has followed the multi-lateral approach in trade. If it is going to continue to follow that policy it has to take steps to make sure it works, or we will have to consider the alternatives, a move towards continentalism or to some form of isolationism. In my view either alternative would be disastrous for Canada's future. The government must actively negotiate to improve our position in over-all trade. Time is running short. I suggest that the livelihood of many Canadian people is dependent on the actions of the government within the next short period of time. Certainly, I think that the role of Canada as a nation is also involved. For these reasons, I feel this is very important legislation and I hope it receives more detailed consideration by hon. members both at second reading and committee stage.


Gérard Laprise: Mr. Speaker, the bill presently before us is intended to increase our exports to foreign countries. As a matter of fact, it asks that the authorized capital of the Export Development Corporation be increased from $25 million to $75 million, which is a considerable increase. After listening to the speech made by the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Howard), and the public statements made previously, everything leads us to believe that the government is trying by this means to find a way to check unemployment.
Mr. Speaker, among the many problems that constitute a chronic challenge to economists-because many economists have also studied this problem, and, to this day, they have not found any real solution-is international trade.
Among other reasons why international trade has become such a cumbersome business is the fact that it has radically changed and its original character and purpose have now been forgotten. In primitive times, when states took shape, there were communities anxious to trade with other communities for the purpose of acquiring goods which they needed and which they were unable to produce for climatic and other reasons.
The original basis for international trade still exists. The most recent and most obvious example has been the
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sudden impressive demand for wheat in China and the Soviet Union. But while the need for large imports exists and will continue to exist in under-developed countries and in countries lacking raw materials, the demand for imported products is slowing down in developed or industrialized countries.
In those countries, public pressure demands exports. Now and then, one hears the slogan, "Export or perish", as if it were the acme of wisdom. This slogan nevertheless expresses what lies behind the term "international trade".
Our ancestors would have been surprised if they had heard this slogan in the pre-industrial era. If someone had told them: "We must import or perish", they would have understood immediately. But who, they would have asked, ever heard of nations perishing because they could not export their products?
It would be interesting and instructive to trace the evolution of world trade and its development from the days when it consisted merely in the exchange of products for other products, up to the complex and capital role it plays nowadays in the economic life of industrial nations. Even when the industrial revolution started, the major problem was to find consumers with enough money to buy the increasing production. Great Britain solved the problem by lending its overseas customers the necessary funds to pay for their purchases. That was a forerunner of the Marshall Plan. But in that case, sooner or later the buyer had to pay and he did so by way of raw products needed in Great Britain.
As the industrial revolution spread, the Search for markets developed and because other countries followed the lead of Great Britain in financing their customers, the international debts known to us appeared. The relatively recent demonstration of the power of money has had an incalculable and often unfavourable influence on world affairs. It has also hidden the real and simple object of international trade and has spread confusion among the people about this matter.
The enigma in the present situation is that developed countries are able today, even without the help of automation, to produce much more than they can consume. The effect of this imbalance is made worse by the fact that there is insufficient purchasing power to ensure the purchase of all products offered for sale. Therefore, markets must be found for the surplus, and that gives rise to these efforts to increase exports.
At the present time, Canada is giving assistance to underdeveloped countries. This does not prevent us from exporting unemployment, operating our industries and finding jobs for our workers, while we are exporting goods we produced at great cost but do not consume.
We find the means of assisting underdeveloped countries by supplying them, for example, with technicians trained at our expense. We also supply them with equipment and machinery in order to help their development. That is another way of keeping our workers busy.
During the last World War, for example, Canada produced a tremendous amount of munitions, of materials
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of destruction that we exported freely over the heads of our enemies and we also exported some to friendly countries to help them fight Nazism. We produced and exported foodstuffs, mainly to England which was not at the time able to pay for them and we granted it credits amounting to billions of dollars, to allow it to buy from us foodstuffs so that it could carry on its war effort.
But when the time came for Britain to pay back the credits it had obtained from Canada, it was obvious, Mr. Speaker, that Canada could not accept, after the war, these payments from Britain, because it wanted to pay back with British products, which has resulted in severe unemployment in Canada.
The British were at work while at home, we had unemployment. Obviously, Canada could not accept this method of repayment, and that is why, perhaps, the government has let Britain get away with its war debt.
Again, world trade is not aimed at the exchange of surpluses for products that we lack, but rather at keeping our production going and employment at its peak. Lord Keynes expressed concisely this state of things when he said that the object of international trade and commerce was to export unemployment.
It is further argued, however, that international trade is what it used to be, that is to say the export of surplus goods against products in demand. While the government wants to have an act passed in order to expand exports, a bill originating from the Senate is introduced for the approval of an agreement signed by the Prime Minister (Mr. Trudeau), during his recent visit to New Zealand, and which aims at increasing our imports from this country.
While we are trying to draft a legislation to increase our exports, we are passing another one to establish new relations with New Zealand. This is why we still maintain that international trade is a two-way operation. It is quite well if we wish to promote trade in one direction rather than the other. Our wheat sales to China and the Soviet Union were, according to the Secretary of State for External Affairs, a superb transaction.
We were concerned, however, when those countries did not insist on paying us with their own products? On the contrary, that fact made the transaction truly superb according to the minister and we were all quite satisfied. For the tons of gold they shipped to Canada, the Russians obtained our wheat which they consumed, while the gold which we received was undoubtedly shipped to Fort Knox.
All countries would like to trade both ways, but not too much. They also seek a favourable trade' balance, which means more exports than imports. To reach and maintain this position, it is necessary to extend credit and have foreign debtors. There are very few cases of customers paying with gold, as does the USSR, while debts created through export credit must never be repaid because payment would entail greater imports, an unfavourable trade balance, in short, disastrous stagnation.

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Export Development Act
At this stage, Mr. Speaker, I would like to quote French author Andre Philip who, in his book Histoire des faits economiques et sociaux, explained how the United States paid the 1914-18 war debt of Germany as
follows:
Between 1926 and 1931, the financing worked in a strange way. Alter the collapse of German currency, the Allies had considerably reduced reparation debts imposed on Germany. The principle of reparations in kind had been rejected from the beginning for fear of the competition that German business leaders could thus make against French and British firms.
Mr. Speaker, that is precisely what I have just explained. In trying to export goods, an effort is being made to export unemployment and that is exactly what the French and English feared when they asked Germany to pay off her war debt.
I resume the quotation:
Reparations having been transformed into cash annuities, Germany's payments could not be very high since compensation, in the form of products it could supply, was being refused. The Dawes plan (1924) reduced the amount of war reparations and, without anyone being aware of it, a very special system of war reparations settlement developed. At that time, there as an abundance of funds in the United States; the Federal Reserve Bank was starting to put a stop to speculation on the New York stock exchange; available American capital looked for short term opportunities abroad and poured into Germany. German bank reserves being thus strengthened, Germany was able to pay off the smaller amount of war reparations; with the money they received in turn, the French and British governments paid back their interallied debts to the United States. Those settlements increased ready cash in America and provided increasing amounts of American capital for short term investments in Germany. The cycle started anew, and finally, the Americans paid off the war reparations debt Germany owed.
Mr. Speaker, developed countries now face the problem of keeping the wheels of industry rolling, and maintaining employment.
But as production capacity has increased and the industrial revolution is spreading to under-developed countries, the gross national product increases by leaps and bounds while demand decreases. Thus, both on the industrial and domestic scenes, the problem is the same: a glut which stems from an insufficient purchasing power.
The solution to the international trade problem will be around the comer as and when we recognize that the evil is rooted in our own country. The problem to solve is that of domestic distribution. Why should we try to export more when we cannot even find the way to consume more in Canada?
As far as international trade is concerned, the sole need for exports is justified by that of reimbursing the amount due on our imports. The "export or perish" motto is meaningful only if we accept the fact that we must export an increasing portion of our production, over and beyond our imports, so that the employment level be maintained and that workers may earn enough money to purchase the balance of our domestic production.
We now come to one of the Creditistes' favorite themes. In developed countries, production techniques
have been harnessed to such an extent that we are now in a position to produce all necessary goods and services to live not only adequately but in ease.
Then, Mr. Speaker, instead of seeking to export more, why not try to consume more? When I am convinced that all Canadians have enough goods at their disposal, that they can acquire enough to satisfy their needs, then I will be in full agreement with the contents of Bill C-184 and ready to accept it. However, it cannot be said that Canadians today enjoy the kind of buying power that would enable them to acquire all the goods and services they need.
Over the Christmas season, I have had the opportunity to meet several Canadians, many of whom family men, who had to eke a living out of unemployment insurance benefits or welfare allowances.
They could not find a job, earn a salary, receive an income. I saw in these families,-and that happens often; others have had the opportunity to realize it; I am sure,- that at the end of the month, before the next allowance comes in, there was not even a quarter left to buy a small box of aspirin to relieve physical pain.
Now, Mr. Speaker, faced with such a situation, instead of trying to export more, we should try to consume more.
We hear everywhere-and that is nothing new-that the workers are asking for salary increases in order to be able to buy more goods, but continued price increases cancel out these salary increases immediately. Therefore, we no longer need what has been proposed by the Beau-pre report, the CNTU or other trade unions. In fact, it is not so much salary increases that we need, as increases in our purchasing power, so that we can buy more goods and consume more.
An increase in purchasing power may be achieved in two different ways. First, by increasing salaries and incomes, and then by reducing prices, which can only be accomplished by reducing income taxes and federal and provincial sales taxes. Only thus can we effectively reduce prices and increase purchasing power. We are now faced with a decrease in purchasing power. For instance, before the Yuletide season, the bus fare between Hull and Ottawa had been 20 cents. Now, without any improvement in service, the same fare costs 25 cents. This is a 5-cent increase and by the end of the week, the clerk, the civil servant, the white collar worker, or whoever has to travel by bus, will see his weekly wages reduced by 50 cents. This means that his buying power will have dropped by 50 cents without additional service.
I am not saying that Bill C-184 should be rejected. In my opinion, it should be introduced and referred to the committee for thorough consideration; however, I contend that this is not the true solution for checking unemployment in Canada, for attaining full employment as requested by so many people. I believe that if we want to be able to make every Canadian happy and satisfied, we have to strive for an increase in consumption rather than in our exports.
[Mr. Laprise.i
January 12, 1971


Mr. Steven Otto (York East):: Mr. Speaker, if the Parliamentary Secretary would stop writing for a moment he would hear me compliment him on the way he presented this bill. I have always been in favour of Parliamentary Secretaries playing a bigger role in the House, especially in the presentation of bills. In the present case, not having the apprehensions that the minister would have, the bill was presented in a much more rosy manner and in much happier vein than I imagine would have been the case had the minister presented it.
We have to go back in history to King Canute, who was alleged to have been brought to the ocean to command the waves to stop and the tide to roll back, or in similar vein to the Prime Minister (Mr. Trudeau), coming out of a cabinet meeting and going before the cameras to say that inflation shall cease, and so it did, to find a parallel to this bill that purports to solve our future ills in the field of imports and exports. With all respect to the Parliamentary Secretary, I say that this is a pathetic little bill. In view of what I am going to say, and in view of the vast problems that Canada will be facing in the 1970's I am going to leave it up to the House to decide just how influential this bill is going to be in protecting Canadian export trade.
The dangers posed to our trade are vast and are no longer a secret. Japan has entered into what is almost a holy war, and very successfully too. I am going to outline some of the pieces of legislation passed in Japan in the export field, and I am going to describe the Japanese export blitz and indicate to the House how successful it has been.
Germany is the second threat and is well established in the export game. We then have the United States in a defensive role. However, the three of them are going to place Canada in extreme jeopardy, and again I am going to leave it to the House to decide whether this bill will indeed meet the difficulties raised.
It is now no secret that Japan controls about 40 per cent of world exports, and this in the space of 25 years. This is no accident, Mr. Speaker. It has been done in this way. First, the export offensive has been personally commanded by Premier Sato; his portfolio is the export trade. He heads the supreme trade council where top business and government leaders quietly slice up the world market and set annual goals for the export of every major product to every country of the world.
I have had experience with Japanese exporters and I know hon. members will be amazed to know that as a result of the system, the very tight pyramid system in the economy of Japan, companies are given what is almost an exclusive franchise for their products for different parts of the world. These companies are expected to increase their exports by a certain percentage every year. If they do not, they lose their franchise. We, on the other hand, carefully protect our competitive position. We are very much aware of monopolies and cartels. It is presumed that in Japan monopolies are sponsored for the
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export market only, but this is not so. The Japanese industrial empire encourages cartels and large growth, as well as what is almost a monopolistic enterprise both internally and externally.
In view of this dedication and concerted effort of the Japanese government, headed by the Prime Minister of the country, in the field of exports, I do not think I need go further and outline how important exports are to Japan. In order to boost exports, the government backs corporations with an arsenal of assistance. For example, it offers credit at preferential rates.
We have credit in Canada, too. The hon. member for Regina East (Mr. Burton) asked the Parliamentary Secretary how many countries have been approved for credit and he had to reply that none had. When applications are made it is naturally to be expected that the buyers of our goods should be considered triple "A" credit risks. Yet our bankers wag their heads and say: 'We are not sure that Company so and so in Argentina is as good as it is made out to be; let us have a financial statement, a guarantee or a bond from them". By this time, of course, there is not much left of that export market.
We export to countries with which we have established trade relations, such as the United States, the United Kingdom and certain countries in Europe. When it comes to expanding and encouraging trade in other countries, there is not a chance. On the other hand, the Japanese, in effect, buy discount paper 100 cents on the dollar and the government absords the risk of non-payment. This is the effect of their regulations and combines. Our businessmen have to go to the bank to borrow money to export and have to pass certain tests before the loan is granted. In order to get it insured, they have to convince the government that the buyer is a first class risk. However, by this time they have been beaten by the Japanese and the Germans who do not care who the buyer is so long as the goods are delivered. Then, the manufacturer gets his cash on the barrel head, the risk being absorbed by the government. I say that this bill is a pathetic attempt to match their legislation.
In addition to this, tax incentives are offered. Even overseas advertising campaigns that fail to meet projected sales targets are insured. In other words, the government of Japan not only sponsors companies and provides them with money to manufacture goods, but it pays for a large part of any advertising campaign and absorbs the losses, if any. If a certain company does not quite make it in another country, then the loss is made up by the government, not by the company. Contrast this with the position in Canada, where we say to our small businessmen: "Why don't you export to Colombia or to Argentina? We will give you all the services of our trade department."
There are two different branches in our external affairs department. One is on the political side and is headed by the Secretary of State for External Affairs (Mr. Sharp). We then have our trade branch. The head of a mission is always recruited from the political side, never from the trade side. So, naturally the ambitious and the keen young men move away from the trade side

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Export Development Act
and get into the political side because we have not emphasized trade. The Japanese government feels that it is the trade attache who is the important person in a country. Cartels of exporters meet regularly to fix prices and lay plans for overwhelming foreign competition. In Japan, whenever two or three competitors are seeking one contract they are merged into one, whereas in Canada we might have six competitors; in the United States 12 competitors and in France four firms competing against each other for the same contract. In Japan, they have a sales cartel through the efforts of the government or by agreement.
There is a large and growing foreign aid program, which is another export promotion device fueled with long term credit and direct investments. The Japanese have what they call the Soogoo Shoosha, which are general trading companies. These trading companies are given the money with which they can make any kind of a deal. After they have sold the goods the government ensures that the money is provided the manufacturers who, in turn, can pay good commissions. The trading companies can then buy and sell.
In other words, in Japan they have sales men who are sponsored by the government. Here, we have to look for manufacturers' agents who must spend money to go to foreign countries in an attempt to establish contacts. This takes a lot of money. Our Canadian entrepreneurs have a tough enough time to make ends meet in Canada. They have not got the money or the inclination to go outside the country.


Mr. Sallsman:: Mr. Speaker, I wonder whether the hon. member would permit a question either now or at the conclusion of his speech?


Steven Otto: At the end of my speech.


Mr. Deputy Speaker;: Order, please. The hon. member for Waterloo is not in his seat. He will have to take his place if he wishes to speak.


Max Saltsman: Mr. Speaker, I was just asking the hon. member-


Mr. Deputy Speaker:: Order, please. The hon. member will have to take his place, and then I can hear him.


Steven Otto: I will answer the hon. member's questions later. He might put them to me at the end of my speech.
Japan also has something we do not have here in Canada. It has an export research organization which coordinates market research, product research, finance research and export research and provides the results to the company involved. We received a report recently from the other house about the status of our research of all kinds, scientific and other. We have absolutely no sense of application of research. We spend millions of dollars on research which is applicable to nothing. We expect the manufacturers in Canada to go to other coun-

tries and research a product. They must spend all that money without knowing whether the product will enven-tually be sold. We are told to get the information from our Department of Industry, Trade and Commerce. I have been there and have been led on a merry chase all over Colombia and Venezuela in respect of a product that was not to be sold there. It cost my company $46,000 to learn that lesson.
The fact is that we do not have the proper research organization in Canada, or a real Crown owned research organization, which combines market research, product research and other research. I have said this for seven years but have achieved no results. We have junior research organizations set up in each department, which usually amounts to someone who does not have much to do who is put in charge of research.
Japan pays an annual retainer to a company for research programs. In 1953, the Japanese instituted a sales program for Japanese cameras. These companies now control 60 per cent of this market for high and low priced cameras. It also launched a program in respect of luggage and stainless steel products. This was based on research carried out by companies on government subsidy. The result of that research was passed on to the producer. The Japanese realized that if they produced luggage of such a quality and price, they could compete on the Canadian market. The manufacturers were told that the Canadian market would accept products of a certain kind. As a result, they concentrated on this field.
I have outlined very briefly the sales drive in the export field by the Japanese. This is the type of thing we must compete against. Japan has also developed another gimmick in export marketing. Japan is short of fuel and energy. Purchasers have come to Canada to buy coal and oil, but this is a two-way street. Japan might purchase $10 million or $1 billion in coal but will then say that having purchased that coal Canada must purchase radios, television sets and tubes manufactured in Japan. If the government of Canada indicates it will not allow these imports and imposes high tariffs, Japan will then withdraw its imports of coal. We will then receive complaints from the western provinces.
Let us now consider West Germany because that country represents another threat to our export markets. This tremendous increase in West German exports started some 40 years ago. Shortly after the war, Germany concentrated on markets in South America. Any business that is done with South American countries now is done through Germany or German financial institutions. In other words, Germany has a strong hold on the whole of the South American economy. This is a shame because South America and Latin America were ripe for Canadian investment and participation.
The United States had exhausted its goodwill in Latin American countries many years ago, and these countries were looking to Canadians but we were way behind the times. The German government sponsored the development of the export industry in the South American countries. Head office plants were established in Germany.
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The money invested in South America is German money and the preference is given to German products. Indeed, the language of business there today is either Spanish or German. The English language is not even mentioned. Throughout most of the world, English is the commercial language but in Latin America the commercial language is German or Spanish.
Perhaps this is the result of our slavish adherence to the terms of GATT. We do not subsidize because we cannot under these general agreements. Germany subsidizes transportation on its canal system, as does Japan. Every firm in Germany, no matter where it might be located, can move goods to the seaports at a pittance. These firms may be located 180, 200, or 300 miles inland. We cannot subsidize the St. Lawrence Seaway System because this would violate GATT agreements.
Germany and Japan directly or indirectly subsidize export financing. They discount all the paper. These governments do all the promotion, all the research and all the export planning. We will not do this because we have to abide by the GATT agreements. The first thing this government should do is re-negotiate Canada out of GATT.
Canada is not the only country in difficulty. The United States is having trouble as well. The trade bill that is going through congress right now includes a device called "DISC". This is an attempt to prevent the onslaught of Japanese, German and European exports on the United States market. One of the provisions that will go through relates to the fact that United States corporations will be allowed to establish sales companies for export trade. The profits made by these sales companies will be untaxed until, if and when the foreign company brings the profits back, and of course this will not happen. Now, do you understand that they receive a 50 per cent bonus? Naturally, the United States parent companies of Canadian subsidiaries will not use the Canadian companies to produce the exports because they want to get the benefit of production in the United States.
Another offence, I believe, against the GATT agreements is the discounting of trade paper which is being done by the Japanese and Germans. While the United States does not have much to fear, it is protecting itself in the 1970's so that it will be able to hold its head above water. The United States will not be fooled by the so-called voluntary restriction by the Germans and Japanese in respect of certain trade items. While we debate the matter of shirts and underwear, they think of much greater problems. The United States is also safe because it has probably the world's greatest accumulation of capital. Much of the money in the European Economic Community is probably United States money, as is the case in respect of Japan and Canada. Therefore, they have a protection which we do not have.
What do we have to do in order to survive in the seventies?


Robert Jardine McCleave: Get rid of Toronto.
Export Development Act


Mr.   Olio@: I think we should have a complete ministry, such as a department of trade and commerce, dedicated solely to the promotion of export trade. We should have a development corporation with a banking system because we are probably the only country in the world which is left with a branch banking system which is headed by a very reactionary and conservative group of men. They are not really businessmen but are men who are of the old school. They look at every penny and cross-examine every applicant to see who his great grandparents were and whether anyone in the family was hanged. They also want to know whether he is guaranteed by the government of Canada and so on. This is our banking system. There is no room in Canada for the young entrepreneur or the daring businessman. It does not matter what we do by means of this bill; so long as our financial institutions are not behind us we will get nowhere.
The only way to handle the banking problem is by controlling the reserves. The banks are still touchy about the reserves. We could say to them that whenever they lend money for export credit purposes reserves of only 2 per cent will be required, but when they lend it for buying convertible cars in Canada or for consumer credit purposes they will be required to have reserves of 30 per cent. That, I believe, would hit them in a way that they would understand. The banks are not likely to cooperate with us and I doubt whether we would ever introduce a banking system which would be involved at all with government. I believe it would be a long, tedious process to attempt to change the banking system and, therefore, we must take control through the only method we have which is through the Bank of Canada.
Canada has a very large bargaining point. We still control probably the largest source of energy in the world. I want to mention the deal made by the Minister of Energy, Mines and Resources (Mr. Greene). We sold $6 billion worth of gas to the United States but that $6 billion worth of gas would supply the energy necessary to produce $60 billion dollars worth of profits from manufacturing. We should say that so long as $20 billion of the profits from manufacturing remain in Canada, they can have the gas. In other words, there is only one way to save our position, and that is to tie manufacturing and growth in Canada with our export of energy because they have to have it. The United States must have our gas and probably our oil. They must have our minerals, our steel, our iron and all these things. I think we can insist on this as we did in respect of the automotive pact. The automotive pact is one reason our exports to the United States are increasing. We could do the same thing in respect of our energy. It is the only weapon we have and I believe we should use it.
We must rationalize our industry. We talk about rationalization, but a few weeks ago we spent a good part of a day protecting the shirt industry. Rationalization, I think, would indicate that the shirt industry is just not for Canada. The aircraft industry, however, is. We have a source of cheap power. About one-third the cost of producing an aircraft is represented by the use of electrical power. We have the aluminum and other raw materials.

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Up to 1962, we had the nucleus of an industry and we could have it again. The sponsorship and support of an aircraft industry in Canada would do more for Canada than the shirt, towel, shoe and rubber manufacturers. It must be an industry capable of producing aircraft for the whole world. We have all the necessary materials. We have the ingenuity and the expertise which is required. All we need is the zest for this type of thing. The transportation problems, of course, would be immense.
I wonder whether anyone has considered why we should not enter into an agreement with the United States so that transportation on the St. Lawrence canal would be almost free, as is the case in respect of the Rhine canal in Germany. If this seaway is to be subsidized, we might as well subsidize the whole cost. We could deepen the canal and employ a company from Nova Scotia, for instance, to do it. This would mean a saving in transportation costs. If we do not do this we will not be in a position to compete with Japan and Germany or, of course, with the European Economic community.
I hope I have painted a picture which, if not black, certainly is dark. I believe it is foolish to close our eyes and say we will somehow survive. I will be frank and say that what I say really does not matter. I do not think what the House says really matters, because the mood of the country now is that what the Prime Minister (Mr. Trudeau) does and says is of paramount importance. More than at any time in the history of any country in North America, this happens to be the mood of the nation. Now, the question is whether the Prime Minister will have the necessary audacity and daring. It is the daring which is needed. I refer to the daring to try a completely different way of doing things, rather than count on conventional wisdom.
I know the President of the Treasury Board (Mr. Drury) is a man of great expertise. He was a civil servant for many years before he was a member and a minister. We must never underestimate the power of the grey eminence of the government. I think the Prime Minister, however, must see that it is not advice such as that which will save Canada. There must be a completely new approach and we must have people who will take a dare and encourage new ways of doing things. If necessary we must forget a great number of what we call the sanctimonious things about compensation and so on. If we are not prepared to gird ourselves for this battle, then I think we should forget about economic nationalism completely. I think we should tie ourselves as completely as possible to the United States because it will survive, and if it survives we might survive.
If we try to be completely independent we will go down, and all we will have will be nationalism without a viable economy behind us. Hon. members should read an extremely good article on the Japanese export push which appeared in Fortune magazine of September and which also covers the German methods. If hon. members would read those articles and investigate the current export programs of these countries, they would find that

no matter what tariffs we impose we will never be able to protect ourselves. We will sink to the lowest economic condition we have ever had unless we take the bit in our teeth, so to speak, and say that we are going to do great things and we will do them on our own. But this means courage and it means going out in different directions; the result may be either failure or success. But we have to take the risk.
Right now the people have given the Prime Minister (Mr. Trudeau) their loyalty and have said to him "we franchise you to do whatever you like. If you make a mistake, we will forgive you; but if it works out, so much the better". However, people will not tolerate a reactionary, conventional, old program which will not work. If we are not willing to follow this course then I suggest, to hon. members opposite especially, that they should tell their group to forget about anti-Americanism because the only way in which we can survive is to tie ourselves almost completely to the United States. Then, we can at least hope that together, with our energy and resources, we will be able to fight off the onslaught of the trading nations and thus will survive.


Mr. Deputy Speaker:: The hon. member for York East (Mr. Otto) indicated that he would accept a question from the hon. member for Waterloo (Mr. Saltsman).


Max Saltsman: I wonder whether I could get a clarification from the hon. member for York East. Perhaps I might preface my question by congratulating him on a most interesting speech. I wish to ask the hon. member whether he has completely given up hope for our survival by suggesting that we tie ourselves closely with the United States in order to survive economically. Has he given up hope that we will be able to survive, even though he indicated in his speech that there were possible alternative courses we could take?


Steven Otto: Without being partisan, and I do not think we should be, I would like to say that I trust our government will do this. But I think you will recall that around 1963 or 1964, in a speech on a fisheries bill, I raised the whole question of Russian factory ships. At that time the minister said we should really have no fear and that factory ships were never going to work out, that they were no threat. It was not until recently, after seven years, that we discovered maybe there is some threat from the Russian fishing fleet. I have letters from ministers, and from the Prime Minister, in reply to the article I sent them indicating that Canada is well on its way to a wonderful future and that really all the fears are groundless. Therefore, I have a feeling that the required courage and initiative will not be forthcoming from this government. I think we will slide along cautiously from panic position to panic position. To be realistic, I will say that our chances of surviving are much better if we tie ourselves economically to the United States.


William Gordon Ritchie: In rising to speak on this bill, with which I am in general agreement and which is an extension of legislation already enacted, I should like to say that its main effect will be to increase the capital of the Export Development Corporation to
January 12, 1971

help Canada in its trading position. As for the details of the bill, I will await its appearance before the Standing Committee on Finance, Trade and Economic Affairs where I suppose it will receive a more thorough going over.
I should like to take this opportunity to comment on the bill and the situation in which Canada finds itself in relation to the rest of the world. In spite of the Liberal fiction that Canada is a low tariff country, in fact it is one of the highest tariff countries in the world. In spite of the "song of the shirt" which the Minister of Industry, Trade and Commerce (Mr. Pepin) sang just before Christmas, we are as adept as the next country in establishing quotas and other fine points to prevent the entry into Canada of so-called undesirable things such as shirts. While we are all for free trade, it receives little support when our producers are threatened by the entry of some products made by a far away and dimly seen individual.
Some time in the future there is to be action on the full implementation of a new textile policy. Presumably, following that action, there will be no further need for quotas and surtaxes on such things as shirts, even though the industry claims to be in the vanguard of technological progress throughout the world. There will of course be others who feel concern for the electronics, chemical, furniture and shoe industries, as well as other industries, which depend for their sustenance on the tariff structure.
This country depends on trade relatively more than any other country in the western world. The value of Canada's trade is high as a result of the export of the raw materials which the country produces. It is estimated that the export of mining products produces approximately 20 per cent of the value of the country's total exports. The mining industry, more than any other industry, will be affected by the white paper on taxation if it is put into effect. There is no doubt that it will have a detrimental effect on mining exploration and development which will only become apparent in the years to come. In the mining industry more than in any other, it is apparent that taxes are a form of expense, and as taxes rise less mining and exploration development will take place. There will be less mining of low grade ore bodies. At times, we even subsidize mining by means of the Emergency Gold Mining Assistance Act.
Another 20 per cent of our exports sure in pulp and paper and wood products. This market has been greatly reduced, and the effects of the strike in British Columbia will not be manifested for some time. The United States, one of our main markets, has had considerable success in increasing the growth of timber, which has tended to reduce our exports. With regard to the agriculture industry, our large western grain industry-the only one which exports in significant amounts-has fallen on hard times. The optimistic predictions that we would export 700 million bushels of grain in the next crop year have been dampened over the Christmas holidays by indications that the U.S.S.R. has harvested a bumper crop so it will not take the balance of the 53 million bushels of wheat for which it contracted. Therefore, instead of 500 million bushels of wheat being exported this year, only 350 million or 375 million bushels will be exported.
Export Development Act
When it is considered that of this amount almost 100 million bushels is being offered to developing countries as a means of aid through low cost loans and so on, sales that may not recur, it is obvious that our grain exports are uncertain. The rosy picture painted by the minister in charge of the Wheat Board is somewhat clouded by recent developments, and the western farmer will be in a worse cash position than he has been led to believe.
Of increasing concern to those who realize that Canada must preserve a large international trade has been the interesting development of a Canadian nationalism. This was exemplified in a statement made by the Minister of Energy, Mines and Resources (Mr. Greene) when he preached Canadian nationalism in Denver, which brought the following comment from the United States Undersecretary of State, Mr. Hollis M. Dole:
With friends like Canada, who needs enemies ... I am grieved by the position Canada has taken because intense nationalism such as Mr. Greene expressed can be a two way street.
Mr. Greene's conversion on the road to Denver is a reflection of an already prevailing mood. Canadian nationalism seems to be mainly centred in Toronto, and its two leading exponents are Walter Gordon and Melville Watkins. In essence it is only logical that Toronto, along with Montreal, should remain the focus of Canadian nationalism because these communities have most to gain from strong nationalism. With a strongly centralized, nationalized country, the fruits of our widespread country would be accumulated in the coffers of the companies and the citizens of those great cities.
Amongst Canadian nationalists, it seems there is a curious view as to the auto pact. The auto pact, which accounted for 25 per cent of our exports last year, has been one of the mainstays of the value of manufactured exports to this country. Recent hard bargaining over the auto pact highlights some curious views in the Canadian stand. It is generally agreed that the auto pact, as it presently stands, has been of great value to Canada, and has worked in our favour to the moment. The Canadian decision authorizing large natural gas sales, followed by the liberalization of Canadian access to U.S. oil markets, have somewhat lifted the cloud from U.S.-Canadian economic relations.
In preparing the controversial trade bill for U.S. Senate action, the powerful Senate finance committee added a provision requiring Canada to agree to meet U.S. objections to the working of the auto agreement by the end of 1972 or face the possibility of U.S. withdrawal. The United States has been increasingly dissatisfied with its balance of payments position in relation to Canada, which it feels started with the implementation of the auto pact. There is no doubt that this agreement is not entirely satisfactory to the Americans, and they have objected strenuously to the safety features built in to protect the position of the Canadian manufacturers. President Nixon has been critical of the continuing of the safeguards, saying that they were an unnecessary burden on the automotive industry and an obstacle to full realization of the agreement's objectives.

January 12, 1971
Export Development Act
Now, Mr. Speaker, it seems to me that in the Canada-U.S. auto pact we have an example of trade of mutual importance to our two countries. Even to these nationalists, it should cause some thought. It indicates that Canada cannot live alone or be entirely unsupported by its neighbour to the south. Indeed, it might well appear that in time of international crisis the automobile facilities of Canada would be denied to the United States in pursuit of its national interests. In my opinion, those who say that there should be a total ban on the export of energy resources, such as natural gas and oil, do not realistically recognize that Canada will have to trade in the world.
I would like to point out what will be one of the most important problems facing us in the coming years. At present the way seems to be under preparation for a long trade war between the United States and the European Common Market. The Americans have been considering protection by means of the Mills bill. There have been talks on the problem of the Mills bill, and the general problem of quota restrictions on U.S. imports, as well as voluntary restrictions on the exports of supplying countries. There has been some talk that the European Common Market governments might prepare another round of discussions at Geneva on imposing reprisal restrictions on the import of American goods. In return, the United States has its worries about the Common Market.
The United States is worried that the European Common Market is organizing a free trade area, or at least a preferential trading area, stretching from Iceland to Zanzibar, and from the Arctic Circle to south of the Equator. Four new prospective Common Market members, including Great Britain, as well as other western European countries are anxiously waiting for the preferential trading arrangements that the Common Market can offer. Already in the Mediterranean area there is a preferential trading system which includes Greece, Turkey, Israel, Spain, Morocco and Tunisia, and there are widespread trade preferential arrangements in Africa with 18 countries, as well as Nigeria, Kenya, Uganda and Tanzania. So far as Washington is concerned there is a vast zone of discrimination, actual and potential, against American trade, and it seems that the Geneva experts in GATT can offer little comfort.
As well, Mr. Speaker, many big American companies have invested enormous sums in European subsidiaries, relying on the Treaty of Rome which guarantees them the same status and treatment as local companies. But these six countries now seem to be creating a new class of European company which will have privileged access to finance and official procurement orders. Access is to be limited to corporations for which the ultimate sources of decision are in the European Common Market. Although this has not been finally decided, big American corporations are angrily facing exclusion from some of the largest markets that they supply.
Then there is the agricultural policy of the European Common Market with high prices, ultra-protection, and equalizing levies. The European Common Market farmer has had eight years of subsidy market support, and assured sales without a ceiling. European farmers costs
have risen with their earnings so that they cannot readily face a change in the system. They have attempted to resist market changes, and are not really as efficient as their farmer colleagues in North America and Australia.
So, Mr. Speaker, the stage seems to be set for a trade war between the European Common Market and the United States. Canada cannot hope to escape the effects of this. It would seem that this may be one of the moments in history when mankind's reactions may be favourable to mankind's future. Opportunities of this kind occurred in 1951, with the coal and Steel Community, which was the predecessor of the European Common Market, and again in 1958 when the Treaty of Rome was ratified. Britain remained aloof on both occasions, but it would seem it is now ready to join.
The twin issues that will determine the future of the western world are the political cohesion of Europe and the expansion of world trade. Opportunities now exist for both to occur, but at the moment Europe has lost its momentum toward reunification. West Germany is not an equal negotiating partner, and neither the United States nor the Soviet Union is enthusiastic about a strong European trading bloc. As a result of the Moscow-Bonn Treaty, the Soviet Union could veto certain steps towards European unity.
As I have stated previously, there are considerable political difficulties between Washington and the European Common Market over agricultural surpluses. The problems of agriculture and of non-tariff barriers, unless both are tackled together in comprehensive commercial negotiations, could reverse the trend of expanding world trade. There has been an increase in non-tariff barriers, which in many ways have become more important than tariffs. Indeed, some experts fear that the world economy may be at the start of wholesale conversion from tariff to non-tariff protection which would wipe out the trade liberalization achieved to date.
A publication on hidden barriers to international trade lists as priorities in future negotiations on the expansion of world trade the removal of quantitative restrictions, or voluntary restraints on products from Japan, as well as Japanese agricultural protection. Protection benefits certain privileged producers, but is paid for by the community at large through higher prices. Thus the twin issues of a strong united Europe and strong free trading world are closely linked.
Canada, by virtue of its great stake in the trade of the world, and the importance of trade to its own position, will have to be alert to what is happening in the world about it. I think we should have been more energetic in following closely the progress of the British entry into the European Common Market. Mr. Speaker, I have somewhat more hope than the preceding speaker that Canada will be able to preserve an independent position in the world, but we will need to use all our ingenuity to preserve that position.


Gerald William Baldwin: I think, Mr. Speaker, that it is five o'clock. If it were not five o'clock, I would have something to say, but now I am quite prepared to let the House wait until eight o'clock when I will make my comments.
[Mr. Kitchie.l
January 12, 1971



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order. 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 Hillsborough (Mr. Macquarrie)-Health-Effect of certain brands of tooth paste on tooth enamel; the hon. member for Kootenay West (Mr. Harding)-Air Transport-Consultations with manufacturers of DC-8 on spoilers-effect of sonic boom; the hon. member for St. John's West (Mr. Carter)-Regional Economic Expansion-Argentia, Newfoundland-Report on effects of closing of United States naval station.
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, Public Bills, Private Bills, Notices of Motions.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. R. N. Thompson (Red Deer) moved: that Bill C-23, to amend the Financial Administration Act (Parliamentary Commissioner for Administration), be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, it has been my privilege to bring this bill to the attention of hon. members on two previous occasions during the last 12 months. In fact, it was before the House for debate on January 13 and October 6 last year and again today.
Hon. members may wonder why I feel so strongly about the need for such an office in the House of Commons. It is not a new idea. I have had the privilege of presenting this private bill in the House in one form or another at least 15 times in the last eight years. This bill is concerned with the establishment of the office of what is commonly known as an ombudsman. This bill would name this special office the Parliamentary Commissioner for Administration.
Increasingly, Mr. Speaker, the rights of Canadian citizens are being transgressed. This is basically because of increasing domination of government and governmental affairs on the rights of individual citizens. I am convinced of this, not only because of the correspondence that crosses my desk, but also because of the numerous articles in the press and the numerous comments by members in this chamber and in the provincial legislatures. This has resulted in action by most legislatures in establishing the office of ombudsman. It is necessary that we
Financial Administration Act have this office at the federal level to safeguard the rights of Canadian citizens.
This legislation would add this office to the present duties of the office of the Auditor General. His duties would include those of a parliamentary commissioner or ombudsman relating to administrative matters concerning the federal level of government. It is logical that the Auditor General have such authority. He has stated this to the committee on several occasions, particularly in 1964 when a bill to establish a formal ombudsman was being considered by the Standing Committee on Justice and Legal Affairs. When he appeared before the Standing Committee, he stated that he has been called upon to serve in the capacity of ombudsman as it relates to financial matters, taxation problems and other areas where governmental bureaucracy increasingly comes into play in the lives of Canadian citizens.
I think it is very logical that this bill should be considered. I plead with hon. members at this time to agree to refer this bill to the Standing Committee on Justice and Legal Affairs so that a more thorough examination of the proposition which this bill presents might be considered by this committee. The Auditor General would have the opportunity to explain to the committee the need for such a bill. Members of the committee, and of this House, would have the opportunity to express their opinion on the need for such an office. I wish to draw to the attention of hon. members a few of the principles of the bill.
The bill is intended to give to the Auditor General the function of parliamentary commissioner. In that capacity, it would be his duty to investigate the administration, by a power or authority or officer of such power or authority, of any federal law of Canada whereby any person is aggrieved or, in the opinion of the commissioner, may be aggrieved.
Citizens who believe that they have been aggrieved could appeal directly through their Member of Parliament or they could make direct appeal to the Auditor General acting in his capacity of parliamentary commissioner. It would be the duty and function of each Member of Parliament to decide whether a complaint should be considered for direct reference to the commissioner.
It has been said that we, 264 Members of Parliament, are in effect ombudsmen. I agree with that. However, our powers are limited. We do not have the power of inquiry. Nor do we have the necessary assistance in the area of research to properly handle and investigate many of the problems that come before us. I, personally, know this is the case. When this bill was before the House in October, I mentioned a number of specific cases where it was impossible for me, as a Member of Parliament, to get satisfactory answers to complaints registered with me by certain constituents. I know that all hon. members face this problem.
It is all right to say that we act in the capacity of ombudsman. Very often we are able to render that service. It is our responsibility. On the other hand, there are many instances where we cannot handle the situation because we do not have the authority or because we do not have the necessary time or assistance to make a

January 12, 1971
Financial Administration Act proper investigation. The fact that a Member of Parliament would make the referral to the commissioner in his office of Auditor General would safeguard this office from being flooded with complaints of a nuisance character. I do not believe this would curtail the duties of the Auditor General in any way. I think it would enhance his duties. I believe that the Auditor General is one of the most important officers of this House.


Some hon. Members:: Hear, Hear!


Robert Norman Thompson: In recent months we have seen the government attempt to curtail the powers of the Auditor General. As far as governments are concerned, the Auditor General has been embarrassing on a number of occasions. This does not only apply to this or the previous government, but to all governments since that office was established. That should be in itself evidence that such an office is necessary.
It is imperative that we have a watchdog over the expenditure of tax dollars collected from the citizens of Canada. By withdrawing the legislation that would have curtailed the powers of the Auditor General, the government recognized this fact. Tremendous pressure was brought to bear on the government, not just by members of opposition parties, but by members of the government, the public and every newspaper in this country that I have had occasion to see. It is generally recognized that the office of Auditor General is vitally important. I regret that at one time the government thought it was necessary to take this action, and I regret also that his position is still not clear with regard to hiring a staff which is essential for carrying on his work. I believe this additional duty would enhance his position, strengthen his authority and help him to act not only as a watchdog of government expenditure but as the guardian of the rights of individuals as they relate to administrative errors which interfere with the normal rights belonging to Canadian citizens.
The least this House could do would be to allow this bill to pass to the Committee on Justice and Legal Affairs where a study could be made of the situation in depth. The majority of hon. members with whom I speak feel as I do about this issue. They agree that it is necessary that we have the support of such an officer. The services which we ourselves attempt to render to those we represent would, in such a case, probably be more effective then they are now. In other words, the Auditor General acting as a parliamentary commissioner for administrative matters, basically financial matters, would be concerned about the rights of private citizens as they relate to grievances arising from administrative error or interference with a citizen's normal affairs.
I believe it is our responsibility to ask the Committee on Justice and Legal Affairs to consider this subject in depth and to let the Auditor General himself speak on it. Too often this issue has been passed over. On two different occasions, the prime minister of the day made a commitment to the House of Commons and to the people of Canada in Speeches from the Throne, that the office of
ombudsman would be established. The present Prime Minister (Mr. Trudeau) has expressed the opinion that the Minister of Justice could act as ombudsman. In my opinion, he cannot do this; the very nature of his office prevents his doing so. It is true he might handle a few major cases, but it is the minor cases, those about which the general public never hears, that are my major concern as I present this bill.
It is not enough to say we do not need such an officer. I realize that senior officers in the public service resent the making of such an appointment because they feel there would be someone looking over their shoulders in case they made mistakes.


An hon. Member:: There should be.


Robert Norman Thompson: There should be. There are others who feel there is no need for an appointment of this nature because the courts are available to redress the grievances of Canadian citizens. The courts do serve an important role, but any one of us here who has anything to do with the problems of constituents knows it is impossible for the courts to take action in most of these cases.
The holder of the office I propose will be a protector of civil liberties. This idea has worked effectively at the federal level in a number of states. It is working effectively now in five of our own provinces. The bill before the House does not call for the establishment of a general ombudsman over the entire field, it confines the office to the area where most grievances arise, namely, in connection with administrative measures by the federal government itself. Again, I ask that the House give favourable consideration to this measure and refer it to the Committee on Justice and Legal Affairs.


Mr. Alastair Gillespie (Parliamentary Secretary to the President of the Treasury Board):: Mr. Speaker, all members of the House will agree, I think, that the hon. member for Red Deer (Mr. Thompson) is a persistent man and a man who holds the cause of justice high.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: As he himself told us, this is perhaps the eighth occasion on which he has sought to introduce this bill or a bill similar to it. On other occasions, as he also mentioned, he has sought to introduce a companion piece or an alternative piece serving very much the same purpose as the bill we are discussing this afternoon.
In the debate which took place on October 6 of last year, he stated:
It has been my privilege to bring before this House the need for an ombudsman, a parliamentary commissioner, a man who would be concerned with the rights of the private citizen particularly as they relate to the growing power and ever-increasing dominance of the public service in the normal life and living of the individual Canadian.
It is a truism to say that government is getting bigger, and as government gets bigger there is a tendency for the individual to shrink, a feeling, which we have all experienced, of a difficulty in getting at the source of power. To this extent we can identify with the purpose

January 12, 1971

of the hon. member's bill. But there are some questions I should like to raise with respect to the provisions of the bill and, indeed, with respect to the concept of an ombudsman. The hon. member says that what we need is a mechanism whereby a citizen who feels he has suffered a personal injustice at the hands of the administrative bureaucracy may have his case considered. The hon. member referred this afternoon to the rights of the individual and to the need for ways in which he can find redress against administrative error or interference.
Before considering in detail the case he has placed before us, let us examine briefly the means which are immediately available for such redress. There are several. He himself put first, the Member of Parliament. I think we would all agree with this order of priority. I suggest there is another, namely, the collectivity of Members of Parliament-the House of Commons. The question period does provide an opportunity for members of opposition parties or, indeed, for any hon. member to call attention to injustice and to seek a remedy. Initiatives have been taken by this government and by other governments and some of these will be dealt with this afternoon by my colleague, the Parliamentary Secretary to the Minister of Justice (Mr. Bechard).
In his remarks today and on an earlier occasion the hon. member indicated his view that an ombudsman and, in particular, an ombudsman in the person of the Auditor General, would make civil servants more careful. I believe those are his words, and they can be found on page 8828 of Hansard. Surely, though, there are other ways of creating a sense of care in our public servants. Surely, we do not need an ombudsman to create this sense of responsibility. As the hon. member himself said, we are primarily concerned with administrative error. I do not think he made a case for showing that an ombudsman is going to make civil servants any more careful than they otherwise would be.
p.ra.)
Secondly, the hon. member said that we do not have the power of inquiry. In his previous speech he referred to this question as well. He linked this, in effect, with saying that we do not have facilities for research and investigation such as the Auditor General has. I would agree with him that we do not have these facilities. I also think that he would agree with me that we need to improve the facilities of Members of Parliament, and I hope to have something more to say about this. However, we do have a very significant power when we talk about inquiries because we can initiate inquiries, though we ourselves cannot undertake inquiries. Therefore, I will agree in part with him when he says we do not have the power of inquiry, though as I say we do have the power to initiate inquiries.
Thirdly, he made the case that the Auditor General, in the role of ombudsman, would strengthen the confidence of the public in matters of public administration. I do not think that he has substantiated this point; in fact I am not at all sure it can be made. Certainly, it cannot if we examine the proposed bill before us. As I shall attempt to
Financial Administration Act argue, the proposed bill would definitely lead eventually to a lack of confidence on the part of the public in the very agency of Parliament that we all want to protect, namely the office of the Auditor General.
Before dealing with that in detail, let me ask these questions. Do we in fact need an ombudsman for Canada? We are aware that there are four provinces in Canada with ombudsmen, Alberta, Manitoba, Quebec and New Brunswick. Some Scandinavian countries have had an ombudsman for some years; more recently other countries have been experimenting with the idea.
In the last debate the present Minister of National Defence (Mr. Macdonald) raised a number of questions in his remarks. He referred to his experience as President of the Privy Council and his particular duties in that area. He pointed out that most of the successful experiments with an ombudsman have been in fairly limited jurisdictions with small populations. He acknowledged that in West Germany, a very much larger country in terms of population, there is an ombudsman who relates his activities, as I understand it, entirely to military questions, complaints arising from the military apparatus and not from the civil apparatus.
He also argued that in other instances an ombudsman has worked well, such as in a country with a fairly homogeneous society; that is to say, a society that might perhaps be described as a unitary state. I do not mean to imply that the U.K. is necessarily homogeneous in every sense of the word, but in a unitary state there is a direct relationship between the citizen, Parliament and the ultimate authority. I think I would have to say that a federal state, particularly one as far flung as ours, would not be homogeneous in the same sense as the United Kingdom. Surely, distance and accessibility are important when it comes to the individual being able to appeal to his ombudsman.
I believe there have been references in the past to an ombudsman working well in universities. Here again, I think we are looking at quite a different kind of situation. Obviously, there is no Member of Parliament, or representative in the sense of a Member of Parliament, in the university constituencies. I think one could see the idea of accessibility and the relationship of a citizen to one man very much more clearly.
These thoughts surely lead one to believe that if we are going to ignore the problem of distance and the question of numbers, the only way we could deal with the matter would be to have what might be described as a panel of ombudsmen, not one ombudsman. However, this evening we are being asked to consider one ombudsman, the Auditor General, and I would say there are real weaknesses in such a proposal, real questions about whether one ombudsman could serve our country.
Another weakness I should like to outline this evening relates to the independence of the office of the Auditor General. The bill before us, Bill C-23, proposes a new section 75A for the Financial Administration Act. This section has three sub-sections setting out the general procedure whereby a real grievance could be brought to

January 12, 1971
Financial Administration Act
the attention of the Auditor General. I should like to refer in particular to sub-section (1) which provides:
It shall he the function of the Auditor General to act as Parliamentary Commissioner for Administration (hereinafter called the Commissioner) and in that capacity, it shall be his duty to investigate the administration, by a power or authority or officer of such power or authority, of any law of Canada whereby any person is aggrieved or, in the opinion of the Commissioner, may be aggrieved.
The wording of this subsection suggests that the powers of the Auditor General would extend to all laws of Canada, and presumably would include municipal bylaws as well as federal enactments.


Robert Norman Thompson: Federal laws only.


Alastair William Gillespie: I appreciate the clarification. The hon. member has clarified the record by saying it refers only to federal laws, and presumably the wording could be changed to reflect that position. Subsection (2) provides:
The Commissioner shall act only at the instance of a member of the House of Commons, as the elective representative body in Parliament, and on a complaint of personal injustice suffered by a complainant.
I think the hon. member made a considerable point of this in his remarks this evening in that he said it was important to maintain the parliamentary process and the position of M.P.'s in that process. He went on to say that, by providing that such grievances must first be processed through a Member of Parliament, this would prevent a great flood of grievances going forward to the Auditor General. Presumably he was suggesting that through this mechanism Members of Parliament would screen grievances received from their constituents. Presumably he was implying that a Member of Parliament would make a preliminary investigation in respect of the grievance of his constituent and then would make a judgment.
# (5:30 p.m.)
I suggest to him that in fact, as he pointed out, Members of Parliament have limited time to make investigations of this kind and that it would become an automatic procedure. A grievance would be received by a Member of Parliament and would automatically go forward with his endorsement to the Auditor General. I cannot see that there would be any screening or any control point by providing that grievances be funnelled through Members of Parliament.
The bill provides as follows in proposed section 75A (3):
It shall be the duty and function of each Member of Parliament to decide whether the complaint appears to be one appropriate for reference to the commissioner.
I am assuming this would be an individual judgment, not a collective one of the House of Commons. We get into difficulty in the next proposed section where it refers to the powers that would be accorded to the Auditor General to refuse to investigate grievances which have been submitted to him by a Member of Parliament. The provision is as follows:
The commissioner, in his discretion, may refuse to investigate or may cease to investigate a grievance if
(a)	a remedy already exists;
(b)	it is trivial, frivolous or vexatious; or
(c)	upon a balance of convenience between the private interest of the person aggrieved and the public interest, the commissioner is of the opinion the grievance should not be investigated.
1 suggest that this is precisely the kind of situation which would destroy the credibility of the office of Auditor General and it would perhaps ensure the discredit of his objectivity, impartiality and concern with seeking out facts because it would place him smack bang into the area of political judgment. I agree with the hon. member that it would be important under the plan he has put forward to provide a method whereby the Auditor General could refuse or reject a request to investigate. When he is put in the position of being asked to express an opinion or make a judgment as between the interest of the private individual and the public interest, surely he is being forced right into the political arena by being asked to make a political judgment rather than a statement of fact.
There is one other area in respect of which I would argue that the office of the Auditor General would be seriously affected by this bill. There is no provision for additional staff, perhaps quite rightly because it is a private bill. To suggest that the Auditor General could take on these duties and provide for investigation in addition to the whole spectrum of his present duties is surely to suggest the impossible, unless you are also prepared to accept the idea that he would be less effective in doing what Parliament has already charged him to do. Surely this is an intolerable suggestion to be made in this House.
I suggest there is one other reflection on the office of the Auditor General which should be put straight. The hon. member in his remarks hinted that efforts might have been made to curtail the powers of the Auditor General. In fact, I think he suggested there was evidence that the government wished to curtail the powers of the Auditor General. I think this is specious and false, and the hon. member has been misinformed or is unaware-


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired.


Robert Norman Thompson: Mr. Speaker, may I ask the hon. member a question?


The Acting Speaker (Mr. Laniel):: This can only be done with unanimous consent of the House, in view of the fact that the hon. member's time has expired. Does the House agree to allow the hon. member for Red Deer (Mr. Thompson) to ask a question of the Parliamentary Secretary?


Some hon. Members:: Agreed.


Robert Norman Thompson: The hon. member for Etobicoke (Mr. Gillespie) has agreed in most instances with the principles of this bill. He differs only in respect of the ways in which the duties should be carried out. Would he give his consent to the bill and pass the word along to other

J anuary 12, 1971

members of his party who may wish to speak on the bill to allow it to go to the Committee on Justice and Legal Affairs, where his arguments and my arguments could be considered in greater depth along with the principles of the bill?


Alastair William Gillespie: Mr. Speaker, I have tried to indicate in my remarks that while I support the thought that inspired the bill, I do not think the hon. member has made a case for an ombudsman. I do not think he has even made a case-assuming that such an office may be desirable- that the Auditor General might act as ombudsman for Canada. For those reasons I am not in a position to advise my colleagues that we should refer this matter to the committee.
I think it is most important that we make every effort to support the effectiveness of Members of Parliament and I very much hope that the recommendation of the Beaupre commission in this regard will find support on all sides of the House, because the more effective a Member of Parliament, the less need there will be for an ombudsman in Canada.


Francis Andrew Brewin: Mr. Speaker, when I came into the House at about five o'clock I did not anticipate taking part in this debate; therefore, I am not prepared with any very learned material on this motion. I want once again to reiterate my support, and I think the support of all members of my party, for the general principles of this bill and its reference to the Justice and Legal Affairs Committee.
At the same time, I cannot refrain from expressing my disappointment at the essentially negative attitude of the Parliamentary Secretary. He expressed extremely well some objections to the bill as drafted. I think he failed altogether to deal with the basic issue of whether we should have an ombudsman. In my view, notwithstanding all the functions that can be performed by a Member of Parliament, notwithstanding the function of Parliament itself, what can be done by the department and by the courts, there remains vast proliferation of administrative law in respect of which an ombudsman could properly function.
I share to some extent the Parliamentary Secretary's doubt as to whether this function could best be performed by the Auditor General. My personal view is that it would be better performed by another officer. I do not think the essentially judicial function is quite the same as the financial administrative function of the Auditor General. However, I understand, because on a number of occasions I have heard the hon. member for Red Deer (Mr. Thompson) put this matter forward, that he is adopting this expedient, as a private member of the House, of introducing a principle that does not involve setting up new machinery in order to comply with the rules of the House.
If this matter were referred to the Committee on Justice and Legal Affairs, the committee could investigate the need for an ombudsman and whether the Auditor
Financial Administration Act
General is the officer most fitted to perform that duty. I think a very valuable function could be performed because as is acknowledged on all hands, this instrumentality has worked. It is not novel. It has worked for many years in the Scandinavian countries. My friend the hon. member for Etobicoke (Mr. Gillespie) said they are homogeneous. That is a pretty weak argument.
I do not think any lack of homogeneity in our population is a reason that this proposal should not operate. It has worked in countries like New Zealand where it has been tried. It has been tried in our provinces which are not wholly homogeneous, where there are mixed populations. Some of the matters which would be investigated by an ombudsman would turn out to be of little substance, but in some cases the ombudsman would be able to right injustices which could not be righted in any other way.
I agree with the proposition that some of the important functions of an ombudsman should be carried out by the members of this House. I hope the Beaupre commission report will be adopted in this respect at least, because it suggests that members of this House should have offices of their own and a staff to enable them to receive the grievances of constituents. I support this proposal; I think it would make our work more effective. But I do not see anything inconsistent in that and the proposal for an ombudsman. In fact, the situation would appear to be quite the reverse. The more complaints of maladministration or administrative injustices which are brought to members' attention through the efficient conduct of their business, the more members will need an ombudsman to deal with matters beyond their responsibility so that complaints may be investigated by an impartial and judicial official rather than by one who is perhaps a partisan Member of Parliament. I say both are necessary.
The Minister of Justice (Mr. Turner) has, quite rightly, taken considerable pride in saying that the new federal court will be given wide judicial responsibility to review administrative federal tribunals. This is claimed, justly, in my opinion, by the Minister of Justice to be one of the major contributions of the new federal court. This is excellent. I agree with it. But we need all the instrumentalities at our command and not just some of them. We need an enhanced federal court with wide jurisdiction. We need more efficient and effective Members of Parliament who are provided with the facilities to better carry out their function. We need an ombudsman, whether that office be part of the function of the Auditor General or someone else.
I do not complain about the civil service or bureaucracy of Canada because by and large I believe it does a good job. But inevitably in the complexity and multiplicity of its function, things are done which diminish the rights of ordinary citizens. We need all the available instruments with which to fight injustice. It is for this reason we support this resolution. We believe it would be extremely useful if this whole matter were investigated by the Committee on Justice and Legal Affairs. I am not sure whether the Parliamentary Secretary was expressing his own conviction when he said what he did, but we regret the negative attitude expressed today and over the years

January 12, 1971
Financial Administration Act with regard to the importance of appointing an ombudsman.


Mr. Albert Bechard (Parliamentary Secretary to Minister of Justice):: 
Mr. Jack Cullen (Sarnia-Lambfon):: Mr. Speaker, in a way I welcome the opportunity to participate in this kind of debate, but unhappily the subject is so controversial
J anuary 12, 1971

and interesting that many of my colleagues have participated and have left me very little time in which to make my comments. Because time may cut me off, and so there is no equivocation about my position on this bill, let me say that I propose to vote against it.
I compliment the hon. member for his perseverance in bringing this bill before the House because I think it is the kind of legislation with which we should be dealing. However, I would have been happier had it come forward in the form of a motion setting forth the ideas that the hon. member wishes to promote. In that way, rather than referring the bill to the Standing Committee on Justice and Legal Affairs, in effect we would be discussing a notice of motion and making recommendations to the government for its consideration.
Like the hon. member, I feel that there is a role for the ombudsman to play federally. I agree with some of the points made by the hon. member for Greenwood (Mr. Brewin), who said there may be a gap in the federal area where the rights of individual citizens are not adequately protected. Surely somewhere in that vague area there is a role for an ombudsman to play.
It may be that too much time has been spent in this bill in trying to determine who should fulfill the role of ombudsman. This is where I take exception to the hon. member's suggestion that this function should be performed by the Auditor General. I note that the hon. member was able to bootleg some uncharitable comments about the government's position in dealing with the Auditor General. May I say for the record that I am in favour of a fully independent Auditor General operating in his present unimpeded fashion.
I think the legislation before us could have accomplished the same aim with very minor changes. I was unhappy that the bill respecting the Auditor General was removed, but there seemed to be good reason for doing so. I hope that the bill is only dormant and is not deceased. Because I am for a fully independent Auditor General, I wonder, as did the Parliamentary Secretary, if we would not be dragging him into the field of politics and into an area where he should not be and where he will lose his independence.
I am concerned, as was the Parliamentary Secretary, that we may be diffusing the obligations we have to our constituents as Members of Parliament. I am satisfied that Members of Parliament who represent every portion of this great country are in a much better position to act in the capacity of ombudsmen and to fill the kind of gap which the hon. member for Greenwood and myself perceive. But with our present facilities it is impossible to do this. We do not have sufficient staff, we do not have adequate office space and we do not have sufficient contact with our ridings. Unhappily, sessions now last from nine to ten months, depending on the legislation that must be passed, and for that reason we cannot get back to our constituents as often as many of us would wish.
While the House is in session we often have to visit our constituencies on weekends only and that is the only time we can meet our constituents. I think that sessions should be divided into three or four sections so we would have three or four months in which to perform the kind
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of service that an ombudsman would perform. I do not like the idea of a Member of Parliament hearing a complaint from a constituent and having to determine whether it is the kind of question he can handle or whether it should be referred to an ombudsman. We would then have to determine what kind of matter the ombudsman could handle.
The pressure would then be on the ombudsman who would be overloaded and asking for more staff because he would constantly be asked by 265 Members of Parliament what he had done about their particular case. I see it as a weakness if a Member of Parliament has to determine whether a person has a grievance that should be brought to the attention of the ombudsman, as suggested in this bill. To quote Mr. Churchill, "Give us the tools and we will finish the job". I think we could do the job better than most, and certainly better than a paid civil servant operating with a fancy title such as suggested in this bill.
There is a place for an ombudsman but that place can be adequately filled by Members of Parliament. It is being done today by good, conscientious, hard working members of this House, but we could do a better job and I hope we will be given an opportunity to do it. This would be better than setting up another bureaucracy which would only increase red tape.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen (for the Minister of Industry, Trade and Commerce) that Bill C-184, to amend the Export Development Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Gerald William Baldwin: Mr. Speaker, I shall say just a few words, in line with the usual modest and moderate contributions that I make from my place in this House, with regard to this bill. In the first place, I do not think the bill is as simple as has been suggested. I think there are some pretty substantial proposals contained in it. I shall not deal with all the proposals, because I am not allowed to do so, but the change in the amount of money involved and the total

January 12, 1971
Export Development Act
guarantee which will be available are very substantial. The Parliamentary Secretary has referred to this point and so have hon. members in our party and in the New Democratic Party.
The changes with regard to section 29 of the act, and the rights which would empower the corporation to participate in joint financing arrangements with a third party without obtaining the approval of the Minister of Finance, are novel and constitute a departure from the original legislation. There are some interesting provisions in clause 7 of the bill on which I will question the Parliamentary Secretary later. In clause 8 there is provision that a contract may be authorized without requiring the government of the country in which an investment is made to give a written assurance. All these proposals constitute a departure from the provisions of the original legislation. The amount of money involved is of such magnitude as to indicate that this is not a completely different bill but certainly a bill of a different kind.
I think it is of interest to look at the history of the bill. For 25 years we had the Export Credits Insurance Act. I think that all governments which were operating while it was in effect did a pretty good job. The hon. member for Prince Edward-Hastings (Mr. Hees) is not here, and I know that with his usual modesty he probably would not want to be here while I was saying some nice things about him. As Minister of Trade and Commerce in the administration of the right hon. member for Prince Albert (Mr. Diefenbaker), he was responsible for inaugurating a speed-up and improving and enlarging the administration of the act. He did a good job of selling the products of this country, with his ability to be exceedingly persuasive, to hear the right things and sometimes not to hear and see the things he did not want to hear and see. He has demonstrated this ability when asking questions in the House, when his right eye and ear are not as attuned to the Chair as the Chair might wish. He did a tremendous job in promoting the exports of this country.
In 1969, after 25 years, the present government brought down new legislation. That legislation received royal assent on June 27, 1969, and was proclaimed on October 1 of that year. A year later, when the present session opened, the changes in the bill with which we are now dealing were referred to in the Speech from the Throne and contained in its list of legislative proposals. In other words, almost a year to the day from the time the original bill was proclaimed, very substantial amendments are put forward.
This new bill was obviously ready in October, 1970, Mr. Speaker. It was sent to the other place rather than here. This indicates that the bill had been drafted for some time. It will be perfectly clear to anyone who examines the bill that the changes with which we are now dealing must have been contemplated and brought to the attention of the government within a few months of the other bill being passed. I think this is very significant. This government has received great credit for reorganizing the cabinet system. The Prime Minister (Mr. Trudeau) is called the great administrator because he
organized the cabinet committee structure. He has stated that everything will now go smoothly, efficiently and without delay. On the contrary, with this bill we see a situation which I have pointed out many times. I am not referring to this bill in particular, but often badly prepared bills are presented to this House. They do not take into account their impact on the public which they are designed to assist. Bills are introduced which are hastily conceived and not ready to be presented to the House. What more proof do we need than this measure? These substantial changes must have been contemplated within six or eight months of the original bill being proclaimed. In other words, the original bill was imperfect.
I know it is the fashion for a great many of the intellectual, pompous and pontifical commentators who unofficially belong to the volunteer part of the Liberal propaganda machine to heap great praise upon this government, its efficiency and the way it operates. They swoon when the right hon. gentleman who occupies the position of Prime Minister is within their range. What absolute drivel!


Some hon. Members:: Hear, hear!


Gerald William Baldwin: We were involved in a very interesting situation yesterday and again today. Members of this party and of the New Democratic Party made suggestions with regard to the very important legislation which the Minister of Consumer and Corporate Affairs (Mr. Bas-ford) introduced in this House. The minister must have had some doubts about this legislation. He indicated that in his view the legislation should be sent to a committee and that the committee should have absolute freedom to interview witnesses. However, it was necessary to take drastic action in this House in order to bring about that to which we are entitled. This bill is an indication of the wisdom of that course. There is no suggestion that this government, its ministers and their advisers have the monopoly on wisdom, good sense and economic provision.


Stanley Ronald Basford: That is why we straightened out the committee system.


Gerald William Baldwin: I want to make that quite clear, because a number of bills introduced in this House are not original in nature; they are amending legislation. My recollection is that 50 per cent to 70 per cent of the legislative list attached to the Speech from the Throne consists of amending bills, many of them amendments to acts passed by this government. It is very essential that all legislation be thoroughly examined by unbiased, independent committees with the assistance of necessary witness. There have been instances when the committee has made a thorough examination and it has not been necessary to waste our time in considering a matter and sending it back to the same committee.
I do not know the views of the Parliamentary Secretary in this instance. I hope when he replies he will indicate, if he has authority on behalf of the government, that if it is the view of the committee he and the minister will agree that this is an important bill involving

January 12, 1971

changes of some magnitude. If members of export associations and others want to appear before the committee and express their views, I hope the government will welcome them. A declaration of this kind by cabinet members would alleviate the very serious situation which has developed as a result of the peculiar operations of certain people in positions of responsibility.
What about the bill generally? We have had a good debate on it. Exports are of the greatest importance to this country. In view of what has been said by members on both sides of the chamber, I think we are aware of the risks and dangers which we face. Anyone who reads, watches, listens and learns will reach the conclusion that the likelihood of the United Kingdom entering the Common Market is very much greater than it was a year ago. The Prime Minister of that country was the principal negotiator in the previous Conservative administration. I understand that he has very definite views about the conditions involving entry of the United Kingdom into the Common Market. Negotiations have now progressed to the stage where the likelihood of entry appears very great. There is a very strong probability that the financial differences, differences involving agricultural produce and other difficulties with relation to the Common Market will be resolved. Within a year or 18 months Britain may become a member of the Europe- an Economic Community.
We must also look at the situation in the United States. While it is true that the trade restriction bill which went before Congress last year did not pass before Congress closed, this was only because the bill had been tacked on to other legislation which was opposed by members of the Senate. The bill died at the conclusion of the congressional proceedings at the beginning of this month. However, we must remember that it was an administration bill. It was introduced by the government. The bill was apparently proposed by the President because of political obligations which he incurred during the course of the election. There is no doubt that the United States administration, which is receiving increased support in Congress, the House of Representatives and other parts of the United States, tends toward a greater degree of protectionism. We have to live with this. I do not decry the job that our negotiators did during the Kennedy Round talks. They benefited this country. However, they did so on instructions of the government.
If the negotiators had had their own way, they might have been willing to to be more flexible in horse trading. In the result, it seems we have had a free ride for quite a long time. We obtained benefits from the Kennedy round talks for a number of reasons. I will not go into them now. I do not think those reasons exist any longer. We may find that we are left in a hard-hearted world as far as international trade is concerned. I think we will find that the ease with which we have been able to extend our economic operations and external trade in the past has vanished. Some benefits arose from our very large sales of agricultural products, natural gas and petroleum. The United States-Canada automotive trade pact is very definitely being threatened in the United States.
Export Development Act
Our opportunity to continue our trading operations, to expand them or even to hold them at the present level will depend on a number of factors including legislation of the kind before us. We do not have the benefit of an economy of scale in our own country. We have to rely on an economy of expertise, on an economy of automation. The well known French writer and political expert, Ser-van-Schreiber, in his book "American Challenge" referred to this. I do not agree with everything he says in his book, but every Canadian could read it with profit. There are difficulties envisaged there.
There was a debate here today between the hon. member for York East (Mr. Otto) and some of the members of the New Democratic Party about American ownership and Canadian nationalism. In my view, this is a debate which is not of great profit to the House or to the country. No doubt there are problems, but I thoroughly disapprove of any shrill, strident anti-Americanism. Equally, it is of no use trying to minimize the difficulties which face us in connection with the great multinational corporations which we have.
While the subject is only incidental to the bill before us, I should like to draw attention to the usefulness of the approach made under the administration of my right hon. friend from Prince Albert who instituted, in conjunction with the late President Eisenhower, a study of this question on an international basis. This is not a situation which affects Canada or the United States alone; it is an international situation and we should look at it in this light rather than conduct sterile debates on a topic which I fear may become a political issue in the next federal election. Now is the time to launch, at the instigation of Canada, an international campaign to hold meetings and discussions on an international level.
That is all I wish to say generally. I am sure the bill will receive study in committee. I think it can be improved, but I shall not specify the improvements now. That is a matter to be considered later by the committee. I would, however, ask the Parliamentary Secretary to comment on one point which has puzzled me. I shall not debate the basis of the change, but clause 7 of the bill would make certain changes with regard to the nature of an instrument which can be regulated and dealt with by the corporation in the course of its financial operations. The original wording provided that negotiable instruments could be dealt with under clause 33 of the original bill, but the word "negotiable" has been removed and in its place we find the word "instrument" alone. "Instrument" as defined in the original bill means something far different from "negotiable instrument," as all of us with knowledge of the law or knowledge of business practice appreciate. I would ask the Parliamentary Secretary when he closes the debate to tell us precisely the reason for the inclusion of clause 7. Is it intended to minimize the type of security to be dealt with in the manner set out in clause 33 of the original bill, or is it merely for the sake of bringing about certain changes in terminology?
2340

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Export Development Act


Mr. Deputy Speaker:: Order. If the Parliamentary Secretary speaks again it will have to be by unanimous consent of the House. Is there such unanimous consent?


Some hon. Members:: Agreed.


Bruce Andrew Thomas Howard: Mr. Speaker, there have been many and varied contributions to the debate today. I regret that many of the comments which have been made, however valuable, have not pertained specifically to the bill before us. Nevertheless, I regard them with great interest. They have been concerned with the general subject of trade and Canadian trade policies and are of use to the government as they will be of use to the committee when it studies this bill in detail.
I should like to deal specifically with a number of observations which have been made. I found some of them very strange. We have found ourselves, as Canadians, with an unprecedented trade surplus, with rapidly expanding international trade, and yet at a time like this we have been beating our breasts and calling down upon the Lord to ask him how such a strange thing came about that we should be so successful. I suppose this is typically Canadian and that we all share this trait. We are selling our goods all over the world in unprecedented quantities and we say: There must be something wrong. The government must be making a mistake. Businessmen in Canada cannot be doing the right thing; we are successful. As I say, I suppose this is typically Canadian, but I confess I found some of the comments today surprising.
No doubt there are difficulties ahead of us. It is not just clear sailing and it would be wise for us to pay attention to what may lie before us. It has been pointed out that the undoubted entry of the United Kingdom into the European Common Market will cause us considerable difficulty; we shall have to find markets to compensate for the markets we shall lose when the United Kingdom makes this change. This is a situation we shall have to face honestly. But along with the entry of the United Kingdom into the Common Market there are considerable opportunities for us. This is a rapidly expanding market which is prepared to consume increasingly large quantities of not only our raw materials but our manufactured goods. It is more important for us to concentrate on the opportunities open to us than upon the difficulties. If we do, we shall come out all right.
Another of the pessimistic views expressed here this afternoon concerned the DISC program which has been proposed in the United States. It was pointed out by the hon. member for Peace River (Mr. Baldwin) a few moments ago that this proposal had not been passed by the United States Congress, that it had been dropped. Perhaps it will be revived and brought before Congress again, but let us cross that bridge when we come to it. Let us enter, well prepared, upon any negotiations which may be conducted, but I believe we should not cry too much before we are hurt.


Max Saltsman: May I ask the Parliamentary Secretary a question?


Mr. Deputy Speaker:: Is the hon. member rising on a point of order?


Max Saltsman: I should like to direct a question to the Parliamentary Secretary, since he is giving his views on how successful we have been. I should like to ask him whether he thinks the highest rate of unemployment in the western world, and the slowest growth rate, is cause for congratulation.


Bruce Andrew Thomas Howard: I did point out, Mr. Speaker, that we are not without problems in Canada. What I said was that we have been extremely successful in the matter of world trade, and I specifically made that point. I suggest that having been successful in this area, we should not cry about our success but be happy with it.
A point made by the hon. member for Regina East (Mr. Burton) this afternoon concerned our investments in lesser developed countries than Canada. He suggested this was some kind of economic imperialism that we should fear and shy away from; that the instrument before the House made it easier for Canadian businessmen to take part in this economic imperialism and indeed encouraged them to do so. I do not share that view, and I know my view is shared by many other people who are specialists in the field of external aid. I also know that all the official aid that we could ever give would never solve the problem of developing economies in countries that need such help. Unless we can encourage our businessmen to invest, to create employment and thus improve the economies of these countries, even with all the official aid that we could give to them these countries could never hope to bring themselves above the poverty level. The countries themselves recognize this and welcome and encourage the establishment of Canadian industry within their borders.
Perhaps we have to be careful of the terms under which industry goes into foreign countries, just as we have to be concerned about the terms on which foreign industry enters Canada, though that is a very different question. I think our industries must be prepared to live by the laws of the countries in which they do business. They must be prepared to adapt to local conditions and be good corporate citizens of those countries. They must be prepared to recognize that the welfare of the people in those countries must be considered. But as I say, it is the terms on which they operate that are important, not the fact that they are there.
The hon. member for Regina East also raised the question of foreign ownership of industries that are eligible for assistance by the Export Development Corporation. He asked what attitude the corporation took toward foreign-owned export companies, and he seemed to express concern that assistance might be given to these companies which could be inimical to the national interests of Canada. Let me assure the hon. member for Regina East and other hon. members who might be concerned with this point that the operations of the Export
January 12, 1971

Development Corporation are governed by the Export Development Act and are restricted to persons who carry on business in Canada. Further, I am informed that on each and every application without exception the EDC looks into such matters as autonomy, financial and corporate responsibility. The Export Development Corporation takes positive steps to ensure that the objectives of those seeking this assistance are consistent with those of Canada.
The EDC does not cover the credit risk of sales by Canadian exporters to their foreign affiliates; obviously this would be quite improper. For example, the export of raw materials to a parent company would not be eligible for insurance against non-payment. However, I would add that sales of Canadian goods or services abroad by foreign affiliates do qualify, and many of our manufacturers are availing themselves of this facility in marketing Canadian manufactured end products. Thus, it is a matter of concern to the EDC to see that businesses are scrutinized in order to ascertain whether they will make a substantial contribution to the economy of Canada and that it is not a case of somebody else's goods being moved to Canada, given a coat of Canadian paint and exported again with the benefit of Canadian financing.
The hon. member for York East (Mr. Otto) made a number of valuable points this afternoon. However, he referred to this bill as a pathetic little bill which would not do very much for the great trade problems facing Canada. I do not know about that. I think $1 billion is not a "pathetic little bill". Indeed, it is a pretty big bill to most of us. I suggest to the hon. member that this bill is but one instrument, one part of our trade machinery. There are a great number of ways of aiding, developing and promoting Canada's international trade. The Export Development Corporation fulfils a specific function and fulfils it extremely well.
The hon. member's references to trading methods of other countries, and particularly to the aggressive trading methods of the Japanese and the Germans, are valuable lessons for Canadians. We should never close our eyes to the things these countries are doing in competition with us and we should be prepared to learn, to adapt and to imitate wherever possible and whenever this will be of value to us.
I think I should clarify one matter that was raised this afternoon by the hon. member for Regina East in connection with a question he asked. I understood the hon. member to be referring to export credit insurance and I think I misinterpreted his question and gave him a wrong answer. He was referring to the kind of guarantees that certain countries are required to give to Canada. We have eliminated this provision in an amendment to the act since we found that these guarantees were impractical. Most countries objected to them. In answering his point this afternoon, I said that no country had given this guarantee or had agreed to give such a guarantee to Canada. During the dinner hour I discovered that very recently two countries had given the required guarantee. Nevertheless, this provision is being eliminated and is no longer a requirement under the act. It is also being
Export Development Act
eliminated for another reason, and it is because these agreements are, in effect, treaties between countries and are normally reciprocal. In this regard, under the Canadian Constitution the federal government would be infringing upon provincial jurisdiction, and as a result we are unable to offer any reciprocity. This is another reason that provision is being withdrawn from the act and the act is being amended accordingly.
I should also like to refer to comments by the hon. member for Peace River (Mr. Baldwin) who spoke a few moments ago. He pointed out that only a short time ago the act was revised. This is quite true; the act was revised a short time ago. I think it is a tribute to the fast growth and pace of Canadian export business that it is necessary to raise these limits again. In establishing the limits that are set up before us tonight, I do not anticipate that it will be very many years before we will have to raise them again.
It is the policy of the government to bring these changes before Parliament frequently, rather than to set very large limits that might last for 10 or 15 years in the future. We would rather bring this measure back to Parliament in order that Parliament might have an opportunity to review the limits and policies frequently. In this way the House will have an opportunity to comment, amend and negotiate regarding the operation of the Export Development Corporation.
The hon. member for Peace River also asked for assurance that the views of outside witnesses would be welcomed before the committee. I am sure that the House leader of the Conservative party knows much better than I, having been here for many years, that the business of the committee is in the hands of the committee. While I welcome the views of outside witnesses, this is certainly a matter for the committee to decide and I think we would have to leave it to its members to make that decision.
A final point raised by the hon. member for Peace
River related to section 33 of the act to be amended______
clause 7 of the bill before us. This involves the question of negotiable instruments. This is a technical change necessary because the Export Development Corporation is doing business in many countries around the world where what we refer to as negotiable instruments do not always represent a practical means of binding an agreement. It has been found impractical to follow this to the letter of the law, and for that reason the change is being made. What now is being allowed is an instrument, not necessarily negotiable, which may be approved by the Minister of Finance. This requires ministerial approval.
There have been a great many valuable points raised during the debate today. I referred previously to the valuable suggestions by many members. The hon. member for York East had a valuable contribution to make. The hon. member for Dauphin (Mr. Ritchie) reiterated the importance that I think we all feel of the elimination of non-tariff barriers in international trade. I agree with the hon. member that we face a growing

January 12, 1971
Export Development Act
number of non-tariff barriers and we must find ways to eliminate them. The climate of international negotiation does not seem to lend itself at the moment to another great Kennedy-like round of tariff negotiations. There is no reason why we cannot be negotiating a number of lesser agreements to remove some of the 800 non-tariff barriers under GATT that bother us today.
Many of these non-tariff barriers are of minor consequence, and if Canadian businessmen or members of this House are cognizant of specific items they feel can be removed and are bothersome to Canadian business, we would be very glad to hear from them. This government stands ready to negotiate at every possible level and is most anxious to develop the freest possible kind of trade in order to improve our trading position wherever possible in the face of the complications in the world.
This concludes my remarks on the bill. I look forward to our discussions in committee and to suggestions to be made by hon. members at that time.


Gerald William Baldwin: Mr. Speaker, would the Parliamentary Secretary answer a question?


Mr. Deputy Speaker:: Is the hon. member rising on a point of order?


Gerald William Baldwin: I should like to ask the hon. member a question on the last point I raised. The Parliamentary Secretary dealt with the difference between "negotiable instrument" and "instrument". As the Parliamentary Secretary knows, under the act an instrument includes a negotiable instrument and also simple evidence of indebtedness. Having in mind the change in terminology, it would now appear there will be an opportunity for the corporation to negotiate, sell or deal with an instrument, which includes only evidence of indebtedness. Can the Parliamentary Secretary assure the House that the corporation is satisfied that simple evidence of indebtedness as defined by the act, which is now included by the elimination of the word "negotiable", can in fact be dealt with by the corporation as in the past? There is a difference between a negotiable instrument as we understand it in this country and evidence of indebtedness which might be given according to the law of a foreign country but which might not be acceptable here.


Bruce Andrew Thomas Howard: If the hon. member is referring to evidence of indebtedness as being a promissory note, then this is clearly a negotiable instrument. The difficulty arises in that it is now common banking practice in international trade to have a fixed interest rate included in the instrument. Because of this kind of change it is necessary to remove the word "negotiable". This is purely a technical change to accommodate the differences in common usage that have grown up in recent years.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

Stanley Ronald Basford: that Bill S-4, to implement an agreement amending the trade agreement between Canada and New Zealand, be read the second time and referred to the Standing Committee on External Affairs and National Defence.


Marcel Joseph Aimé Lambert: Mr. Speaker, I rise on a point of order regarding the motion to refer this bill to committee. I wonder why on earth it was found necessary that a trade agreement which deals primarily with dumping and anti-dumping negotiation should be referred to the committee on external affairs, when the Committee on Finance, Trade and Economic Affairs is the committee which has dealt in great detail with the question of dumping and anti-dumping and all that flows therefrom. It seems to me that the motion should refer the matter to the Committee on Finance, Trade and Economic Affairs. I hope that someone on the government side who is in a position to move an amendment to the motion will consider my suggestion and move such an amendment.


Mr. Andre Ouellel (Parliameniary Secreiary to Secretary of Stale for External Affairs):: Mr. Speaker, the Protocol modifying the 1932 Trade Agreement between Canada and New Zealand was signed in Wellington on May 13, 1970, by the right hon. Prime Minister of Canada (Mr. Trudeau) and by the Prime Minister of New Zealand.
Although the protocol does not modify the essence of the rules governing our bilateral exchanges, it constitutes an updating of the existing agreement and provides for certain mutual benefits.
First, a new anti-dumping provision enables Canada to fulfill her obligations under the international anti-dumping code while providing for similar treatment for Canadian goods on the part of New Zealand authorities.
Second, under an amendment included in the protocol, Canada pledges to try, by means of administrative measures, to minimize the difficulties encountered by New Zealand exporters due to certain requirements of the Agreement compelling them to ship their goods directly to Canada in order to enjoy the British preferential tariff.
Third, this new clause covering specifically consultations and the establishment of a joint consultative Canada-New Zealand committee provides means and ways to
January 12, 1971

settle with greater efficiency a wide variety of bilateral problems.
This consultative committee will furthermore have to gather at the ministerial level or at the higher officials level, at least every two years, and will then be free to discuss all subjects of common concern.
Fourth, the protocol provides prior consultations for any significant change to the preferential tariff treatment that either party would consider.
Since the original 1932 trade agreement between Canada and New Zealand was introduced in Canada as an act of Parliament, the amending protocol must be introduced as an act amending the act. By approving the protocol for purposes of official acceptance by Canada, the cabinet has decided consequently that this amending bill, which is required, must also be introduced before Parliament.
And I hope that honourable members will be ready to accept Bill S-4 and to refer it to the Standing Committee on External Affairs and National Defence.
I understand the comments made by the hon. member for Edmonton West (Mr. Lambert) but, as this legislative proposal has been introduced by the Minister of External Affairs, I feel that, in accordance with the House's usual procedure, it should be referred to the Standing Committee on External Affairs and National Defence.
In any case, I will consult my colleagues who have more parliamentary experience than I to see if there is not some other way to deal with this bill in committee in order to satisfy the hon. member.


Marcel Joseph Aimé Lambert: Mr. Speaker, why then do we have a committee on Finance, Trade and Economic Affairs?


Heath Nelson Macquarrie: Mr. Speaker, I should like to begin by congratulating the Parliamentary Secretary for his presentation. I think I will not quite emulate his brevity, but I shall not deliver lengthy remarks on this bill. I think it is a good thing to have Parliamentary Secretaries involved in legislation. I note, however, that so far as the record shows, at no phase of the consideration of this measure in the other place was any minister present when it was being discussed.
I am not convinced the bill is as innocuous as it may appear at first blush. I think it may be possessed of a little more potential for importance than may appear. This is an interesting measure in that it is one bilateral treaty which has stood untouched for 38 years. It comes into the area of personal recollection. I can remember as a youngster of 11 that in the election campaign of 1930 everybody was talking about New Zealand buttter. Then there came on the scene a great man who was going to blast his way into the markets of the world and make tariffs work for the farmers as free trade had never worked for them.
We had on the scene in the thirties a very vigorous personality and powerful leader. He is not, and was not, my favourite among Conservative leaders but he did
New Zealand Trade Agreement Act many things when it came to economic matters. It was interesting how he looked at the Commonwealth as it was called in his time. While Bennett had no use for the idealistic concept of free trade, he quarrelled with his friend Lord Beaverbrook about that. He did believe in freer trade, and this agreement with New Zealand which has stood since 1932 was one of the emanations of this belief. I think it is appropriate, too, that on the eve of the Commonwealth Prime Ministers' conference we are tonight discussing a measure which directly emanates from a protocol signed by our own Prime Minister (Mr. Trudeau) and the Prime Minister of New Zealand a few months ago. We are discussing something which had its origin in a year of Canadian centrality in Commonwealth affairs.
We have had periods through the years when Canada and Canadian leaders have given distinct direction to the empire, as it was once called, and to the Commonwealth of Nations as it was later called and is now called. We can think of Sir Robert Borden who in many ways was the father of the modern Commonwealth. We can think of Meighen who gave emphasis to the Pacific, so far as the Commonwealth was concerned, at the 1922 conference. And we think of Bennett in the thirties, making the then outrageous suggestion that Commonwealth conferences should be held other than in Britain and pushing his way to the very centre of things in an age of painful economic nationalism in an effort to get some sort of supranationalism in the world of economic nationalism through Commonwealth agreements. While the hopes of Bennett were not realized and the world did languish far too long in the trough of economic despondence, some of these agreements have stood, and stood well, and we are talking about one of them tonight.
We are very far from New Zealand, geographically, but in many ways very close to this senior member of the Commonwealth. I used to note at the United Nations General Assembly quite a correlation between the votes of New Zealand and Canada on a great many questions; we were very close in many points of view. I think it is important to note always that this Commonwealth is made up of a gossamer connection of all the states and the special associations of groups within the Commonwealth. We, naturally, could not be as close to New Zealand in deference terms as is Australia. We can be, and I think should be, even closer to the Commonwealth Caribbean than we are now. So the Commonwealth is wound up in a series of bilateral and perhaps trilateral agreements all within the framework of a most unique and interesting institution.
Once again we hear that the Commonwealth is threatened and that it is going to break up. I was appalled to hear on the CBC tonight that the Prime Minister of Canada who is in India was even publicly contemplating that a situation might arise where Canada may perhaps find herself leaving the Commonwealth. You do not leave organizations like the Commonwealth. You do not leave the United Nations, nor do you leave NATO because

January 12, 1971
New Zealand Trade Agreement Act everyone there is not on exactly the same wavelength as each individual member desires. This is not the way the Commonwealth is structured; it is not the way it is functioning. To even talk about Canada leaving the Commonwealth strikes me as a painful and regrettable example of anticipatory petulance which I think does no good to Canada and no good to the Prime Minister.
There are features in this bill which no doubt the learned economists of my party will want to discuss in greater detail. There are a couple of basic aspects which concern me. I notice that we are following the original treaty and using the British preference. I wonder what will happen to this treaty when the U.K. becomes a ;ull-fledged member of the European Economic Community. What will the British preference in this legislation mean, and will we not in fact have to say about this reasonably ancient treaty-if I may call something reasonably ancient-that it has outlived its usefulness and that we are back to square one so far as trading relations with New Zealand are concerned? Therefore, this is not just a simple piece of legislation: the whole question will have to be reconsidered very carefully.
The thing that has always pained me about the present government is that they seem almost to have been taken by surprise by the fact that the British have seriously contemplated and are in fact on the way into the European Economic Community. Another thing that strikes me as important-it will have to be carefully discussed and I am sorry that no one who has been piloting this measure in either place has mentioned it-is the question of agricultural products today. It was butter in the 1920s and the 1930s, and it is another agricultural commodity- I am not an expert in agriculture-which we should be considering very carefully in the context of the present state of Canadian agriculture. The reference is to the anti-dumping techniques. They strike me as being reasonable and sound. I am not quite prepared to go along with the hon. member for York East (Mr. Otto) in reference to GATT, but neither do I worship at that particular temple every day of the week.
Having said these general things and noting carefully what my colleague in front of me, the hon. member for Edmonton West (Mr. Lambert), said about the Trade and Commerce people rather than the External Affairs people, I am inhibited and overly modest about getting into these important matters. I know that probably he will be getting into them with his usual perceptive and comprehensive manner and will deal with them in greater detail.
I have a feeling that this agreement, because of events in Europe with reference to the United Kingdom, will not last anything like 38 years. It will be shortlived, and therefore we must bear this carefully in mind. I think we should approach the matter as one of economics. Of course it is a trade measure. I think the fact that the Commonwealth is involved makes it a little more than just another treaty. I am glad to have had the opportunity to make these few remarks. Having made these observations, I have no disposition to prolong the discussion.


Max Saltsman: Mr. Speaker, I think it is natural for a Canadian to welcome any enlargement of contacts with a beautiful country such as New Zealand. New Zealand in some ways is very much like Canada. Anyone who has visited that country, as I had the privilege of doing along with the hon. member for Edmonton West (Mr. Lambert) during the Commonwealth conference in 1965, comes away impressed with the similarity of that country to Canada. In many ways New Zealand stands in relationship to its giant neighbour, Australia, with seven times its population, as does Canada in relation to the United States and the same kind of feeling exists, the same kind of hesitancy about the future.
The New Zealand economy is structured almost entirely on agricultural export. The latest figure I can recall is that 95 per cent of New Zealand's exports are agricultural. This results from the geography and the population of the country. Therefore, when we enter into an agreement with a country like New Zealand, as welcome as that agreement is and as welcome as contacts with New Zealand are, we must realize that it poses a very serious threat to Canadian agriculture at a time when it is already in very great difficulties.
Unfortunately, the remarks of the Parliamentary Secretary were not very enlightening in the sense of telling us what will happen as a result of this agreement, what are the prospects for Canadian agriculture and in what difficulties Canadian agriculture will find itself as a result of the agreement. Nor were we told what provisions the government is making to correct any dislocation of Canadian agriculture that might result from this gesture of accommodation toward a country which we like.
As I have said earlier, our farmers are in increasing difficulty. New Zealand is also facing increasing difficulties in terms of her agricultural exports. Most of New Zealand's agricultural exports have traditionally gone to the United Kingdom; it is the single biggest market for New Zealand. We understand that the U.K. is trying to set special terms of entry to permit its trading relationship with New Zealand to continue. Unless she can get this kind of an agreement as a condition of entry into the Common Market, a large proportion of the produce which is now going to the U.K. will be thrown into other world markets, particularly the markets of countries with which New Zealand has a trading agreement. I say this to highlight the danger that exists in signing agreements with friendly countries with whom we wish to maintain trade without making adequate provision for the effect they will have on Canadian production and our farming industry.
The relationship between Canada and New Zealand, although it goes back a considerable span of time, has not been very friendly or very compatible in recent years. I do not think there has been any open hostility, but there has certainly been a considerable degree of coolness in the relationship between our country and New Zealand. New Zealand was one of the few countries that did not exhibit at Expo. This was a great disappointment to Canada. We have had difficulties with New Zealand in terms of reaching agreement for our international air lines to land in that country.
[Mr. Macquarrie.l
January 12, 1971

l
There have been few ministerial visits to Canada. Recently the Prime Minister of New Zealand visited us, but previously there was a tendency for Canada to be bypassed when New Zealand ministers were touring the world. However, Mr. Speaker, when you are in New Zealand the situation is entirely different. One could not ask for greater friendship or greater hospitality than was extended to our delegation when we were in that country, a delegation that was so well led by the very able Minister of Consumer and Corporate Affairs (Mr. Bas-ford). I am sure he will recall that visit with great pleasure.
If we look at the trade picture between our two countries we find that we sell about 300 products to New Zealand, some in fair sized quantities and some in lesser quantities. We sell New Zealand a considerable amount of chemicals and fertilizers, but virtually all the goods that we sell are industrial goods that come from central Canada and it is quite obvious that in return we buy virtually all agricultural products, which will principally affect the farmers of western Canada. At one time those products were butter, cheese and mutton. Today the principal product is New Zealand beef, which is a prime competitor for our western beef industry. Yet this is at a time when the government through its Lift program has been suggesting to western farmers that they should get out of grain production and concentrate on beef production. At a time when our farmers are being told they should switch from grain to beef, an agreement is made between our country and New Zealand to provide for the importation of more beef products from that country.
I would like to indicate how trade between the two countries has been changing over the last few years. For a long time our exports to New Zealand were at least double our imports from there. In 1968 we exported $31,842,000 worth of goods to New Zealand and imported $18,645,000 worth of goods. In 1969 this pattern changed; we exported $36,976,000 worth and imported $41,482,000 worth. For the first time we started to import more than we exported. There was a reason for that, Mr. Speaker. For years most of the products we imported did not find their way on to the Canadian market. They came into Canada to be transshipped to the United States and did not have a serious effect on our domestic market. Here they were cut up, packaged and prepared for North American delivery and forwarded to the U.S. market. That situation existed until last summer, when serious objection was raised by American farm organizations that Canada was being used as a bypass for New Zealand produce. As a result, this trade was effectively curtailed.
In 1970 we exported $35,192,000 worth of goods to New Zealand. In fact, through the years our export figures remained fairly constant. But in 1970 we imported $38,-
311,000	worth of goods from New Zealand, which came on to the Canadian market because the U.S. border was being closed to New Zealand imports; New Zealand products could not enter the United States as easily as before. New Zealand goods that were in storage in Canada for transshipment to the U.S. found their way on to the
New Zealand Trade Agreement Act Canadian market and represented a serious source of competition for the already hard pressed Canadian farmer.
Therefore, while the signing of agreements of this kind with a country like New Zealand is welcome, a country that is very much like Canada in terms of its people, its outlook and attitude, and while we want to extend the scope of our friendship and trade, it raises enormously serious problems and adds to the already great feeling of unhappiness and sense of neglect being felt in our western provinces.
The argument we have always heard is that the east is continually trading off agriculture for manufactured goods. Westerners said this with respect to the Kennedy round, and with a considerable amount of truth. They will say it again with respect to this agreement, again with a considerable amount of truth. This is the great dilemma that faces us. It would not be such an enormous dilemma, Mr. Speaker, if we had a statement of policy from the government. This is the great difficulty.
We know that changes in trade are taking place throughout the world. The farmers know changes are taking place. But what actually is happening? What kind of provision is being made to take account of the dislocations? When my colleagues listen to me speak about the necessity to protect the shirt and shoe industries in my riding, they ask me, with great justification, "What is being done to protect the farmer?" That is part of the grievance of the west. What we need is a policy that takes these matters into account, that recognizes the diversity of interests within this country and in a planned fashion, with an organized approach, with the co-operation and participation of those affected, reaches a decision about the future of industries in such a way as not to disrupt violently the livelihood of those engaged in them and their ability to survive.
Therefore, we feel that the government must provide us with answers to the questions that this agreement raises. We want to know what have been the consequences of trade between Canada and New Zealand and what provisions the government is making to take account of them. We intend to give the bill close scrutiny both in committee and in the House.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I would like to make some comments on the bill under consideration and at the same time ask the Parliamentary Secretary to the Secretary of State for External Affairs (Mr. Ouellet), for some information relating to the expressions "goods", goods the growth", and so on.
Article 2 of Bill S-4 reads as follows:
Articles IV and V of the Agreement are deleted and replaced by the following Article:
Now, in article IV of the agreement signed in 1932 and assented to May 13, we read the following:
Goods entitled to entry under Article I hereof shall not be subject to Section 6 of the Customs Tariff of Canada unless previous notice has been given by the Government of Canada to

January 12, 1971
New Zealand Trade Agreement Act
the Government of New Zealand that the importation of such goods would prejudicially or injuriously affect the producers or manufacturers of similar goods in Canada,-
Since, with Bill S-4, this clause is eliminated, the protection which used to be granted to the Canadian producers would also he eliminated.
I remember that, last year, at the time of the visit to New Zealand of the Prime Minister (Mr. Trudeau) it was said on television that the Prime Minister would have stated that the Canadian government's dairy policy was aimed at reducing production to allow the New Zealanders to export their dairy products to Canada.
Now, Mr. Speaker, at the end of December, Mr. Roland Pigeon, President of the Cooperative federee de la province de Quebec, sent a telegram to the President of the Canadian Dairy Commission and requested that the Commission's regulations be amended so as to protect dairy production and prevent a possible shortage of dairy products in Canada.
This is why I am rather worried and this is the reason for my remarks. I would like to know what is the actual purpose of Bill S-4. Is it really to permit the importation into Canada of competing products and to enable New Zealand to export here what we have already in sufficient quantities to a point that the government has already thought of penalizing the producers that would exceed their quotas? Everyone knows that if production exceeds the quotas set by the Canadian Dairy Commission, the producers are subject to a penalty of $1.25 per hundredweight.
What happens when we deal with some country? I am for trade with the Commonwealth countries and others in the world. This is quite normal. But I believe that we should not import goods likely to affect labour, production or income within some sector of our society.
It might be argued that butter from New Zealand can be obtained at 45 cents or 50 cents per pound. In turn, I might say: A pair of shoes from India can be obtained at $2. Also good quality shirts can be obtained from Japan at $3; the same rationale could be used concerning many other goods and many other staples.
By always importing what is cheaper elsewhere, we stifle industrial development at home, prevent our industries from expanding and producing, and deprive Canadian workers of their jobs. Before long our country might become an importing country only for the fact that other countries are able to produce goods at lower cost.
I wish we were told exactly what is meant by "goods the growth..." This is what we find in the bill:
2. Goods the growth, produce or manufacture of... into New Zealand-
What does this mean? Have we established what are the goods the growth, produce or manufacture of New Zealand which will be imported?
That is what I wanted to stress so as not to be told some day: We would have told you if you had asked
about it. You ask about it now that the legislation has been passed, now that the bill has been ratified. It is too late!
I sincerely hope we are given all that information when the bill is examined more thoroughly so as to be able to pass such information along to the people we represent.
I already have enough problems in my own constituency without having to approve legislation that might create still greater problems.
That is why I hope the Parliamentary Secretary will be able to give us all the necessary information so that we may know exactly where we are going.


John (Jack) Henry Horner: Mr. Speaker, after looking at Bill S-4, which deals explicitly with Canada-New Zealand trade arrangements, I immediately checked our import-export relationship with New Zealand. I realize that trade is a two-way street. If we expect to export, we must import. Much to my surprise, I found that Canada and New Zealand are relatively in balance with regard to trade. During the period January to October last year, Canada imported from New Zealand goods valued at approximately $35 million. In the period January to October, Canada exported $35 million worth of goods to that country. In the same period Canada imported almost $27 million worth of beef. Our total imports and exports are about equal.
I wondered about the reason for Bill S-4. After some study I realized that this bill will allow New Zealand to apply anti-dumping legislation against our manufactured goods. I question the motivation of the bill and whether Canada's position is secure in this regard.
I wish to quote from an article dealing with beef. This is of particular concern to western Canada. The hon. member for Waterloo (Mr. Saltsman) dealt with this matter to some extent. I quote as follows from page 17 of the January 1971, issue of Cattlemen:
The Canadian government, oi course, has created problems for itself.
I emphasize those words.
Canada alone among major nations clings to the concept of free trade among nations. Who will deny that this is an admirable goal? Of course it is. However, to adopt this stance, when other countries are moving the other way, is foolishly naive. The net effect is that Canadian primary industry is forced to "swim upstream" against a very strong current indeed.
Let's look at the record. As mentioned, the United States is now in a protectionist mood and has since 1964 imposed quotas on beef from Oceania. The European Common Market has since its inception imposed rigorous quotas, tariffs and variable levies against all manner of agricultural products, including beef. Japan imposes a quota plus a tariff of 25% of the value (cost plus freight) of beef. Finally, the United Kingdom recently announced a system of variable levies for many agricultural products, including beef, to go into effect April 1, 1971. Thus, Canada stands alone unprotected in any way from world markets. What a ripe target!
Therefore, the position of the federal government is at best naive and at worst suicidal for primary industry. In times like these we must have rational flexible policies designed to cope with modem realities. Nowhere is this need more in evidence than in the current situation respecting beef imports. Between 1969 and 1970, imports from Oceania more than doubled. What

January 12, 1971

if they double again in 1971 and again in 1972? Why shouldn't they? We apparently have neither the laws of Parliament nor the desire of parliamentarians to prevent just such an occurrence.
That outlines the position with regard to beef and the oceanic countries, New Zealand and Australia. What is the situation with regard to New Zealand and beef imports? In 1969 we imported 28.7 million pounds of beef from New Zealand. This year, with the third quarter complete and statistics for the fourth quarter not yet to hand, we have already exceeded the 1969 total. We are faced with a total of 30 million pounds of beef from New Zealand alone. This gives us some idea of the increase. In fact, last year 7 per cent of the beef consumed in Canada came from Australia or New Zealand. This year it is something in the order of 12 per cent.
I am not particularly objecting to the fact that Canadian producers must meet competition, but I should like to recall the words of the Minister of Agriculture (Mr. Olson) when he told a recent meeting of the agricultural congress that Canadian agriculture was subsidized to a significantly less degree than that of any other country in the world, including New Zealand and Australia. As the article in the Cattleman said, we must become sharp traders; we must be able to bargain for the rights of our producers. One can readily understand that western Canada is anxious to divert part of its wheat production capacity into the beef industry. For our part we must allow it a market for the products which Canadian farmers and ranchers have decided to raise.
How does this relate to Bill S-4? To explain this perhaps I should read from the proceedings of the Senate Committee on Banking, Trade and Commerce. As reported on page 7 of the committee proceedings for November 4, 1970, Mr. J. R. Roy, acting head of the commercial policy division of the Department of External Affairs had this to say when explaining Bill S-4:
This bill is required to put into effect the Canada-New Zealand trade protocol which amends the 1932 trade agreement between Canada and New Zealand. The trade protocol was signed on May 13, 1970, in Wellington by the Prime Minister and the Right Honourable Keith Holyoake, Prime Minister of New Zealand.
We thought our Prime Minister (Mr. Trudeau) was attending nightclubs over there, but now we find he signed some important trade agreements which may have repercussions across western Canada particularly. He apparently believes in the theory that all play and no work makes "Pet" a dull boy. Mr. Roy continued:
The protocol does not alter the basic framework governing the conduct of our bilateral trade with New Zealand. However, it does update the present agreement and provides for certain benefits of mutual advantage.
I draw attention to the words "mutual advantage". As I read these committee proceedings, I fail to see the advantage which Canada will derive from this agreement. Mr. Roy continued:
There is a new provision on anti-dumping which will allow Canada to fulfil its obligations under the international antidumping code. At the same time it provides for roughly equivalent treatment of Canadian goods by the New Zealand authorities.
New Zealand Trade Agreement Act
Apparently Canada will be able to apply anti-dumping regulations against products coming from New Zealand. Well over three-quarters of the products coming from New Zealand are in the form of meat, lamb and beef- mostly beef. We receive practically all our mutton from New Zealand and there is a fifty-fifty break as between New Zealand and Australia lamb. Can we apply an anti-dumping code against these entries at any time? I doubt it very much. The chairman of the committee asked a question and Mr. Roy replied as follows:
In order to set this matter straight we have requested and obtained a modification to the trade agreement with New Zealand.
Senator Molson then commented:
There is no explanation here of the articles to be amended. For example, article IV and article V of the agreement are deleted. Frequently when legislation is prepared the changes are shown. In this case there are blanks on the explanation side.
Provision of explanations is normally a standard procedure. The effect of changes made is explained on the explanation side of the page. Senator Molson is quite right; Bill S-4 contains no explanatory notes whatever. On the following page, article IV of the GATT arrangements is discussed. Earlier today, a member of the government told us how good GATT was to Canada. I shall not quote his remarks but I wish to draw attention to the following point. Bill S-4 gives the government of New Zealand an opportunity to apply anti-dumping regulations under the GATT agreement to manufactured goods entering that country from Canada. No explanation of the reason has been given in this House, and I fail to see that any explanation was provided during the Senate committee hearings. No assurance was given that similar action could be taken by Canada against commodities, manufactured or otherwise, entering this country from New Zealand.
I invite hon. members to consider the problems facing western Canada agriculture today. One sees a substantial increase in hog production all across western Canada, in the neighbourhood of 70 per cent in the province of Saskatchewan, 26 per cent in Alberta and 23 per cent in Manitoba. One might ask what effect this will have on the price of cattle. It has had a drastic effect on cattle prices, thus compounding the difficulties which Canadian cattlemen face already, quite apart from sharp increases in imports from Australia and New Zealand.
I invite hon. members to read the Washington Farmlet-ter put out by a farm writer, Wayne Darrow. He has this to say about the price of pork in the United States. He writes that because pork prices have fallen so low they have caused a sharp decline in the price of cattle, amounting to 5 cents a pound. I read from the Washington Farmletter of January 8. Hon. members will see that these are current figures.
Not all the damage of the hog glut Is reflected in hog price returns. Cattlemen got hurt, too. Choice steer prices at Omaha peaked at $31.48 cwt. the first week in July. Then, although volume of beef kill remained right at 1969 level, price fell to $26.09 in December. Both pork volume and economic sag had a hand in this $5 fall.
2348

January 12, 1971
New Zealand Trade Agreement Act
This emphasizes that by allowing a surplus of grain to build up in Canada we have brought about a diversion to hog and cattle production. This past year alone, as a result of programs in the province of Saskatchewan the number of cows increased by 86,000 head, and no doubt there was a similar increase in the province of Alberta. This means an increase in cattle herds throughout the country.
Can we sustain an agricultural industry that encourages producers to produce livestock rather than to grow wheat and other commodities that have created a glut? Can we do this by allowing our prices to fall and imports to increase? I repeat that last year in beef alone there was a substantial increase in New Zealand exports to Canada as well as from Australia. Over-all, last year Canada imported something like 7 per cent of all beef consumed in Canada, and this year we have imported something like 12 per cent of all beef consumed in Canada.
With regard to lambs, we have long tried to negotiate with New Zealand and reach an agreement. We have stated that if New Zealand would not export its frozen lamb products to Canada at the same time as Canadian lambs were going to market, we might be able to handle an appreciable amount of New Zealand lamb. Yet repeatedly our market has been hurt substantially by heavy imports of New Zealand lamb at a time when Canadian lambs were going to market. This has had a very depressing effect on price. I am a little reluctant to see Bill S-4 pass when it appears that we are giving New Zealand the right to impose anti-dumping restrictions on Canadian manufactured goods entering their country, while we are not giving ourselves a reciprocal right in regard to the main agricultural imports from New Zealand. Lambs have been an historical problem in the Canadian agricultural market, both as to the timing and the volume of imports.
We should examine this bill very closely and ascertain whether, when the Prime Minister signed the trade agreement on May 13, 1969, he was overtaken by a conciliatory spirit as a result of the hospitality shown him by the New Zealand government. I was interested in the remarks of the hon. member for Waterloo about the New Zealand government being very hospitable to us when we visit their country, yet they are hardly prepared to come here to consult or visit us. The thought has entered my mind that since they have a Labour government in New Zealand, they therefore tend to protect their own market and not be too concerned about their traders. At least, a few years ago they had a Labour government which was not too hospitable to New Zealand's trading neighbours. Since then they may have mended their ways and perhaps become shrewd traders, catching the Prime Minister in a weak moment.
Having said that, I concur with the hon. member for Edmonton West (Mr. Lambert) who stated he could see no reason why this bill should go to the external affairs committee instead of to the committee on trade and commerce. I think this is a very good suggestion since we
are dealing here with a country that is almost an equal trading partner with us. If we give them some advantage, we should receive a similar advantage. I say this in view of the concern and the fear being expressed in agricultural circles in western Canada. Since the government is very responsive to fears that are expressed, and perhaps even over-reacts in such matters, I hope it will act normally in this case and refer the bill to the committee on trade and commerce.


John Stratford Burton: Mr. Speaker, I wish to participate on the debate on this bill for a few moments because I object to the manner in which the government is handling legislation in the House. An agreement has been signed by Canada and New Zealand which, as the Parliamentary Secretary quite properly pointed out, requires ratification by the Parliament of Canada. However, my objection has to do with the fact that we did not hear a single word from the Parliamentary Secretary about some very significant events and developments which have taken place since the agreement was signed. It seems to me that if we are to have any sort of reasonable or sensible debate on the subject of this agreement, it is important that the government give us some information about developments since last May.
As has been pointed out, relations between Canada and New Zealand have not been at their best for some time. Possibly one reason for this is that we both produce similar products, particularly in the field of agriculture, and these products compete with each other. Naturally, this poses some difficulty in reaching a good trading agreement.
However, I think it is important to take note of recent developments, as did the hon. member for Waterloo (Mr. Saltsman) and the hon. member for Crowfoot (Mr. Horner). Toward the end of last June it became quite clear that a serious situation was developing. There has been a flow of livestock products in both directions between Canada and the United States. Generally, we have seen a greater importation of cattle from the United States to Canada than vice versa. However, we also found there was a fairly heavy movement of cattle or manufactured meat particularly from Australia and New Zealand which was being shipped to the United States via Canada.
This situation reached the stage where toward the end of last June the United States government decided it would have to impose restraints against further shipments in view of the fact that direct shipments from Australia and New Zealand, plus the shipments coming via Canada, were such that there were protests from U.S. farm organizations. As the Globe and Mail of July 17 pointed out, officials were dickering about the duration of the trade suspension, which officials estimated would be two months at the outside. It would be useful to have a further outline from the government as to what actually took place. The Globe and Mail article also noted that the glut of manufactured meat became a threat when the United States called a halt to imports of the Australasian variety by way of Canada.

January 12, 1971

Then a very important point was made by the Globe and Mail article, which pointed out that about a dozen Canadian dealers, packers, importers and brokers had built up the transshipment of Australasian meat to the United States into a flourishing business. The business has built up to about 50 million pounds annually. It was also noted that the arrangement violated a U.S. program of voluntary restraints on meat imports, with U.S. warnings to Australia, New Zealand and Canadian dealers, and led to a ban order on June 30. When this was protested by Canada, with the suggestion that it be brought in in easy stages, it was pointed out that the United States had reminded Canada of this and that numerous advance warnings had been issued.
It was also pointed out in an article in the Globe and Mail of December 1, that although shipments of Australian and New Zealand beef to Canada had been shut off by U.S. customs officials, there had been evidence that Canadians had been sending in more of its own beef while keeping some of the third country meat. I think this points to the need for a government statement on the situation, if in fact we are to deal with some of the problems that have arisen and if we are to reach the objective of a reasonable and sensible trade arrangement with New Zealand, which I am sure all members in this House would like to see.
The situation I have referred to, and some of the developments over the past several years, are illustrative of the confusion which exists in agricultural industry and agricultural production in Canada. This is illustrated by the fact that last year, I believe for the first time, imports of food into Canada exceeded the value of exports of food. Certainly there is no need for this situation which has resulted solely from government mismanagement and the absence of adequate government policy.
We must avoid some of the problems which have plagued our agricultural industry. We also want to carry on trade with foreign countries, but there is room for further effort to bring about rationalization in respect of the timing of marketing various products, which was referred to by the hon. member for Crowfoot, and in respect of rationalization of production.
I wanted to place on the record our concern about some of the problems which exist. With these few remarks I urge the government to take steps to ensure that in fact the interests of all concerned are adequately protected by arriving at a more sensible solution than appears to have been the case in the past.


Marcel Joseph Aimé Lambert: 
Gerald William Baldwin: Mr. Speaker, I will require only two or three minutes to complete my
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January 12, 1971
New Zealand Trade Agreement Act remarks. I hope Your Honour will let your eyes glide softly past the clock for that length of time, with the hope that we can complete this debate.
I agree with the hon. member for Edmonton West (Mr. Lambert) about the reference to committee. The one occasion the Committee on External Affairs delved into economic matters-and I have a great deal of respect for the deliberations of that committee-was an unmitigated disaster. The committee left its natural field and got into matters of United States nationalism. I hope the committee keeps away from this situation in the present case.
As the only member of this House who was born in New Zealand, perhaps I will be permitted to say a word or two on this subject. Having been nourished for the first few years of my life on New Zealand agricultural products, I hope I am a good illustration of their benefits-the mildness and moderation which they engender in the people of New Zealand. To some extent I agree with the hon. member for Crowfoot (Mr. Horner). There are problems in respect of which we must be careful. We must bring these to the attention of the authorities.
I was at a meeting of farmers in the Peace River country some two months ago. Several hundred farmers met to view, with great indignation, the agricultural policies of this government, particularly the unfortunate Farm Products Marketing Act. During the course of that meeting I rediscovered that a fledgling sheep industry was being developed in the north. I conclude what I have to say by placing on the record one paragraph from a letter I received, which I think will indicate my concern with the situation and will draw it to the attention of the authorities. This letter is from the president of the South Peace Sheep Breeders Association. In part it reads:
One concern we have is the importation of lamb from Australia and New Zealand. These countries have built their whole economy around sheep and the environment allows them to raise these sheep in a very economical manner. These importations present the people in the Peace River country who are struggling to develop a new industry with a very difficult competition. This is particularly true if importations are allowed in at the time of our heavy marketing, and we feel that strict import regulations are needed.
I must point out that this is not prohibition but regulation.
We would therefore ask the federal government to conduct a full investigation into the effect imported lamb has on the price of domestic lamb. In this regard we would draw to your attention these specific questions. Why is there an 8 per cent spread between imported lamb and Canadian lamb, the imported being the higher priced product? At times the price spread between Edmonton and Toronto markets appears excessive. We have noted differences as much as 16 cents a pound, and we would like some explanation.
Quite obviously, this bill provides the machinery to do this. I take this opportunity to bring the matter to the attention of the authorities and hope that the bill will now pass and be sent to the committee proposed by the hon. member for Edmonton West.


Herbert Eser (Herb) Gray: Mr. Speaker, we have given consideration to the very constructive suggestion of the hon. member for Edmonton West (Mr. Lambert) and are prepared to accept the suggestion to change the order of reference of this bill from the Standing Committee on External Affairs and National Defence to the Standing Committee on Finance, Trade and Economic Affairs. I can say from my own experience, having had the honour of piloting the antidumping bill through the House and through the finance committee that the members of that committee from all parties are equipped to deal with the matter now before the House. Therefore, I move, seconded by the Minister of Consumer and Corporate Affairs (Mr. Basford):
That the motion be amended to change the reference of the bill from the Standing Committee on External Affairs and National Defence Committee to the Standing Committee on Finance, Trade and Economic Affairs.


The Acting Speaker (Mr. Laniel):: Order. It is the practice of the House to have a written motion. However, with the unanimous consent of the House I think the Chair can change the motion which is before us so that the motion will read that the bill be referred to the Standing Committee on Finance, Trade and Economic Affairs, rather than to the Standing Committee on External Affairs and National Defence. Is it agreed?


Some hon. Members:: Agreed.


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


Some hon. Members:: Question.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

Gerald William Baldwin: Mr. Speaker, may I be permitted to ask the Parliamentary Secretary to the President of the Privy Council whether the government intends to bring in any legislation to assist the economic situation, or are we to follow the rather pedestrian list which we have?


Mr. Jerome:: Mr. Speaker, my hon. friend well knows, the order which has been set for legislation this week. Following the measure just passed will be Bill C-192, the young offenders bill, followed by Bill C-185, in respect of the Crop Insurance Act, followed by Bill C-187, respecting minerals in the Yukon Territory, followed by Bill C-193, to amend the Northern Canada Power Commission Act. I do not suppose it is appropriate to make lengthy comment on whether that list of legislation satisfies my friend with regard to the importance of the items therein contained.


Stanley Ronald Basford: He should read the editorial in the newspaper.

January 12, 1971



PROCEEDINGS ON ADJOURNMENT MOTION

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

Heath Nelson Macquarrie: Mr. Speaker, whether we all have clean hands and a pure heart or not, Canadians do try to clean their teeth quite often, and when I asked a question the other day about abrasive qualities in toothpaste used by Canadians I was not being facetious or loose-lipped. It is very important, considering the dangers inherent in toothpaste as discovered in areas of the United States, that we in Canada know exactly what is the potential for injury in the toothpaste which is used by millions of Canadians.
I have news items here which indicate that three separate organizations in the U.S. have gone into this matter very carefully, the National Academy of Sciences, the U.S. Food and Drug Administration and the American Dental Association. The findings of these prestigious bodies are quite disturbing. Many of the well known toothpastes on the market, sold by millions of tubes and containers, have qualities which are injurious to the dental health of their users. One news item indicates that there is an abundance of abrasive material in one brand which is injurious to tooth enamel and, therefore, contributes to early decay. Another points out that out of 11 brands which claim to prevent or retard tooth decay, only two have any right to that claim whatsoever, and one is doubtful. The others, they believe, have no efficacious qualities whatsoever in this particular field.
If the U.S. is making such a vigorous assault in this very important area, I say that the mouths of Canadians are important, too. I urge and implore the Minister of National Health and Welfare (Mr. Munro) and his officials to give the Canadian people reassurance, guidance and suggestion. If people are making false advertising claims and making millions of dollars out of them, something should be done.


Mr. Gerard Duquel (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, on behalf of the Minister of National Health and Welfare (Mr. Munro) and in response to the hon. member's question concerning a recent study by the American Dental Association of the abrasive quality of some brands of toothpaste, I wish to inform the House that the federal government has not to date conducted similar studies although continuing studies are going on regarding other aspects of toothpaste, such as the use of chemical additives and the efficacy and safety of popular toothpaste brands. We are studying the report of the American Dental Association and conducting a survey of Canadian schools of dentistry to determine what action, if any, is required. When this survey is completed, the Minister of National Health and Welfare will be pleased to report to the hon. member.
Proceedings on Adjournment Motion



AIR TRANSPORT-CONSULTATIONS WITH MANUFACTURERS OF DC-8 ON SPOILERS-EFFECT OF SONIC BOOM

Mr. Randolph Harding (Kootenay West):: Mr. Speaker, on December 4, 1970, I asked the following question in the House of Commons:
Has the government formulated a definite policy in regard to the sonic boom and its effect on Canadian communities in general? If not, what surveys on the problem have been made or are contemplated by the Department of Transport?
You, sir, suggested that the matter be raised at this time. It is obvious that the government cannot long delay a decision on this important matter. Several countries are building and offering for sale supersonic transport planes. There is the joint effort by Britain and France in the building of the Concorde, which has already been test-flown. Russia has also built and tested its TU-144. The United States has been building a supersonic transport model which might be ready for testing in 1972.
It is clear that the technological knowledge to build and fly these planes is now available to the countries of the world. As usual, there has been too little research done on the effects these planes will have on the terrain over which they will fly. This information is required before any sensible decisions about supersonic transport planes can be made. Already the airlines of the world are placing various types of options for supersonic transport planes. These options are not firm orders to buy, but are delivery positions and could be dropped by the various firms with only a small loss involved. However, it indicates that the companies are very interested and will try to incorporate supersonic transport planes in their air fleets.
The problem of noise and the damage it can do is probably the chief obstacle to satisfactory supersonic transport flight. As yet in Canada we have done little to assess this problem. In the United States opposition has been growing to supersonic flights over American territory. Recently, by a vote of 52 to 41 the U.S. Senate rejected a proposed $290 million subsidy for the development of the American supersonic model. A bill has been introduced in the U.S. Senate to prohibit the flight of supersonic transport over United States territory. The rejection of this $290 million subsidy by the U.S. Senate was based on the trouble and damage which sonic boom might cause to the environment. At high altitudes these aircraft could cause a path of sonic boom 60 miles in width. The effect this loud, sudden and frequent thunderlike boom would have on both individuals and animals has not yet been estimated.
There are also economic factors involved. Companies and individuals are interested in the effect that supersonic transport planes will have on air transport costs. Indications are that these will be sharply increased. There is also the serious problem of pollution. Up to the present, tests have indicated that there will be a vast increase in pollution problems at airports and in the upper atmosphere.
It is obvious that in the next three or four years the Canadian government must introduce firm regulations

January 12, 1971
Proceedings on Adjournment Motion covering supersonic transport. I take this opportunity to urge the minister and his department to press forward with all speed with research on this matter. We have no time to lose. The problem of noise pollution is a major one, not only in Canada but throughout the world. We must ensure that we make no mistakes in this regard in connection with Air Canada and other Canadian air companies when they are placing orders for supersonic air transport planes. If supersonic flight is not to be allowed over Canada, such companies should be told at the earliest opportunity.


Gérard Duquet: Mr. Speaker, I commend the hon. member for Kootenay West (Mr. Harding) on what appears to be a very sincere interest in the extremely important subject of sonic boom and its effect upon us and our environment.
In addition to the question raised on December 4 concerning definite government policy, I noted that the hon. member asked a related question of the Minister of Transport (Mr. Jamieson) on December 11 regarding the involvement of Air Canada and their future planning on this matter. At that time the minister assured us of the the very constructive discussion which has been held among officials of Air Canada and the Ministry of Transport. This is very encouraging.
The first part of the hon. member's question asked whether a definite policy has been formulated with regard to sonic boom. The answer is yes, Mr. Speaker. The government's policy is reflected in the air regulation 515(2) which was promulgated in 1965. It provides as follows:
No aircraft shall be flown in such a manner as to create a shock-wave the effect of which is to create or likely to create a hazard to other aircraft or to persons or property on the ground.
Where Canadian air space is concerned, this policy is in full effect. Hon. members will recall that the minister has reaffirmed this regulation in recent weeks in reply to questions resulting from the development of giant supersonic aircraft in Britain. Officials of the ministry are following closely the present flight trails of the Anglo-French Concorde and are specifically interested in any facts which may be uncovered by the sonic boom measurement portion of these trials.
The hon. member also referred to surveys on this subject. There is now established an interdepartmental committee on the sonic boom with representation from the departments of Transport, National Defence, National Health and Welfare, the Canadian Wildlife Service, Air Canada and the Canadian Meteorological Service. This committee is attempting to examine the problem of sonic boom from all aspects which appear to have relevance to a Canadian evaluation of the problem.
In addition to this, the Department of Transport has sponsored and is represented on the ICAO sonic boom panel. We are represented by Dr. H. S. Ribner and Dr. I. Glass of the University of Toronto institute for aerospace studies. This panel is composed of technical experts from a number of countries. They have recently completed a

l\ year study of the problem and have submitted to the ICAO air navigation panel their evaluation of the state of knowledge with respect to sonic boom.


The Acting Speaker (Mr. Laniel):: Order, I regret to interrupt the Parliamentary Secretary, but I have to remind him that his time has expired.

REGIONAL ECONOMIC EXPANSION-ARGENTIA, NFLD.-[DOT]



REPORT ON EFFECTS OF CLOSING OF UNITED STATES NAVAL STATION

Mr. Walter C. Carter (St. John's West):: Mr. Speaker, on December 7 I asked the Minister of Regional Economic Expansion (Mr. Marchand) the status of the report of the task force appointed by him some time ago to investigate economic conditions in Argentia, Newfoundland, as a result of the phase-down of the United States naval station in that area. The minister replied that the report had been submitted and that some recommendations of the task force had been accepted. The minister referred to the renovation of the Castle Hill project in Placentia, the rebuilding of a road from Long Harbour to the TransCanada highway and the construction of a community stage complex in the Argentia area. The phase-down of the U.S. naval station at Argentia, which imposed very severe hardship on the social and economic life of that area, took place in 1969. It was finalized in February, 1970. It is almost a year since the final lay-off.
The task force was appointed by the Minister of Regional Economic Expansion in conjunction with his colleague, the Minister of Transport (Mr. Jamieson), on March 7, 1970. In its report, the task force made a number of recommendations including paving of the road from Long Harbour to the TransCanada highway. They recommended provision of a small boat building and boat repair complex in the Argentia area. They recommended that a community stage be built and that power facilities be provided. They recommended a national historic site referred to as Castle Hill, as well as a few minor jobs involving minor expenditures.
* (10:20p.m.)
The minister would have us believe, in reply to my question of December 7, that all is well, that the task force has reported, that the recommendations of the task force have been accepted, that work in connection with some of those recommendations has already begun and that as a result there is a real boom in the area. What the minister did not tell the House is that work has started in connection with only one of the projects recommended by the task force-the improvements at the historic site on Castle Hill. This has provided fewer than 50 jobs.
I would point out that the Argentia-Placentia area has a population of more than 7,000 people and a work force in excess of 1,000 of whom, today, approximately 300 are unemployed. We hear figures quoted with regard to unemployment. It is said the national figure is something over 6 per cent. Hon. members should realize that in the
January 12, 1971

area to which I am referring the unemployment rate is something like 30 per cent. The economic situation there has been aggravated by the fact that two or three years ago the government resettled a large number of fishermen and their families in this area. I believe 240 families were moved, probably involving about 1,000 people. This imposed an additional burden on the infrastructure of the area, particularly on the educational facilities.
Centralization is a responsibility of the Department of Regional Economic Expansion, and I contend that since the movement of people into this area imposed an intolerable burden on the educational facilities, to such an extent that the schools are overcrowded-500 children cannot obtain reasonable accommodation in them-the government has a responsibility to give the school authorities the means of making additional classrooms available to enable these children to get an education. At present, children are taught in the basements of buildings, in parish halls in the area and in other makeshift, temporary quarters.
A number of questions with regard to the Argentia phase-down and the promise by the government to institute a crash program have been unanswered. The Minister of Transport went to Newfoundland in July of 1970 and announced with a great deal of gusto a $2 million program for the area. This was to be a crash program. Seven months later there is very little evidence of the crash program announced by the hon. gentleman. That is typical. A task force was appointed by the government, but it did not take the logical step that should have been taken in a case like this and institute feasibility studies to determine the economic prospects of the area.
I feel this area of Newfoundland has a great future in that a number of industries could, with encouragement from the government and after the proper studies have been carried out beforehand, become viable. The industries of fishing, forestry, mining, tourism and transshipping, to mention but a few, could become viable in this area. I think the government has put the cart before the horse and that it should have initiated studies to determine the economic prospects of the area.


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


Mr. Marlin P. O'Connell (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, having been a member of the Standing Committee on Regional Development and having had the privilege of visiting the Argentia area last May, I share with the hon. member for St. John's West (Mr. Carter) his sense of urgency about the need to alleviate conditions there. I do
Proceedings on Adjournment Motion not believe he is correct in saying that the minister wished to convey the impression that there was a boom in the area; quite the contrary.
Before answering him more specifically, I ought to set the record straight with regard to responsibility. In so far as there is federal responsibility in regard to the resettlement program, or centralization program as it may be called, this federal responsibility is carried out by the Department of Regional Economic Expansion. But that is a different thing from saying that the responsibility for the program itself is a federal one. This is basically a provincial responsibility; the federal function is to assist.
The task force referred to is a task force agreed to by Canada, the United States, the province of Newfoundland and the Placentia Area Development Association. It is chaired by a senior official of the Department of Regional Economic Expansion. This task force has made two reports to the federal and provincial governments, in which recommendations were made for projects and measures to be carried out by the bodies represented thereon to alleviate the social conditions and serious loss of employment brought about by the curtailment of operations at the United States naval base at Argentia. I expect that the hon. member is referring to the second of these two reports, which was received by the governments early in December. It is essentially a review of the progress to date, with recommendations for further measures.
As the hon. member knows, in the first report emphasis was placed on short-term measures to be initiated as quickly as possible. The federal government, in July last, accepted the three main project proposals of the task force's first report and agreed to a federal expenditure of $1,625,000 for these three recommended federal projects. These projects are in various stages of construction or initiation, and the hon. member referred to them. Other joint or shared-cost programs to be proceeded with under ARDA were proposed in the first report. One, at least, of these projects has been started, principally the tourist chalet and park at Dunville, to cost $100,000. For these projects the province must submit applications for approval, as it has in several instances.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the parliamentary secretary, but the time allotted to him by the rules of the House has expired.
Motion agreed to and the House adjourned at 10.30 p.m.

Wednesday, January 13. 1971